Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Seeds are not parts of plant - even Customs Tariff recognizes seeds for sowing and plants and parts thereof differently - Seeds imported by respondent for sowing i.e. seasonal flowers through Courier cannot be considered as being imported in contravention of Courier Import & Export (Clearance) Regulations, 1998 - Revenue appeal dismissed: CESTAT

THIS is a Revenue appeal filed in the year 2004.

The respondent made import of flower seeds through courier. The adjudicating authority, after taking into consideration the provisions of Courier Import & Export (Clearance) Regulations, 1998, held that plants and parts thereof cannot be imported through courier as per the Regulations. In as much as he concluded that the seeds are parts of plant and hence the goods are to be considered as having been imported in contravention of the Regulations. He held that the flower seeds are liable for confiscation and allowed redemption of the same on payment of redemption fine. Penalties were also imposed. In appeal, the Commissioner (Appeals) held that the seeds are not plant or parts thereof and consequently allowed the appeal filed by the respondent.

Aggrieved with this order, the Revenue is in appeal before the CESTAT.

Income Tax

Whether value of property declared by assessee-seller before Settlement Commission would bind the purchasers - NO: HC

THE assessee is the wife of Mr. Gopal Gupta who was inducted as a director in a company known as D.J. Infrastructure Developers (P) Ltd., which was allotted hotel land at Motia Khan, New Delhi in an auction by the Delhi Development Authority. Thereafter shares were allotted to Gopal Infrastructures (P) Ltd., a group company of Gopal Gupta Group in the DJI. The total cost of land in the books was shown to be Rs 90 crores., however, the AO considered the valuation at Rs 130 crores including a premium computed at Rs 40 crores. It was also the case of the Revenue that since 1/3rd of the shares in DJI were acquired by Gopal Infrastructures the share of the premium would be Rs 13.3 crores which was supposed to be paid by Sh. Gopal Gupta and his wife to the other Group from whom the said shares were acquired.The issue was taken to the Settlement Commission which passed an order accepting the figure of Rs 16 crores.

The issues before the Bench are - Whether the value declared before the Settlement Commission by the seller of the property can bind the purchasers and Whether when the purchaser of the property declares the difference between the value of the property and the amount shown in its return of income before the Settlement Commission, the same amounts to concealment of income. And the verdict goes against the Revenue.

Central Excise

Investigation revealing that duty paid Naphtha on which credit was taken was diverted for adulteration of petrol and records manipulated to show consumption in factory - out of 45 purported purchasers, only 22 were found to be non-existent, whether investigation was done in respect of balance 23 purported customers is not forthcoming - Matter remanded: CESTAT

THE appellants are engaged in the manufacture of solvents, namely, Beesol-7000 and Beesol-7100 for which the main input is Naphtha. The case of the Revenue is that the appellants have fraudulently availed MODVAT credit of duty paid on the Naphtha either without actual receipt of the same in the factory or without consuming the same for manufacture of solvent. In as much the allegation is that Naphtha which is used for adulteration of petrol, diesel etc. was illegally diverted and the appellants have manipulated their records to indicate that said Naphtha has been used in the manufacture of solvents.

The allegation of diversion of Naphtha is based upon non-production of final product viz. solvents, which in turn is based upon three main evidences.

See our Columns Tomorrow for the judgements