Jurisprudentiol-Recent Supreme Court Judgements
Central Excise - Valuation - value of administrative overheads, bonus, gratuity, interest, conversion charges and depreciation charges, includible - Extended period not applicable as no intentional misdeclaration with the purpose to avoid payment of correct excise duty:
CESTAT vide its common order dated 13.02.2004 allowed the appeals of the assessee on the ground that the larger period of limitation was not invocable against the assessee and accordingly set aside the demands of duty on them. It was also held that the cost accountants were the experts authorized by the law to do the costing of production of the goods and their duly certified statements/ reports relating to such costing were legally authentic enough to be acted upon by their clients and any error found in such certificates would not be a valid ground for any authority to proceed against the clients criminally or quasi-criminally.
The Supreme Court noted that earlier there was some ambiguity and it was not clear as to whether cost of labour, bonus, etc., is to be included while arriving at the cost of captive consumption of this item. This was clarified only vide circular dated 30.10.1996 issued by the Central Board of Excise and Customs. It, therefore, cannot be said that the respondents-companies made intentional misdeclaration with the purpose to avoid payment of correct excise duty. The Supreme Court found that the CESTAT was right in holding that extended period of limitation would not be applicable in the present case.
Please see Commissioner of Central Excise, Ahmedabad Vs Asarwa Mills And Ors-
Central Excise - North East exemption for tobacco withdrawn retrospectively - Retrospective withdrawal already upheld by Supreme Court - High Court order not valid:
Government of India vide Memorandum dated 24.12.1997 unveiled a new Industrial policy for the North Eastern Region. In the said policy, in order to give stimulation to the development of Industrial infrastructure in the North Eastern Region, the said region was made tax free zone for a period of ten years giving incentives to those who wanted to establish their industries in the region. Pursuant thereto a Notification was issued on 8.7.1999 granting exemption on goods cleared from units located in growth centers and integrated infrastructure centres. On 31.12.1999, another Notification was issued whereby exemption of Central Excise was withdrawn in respect of goods under Chapter 21.06 (Pan Masala) and Chapter 24 (tobacco and tobacco substitutes), including cigarettes chewing tobacco etc.
The High Court has held that principle of promissory estoppel shall apply and once a promise was given by the Union of India to give the assurance that no such duty would be charged, for a period of 10 years, it was not open for the Union of India to withdraw the same. During the pendency of the appeal, the Supreme Court in R.C. Tobacco Pvt. Ltd. and Anr. vs. Union of India and Another - had upheld the validity of retrospective withdrawal of exemption - so, the High Court order is no more valid.
Please see Union of India Vs Dharampal Satyapal Ltd and Ors-
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