Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Import of Spurious Drug - clear omission on part of importer has rendered goods liable to confiscation hence importer cannot escape penal consequences - Pre-deposit ordered of Rs.50,000/- towards penalty: CESTAT by Majority

THE appellant imported a consignment of Prednisolone BP/USP/IP from China, declared to be manufactured by M/s. Tainjin Tianyao Pharmaceutical Co. Ltd., China. The goods were covered by invoice and packing list issued by M/s. Sinobright Development Ltd., Hongkong. The impugned goods arrived in India vide Air Way Bill and the bill of entry was filed by the CHA on behalf of the importer. The bills of entry were assessed as per the declaration given therein and the importer paid Customs duty of Rs.5,24,536/-. As per the import policy in force the importer was required to produce a “No Objection Certificate” from the Drug Controller General of India and, therefore, representative samples of the impugned goods were forwarded to the Assistant Drug Controller, Mumbai for obtaining NOC. After examination and comparing of the labels and the container, etc. it was declared that the subject drug was ‘spurious' and not manufactured by the original manufacturer.

Income Tax

Whether reassessment can be initiated after four years merely on ground that one of Directors of assessee company filed complaint of siphoning of funds before CLB - YES: HC

THE issues before the Bench are - Whether AO has the authority to reopen assessment after expiry of four years, on receipt of complaint of siphoning of funds, filed by one of the Directors of the assessee company; Whether the fact that such complaint has been filed before a statutory authority like Company Law Board can have any material relevance to ascertain its credibility; Whether when the complaint can constitute tangible material for reopening the assessments, it can equally constitute tangible material giving rise to the belief that the income had escaped assessment and Whether there is no duty of the assessee to disclose all relevant information at the time of original assessment, merely because the AO has not asked for it. And the verdict goes against the assessee.

Central Excise

Classification - whether “Arjun-Ultra-1 CE” is a ‘Tractor' or ‘Front End shovel Loader' - Revenue demanding duty in respect of all clearances by classifying the same under C.H 8429 whereas assessee classifying under Ch. 87 and claiming exemption - Prima facie case for total waiver - Stay petition allowed: CESTAT

THE applicants are engaged in the manufacture of Tractors and the dispute in the present proceedings is in respect of the model “Arjun-Ultra-1 CE”. The applicants were clearing this model by claiming the classification under Chapter Heading 87 of the Tariff as “Tractor” as the same was exempted from the payment of Central Excise duty.

The Revenue wants to classify the same under sub-heading 8429 5100 of the Tariff specifically as ‘Front End Shovel Loader' and accordingly charge the same to Central Excise duty.

The proceedings resulted in confirmation of the demand of Rs.17,26,89,200/- along with penalty and interest by the CCE, Nagpur.The appellant, therefore, in his “Arjun-Ultra-1” drove all the way to the CESTAT with a Stay application.

See our Columns Monday for the judgements