Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Refund of duty paid under protest - Interest payable only on expiry of three months from date of claim after final order by Tribunal: HC

GOING by the clear provisions available under Section 27A of the Customs Act, held that the assessees would be entitled to interest on the expiry of three months from the date of receipt of the application to the date of refund of such duty and on no account they would be entitled to interest on the amount paid under protest from the date of payment, as had been claimed by them. It is also made clear that the refund claim could be validly held to be made only on the disposal of the appeals by the Tribunal and not any date prior to that, which means, the date on which the order was passed by Collector of Customs (Appeals) would not be of relevance for the purpose of limitation.

Income Tax

Whether when word 'manufacture' has not been defined, common parlance meaning can be resorted to and Sec 10B benefits cannot be denied - YES: HC

THE issues before the Bench are - Whether the activities of moulding, cleaning, grading and undertaking a detailed line of processing for exporting dried plants and potpourri involves any manufacturing; Whether deduction u/s 10B can be claimed, when the final product was created through an irreversible process giving rise to a product commercially different from the raw materials; Whether in the absence of specific definition of manufacture in section 10B, common parlance can be relied on; Whether the mere presence of three of the Directors of the company as partners in the assessee firm, by itself, would make the firm as one, split up from the company, although they dealt in different line of products and Whether further when some workers are working both for the company and the assessee firm, it suggests that the firm was formed through splitting of the company. And the verdict goes in favour of the assessee.

Central Excise

Refund of pre-deposit - Petitioner is entitled to interest for delayed refund of pre-deposit: HC

THE question here is not of interest on refund of the duty amount but of the pre-deposit. There is no express provision of payment of interest on the refund of predeposit. However, drawing analogy from Section 11B of the Central Excise Act, which provides for the refund of the duty, Section 11BB speaks of the interest on the refund of the duty as there would arise a requirement of payment of interest if the duty is not refunded within a period of three months from the date of receipt of application to be submitted under subsection (1) of Section 11B of the Act. Such interest needs to be paid at such rate fixed by the Central Government on expiry of period of three months from the date of receipt of application. The deeming fiction under Section 11BB says that for the purpose of this Section, the order made by the Higher Appellate Authority or the Court shall be deemed to be the order made under sub-section (2) of Section 11B.

See our Columns Wednesday for the judgements