Jurisprudentiol - Friday's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
Rule 14 of Cenvat Credit Rules, 2004 - Credit taken but not utilized till reversal - Whether Interest and Penalty can be levied? The controversy of "'and" & ‘'or'' finally comes to an end? HC
THE short point involved in the present Civil Miscellaneous Appeal is as to whether a mere taking of CENVAT credit facilities without actually using it, would carry interest as well as penalty? Court has perused the entire decision in (Commissioner of Central Excise & S.T Bangalore Vs. Bill Forge Private Limited) - and ultimately found that mere taking of CENVAT credit facilities is not at all sufficient for claiming of interest as well as penalty. It is an admitted fact that Rule 14 of the Cenvat Credit Rules has been subsequently amended, wherein it has been clearly stated as "taken and utilised". Therefore it is quite clear the mere taking itself would not compel the assessee to pay interest as well as penalty. Further, the subsequent amendment has given befitting answer to all doubts existed earlier.
Income Tax
Whether initiation of re-assessment u/s 147 gets vitiated merely because AO fails to correct assessment completed u/s 143(1) by issuing notice u/s 1432(2) - NO: HC
THE assessee is a medical institute cum hospital. The assessee filed return for A.Y. 06-07 on 14.03.2007 declaring total income at NIL, as the hospital was under construction. The A.O. was not satisfied with the investment shown in institute cum hospital building of the assessee company after assessment proceedings for A.Y. 2008-09. The DVO estimated the total investment in the construction of Hospital building during at Rs.1,75,73,800/- against the investment declared by the assessee at Rs.1,50,99,423/-. The assessee had furnished nothing on the basis of which its investment at Rs.1,50,99,423/- during the relevant year may be relied upon. The assessee submitted that he was only required to furnish return of income without any enclosures, however, he produced all the vouchers and receipts before the Assessing Officer.
The CIT(A) rejected the appeal on the ground that the assessee had not maintained complete details in respect of his accounts of cost of construction and had underestimated the investment in construction of the hospital building.
The issues before the Bench are - Whether initiation of re-assessment u/s 147 gets vitiated merely because the AO fails to correct assessment completed u/s 143(1) by issuing notice u/s 1432(2) and Whether a prima facie opinion on escapement of income is good enough reason to resort to the provisions of Sec 147. And the verdict goes against the assessee.
Customs
Storage of imported goods in warehouse pending clearance - whether Customs authorities can issue certificate and order waiver of demurrage charges in all cases - No, says HC
CUSTOM authorities are issuing waiver directions even in cases where the importers are clearly at fault and fine, penalty, personal penalty and/or warning has been imposed by the customs authorities. Even in cases of mis-declaration, undervaluation and concealment, the certificates are being issued. This is clearly giving premium to dishonesty. The waiver should be granted in genuine cases where the importers are ultimately found not at fault. It cannot be that all importers honest and dishonest are treated equally.
Where on conclusion of the adjudication proceedings there is no imposition of any fine, penalty, personal penalty and/or warning by the customs authorities, the Policy for Waiver of demurrage charges would be applicable and the importer would be entitled to be considered for its benefit.
Until Tomorrow with more DDT
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