Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

CENVAT - Prior to 2011, trading was not considered as service at all and, therefore, appellant could not have taken credit pertaining to trading activities ab initio - Pre-deposit ordered of Rs.3 Crores: CESTAT

PRIOR to 2011, trading was not considered as service at all and, therefore, the appellant could not have taken credit pertaining to the trading activities ab initio. Since Rule 6(3) talks of dutiable as well as exempted services, it cannot apply to a situation wherein credit taken pertains to a non-service activity. Similarly, in the case of Insurance services availed by the appellant, bulk of it pertains to traded goods and, therefore, the appellant could not have taken credit in respect of this service for the manufacturing activity undertaken at their Alibag factory.

Income Tax

Whether where assessee admits tax liability on its own, law does not require further evidence to corroborate same - YES: AP HC

THE assessee is a company. During assessment, AO made an assessment on the basis of voluntary statement made by the MD of assessee. In that statement, it was admitted that certain defects persist in maintenance of expense vouchers. The payments were not properly recorded. Taking into account the above deficiencies, which were not deliberate and to cover up any other omissions and commissions, assessee voluntarily offer Rs.20.00 lakhs as additional income in respect of training and development divisions of the company and EOU division of the company. The fact shows that at the time of assessment, assessee had not retracted the aforesaid admission making voluntary disclosure.

The issues before the Bench are - Whether voluntary admission of income by the assessee can be considered as a valid piece of evidence and Whether in case an assessee accepts the tax liability on its own, there is no need to collect further evidence or making any enquiry. And the verdict goes against the assessee.

Customs

Refund - No prudent business man/organization would continue to bear incidence of higher duty without passing same to buyer of goods - refund claims hit by Bar of unjust enrichment -: CESTAT

THE respondents had imported 75 consignments of Aloe Vera Products viz. Aloe Vera Gel, Aloe Berry Nectar and Forever Freedom and cleared the same between May, 2003 and April, 2005. A dispute arose between Revenue and the respondent regarding the classification of the product.

While respondent sought classification of these products under Customs Tariff Heading 2009 as Fruit Juices & Vegetable Juices, Revenue decided the classification under Customs Tariff Heading 2106 as Food Preparation. The matter was finally decided by the Tribunal (2005-TIOL-964-CESTAT-MUM) in favour of the respondent.

Consequent to the said decision, the respondent filed a refund claim for differential amount of Customs duty paid to the extent of Rs.7,61,06,909/- The Deputy Commissioner vide his order dt. 14.11.2006 held that the said amount was required to be refunded. However, the refund claim was adjudicated to be hit by the bar of unjust enrichment and, therefore, adjudicating authority directed that the refund amount shall be credited to the Consumer Welfare Fund in terms of Section 27(2) of the Customs Act, 1962.

See our Columns Tomorrow for the judgements