Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Printout generated from PC seized cannot be admitted as evidence for non-fulfillment of statutory condition of Section 138C of Customs Act, 1962 - demand based on retracted statement is not maintainable - veracity of panchanama doubtful - LME price cannot be applied to imported scrap: CESTAT

WITH regard to the demand confirmed on account of contemporaneous imports, the Bench observed that the adjudicating authority considered the evidence retrieved from computer printout and which has been held as not admissible as per Section 138C of the Customs Act, 1962. The Bench further observed that that part of the demand has also been confirmed on the basis of a publication of mineral and metal review and the comparative chart prepared by the appellant indicating the values of contemporaneous imports of aluminium scrap at various ports has not been considered by the adjudicating authority and hence demand on account of contemporaneous imports is not sustainable. In the matter of adoption of LME price, the Bench held that LME price is the price of prime metal and admittedly the appellant had imported the scrap and hence demand on the basis of LME price is also not sustainable.

Income Tax

Whether goods which are declared to Customs as scrap and sold without putting same to any manufacturing process is covered u/s 206C and assessee is liable to collect tax at source - YES: ITAT SB

THE issues before the Bench are - Whether the goods which were imported as scrap and sold by the assessee without any manufacturing is covered under section 206(C) of the Income tax Act and assessee is required to collect tax at source; Whether first proviso inserted in sub-section (6A) of section 206C with effect from 1.7.2012 is retrospective in nature as it not only seeks to rationalize the provisions relating to collection of tax at source but is also beneficial in nature in that it seeks to provide relief to the collectors of tax at source from the consequences flowing from non/short collection of tax at source after ensuring that the interest of the Revenue is well protected and Whether the definition of 'scrap' under the I-T Act is wider than the same under the Customs Act. And the verdict partly goes in favour of the Revenue.

Service Tax

Fabrication or erection of tank at site brings into existence an immovable property and, therefore, it cannot be said that appellant has undertaken any manufacturing activity as defined u/s 2(f) of the CEA, 1944 - activity undertaken would qualify as Erection, Commissioning and Installation services - Pre-deposit ordered: CESTAT

AS far as the fabrication or erection of tank at site is concerned, the activity brings into existence an immovable property. Therefore, it cannot be said that the appellant has undertaken any manufacturing activity defined under Section 2(f) of the Central Excise Act, 1944. Therefore, the activity undertaken by the appellant would qualify as erection, commissioning and installation services. According to the appellant, the liability would come to Rs. 10 lakhs.

Happy Ganesh Chaturthi

See our Columns Tomorrow for the judgements