Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Import of motor vehicle parts and clearance to domestic market after repacking - there cannot be different Retail prices for purpose of CVD and for purpose of Excise duty in respect of same goods - there is no valid explanation by applicant regarding lower MRP for purpose of excise duty - Pre-deposit ordered of duty demanded: CESTAT

THE applicants are engaged in the manufacture of motor vehicles and are importing motor vehicle parts. At the time of import of the motor vehicle parts, the applicants were declaring MRP for the purpose of payment of CVD and automobile cess. The applicants were availing CENVAT credit of the CVD paid.

The imported automobile parts were cleared to domestic market after repacking. As the automobile parts are specified goods leviable to Central Excise duty as per Section 4A of the Central Excise Act, the applicants declared MRP for the purpose of payment of Central Excise duty.

The eagle eyes of the jurisdictional officers smelled a rat here.

It was observed that the applicants were declaring higher MRP for the purpose of CVD to the Customs authorities but were paying Central Excise duty after repacking on a lower MRP.

Therefore, SCNs for demanding differential Central Excise duty were issued and the same were confirmed by the adjudicating authority along with penalties & interest.

Income Tax

Whether when a notice issued u/s 226(3), is not pursued further by Revenue in terms of any show cause notice, assessee can still be treated as deemed assessee in default - NO: HC

THE issues before the Bench are - Whether when a notice issued u/s 226(3), is not pursued further by the Revenue in terms of any show cause notice, the assessee can still be treated as deemed 'assessee in default' qua this notice; Whether a notice can have a valid enforceable effect in law, even if it has been waived; Whether in case of a general lien, bank has a lien on the account in respect of dues of the party and the said parties are indebted to bank; Whether in absence of a garnishee order, the saving bank account and open cash credit account can be clubbed together; Whether proceedings u/s 226(3) are in nature of garnishee proceedings; Whether a person to whom garnishee notice is issued, must be in the position of a creditor with respect to the assessee in default; Whether at the time of the garnishee notice, the sum must be due to the assessee and Whether in order to create Banker's lien on several accounts it is necessary that they must belong to the payer in one and in the same capacity. And the verdict goes in favour of the assessee.

Service Tax

Appellant placing an advertisement for their machinery in a magazine published in UK - department demanding ST under 'Sale of space or time for advertisement' - s. 65(105)(zzzm) excludes sale of space for advertisement in 'newspaper' - definition of 'newspaper' is wide enough to cover any periodical work and includes 'magazine' - strong prima facie in favour - Pre-deposit waived and stay granted: CESTAT

THE appellant are manufacturer of machinery used in fertilizer industry. They placed an advertisement for their machinery in a magazine, called Fertilizer Focus which is published in UK. The department was of the view that for the consideration paid by them for putting out the advertisement in the foreign magazine, the appellant is liable to discharge Service Tax under the category of "Sale of space or time for advertisement services.”

See our Columns Friday for the judgements