Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Processed Textile Fabrics - although HASITPACD Rules, 1998 have been held to be ultra vires of section 3A of the Act, yet manufacturer is liable to pay duty u/s 3 of CEA, 1944 in respect of dutiable goods cleared without payment of duty - pre-deposit ordered: CESTAT

THE applicants are engaged in the manufacture of processed textile fabrics falling under Chapters 54 & 55 of the CETA, 1985. The annual capacity of the stenters of the applicant under the provisions of the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 was determined by the Commissioner of Central Excise vide order dated 29.6.1999. As per the determination, the applicant was required to deposit the duty as determined, at the end of each month. However, the applicant failed to do so, therefore periodical show cause notices were issued and the adjudicating authority confirmed the demand of Rs. 11,86,006/-, interest and penalty.

Income Tax

Whether merely because assessee receives sponsorship exceeding Rs 10 lakh on motor car races, its otherwise charitable object of general public utility becomes non-charitable and it warrants cancellation of registration u/s 12A - NO: ITAT

THE assessee is a registered society and had registration u/s 12A(a) since 1977. Objects of the assessee, inter alia, were to promote sports of motorcar and motorcycle and conduct motor races, competitions, etc. During the scrutiny proceedings, for A.Y 2009-10, the A.O. sent a proposal to the DIT(E) recommending cancellation of registration granted to assessee u/s 12A(a). In the opinion of DIT(E), the motor sports were for the purpose of promotion of business of sponsors. The sponsorship proceeds were commercial receipts in the hands of the assessee. The DIT(E) was of the opinion that assessee was hit by proviso to Section 2(15) inserted from 1.4.2009. Therefore, according to him, the objects and activities of the assessee could no more be considered charitable in nature.In this view of the matter, he cancelled registration granted to the assessee u/s 12A(a).

Customs

DRI case - Refund - it is not disputed that appellant has paid amount during course of investigation but there is no adjudication order and no confirmation of demand as on today against appellant - in this circumstances, order rejecting refund as pre-mature is set aside and appeal allowed with consequential relief - refund to be granted within 30 days: CESTAT

THE appellant had imported SAP software from SAP AG, a German corporation. There was a dispute regarding the valuation of the goods; therefore, the DRI, Bangalore initiated an inquiry against the appellant. During the course of investigation, one of the officials of the appellant admitted the undervaluation of the software. Pursuant to the enquiry, the appellant paid an amount of Rs.70,19,299/- (duty of Rs.53,04,000/- and rest is interest) without prejudice to their contention, in December, 2008. The appellant waited for the show cause notice for some time. Probably they lost their patience so in the month of June, 2009 they filed a refund claim in respect of the amount so deposited by them. Two months later a SCN dated 31.08.2009 was issued to the appellant and adjudication of the said SCN is still pending. Incidentally, the refund claim was rejected on the premise that the same was pre-mature. As the lower appellate authority upheld this view, the appellant is before the CESTAT.

See our Columns Tomorrow for the judgements