Jurisprudentiol - Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Whether mere fact that payments in respect of expenses incurred by assessee were made by account payee cheques, it suffices to accept transactions as genuine - NO: HC

THE issues before the Bench are - Whether, if a party fails to avail of the opportunity to cross-examine a person at the appropriate stage in the proceeding, the said party would be precluded from raising such issue at a later stage of the proceeding;Whether mere fact that payments in respect of expenses incurred by the assessee were made through account payee cheques can be the sole criteria to accept the genuineness of the transaction;Whether the transactions through account payee cheques can be accepted even when the identity of the creditors to whom such payments were made were doubtful and Whether the issue as to the expenses were necessary or not in terms of the commercial expediency u/s 37 (1) of the Act would arise only after the assessee had discharged its initial onus to prima facie establish such claim. And the verdict goes against the assessee.

Service Tax

BAS - Applicant were appointed by M/s YBL as distributors of beer in Sikkim region and accordingly purchased beer from M/s YBL and sold to retailers in area - prima facie no case made for waiver - pre-deposit ordered: CESTAT

BY an agreement dated 01.04.2006 between M/s.YBL and the applicant, the applicant was appointed as a sole distributor for marketing the products of M/s.YBL in the state of Sikkim on behalf of them. At clause 7 of the said agreement, it is mentioned that there shall be no margin to the distributors (i.e. the applicant) with regard to their business. Hence, the margin shall be reimbursed to the distributors on monthly basis by providing distributor discount (or other re-imbursement expenses). It is further mentioned that the distributors shall submit monthly manifesto and the first party (M/s.YBL) shall reimburse the amount stated in the manifesto. The parties to the agreement agreed that the monthly discount shall be discharged at the rate fixed under the said clause.

Customs

Revenue not above law - they have to follow provisions of law as laid down in statute and within time frame work prescribed as there is no provision in CHALR, 2004 to condone delay - suspension revoked: CESTAT by Majority.

THE allegation against the CHA is that the refund claim of Rs.5.15 Crores was attempted to be filed in October 2010, which had become time barred by October 2010 and Smt. Shivani Gurav, STA inserted the said entry of M/s General Motors refund at serial No.1284 of page 364 which pertains to the claims received up to 16th June 2010. By making this entry, the claim would have been treated as filed within time limit. The Revenue was of the view that if the appellant CHA, ShriHareshB.Shah, Director had acted with due diligence, the attempted filing of time barred refund claim would not have taken place. As the investigation started, M/s. General Motors withdrew the refund claim which was allowed to be withdrawn on 09.12.2010.

Central Excise

One wrong decision cannot be basis of another wrong decision - whether in respect of packing machines for Pan masala/gutka duty would be payable only on pro-rata basis for number of days in month during which machine had functioned or would be payable for whole month without giving abatement for period for which machine was sealed - Prima facie case not in favour: CESTAT

THERE is no provision for abatement of duty on the machines which were in sealed condition during the month and for this reason were not operational - though this provision in PMPM rules may appear to be harsh, it has to be borne in mind that the Government notifies items under Section 3A having regard to Nature of process of manufacture or production of excisable goods of any specified description, extent of evasion of duty in regard to such goods, or such other factors as may be necessary to safeguard the interests of revenue - PMPM Rules have been framed taking into account the ground reality of rampant duty evasion by Gutka and Pan Masala units.

See our columns Tomorrow for the judgements