Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Appellant could not have availed CENVAT credit on HR Coils and paid 8% amount on removal - merely because some waste arose and same was cleared on payment of duty does not mean that both, dutiable and exempted goods were manufactured out of common input: CESTAT

THE appellants were engaged in manufacture of tubes and pipes falling under Chapter 73 and availing benefit of CENVAT credit of duty paid on inputs/capital goods used in the manufacture of final products. Appellants received HR coils/steel plates from M/s. Essar Steel Ltd. on account of Petron Civil Engineering Pvt. Ltd. who had given an order to the appellant for manufacture of MS pipes to be produced on job work basis for supply of the same to Gujarat Water Infrastructure Ltd. for the purpose of supply of drinking water. The said supply to Gujarat Water Infrastructure Ltd. was exempted from excise duty vide Notification No.6/2002-CE dated 1.03.02. The appellant took the CENVAT credit of the entire amount of the excise duty paid on such steel plates by M/s. Essar Steel Ltd. and reversed 8% of the value on the exempted goods i.e. pipes cleared by them to Gujarat Water Infrastructure Ltd.

Income Tax

Whether any benefit derived by assessee on account of amalgamation can be construed as an income taxable as per provisions of Sec 28(iv) - NO: ITAT

ASSESSEE is a registered company. The return of income filed by the assessee, which disclosed a loss of Rs 1,26,760, was selected for scrutiny assessment under the Computer Aided Scrutiny Selection (CASS) scheme. In the course of the scrutiny, the Assessing Officer noticed that the company had increased its share capital, and that an amount of Rs 2,06,87,692, which was shown as ‘Capital Reserve (other than profit and loss account)', was shown in the current year's balance sheet, whereas no such amount was reflected in the immediately preceding year's balance sheet. In response to the Assessing Officer's requisition to explain these facts, it was submitted by the assessee that the assessee company was part to an amalgamation scheme, duly approved by Calcutta High Court, wherein one Vidya Vincon Private Limited (VVPL, in short), i.e. amalgamating company, amalgamated in the assessee company with effect from 1st April 2007. It was also explained that the capital reserve of Rs 2,06,87,692 came into existence in the books of the assessee, on account of amalgamation with VVPL.

Customs

In Customs Act nowhere is it mentioned that arranging for loan or giving amount on lease for payment of duty of imported goods constitute an offence for imposition of penalty: CESTAT

PENALTY has been imposed on the ground that the appellant has arranged money for payment of duty of the car. In the Customs Act, nowhere arranging for loan or giving the amount on lease for payment of duty of imported goods constitute an offence for imposition of penalty under Section 112A and 112B of the Customs Act. Therefore, the penalty cannot be imposed. Accordingly, the same is set aside.

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