Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Refund - Unjust enrichment - Reduction in price after clearing goods due to discounts - Addison & Co case is still relevant - Refund Allowed: HC

THE appellant is engaged in manufacture of paper and dispatches the paper from time to time by raising composite invoices setting out the price amount payable, which is inclusive of excise duty. The appellant had sold goods to various dealers and collected the invoice amount, which is inclusive of excise duty as applicable at the relevant point of time. Later on, on account of market conditions, the dealers were offered quantitative discounts and other discounts and the invoices were revised accordingly. At the time of clearing the goods from the factory premises, the appellant had paid the excise duty on the invoices amount. Later, when the invoices were revised, the excise duty component, which was collected from the dealers initially, was revised in terms of the revised invoice price, which was lower than the invoice amount, which was initially issued. The difference of amount in excise duty, which was collected, was given credit to the dealers, thereby the actual amount of excise duty collected from the dealers was corresponding to the revised invoices subsequently issued.

Income Tax

Whether, for purpose of Sec 80IA, expression 'manufacture or production' also includes 'processing' in its ambit - NO: HC

THE AO rejected the claim of deduction u/s 80IA(2)(iv)(c). The CIT (A) allowed the appeal of the assessee observing that the definition of the word Industrial Undertaking to which Section 80IA applies, includes 'processing of goods' also. Even processing of goods can be considered alongwith manufacture or production of goods while allowing deduction in respect of profits of the industrial undertaking u/s 80IA. Therefore deduction was allowed.

The ITAT partly allowed the appeal of Revenue observing that deduction u/s 80IA had been claimed on the transformer oil, scrap as well as the labour charges for the sale of scrap.

The issue before the Bench is - Whether, for the purpose of Sec 80IA, the expression 'manufacture or production' also includes 'processing' in its ambit and Whether when the transformer oil has been purchased by the assessee from market and centrifuging had been done by centrifugal machine in order to make it usable in Transformer, it cannot be construed that due to this transformation or activity there was change in the substance and new substance or article had come out. And the verdict goes against the assessee.

Central Excise

CX - Unmanufactured Chewing Tobacco - Packing Machine Capacity Determination Rules -machines found in rented godown plugged into electric socket but with essential parts like motor missing - whether conclusion by Commissioner that missing parts of machines can always be attached to machines to make same operational as it does not require substantial engineering skills and thus goods can be deemed to have been manufactured and cleared by deeming fiction of Rules needs to be prima facie upheld & pre-deposit is to be ordered - Difference of Opinion - Matter referred to Third Member: CESTAT

THE appellant is engaged in the packing of pouches of unmanufactured chewing tobacco (Ch. 24) bearing brand name 'Laxmi Chhap'. The manufacturing activities are being conducted from the premises located at B-21, Krishnapuri, Old Ramgarh Mod, Jaipur. The premises of the appellants' company were visited by the central excise officers on 18.1.2011 who conducted various checks and verifications. They also visited the rented godown of M/s. Rajesh Tobacco Co. situated at 269, Govind Nagar East, Old Ramgarh Mod, Jaipur and found certain goods of 'Laxmi Chhap' brand were lying. In addition, the officers also found three packing machines in the said premises.

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