Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Purchase order as well as the invoice were available at time of filing Bill of entry, therefore, as per CBEC Manual, amendment in Bill of entry is required to be allowed although goods have been given out of charge - appeal is allowed with consequential relief: CESTAT

++ EVERY organization (including this Tribunal) has its own procedure to process various documents. This process takes its own time.

++ Like in the present case, this Tribunal's order is required to be examined in the Custom House at different levels and finally a decision has to be taken whether to accept the order of the Tribunal or challenge the same before the Hon'ble Court and also whether to file stay petition.

++ We must respect the procedure being followed in every organization and also not put any organization in different direction or change their priority.

++ Of course, if any lower authority is not implementing orders passed by this Tribunal, appellant can bring that to the notice of the Tribunal and there are adequate provisions and powers with this Tribunal to ensure implementation of its order.

++ However, directing the lower authority to implement the order in a particular time frame at the time of issuing order itself is not appropriate.

++ Such a direction of the Tribunal would be affecting the normal working of the Custom House and also put avoidable and uncalled pressure on officers dealing with the subject.

Income Tax

Whether when assessee itself is contractor of IOCL for transportation of LPG cylinders, hiring of truck owners for executing contract is to be construed as sub-contract liable for TDS u/s 194C - YES: HC

THE assessee is engaged in the business of purchase and sale of LPG cylinders. The AO noticed that the main contract of the assessee for carriage of LPG was with the Indian Oil Corporation, Baddi. The assessee had received the total freight payments from the IOC Baddi to the tune of Rs. 32,04,140/-. The assessee had, in turn, got the transportation of LPG done through 3 persons. The A.O. observed that the assessee had made a sub-contract with the given three persons within the meaning of section 194C and, therefore, he was liable to deduct tax at source from the payment. On account of his failure to do so, the said freight expenses were disallowed by the A.O. as per the provisions of Section 40 (a) (ia).The CIT(A) & the Tribunal upheld the AO order.

The issue before the High Court is - Whether when the assessee itself is a contractor of the IOCL for transportation of LPG cylinders, the hiring of truck owners for executing the contract is to be construed as sub-contract liable for TDS u/s 194C. And the verdict goes against the assessee.

Central Excise

Credit taken on extra copy of invoice, Xerox/photocopy is inadmissible as these are not prescribed documents under rule 9 of CCR, 2004 - in order to claim benefit under the law, substantial compliance is not enough and procedures prescribed in statute should be mandatorily followed: CESTAT

CENVAT credit of Rs.1,08,263/- was denied to the appellant by the lower authorities on the ground that the documents on the strength of which credit has been taken were not specified under the Rules.

The appellant is before the CESTAT and submits that the only ground for denial is that they had taken credit on the basis of extra copy, Xerox/photo copies of the duty paid documents; otherwise there is no finding to the effect that the appellant is not eligible for credit. For contending that denial of CENVAT Credit for procedural infraction is not permissible in law, the appellant relied on a plethora of decisions. Another plea taken is that the SCN was issued in December, 1994 and adjudication was done only in the month of February 2007 i.e. after a hiatus of 12 years and on this ground alone the proceedings needed to be set aside.

See our Columns Tomorrow for the judgements