Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Penalty & Interest - In SCN, no allegation of any fraud, collusion, wilful mis-statement, or suppression of fact or contravention with intent to evade payment of duty has been made - In absence of such allegation, there was no scope of invoking provisions of Section 11AB & 11 AC: HC

THE penalty can be applied only by taking aid of Section 11AC of the Central Excise Act, 1944 where there is collusion, wilful mis-statement or suppression of fact or contravention of any of the provisions of the Act with intent to evade payment of duty. In the show-cause notice, all that has been alleged is mis-statement or wrong classification, but no allegation of fraud, collusion, suppression or intention to evade lawful duty has been made. Therefore, for the selfsame reason, penalty also cannot be imposed.

Income Tax

Whether valuation of closing stock at market price is permissible only in cases where business is discontinued and not where business carried on by partnership firm is taken over by successor company without any interruption on conversion of firm into company - NO: ITAT

THE; issues before the Bench are - Whether valuation of closing stock at market price is permissible only in cases where the business is discontinued and not where the business carried on by the partnership firm was taken over by a successor company without any interruption on conversion of firm into company and Whether the provision of section 40A(3) is attracted only when there is actual payment of cash from one person to another and not where transaction takes place only as part of exchange. And the answers favour the assessee.

Customs

REFUND - Limitation - it would be in interest of justice to treat letter dated 06.9.2006 as refund claim - After all, whole amount had been deposited but related goods have undisputedly not arrived in India: CESTAT

IMPORTED 1000 units of Heat Detectors on 30.8.2006 and cleared under RMS on payment of duty - CHA noticed that the number of heat conductors in the package was 100 as against 1000 units and sought for refund of duty paid relating to 900 units vide letter dated 6.9.2006 - The department vide letter dated 13.10.2006 informed the importer to file a claim in proper format - Importer filed claim on 28.7.2007 - Original authority as well as appellate authority rejected claim - Held: It is not in dispute that the original authority has accepted the short landing of imported goods - In the peculiar facts and circumstances, the CHA who has been duly authorised by the importer has sought for refund vide letter dated 6.9.2006 - This fact is not in dispute - Nevertheless, in the facts of the present case, it would be in the interest of justice to treat the letter dated 06.9.2006 as refund claim - After all, the whole amount had been deposited but the related goods have undisputedly not arrived in India.

See our columns Tomorrow for the judgements