Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Commissioner (Appeals) has no power to review order of pre deposit, but if order of pre deposit passed by Commissioner (Appeals) is erroneous, Tribunal is required to set aside order of Appellate Authority and remand matter to Appellate Commissioner after passing an appropriate order as to pre deposit as laid down by Tribunal itself in Girnar Transformers Pvt. Ltd case Matter remanded: HC

THE appellant filed an appeal with Commissioner (Appeals) who ordered a pre deposit of 50% of the duty demanded. The appellant, made a request to the Appellate Commissioner to reconsider the order. The Appellate Commissioner took up the said request letter as a review application and proceeded to dispose of the appeal in the following manner:

(i) The assessee had no case on merits;

(ii) There is no power to review/reconsider the order directing pre deposit; and

(iii) The assessee had not complied with the direction of the Appellate Commissioner in his order dated 24.2.12 and, therefore, the appeal is liable to be rejected summarily for non-compliance

Income Tax

Whether Section 80IA benefits are available to captive electricity unit supplying power to assessee's manufacturing plant - YES: HC

THE assessee company was engaged in the business of manufacturing of fused Aluminium Oxide Grains, Calcined products, Monolithics, Refractories, Bonded Abrasives, Ceramic Paper and trading of Monolithic and Refractories. The assessee had an Abrasives Grains Division that manufactured fused Aluminium Oxide grains etc. The assessee had setup a power plant for captive supply to the Aluminium Oxide gains unit. Profit earned from the power plant unit was claimed as eligible for deduction under Section 80 IA as an undertaking engaged in generation of electricity. The assessee along with return of income filed Form No.10CCB, computing deduction under Section 80 IA. In the course of the assessment proceedings, assessee filed a technical note explaining the features of the power plant established by them to generate electricity. The Assessing Officer denied benefit of Section 80 IA in respect of power plant unit.

The issue before the Bench is - Whether Section 80IA benefits are available to captive electricity unit supplying power to assessee's manufacturing plant. And the answer is YES.

Central Excise

Right to sell in DTA accrues on first day of a FY - accrued/vested right cannot be taken away merely because there was delay in issuing letter of permission by DC - such an interpretation would make mockery of provisions of EXIM policy: CESTAT

THE appellants are 100% EOUs engaged in the manufacture of cotton yarn and during the process of manufacture, cotton waste arises.

As per the EXIM policy and the guidelines issued in this regard the appellants are entitled to sell 50% of the value of their exports during a financial year into DTA in the subsequent financial year.

In the present case, impugned duty demands have been confirmed by the CCE, Kolhapur on the sole basis that the permission for DTA clearance is valid from the date of issue of letter of the Development Commissioner and prior to issue of such letter, there is no entitlement to the appellants for sale into DTA.

See our Columns Tuesday for the judgements

Until Tuesday with more DDT

Have a nice extended weekend.

Happy 68th Independence Day (15th August Friday) and Janmashtami (18th August Monday)