Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Manufacture - Affixing labels and testing samples of imported lubricating oil additives - Not manufacture within scope and purview of Note 5 of Chapter 38 of CETA Schedule: HC

THE assessee is engaged in the manufacture of Lubricating Oil Additives and also importing additives and trading the same locally. The imported barrels are affixed with certain markings containing name and address and other details of the assessee and samples are tested and a test report is also enclosed with each consignment, which is sent to the customers. The assessee treated their activity as a trading activity and did not pay any duty of Excise for the clearances affected. The Department pursuant to certain investigation, issued three show cause notices for the period from March 1997 to January 1999, February 1999 to August 1999 and September 1999 to January 2000, alleging that the activity done by the assessee amounted to "manufacture" in terms of Note 5 to Chapter 38 of the Central Excise Tariff Act Schedule (CETA Schedule] and therefore excise duty should have been paid on the goods sold by them in India.

Income Tax

Whether assessee can claim deduction u/s 80HHC, ignoring deduction already claimed and allowed u/s 80IA - NO: HC

THE assessee claimed deduction of Rs.16.54 lakhs u/s 80IA and of Rs.52.75 lakhs u/s 80HHC, and declared NIL income. The AO held that with the introduction of subsection (9) of section 80IA, statute had barred double deductions. The amount of deduction claimed and allowed u/s 80IA had to be reduced from the profit of industrial undertaking for the purpose of allowing any other deduction for which the assessee was entitled to; in the present case u/s 80HHC. The CIT(A) confirmed the order of the AO in this respect. The Tribunal allowed the Assessee's Appeal.

The issue before the Bench is - Whether the assessee can claim deduction u/s 80HHC, ignoring the deduction already claimed and allowed u/s 80IA. And the verdict goes against the assessee.

Central Excise

Central Excise - Stay and Waiver of pre-deposit: CENVAT Credit on Capital Goods - There is absolutely no requirement that the capital goods at time of receipt must be owned by manufacturer or that the same would cease to be capital goods, if they are installed in factory and become fixed to earth: Demand to tune of Rs. 800 Crores Stayed: CESTAT

THE appellant are a Public Sector Undertaking, engaged in the manufacture and marketing of petroleum products. The dispute in this case is in respect of their refinery at Panipat where they manufacture various petroleum products falling under Chapter 27 and also goods covered by Chapter 39 of Central Excise Tariff, Act 1985. During period from July'07 to March'12 the appellant had taken Cenvat Credit of Rs.3,67,72,79,616/- in respect of various items of capital goods received by them for erection, installation and commissioning of Naphtha Cracker Plant.

Commissioner Central Excise, Rohtak confirmed the Cenvat Credit demand of Rs.367,14,65,992/- and 58,13,624/- against the appellant along with interest thereon under section 11AB and besides this, imposed penalty of Rs. 367,72,79,616/- on the appellant company under Rule 15(2) of the Cenvat Credit Rules, 2002 read with Section 11AC of Central Excise Act., 1944.

See our Columns Tomorrow for the judgements