Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

On examining goods at docks, part quantity of packed Sugar was found not up to standard grade, hence same were not loaded - Confiscation, RF & penalty is imposable u/s 113(k) of CA, 1962 only on account of any willful act, negligence or default of exporter - since proper care was taken by merchant exporter, no cause for ordering confiscation etc.: CESTAT

THE appellant, a merchant exporter, procured 10,000 bags of sugar for exportation. The said consignment was manufactured and supplied by Nagar Taluka Sahakari Sakhar Karkhana Ltd.

The buyer wanted the sugar of certain grade. As the goods were not examined at the end of the manufacturer/supplier they were examined in the docks by the surveyor of the buyer at Docks wherein it was found that out of 10,000 bags, 5980 bags were not upto the standard grade. These bags were, therefore, not loaded on the vessel and were taken back to the unit.

Income Tax

Whether for purpose of determining time frame for completion of assessment, date on which requisition u/s 132A is made, is irrelevant - YES: HC

ASSESSEE derives commission income from purchase and sale of properties and from the trading of transistor parts. It also worked as an informer for DRI. CBI conducted a search and seized cash of Rs. 1.12 crores. DIT (Inv.) issued warrant of authorization u/s 132A to CBI to deliver the books of account, documents and the assets seized by CBI during the search.

Assessee filed a petition before Special Judge requesting for release of cash seized by CBI. The Special Judge dismissed the petition of assessee and directed CBI to transfer the seized amount to Income tax Department. Assessee filed return declaring an income of Rs. 1.13 crores for AY 2002-03 which included Rs. 90 lacs seized by CBI in response to notice issued u/s 158BC. AO made assessment considering the whole amount seized as undisclosed income for the block period. AO also completed assessment for AY 2002-03 separately determining the income at Rs. 90 lacs.

The issue before the Bench is - Whether for the purpose of determining the time frame for completion of the assessment proceedings, the date on which the requisition under Section 132A is made, would not be material and the time period must run from the date when AO is in a position to proceed with the assessment proceedings and conclude the same. And the verdict goes in favour of the assessee.

Central Excise

Appellant manufacturing transformers and clearing same on payment of duty by availing CENVAT - prima facie denial of CENVAT credit on inputs used in manufacture of transformers on ground that in respect of service provided of erection and commissioning of such transformers, appellant paying ST by availing Works Contract Composition Scheme cannot be upheld - Stay granted: CESTAT

THE appellant is a manufacturer of transformers and has executed a contract with M/s. Sunil Hitech Engineers Ltd. for supply, erection and commissioning of transformers.

The adjudicating authority is of the view that the appellant is not eligible to avail the CENVAT Credit on the inputs which were procured and consumed for manufacturing of transformers as they have discharged the service tax liability under the category of Works Contract services by availing Composition Scheme and that they having availed the CENVAT Credit they should not have availed and discharged tax under Works Contract composition scheme.

See our Columns Tomorrow for the judgements