Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

CENVAT - Rule 4(5)(a) of CCR, 2004 nowhere envisages that waste and scrap generated at job-worker's premises should be brought back by supplier and if they are not brought back, supplier of raw material is liable to discharge excise duty liability - prima facie strong case in favour –stay granted: CESTAT

RAISING demands of duty on the supplier of CENVATTED materials in respect of the Waste arising at the job workers' end upon processing these raw materials has been always a wasteful expenditure but the Revenue authorities probably revel in this exercise. The liability to pay excise duty arises not under the provisions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 but under Section3 of the Central Excise Act, 1944 on the manufacture of a marketable commodity as specified in the Central Excise Tariff Act. In the instant case, when the waste and scrap has arisen in the job-worker's premises, the job-worker is the manufacturer of waste and scrap so generated and not the appellant, who is the supplier of the raw material

Income Tax

Whether when assessee wittingly reports particular income under wrong head to take certain benefits, penalty imposed for concealment is sustainable in law - YES: Delhi HC

THE assessee filed its return of income declaring loss and the return was processed u/s 143(1) of the Act. Subsequently, re-assessment notice was issued after noticing that the assessee had claimed depreciation on plant and machinery though no manufacturing activity was conducted during the year under consideration and had wrongly claimed capital loss on sale of investments amounting to Rs.59,15,000/- as business loss.

The twin questions before the Bench are - Whether when the assessee wittingly reports a particular income under a wrong head to take certain benefits, penalty imposed for concealment is sustainable in law and Whether merely making a claim, which was not sustainable in law should not result in penalization u/s 271(1)(c). And the first question is answered in favour of the Revenue.

Service Tax

Commissioner has not explained reasons - We hope that at least this time all submissions made by appellant shall be considered and well-reasoned order shall be passed by original adjudicating authority: CESTAT

TO consider an appeal against an order, there should be some reasoning in the order, which can be considered whether it is appropriate, or not. In the absence of any reasoning in the order, it becomes difficult to consider the same in appeal. In these circumstances, the matter is required to be remanded to the original adjudicating authority.

See our Columns Tomorrow for the judgements