Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

MCCBs imported by the Appellants are not commodities in packaged form and the packing is meant only for the purpose of ease of transportation - assessment u/s 4A for the purpose of CVD is not sustainable - in the absence of Rules, Act cannot be enforced -: CESTAT

THE appellants have imported certain consignments of Molded Case Circuit Breakers (MCCBs) and Plugs and Sockets. The imported plugs and sockets were not individually packed and are received in a carton consisting of 10, 50 or 100 bare plugs and sockets for the purpose of easy transportation. The imported Plugs and Sockets are specifically packed for exclusive use and are not intended for retail sale. The goods were assessed to CVD under Heading 85.36. The goods of heading 85.36 were notified under Section 4A of the Central Excise Act, 1994 vide Notification 13/2002 dated 1 stMarch, 2002 as amended.

Investigation revealed that although the inner as well as outer carton was affixed with the label stating that the goods imported and specially packed are for the exclusive use in any industry as a raw material for the purpose of servicing any industry, mine or quarry and not intended for retail sale, the goods were allegedly sold to various non-industrial consumers at the MRP as per listed price list. The proceedings culminated in the confiscation of goods and confirmation of duty demand of Rs.50,26,981/- by adopting the MRP along with imposition of equivalent penalty u/s 114A and a penalty of Rs.2,00,000/- was imposed on the then G.M. of the appellant Company u/s 112 of the Customs Act, 1962.

Income Tax

Whether recovery proceedings can be initiated without passing an order under Sec 170(3) - NO: Delhi High Court

THE issues before the Bench are - Whether recovery proceedings can be initiated against an assessee, without passing an order u/s 170(3); Whether liability to penalty does not arise merely upon proof of default; Whether liability to pay penalty is a liability to pay tax and Whether penalty can be levied on the deceased persons payable on behalf of the assessee. And the writ is allowed partly.

Central Excise

Racks and Trolleys manufactured within the factory premises by employing fabricators - since appellant supplied raw materials/consumables, the fabricators are only hired labour and not independent manufacturers - CESTAT

THE appellants are manufacturers of excisable goods falling under Chapters 51, 55 and 58.On a visit to the appellant's factory, the CE officers discovered that the appellant had got racks and trolleys [SH 9403]fabricated within their own factory premises out of the raw materials supplied by the appellant and based on their own drawings and specifications. It was further found that the appellant had also supplied consumables such as welding rods, cutting gas etc., required for such fabrication work.

See our Columns tomorrow for the judgements