Jurisprudentiol-Monday's cases

By Vijay Kumar

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

Penalty - If both lower authorities had applied their mind, matter would not have travelled so far - as duty & interest was paid before issue of SCN, penalty u/s 11AC is only 25% of duty: CESTAT

IN this case, the appellant paid the amount of central excise duty in dispute along with interest before issuance of the show-cause notice.

In spite of the above, the adjudicating authority as well as the lower appellate authority confirmed the penalty to the extent of 100% of the duty demanded.

The appellant is, therefore, before the CESTAT and submits that only a penalty of 25% of the duty ought to have been confirmed as per the provisions of s.11AC of the CEA, 1944.

When the AR was asked by the Bench to comment on the issue, he said the Tribunal may take its own view on the subject.

Income Tax

Whether when goods are loaded on ship and title with risk is passed on to assessee as per contract, assessee can claim deduction for loss if goods are not received - YES: HC

THE assessee is engaged in the business of trade in importing timber logs in bulk quantity. It had entered into contract with M/s Ply International, USA for import of teak logs of Tanzanian origin by shipment to be made in June and July 1994. The sale was on C & F basis where insurance was to be covered by the assessee and freight was to be paid by Ply International. The terms of the contract stipulated that once the goods were accepted on inspection, it would be considered as sold and held at the risk and responsibility of the assessee. The assessee for purpose of such contract had engaged the services of shipping vessel, M V Hazar through the charterer viz., M/s Ummall Quwain (UAE) and booked the consignment. The teak logs were inspected by the representatives of assessee at Tanga Port and a certificate was issued on behalf of the assessee stating the quality, quantity and measurement of teak logs.

The issues before the Bench are - Whether where the goods have been given in shipment and title of goods along with the risk has been passed on to the assessee in terms of a contract, the assessee will be said to be at loss if such goods are not received by him and Whether where the assessee has exhausted all the methods to recover the losses he incurred during previous year on account of loss of goods in transit and has not claimed deduction on those losses in the previous year, he cannot be denied from claiming deduction on the said losses in the subsequent year if such loss was not written off. And the verdict favours the assessee.

Customs

Notfn. 158/95-Cus - re-import - just because Commissioner has chosen to sit over appellant's request for extension and not take any decision, benefit of exemption cannot be denied - Appeal allowed: CESTAT

THE appellant had exported a consignment of alloy steel spanners. Some of the alloy steel spanners exported were returned by the foreign buyers for the purpose of repairs. The goods were re-imported. Duty free import of the goods for repair and re-export was claimed under Notification No.158/95-CUS which prescribes certain conditions.

The appellant furnished the required bond backed by the bank guarantee. Since the appellant could not complete repair/re-conditioning within period of six months from the date of re-import they submitted an application to the customs for extending the period of re-export by another six months but no decision was taken on their application for extension of period for re-export.

See our Columns Monday for the judgements