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Tribunal cannot go beyond scope of Show Cause Notice and Order-in-Original - When plea of provisional assessment was never raised by revenue, Tribunal cannot hold assessments are provisional - Matter remanded: HC
THE question before the High Court;
Whether the Tribunal can go beyond the scope of the show cause notice and the Order-in-Original No.61/2001- CAU, dated 16.3.2001 of the second respondent to hold that there had been provisional assessment in this case?
The High Court referred to a decision of the Supreme Court in SACI Allied Products Ltd. v. Commissioner of Central Excise, Meerut - , in a case relating to excise, wherein the Supreme Court held that the Tribunal ought not to go beyond the show cause notice and the order of the Original Authority. Supreme Court held as under:
"16. ..... . It is thus seen that the Tribunal has gone totally beyond the show-cause notice and the order of the Collector, which is impermissible. The Appellate Tribunal cannot sustain the case of the Revenue against the appellants on a ground not raised by the Revenue either in the show-cause notice or in the order.
17. In this context, we may usefully refer to the judgment of this Court in the case of Reckitt & Colman of India Ltd. v. CCE, (1997) 10 SCC 379 = 2002-TIOL-813-SC-CX. This Court held that it is beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet.
High Court found that the Tribunal has misdirected itself to consider the issue on a total new plea, which was not canvassed by the Revenue in the show cause notice.
Income Tax
Whether loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as ascertained liability in computation of book profit u/s 115JB - YES: ITAT
THE assessee showed Tariff adjustment of Rs 51.80 crore out of the sale of Rs.1713.79crore. The AO held that the quantification of reduction in sales was based the on assessee's pending application before CERC and as such this was not an ascertained liability. He, therefore, added back the provision of Rs.51.80crore to the book profit u/s 115JB. The CIT(A) reversed the action of the AO.
The assessee claimed depreciation amounting to Rs.1.30crore. Out of total depreciation on land amounting to Rs.1.30crore, an amount of Rs.1.00crore was debited to the Profit and loss account and the balance amount of Rs. 30.25 lac was added to the cost of capital work-in-progress. The AO held that no depreciation was admissible on land. While computing book profit as per section 115JB of the Act, the AO added back this amount. The CIT(A) deleted this addition.
The issue before the Bench is - Whether the loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as an ascertained liability in the computation of book profit u/s 115JB
Customs
Notfn. 21/2002 - To qualify as 'other alloy steel' if any one of element is present in proportion specified that would satisfy requirement of Chapter Note 1(f) even if other elements are not present in proportion specified: CESTAT by Majority
BASED on information that the appellants were wrongly claiming the benefit of Notification No.21/2002-Cus, Sr.No.190 C on import of steel coils by misdeclaring the same as non-alloy steel, S.I.I.B (Import), NCH, Mumbai undertook investigation and took over 11 live Bills of Entry and carried out a detailed scrutiny. The percentage content of other metals shown in the Mill test certificates were compared with chapter note (f) of Chapter 72, where Other Alloy steel is defined. In all the 11 Bills of Entry, the percentage of Manganese was found to be more than 1.65%, and the Titanium was more than 0.05% and examination of Mill test Certificates of these Bills of Entry also confirmed that goods imported were alloy steel and the benefit claimed under notification No.21/2002 Sr. No. 190C thus was not correct.
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