Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Appellant has discharged CE duty on clearances made to their own unit by determining value based on AV of same products cleared to independent buyers - no cause for employing Rule 8 of Valuation Rules, 2000 - issue settled by LB decision in Ispat case: CESTAT

DURING scrutiny of records it appeared to the CERA Audit that the appellants were transferring excisable goods to their own manufacturing unit on a value determined based on the factory gate sale of the same product to independent buyers. The CERA Audit was of the view that the appellant had to discharge duty liability on such transfers to their own units based on the valuation of goods under Rule 8 of the Valuation Rules, 2000 read with Board Circular dated 13.02.2003.

SCNs came to be issued invoking the extended period and they all met the same fate as is the norm. The adjudicating authority confirmed the demands along with interest but spared the appellants of any penalty. This obviously made the Revenue unhappy and what happened was that both the appellant as well as the Revenue is before the CESTAT

Income Tax

Whether when excise duty is payable at time of clearance of finished goods or debonding from warehouse, any addition is warranted in relation to valuation of closing stock on last day of accounting year - NO: HC

THE assessee concern was engaged in the business of manufacture and sale of alcohol and vanaspati. In addition, it was having rental and interest income. During assessment, AO made addition on account of excise duty in closing stock. It was noticed that excise duty had not been included in the value of closing stock in compliance to the verdict of SC in the case of CIT Vs British Paints Ltd. 2002-TIOL-796-SC-IT holding that valuation of stock only at the actual cost of raw material/ finished goods and not taking into account the overhead charges was not a correct mode of valuation. Excise and custom duties' payable by the manufacturer were manufacturing expenses and should go into calculation of production cost and closing inventory should include an element of such duties.

The issue before the Bench is - Whether when excise duty is payable at the time of clearance of finished goods or debonding from warehouse, any addition is warranted in relation to valuation of closing stock on the last day of the accounting year. NO is the answer.

Customs

Import of old and used digital multifunction printing machines - although confiscation part of order had not been challenged by importer Tribunal had gone into merits only to come to a prima facie conclusion that case does not deserve enhancement of redemption fine and penalty - Revenue appeal dismissed: HC

THE respondent imported old and used digital multifunction printing machines and filed bills of entry. The Revenue took the plea that as per the Trade Policy 2004-2009, import of photocopier machine was restricted and required import licence. The goods were subjected to verification by the customs authorities and according to the Revenue, the importers have admitted that they did not have any import licence and they requested for adjudication.

Orders-in-original were passed, in which value was enhanced based on the Chartered Engineer's Certificate, whose value was accepted by the importers and the goods were thereafter confiscated and were allowed redemption of the goods on payment of fine and penalty.

See our Columns Tomorrow for the judgements