Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Delay in de novo adjudication has been caused only on account of inaction on part of Revenue - adjudicating authority to dispose of matter of year 1989 within period of two months: CESTAT

THE Customs authorities seem to be at leisure. They are not adjudicating a case of the year 1989 in remand proceedings ordered by the CESTAT. Vide an order dated 14.02.2012 the Bench had directed the department to adjudicate the matter within 90 days from the date of communication of the order.

Fearing for the worst, the Revenue filed a Miscellaneous application and had a conjured up a wonderful excuse for the job not done - that there is a mistake in the order dated 14.02.2012 passed by the Bench inasmuch as that the respondent's name is Commissioner of Customs (Adjudication), Mumbai, but the covering letter of the order, the respondent's name is shown as Commissioner of Customs (CSI Airport), Mumbai, and, therefore, this part of the order needs rectification.

Income Tax

Whether computation of capital gains based on delayed rectification deed of property, resulting in lower consideration as compared to original deed, cannot be faulted with - YES: ITAT

THE assessee, an individual, had filed the return of income u/s 139(1) of the Act. During the A.Y. under consideration, the assessee had entered into an agreement to sell a land for consideration. Subsequently, when the land was physically measured the area was actually less than that mentioned in the original sale deed. Thus, the assessee entered into revisionary sale deed and accordingly the sale consideration was reduced. While computing income from sale of land the assessee took the revised sale consideration as base and computed capital gains. In the course of assessment the AO enquired about reduced sale consideration, and in the absence of any satisfying reply from the assessee the AO made additions u/s 50C of the Act equivalent to difference in value as per original sale deed and revisionary sale deed. The AO had also taken cognizance of valuation report whereby the valuation officer (DVO) had confirmed the area of land as 15311 sq. ft. However, the valuation of land by DVO was vague and hence not adopted by the AO.

Central excise

Bagasse & Press mud arising during manufacture of sugar and molasses are waste and not final products - no need to pay any amount of 5%/10% in terms of Rule 6 of CCR, 2004 on ground that common Inputs/Input Services were used in manufacture: CESTAT

THE assessee is engaged in the activity of manufacture of sugar and molasses. Waste is obtained during the manufacture of sugar and is referred as Bagasse and press mud which is cleared from the factory without payment of any Central Excise duty.

The jurisdictional authorities are of the view that since the assessee has availed CENVAT credit in respect of common Inputs and Input service in the manufacture of final products which are cleared on payment of duty and in respect of the Bagasse/Press mud they are not maintaining separate account, therefore, they are liable to pay an amount of 5%/10% on the price of Bagasse/Press Mud as provided in Rule 6 of the CENVAT Credit Rules, 2004.

See our Columns Tomorrow for the judgements