Jurisprudentiol - Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Garments stitched from fabric given by customers - No duty payable: HC

RESPONDENTS are engaged in the manufacture of readymade garments falling under the "Chapter Heading 6201" of the First Schedule of the Central Excise Tariff Act, 1985. The respondents are also engaged in stitching garments out of fabric bought by customers from their shop or brought by the customers from outside. In connection to the latter activity, it is a matter of record that in all such instances, the fabric is given by the individual customer. On the garments so stitched by the respondents, it affixes the label "Specially Tailored By Diwan Saheb Designs for Men". In cases where the fabric is bought from the respondents only, the stitching takes places after the "sale" of the fabric. Moreover, it is not compulsory for the customer to get the fabric stitched from the respondents.

Thus, the dispute pertains to whether the tailoring activity of the respondents, in cases where the fabric is given by the customer, either after being bought from the respondents, or from outside, is liable to excise duty.

Income Tax

Whether when assesse is liable to TDS on salary, including perquisites, but fails to do do because of HC interim order, which was later vacated on basis of SC decision, assessee for period when interim order was in force, can be deemed to be assessee in default - NO: SC

THE issues before the Bench are - Whether when the assesse is liable to deduct tax at source on salary, including the perquisites as per Rule 3, but fails to do do because of an interim order passed by the High Court, which is later vacated on the basis of the Apex Court decision, the assessee for the period when interim order was in force, can be deemed to be an assessee in default and Whether while vacating the interim order the HC allows three months period for compliance of the provisions of the I-T Act, the assessee is to be held to be in default and is also liable to pay interest from such a date as allowed while dismissing the writ.

Customs

Import - Seizure of Imported goods on account of mis-declaration and mis-classification - Show cause notice for extension of seizure period - Show Cause Notice under Section 110(2) of the Customs Act, 1962 is not mere formality, but statutory right to oppose decision for extension of time - Hurriedly passed ex parte order is set aside - HC

AS per Section 110(2) of the Customs Act, 1962, where any goods are seized under Section 110(1) and no notice is issued under Section 124(a) within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. However, as per the proviso to sub-section (2) of Section 110, on sufficient cause being shown, the period can be extended by the Commissioner of Customs for a period not exceeding six months.

The goods imported by the Petitioner were seized under Section 110(1) on the allegations of mis-declaration and mis-classification of goods. The period of six months was to expire on 29.02.2012. Department issued a notice to the petitioner on 21.02.2012 calling upon the petitioner to show cause as to why the period be not extended by six months and to give an opportunity of hearing to petitioner it was directed to appear before the authorities on 24.02.2012.

See our columns Tomorrow for the judgements