Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

It is only when deposition goes through fire of cross-examination that Court or Statutory Authority may be able to determine and assess its probative value. Using a deposition that is not so tested, may therefore amount to using evidence, which party concerned has had no opportunity to question: SC

THE question, however, is whether failure to permit the party to cross examine has resulted in any prejudice so as to call for reversal of the orders and a de novo enquiry into the matter. The answer to that question would depend upon the facts and circumstances of each case. It is evident from Rule 3 of the Adjudication Rules framed under Section 79 of the FERA that the rules of procedure do not apply to adjudicating proceedings. That does not, however, mean that in a given situation, cross examination may not be permitted to test the veracity of a deposition sought to be issued against a party against whom action is proposed to be taken.

Income Tax

I-T - Whether when assessee acquires corporate membership of Golf Club for limited period, any payment made in this regard brings any 'enduring benefits' to be treated as capital expenditure - NO: HC Larger Bench

ASSESSEE had obtained corporate membership of Golf Club, Chandigarh on payment of Rs.6lacs. Rs.16,945/- was paid towards services and facilities used during the relevant AY. During assessment, the AO disallowed such expenses for the reason that the same were personal expenses of the MD and other employees and, thus, added back to the income of the assessee. On appeal, CIT(A) set aside the said disallowance holding that club membership was in the nature of an advantage in the commercial sense and not in the capital field. The CIT(A) also considered the remand report, wherein it was observed that the payment was for acquisition of Club Membership, therefore, it was a capital expenditure. On further appeal, the Tribunal affirmed the findings recorded by the CIT(A) and observed that the membership of the club had been acquired by the assessee for the use of its personnel.

Central Excise

S.4 of CEA, 1944 - Valuation - Related person - Argument that the applicant and L&T Ltd. do not have any mutuality of interest is debatable and needs to be examined in depth at the time of regular hearing - applicant has not produced any data/details at the time of hearing to buttress their contention that they have also made clearances to buyers other than L&T Ltd. - Prima facie applicant does not have a case for complete waiver of pre-deposit on merits - SCN issued on 03.02.2011 is prima facie hit by limitation – duty demanded in SCN 04.05.2011 is within time – pre-deposit ordered of Rs.1.80 Crores: CESTAT

THE applicant is engaged in the manufacture of Fills, Welding Powder Alloys, Flux for welding, coated welding electrodes and coated/uncoated gas welding rods falling under chapters 38 and 83 of the first schedule of the Central Excise Tariff Act, 1985. Prior to 01.07.2006 the applicant was paying Central Excise duty on the goods purchased by M/s L&T Ltd. with reference to the price at which the latter sold the goods viz. the selling price of M/s L&T. However, vide letter dated 21.06.2006 the applicant informed the jurisdictional Assistant Commissioner of Central Excise that, from 01.07.2006 the Central Excise duty on all clearances of final product to M/s L&T will be discharged on the transaction value contracted between them i.e. the duty will be paid with reference to the applicant's selling price to M/s. L&T.

See our Columns Tomorrow for the judgements