Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Goods stored in private bonded warehouse destroyed in floods - Remission of Customs duty - provisions of Customs Act cannot be mixed with those of Insurance Act to deny benefit specifically provided under s. 23 of the Customs Act, 1962 - department directed to refund amount received from Insurance company to appellant: CESTAT

THE appellant had set up a private bonded warehouse under section 58 of the Customs Act, 1962 for warehousing of imported bulk drugs. The private bonded warehouse was duly insured with endorsement in favour of Commissioner of Central Excise and Customs. On 26th July, 2005, due to heavy rains and consequent floods, the goods stored in the warehouse which consisted of duty paid goods and as well as goods bonded without payment of duty were damaged.

The appellant sought remission of customs duty on imported goods bonded under section 23 of the Customs Act.

Income Tax

Whether principle of consistency fails when certain benefits, not legally available to assessee, were allowed in past - YES: ITAT

THE assessee company, a small scale undertaking, had claimed deduction u/s 80IB. The assessment was completed u/s 143(3), allowing the deduction. Subsequently, the CIT observed that the value of plant & machinery of the assessee company was more than Rs onecrore, and the same was not a small scale undertaking u/s 11B of Industries (Development and Regulation) Act, 1951. The CIT observed that us/80IB(14)(g) of the Act the conditions for being small scale undertaking should be satisfied on the last day of the previous year. Thus, invoking powers us/ 263, the CIT directed the AO to reassess the income and allowance of deduction applying ratio laid down us/ 80IB(14)(g) of the Act. Assessee stated that the said conditions were required to be fulfilled only for the first year of claim of deduction.

Central Excise

Valuation - Rule 10A - in terms of agreement, appellant are required to purchase raw materials for manufacture of moulded furniture from persons approved by M/s Neelkamal Limited - it cannot, therefore, be said that raw materials have been supplied by M/s Neelkamal Limited or their authorised persons - prima facie appellant is not covered by definition of 'job worker' under Rule 10A - Pre-deposit waived and Stay granted: CESTAT

THE appellant manufactures plastic moulded furniture for M/s. Neelkamal Limited. In terms of agreement, moulds for manufacture of furniture are supplied by M/s. Neelkamal Limited and the appellant procures raw materials from the manufacturer specified and approved by M/s. Neelkamal Limited. Plastic furniture is supplied by the Appellant to M/s. Neelkamal Limited at the price determined in terms the of pricing formula as specified in the agreement which is based on the cost of raw material including freight plus conversion cost at the rate of Rs.9.50 per kilograms weight of the moulded furniture plus excise duty as applicable. The appellant were discharging duty liability on the plastic moulded furniture manufactured by them and supplied to M/s. Neelkamal Limited on the above mentioned contract price. The department took a view that the valuation has to be arrived at in terms of Rule 10A of Valuation Rules, 2000 inasmuch as the appellant is required to pay duty on the price at which the moulded furniture was sold by M/s. Neelkamal Limited.

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