Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

CENVAT - Conduct of the appellant clearly manifests complete disregard for the law and to somehow avail CENVAT Credit whether the same is entitled or not - prima facie appellant has not made out a case for stay - Pre-deposit ordered: CESTAT

THE department wrote a letter to the appellant pointing out that the appellant is not eligible for CENVAT credit on goods which are not covered under the definition of ‘capital goods' and, therefore, directed the appellant to reverse the credit taken during the period November, 2006 to July, 2007.The appellant reversed the credit in August 2007.

Thereafter, the appellant again took credit of the credit under the category of ‘inputs'.Now, that was sacrilege. Proceedings were initiated by the jurisdictional authorities for recovery of the CENVAT credit availed

Income Tax

Whether omission of facts furnished consistently in several assessment years cannot be construed as innocuous and does warrant imposition of penalty - YES: High Court

PREMISES of father of the partners of assessee firm were raided on 16.7.1987 and account books pertaining to transactions for the period ranging from 1978 to 1987 were seized. In September 1987, assessee approached the CIT with a proposal of settlement offering additional income of Rs.29lacs for the AYs 1982-83 to 1986-87. However, when the assessee got information that the Department was issuing notices u/s 148, assessee worked overtime and filed revised returns for the year 1982-83 to 1986-87. Notices u/s 148, however, was served upon the assessee for all these AYs. The notices had also been issued for initiation of penalty proceedings. Assessee had filed an application u/s 273 seeking waiver of penalty on the ground that it had voluntarily offered additional amount and further that there was no detection by the revenue and, thus, no concealment could be attributed to it.

The issue before the Bench is - Whether omission of facts furnished consistently in several assessment years cannot be construed as innocuous and does warrant imposition of penalty. And the reference is answered in favour of the Revenue.

Customs

Olga Case – Penalty on traders of smuggled Chinese Silk textiles under Section 112(b) of the Customs Act, 1962 – Difference of opinion - Matter referred to the President of CESTAT

THE appellant are traders in Chinese Silk textiles having their business in Chandni Chowk, New Delhi. During 1998-2000, Chinese Silk textiles were smuggled through IGI Airport, New Delhi by a lady passenger, Olga Kozireva. In adjudication of the case, penalties were imposed on the appellants under Section 112(b) of the Customs Act, 1962, for their involvement in acquiring and trading of these smuggled goods.

In the first round of litigation, the Tribunal upheld the penalties imposed and dismissed the appeals. However the High Court of Delhi observed that the Tribunal did not specifically deal with the contentions raised by the appellants and remanded the matter to Tribunal.

See our Columns tomorrow for the judgements