Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Benefit of exemption under Notification No 4/2006 CE is prima facie not admissible for cement used for construction work within factory premises - pre-deposit ordered - CESTAT

THE applicants are engaged in the manufacture of cement falling under Chapter 25 of Central Excise Tariff Act, 1985. The duty on cement is payable on specific rate of duty. The Notification No.4/2006-CE dated 01.03.2006 as amended from time to time had extended concessional rate of duty in respect of various commodities. In the present case, the applicant supplied cement free of cost for construction work within the applicant's factory premises. The applicant claimed benefit of exemption under Notification No. 4/2006-CE (supra). The adjudicating authority denied the benefit of the said notification and confirmed the demand of duty of Rs. 15,80,436/- on the basis of tariff rate of duty.

Income Tax

Whether when first appellate authority has simply directed the AO to pass speaking order before charging interest, such an order can be construed as restrictions being imposed on AO from levying interest under particular Section - NO: Delhi HC

THE assessee is a company engaged in the business of financial consultancy. It had filed its return declaring loss for the A.Y 1988-89. The assessee had claimed this amount after deducting amount of Rs. 1,82,69,610 which was declared as income during A.Ys 1986-87 and 1987-88. During the course of assessment proceedings, the assessee requested that entire declared income should be taxed in the A.Y 1988-89 and no portion of the said income be assessed in the A.Y 1986-87 and 1987-88. The assessee also requested that taxes paid on 17th August, 1987, to be treated as payment of advance tax for the A.Y 1988-89. The AO however, referred to the assessment orders for the A.Y 1986-87 and 1987-88 and held that the consultancy fee/commission was taxable in the said years, but Rs. 1,82,69,610 was treated as assessee's income in the A.Y 1988-89 on protective basis. Accordingly, the AO had directed for charging of interest u/s 201 and 217.

The issue before the Bench is - Whether when the first appellate authority has simply directed the AO to pass speaking order before charging interest, such an order can be construed as restrictions being imposed on the AO from levying interest under particular Section. NO is the answer.

Customs

Old & Used Propping pipes used for construction service are to be treated as capital goods and as per para 2.17 of the FTP second hand capital goods are freely importable: CESTAT

THE appellant imported ‘old and used pipes' declared as "old and used Prop Pep 20-300" and classified them under CTH 7308 4000. The classification was accepted but it was the view of the lower authorities that since the Pipes are ‘Old & used' they are not covered as capital goods as defined in para 9.12 of Foreign Trade Policy and hence not freely importable as per para 2.17 of FTP 2004-09.

As the appellant could not produce the licence for importation of the goods, the same were held liable for confiscation and allowed to be redeemed on payment of Redemption Fine and penalty.

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