Jurisprudentiol-Friday's cases

By Vijay Kumar

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

Proper Officer - Show Cause Notice issued by Deputy Commissioner of Central Excise for recovery of Customs duty in terms of Rule 8 of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 is invalid - No error in order of Tribunal: HC

RULE 8 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 reads:

Rule 8. Recovery of duty in certain case.- The Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise shall ensure that the goods imported are used by the manufacturer for the intended purpose and in case they are not so used take action to recover the amount equal to the difference between the duty leviable on such goods but for the exemption and that already paid, if any, at the time of importation, alongwith interest, at the rate fixed by notification issued under Section 28AB of the Customs Act, 1962, for the period starting from the date of importation of the goods on which the exemption was availed and ending with the date of actual payment of the entire amount of the difference of duty that he is liable to pay.

The assessee challenged the demand under the above Rule on the ground that the Deputy Commissioner of Central Excise is not proper officer to demand duty of customs under Section 28 of the Customs Act, 1962. Tribunal allowed the appeal of the assessee and the revenue is in appeal before the High Court.

Income Tax

Whether LCD Monitor is an information and communication technology device and its manufacturer is eligible to claim Sec 80IC benefits - YES: HC

THE assessee is proprietor of entity carrying on the business in the name and style of M/s Concept Industries engaged in the manufacturing of electronic goods. It had claimed deduction u/s 80-IC. A notice u/s 143(2) was served on him. The assessment order was passed by the AO u/s 143(3), who had deleted the claim of deduction in the sum of Rs.71,99,594/- u/s 80IC on the ground that assessee was engaged in the business of manufacture of electronic goods in the industrial area. The AO recorded the view that no manufacturing activities were being carried out and in fact the business involved only trading under the brand name of the parent company "NACVOX". It was also found that there was no adequate plant or machinery or infrastructure to carry out the manufacturing activities. In his view, the LCD Monitor claimed to be manufactured by the assessee was not covered under Schedule XIV. It had further observed that the assessee had not employed adequate number of local workers as was requisite under the relevant permission by the local authorities.

The issue is - Whether LCD Monitor is an information and communication technology device and its manufacturer is eligible to claim Sec 80IC benefits. And the answer favours the assessee.

Customs

Optical Fibre Cables merit classification under CTH 9001 and not under CTH 8544 - benefit of notfn. 24/2005-Cus not available - importer loses on classification issue but wins on ground of time bar: CESTAT

THE Commissioner of Customs (Imports), Nhava Sheva classified the optical fibre cables imported by the appellant under CTH 9001 and denied the benefit of notification No. 24/2005-Cus dated 1-3-2005 claimed by the appellant by classifying the product under CTH 8544.

Consequently, the adjudicating authority confirmed a differential duty demand of Rs.2.68crores and also confiscated the Optical Fibre Cables. Penalties were also imposed.

After considering the elaborate submissions made by both sides the CESTAT observed that there are two issues for consideration -

See our Columns tomorrow for the judgements