TIOL-DDT 2026 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2026</font><br>
17.01.2013 <br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Irregularities,
inaccuracies, anomalies and mistakes committed by Chartered Accountant
- Punishment upheld - HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>Certificate from a chartered accountant is given great credence even by indirect tax authorities, Tribunals and Courts. But sometimes it surfaces that some CAs give these certificates very casually and without much verification. A Central Excise Joint Commissioner did not take kindly to one such report given by a CA and ultimately the CA was punished by the Institute with suspension for a year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This case came up before the Gujarat High Court recently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner, a practicing Chartered Accountant ["CA"] had undertaken, on agreement, assignment as Chartered Accountant of a multi location unit. The assignment also included work of auditing the accounts of the said company. It appears that on the basis of the certificate issued by the petitioner in his capacity as CA, the Excise Department had made certain assessments and liability of the said company towards excise duty under Excise Act were assessed. Thereafter, it came to the notice of the Excise Department that the accounts and audit report submitted by the petitioner was inaccurate and there were several serious and material discrepancies and anomalies. In this view of the matter, the office of Commissioner of Central Excise, Surat lodged complaint with the institute of the Chartered Accountant ["the institute"] and vide letter dated 24.10.2008 brought to the notice of the institute the irregularities as well as the inaccuracies, anomalies and mistakes committed by the petitioner in the accounts and audit report. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After examining the said complaint by the Joint Commissioner (Audit) of Excise Department, the Disciplinary Committee of the institute, formed prima facie opinion that the petitioner was guilty of professional and other misconduct falling within the meaning of Clause (7) of Part-I of II Schedule to the Chartered Accountants (Amendment) Act, 2006 ["the Act"]. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The competent authority on 12.9.2011 passed order under Section 21(B)(iii) of the Act read with Rule 19(1) of the Chartered Accountant's Procedure of Investigation of Professional and other Misconduct and Conduct of Cases Rules, 2007 ["the Rules"] suggesting and recommending punishment of removal of petitioner's name from member's register for a period of 1 year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 28.1.2012, the appellate committee heard the petitioner and after considering the record including the report of the Disciplinary Committee and the decision of the competent authority, passed order dated 5.5.2012. The appellate committee concurred with the decision of the competent authority i.e. order dated 12.9.2011 and observed that, the appellant is rightly held guilty of professional misconduct within meaning of clause (7) of Part-I of II Schedule to the Act. The appellate committee also held that the petitioner did not exercise due diligence and he had shown gross negligence and carelessness in certifying Tax Audit Report which did not reflect true and fair picture of the affairs of the company and he signed the Tax Audit Report without actually performing the audit as required. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The aggrieved CA is before the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed,</font></p>
<p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">A Chartered Accountant has an obligation, not only statutory but also moral and social, to be absolutely and completely diligent and cautious and careful while preparing, signing and certifying Annual Accounts and/or Audit report. Several Government and private organizations and individuals rely on the report / certificate by Chartered Accountant and once a particular factual aspect or entries, etc. are prepared, signed and certified by Chartered Accountant they are ordinarily accepted without further probing or investigation. </font></strong></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">In such circumstances, the duty and obligation of being absolutely diligent, conscious and careful is multiplied manifold and a Chartered Accountant should not, and cannot take, such obligation or perform his duties lightly or casually. A mistake by a petty clerk or lower level accountant may be dealt with in different manner but a mistake by a Chartered Accountant cannot be treated with indifference or casually or lightly. A mistake by a clerk or an accountant, which may be considered or allowed or overlooked as inadvertent error, cannot be overlooked lightly or casually if committed by a practicing Chartered Accountant, more so when it is committed in Annual report duly certified by him as correct and authentic report. It has to be, and should be, dealt with seriousness which it would deserve. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The professional or trained Chartered Accountant is equipped with knowledge, training and experience to catch a mistake and if such trained and experienced professional allows so many mistakes, errors, inaccuracies and anomalies pass-by without detecting them and if he signs and authenticates report containing such mistakes, etc. and also issues certificate, then, in such circumstances, any fault cannot be found with the conclusions by the Disciplinary Committee, also confirmed by the Appellate Committee, that the petitioner did not exercise due diligence. The petitioner has tried to wish-away his failure in detecting - catching and correcting the mistakes by attributing the blame to typist and computer operator. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The institute, which is statutorily obliged to maintain high standards of the profession and, for that purpose, to take action in cases which are brought to its notice wherein member of the institute is found wanting exercising due diligence and in being careful and cautions, would fail in its duty and obligation if it does not take appropriate action and/or does not pass appropriate order against such member. A lenient attitude by the institute may, in long run dilute the professional standards and tarnish its image and credibility and with passage of time may also result into diluting institute's vigil over its members and their conduct. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">In present case, it is not possible to hold that punishment of removal of petitioner's name from the register for one year is harsh as compared to the proved charge. The decision as regards quantum of penalty is in the realm of the Disciplinary Authority and once misconduct is proved - and accepted as proved by the Court - then Court would not interfere with Disciplinary Authority's decision regarding quantum of penalty unless it is excessively disproportionate which amounts to or appears to be on the verge of victimisation. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner has failed to make out any case to entertain the petition in writ jurisdiction and interfere with two concurrent decisions preceded by prima facie opinion of the Disciplinary Committee. The petition, therefore, fails and is not accepted. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this order today. Please see </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2013/2013-TIOL-39-HC-AHM-MISC.htm" target="_blank">2013-TIOL-39-HC-AHM-MISC</a></strong></font> </p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Intellectual Dishonesty - of CA or CIT? Cost to be imposed on CA or CIT? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THAT</strong> brings us to another interesting case. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <em>QMAX TEST EQUIPMENTS PVT LTD Vs ASSISTANT COMMISSIONER OF INCOME TAX</em> - <strong><font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=39&filename=legal/itat/2012/2012-TIOL-639-ITAT-MAD.htm" target="_blank">2012-TIOL-639-ITAT-MAD</a></font></strong>, the ITAT imposed costs of Rs. 25,000 on the Income Tax Department with the observation: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are of the considered opinion that the order has been passed by the CIT(A) in a non-judicious and arbitrary manner. The order of the CIT(A) is not only against the law laid down by the Hon'ble High Court but smacks mala fide on the part of the CIT(A). It is evident that the CIT(A) has committed "intellectual dishonesty" extending it to the limit of perversity. The impugned order has burdened the assessee with the avoidable cost of litigation before the Tribunal and harassment. We feel that the instant case is one of the rare and fit case where the Revenue should compensate the assessee for causing unnecessary mental and financial harassment. The valuable time of the Tribunal has also been lost in adjudicating the issue which is squarely covered by the judgement of the Hon'ble High Court. Therefore, the appeal of the assessee is allowed with costs of Rs.25,000/-. The cost shall be paid to the assessee in accordance with Rule 32A(2) of the Appellate Tribunal Rules, 1963. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue was a simple one. The assessee was eligible for deduction under Section 10B of the Income Tax Act for a period of ten years - the controversy was the period of this ten years. The assessee claimed the deduction from assessment year 1995- 96 to 2004-05. Revenue alleged that the assessee had claimed deduction under section 10B in the 11th year. According to the provisions of section 10B the deduction is available only upto 10th year of production. Accordingly, the AO disallowed the deduction for the year 2004-05. The AO's order was upheld by the CIT(A). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee had placed on record the Chartered Accountant's Report under section 10A/10B of the Income Tax Act. In the Annexure ‘A' of the said Report it has been specifically mentioned that assessment year 2004-05 is the 10th year for claiming deduction by the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CIT(A) had not considered the CA's report and disallowed the deduction for 2004-05. It was while setting aside the CIT's order that the ITAT passed the above order and imposed cost on the Department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue was really aggrieved and agitated and took the matter again to the Tribunal in a rectification petition. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While hearing the ROM, the Tribunal realised that the assessee started manufacturing in May 1993 and was therefore eligible for claiming deduction under section 10B for the period of 10 years beginning with the assessment year 1994-95. Accordingly, the assessee was entitled for benefit upto assessment year 2003-04 and not 2004-05 as held in the impugned order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal very fairly observed, "The Tribunal inadvertently calculated the period of 10 years starting from assessment year 1995-96 and ending with assessment year 2004-05. This is a mistake, which in our opinion has to be rectified." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the AR appearing on behalf of the assessee also fairly conceded to the factual error in calculation of period of 10 years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the impugned order was recalled and the appeal will be heard afresh. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It requires great courage to admit one's mistake and the stature of the Tribunal is enhanced by admitting such mistakes and correcting them. There is a feeling that the honourable judges refuse to admit their mistakes! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Commissioner of Income Tax who saw the ROM order of the Tribunal asked us in right indignation, <font color="#FF0000">"Now who showed intellectual dishonesty? <strong>The CIT(A) or the C.A</strong>. of the assessee who gave an eligibility certificate for deduction u/s 10B knowing fully well that it is the 11th year of manufacture and deduction under sec. 10B is only available for 10 years ? Who should be punished and cost to be recovered from whom????" </font></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please
see <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=39&filename=legal/itat/2013/2013-TIOL-57-ITAT-MAD.htm" target="_blank"><font size="1">2013-TIOL-57-ITAT-MAD</font></a></em></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Drawback - Ceramic Products - Drawback cap per unit changed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended Notification No. 92/2012-Cus NT dated 04.10.2012 to revise the drawback cap per unit for "ceramic products" of Chapter 69. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_004.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 4/2013 - Cus.,(N.T.), Dated: January 15, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Non Coking Coal as Coking Coal - Big Haul by Customs </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RELIABLE</strong> sources inform us that Jamnagar Customs has cracked a case of huge evasion by an importer declaring non-coking coal as coking coal to avail the exemption benefits under Sl.No. 122 of the Notification 12/2012-Cus dated 17-3-2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Coking Coal falls under CTSH 2701 1910, and attracts 'nil' rate of basic customs duty, if the explanation in sl. no. 122 is satisfied, i.e. the coking coal should have the<strong> reflectance</strong> more than 0.60 and <strong>CSN</strong> of 1 and above. If any of the conditions are not satisfied, the Coking Coal would fall under Sl. No. 124 and would attract 5% Basic Customs Duty, besides other duties. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ch.SH </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Std Rate </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addl rate </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Condition </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">122. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2701</font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Coking coal </font></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Explanation.- For the purposes of this exemption, "Coking coal" means coal having mean reflectance of more than 0.60 and Swelling Index or <strong>Crucible Swelling Number</strong> of 1 and above </font></em></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">123. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">27011920 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Steam Coal </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">124. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2701 11 00, 2701 12 00, 2701 19 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods other than those specified at S. Nos. 122 and 123 above. </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs Officers based on intelligence detained the entire bulk cargo and got the samples tested. On confirmation, that the imported coal does not conform to the explanation in S. No. 122, they had seized the entire 80,000 MTs. An amount of Rs. 16.60 Crores was also recovered from the importers towards Customs Duties. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This modus operandi was detected by DRI two years ago and it was found that a major steel unit was evading Customs duty since 1999. DRI had also issued a Show Cause Notice. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Crucible Swelling Number - Controversial? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HOW</strong> do you find whether the coal imported is coking coal or non-coking coal? There is an interesting story. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As you can see from the Explanation to Sl. No. 122 of Notification No. 12/2012-Cus, <em>"Coking coal" means coal having mean reflectance of more than 0.60 and Swelling Index or<strong> Crucible Swelling Number </strong>of 1 and above.</em> This definition was not there in the predecessor notification 21/2002-Cus for quite a long time. In 2010, the Vizag Customs had issued instructions that <strong>Crucible Swelling Number (CSN)</strong> should be more than 3 to be considered as coking coal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification 21/2011-Cus dated 1.3.2011, the Notification was amended to stipulate that <em>"Coking coal" means coal having mean reflectance of more than 0.85 and Swelling Index Number of more than 2</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By notification No. 31/2011-Cusdated 24.3.2011, a new entry 66A was inserted which exempted<em> Coal having Swelling Index or <strong>Crucible Swelling Number of 1</strong> and above and mean reflectance of above 0.60, for use in the manufacture of iron or steel using Corex, Finex or PCI technology.</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 77/2011-Cus dated 17.8.2011 changed this: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) S.No. 66A and the entries relating thereto shall be omitted. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) in S. No. 68, in column (3), in Explanation, for the figures and words "0.85 and Swelling Index or Crucible Swelling Number of more than 2" the figures and words "0.60 and Swelling Index or Crucible Swelling Number of <strong>more than 1</strong>" shall be substituted. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was followed by a corrigendum dated 25.8.2011, which said, <em>for the words and figure "<strong>more than 1</strong>", read" <strong>1 and above</strong>"</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To sum up: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Prior to 1.3.2011, there was no definition of coking coal, though Vizag Customs insisted on a <strong><em>Crucible Swelling Number</em></strong> <strong>(CSN)</strong> of more than 3. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. From 1.3.2011 to 16.8.2011 - coking coal should have <strong><em>Crucible Swelling Numbe</em></strong>r<strong> (CSN)</strong> of more than 2. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. From 17.8.2011 to 24.8.2011 <em><strong>Crucible Swelling Number </strong></em><strong>(CSN)</strong><em> had to be<strong> more than 1</strong>. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. From 25.8.2011 the<strong><em> Crucible Swelling Number</em> (CSN)</strong> has to be <strong><em>1 and above</em></strong>. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In five months, the <em><strong>Crucible Swelling Number</strong></em><strong> (CSN) </strong>had come down from ‘more than 3' to ‘more than 2' to ‘more than 1' to ‘1 and above'.!It doesn't require Rocket Science to understand the black colour of coal - indigenous or imported. Every thing seems to be black including the money involved! </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2013/2013-TIOL-110-CESTAT-MAD.htm">2013-TIOL-110-CESTAT-MAD</a></font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Friday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue allegation that bond executed for storing goods in warehouse should be kept valid even after removal of goods from said warehouse and till such time goods are sold from duty free shops in airport is not within confines of the law - Revenue appeal dismissed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> department has a unique and interesting case - it is of the view that the bond executed by the respondent in respect of the goods stored in Chowgule bonded warehouse should be kept valid even after the removal of the goods from the said warehouse till such time the goods are sold from the duty free shops in the airport. Inasmuch as this was not done by the respondent, a duty demand was confirmed for a sum of Rs.60,88,233/- along with interest thereon and a penalty of Rs.10,000/- was also imposed on the respondent. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee is given option to convert land into industrial unit after approval, which was obtained after long gap, profits from sale of such converted land, treated as stock-in-trade is to be treated as capital gains - YES: ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee Company is engaged in the business of manufacturing of specialized chemicals and in development of real estate and was owner of certain land allotted to it by Govt of Maharastra. The land was allotted to the assessee on condition that the assessee will obtain necessary approval from land revenue authorities for using the land for industrial purpose within the stipulated time. After obtaining approval, the assessee converted the land into stock in trade and then sold the same and offered the gain as capital gain. The AO during the course of assessment proceedings observed that the assessee had converted the land after a long gap and at the relevant time the land was rural agricultural land and hence the same could not have been converted into stock in trade. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT - Revenue contention that applicant does not have any facility to manufacture excisable goods, hence cannot avail CENVAT - notfn 53/2003-Cus allows import of raw material by merchant exporter having supporting manufacturer - once duty on final product has been paid and accepted by Revenue, CENVAT credit cannot be denied - Pre-deposit waived & Stay granted: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> sizeable number of cases emanating from the Central Excise Commissionerates nowadays relate not to the fact that the assessee has not paid any Central Excise duty or there is any undervaluation but that the assessee should not have paid any duty by taking CENVAT Credit. The applicant is a merchant exporter and the imported raw material was supplied to M/s Maharashtra Seamless Ltd. under rule 4(5) of the CENVAT Credit Rules and the goods were manufactured and thereafter the applicant paid duty by utilizing the CENVAT credit as well as paying from PLA. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
</body>
</html>