Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Appellant receiving duty paid billets from Jamshedpur unit, value of which was determined as 115%/110% of cost of production - AV of wire rods manufactured out of these billets should be 115%/110% of the cost of production of billets and not the cost of raw material consumed for manufacture of billets - Duty demand of Rs.8.61 Crores upheld along with penalty: CESTAT

THE appellants are engaged in the manufacture of wire rods falling under Chapter sub-heading 72142090 of CETA, 1985. The appellants received inputs, i.e. billets, from their Jamshedpur unit on payment of duty on the value determined 115%/110% of cost of production in terms of Rule 8 of the Central Excise Valuation Rules, 2000. The duty paid on the billets was taken as credit by the appellants. The appellants manufactured wire rods and stock transferred the same to their Borivali unit on payment of duty. However, on scrutiny of records by the department, it was observed that the appellants while computing the cost of production of wire rods only took into consideration the cost of production of the billets instead of 115%/110% of the cost of production of the billets, which resulted in short payment of duty.

Income Tax

Whether when assessee has transferred money taken on interest from sister concern in P&L account, and sister concern has dissolved without receiving interest and principal sum, such sum warrants addition u/s 41(1) in assessee's hands - YES: ITAT

THE issues before the Bench are - Whether when assessee has transferred the money taken on interest from its sister concern in P&L account, and the sister concern has dissolved without receiving either the interest or principal sum nor has it demanded from the assessee, such sum warrants addition u/s 41(1) in the hand of the assessee - Whether the nature of receipt, which was capital in the beginning, can undergo a change with influx of time and the same can become revenue receipt. And the verdict goes against the assessee.

Customs

Since the goods are not notified under S.123 and provisions of Chapter IVA, relating to notified goods have been deleted from the Customs Act more than decade back, there cannot be any order of confiscation: CESTAT

THE Commissioner of Customs (Appeals), Airport, Mumbai held that since the goods are not notified under section 123 and Chapter IVA dealing with notified goods have been deleted from the Customs Act, 1962, the goods are not liable to absolute confiscation, let alone confiscation. Accordingly, he allowed the appeal filed by the respondent. Revenue is not happy with this "all is lost" order and, therefore, is before the CESTAT.

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