From our Legal Corner - tomorrow's cases

By Vijay Kumar

Central Excise

Vice of vagueness : Department loses another shabby case

What can the poor department do when the assessee does not co-operate with the investigator? I, for one, do not understand this concept of co-operation. Why should a victim co-operate with the tormentor? Is it not the department's job to investigate and prove the case? Will they accuse the lawyers of not assisting the poor prosecution in winning cases?

Any way here was a non co-operative offender who was closely related to the Revenue - BSNL, a wholly owned company of the Government of India, on whose behalf the patriotic Revenue officials make life miserable for others. And when BSNL did not co-operate by offering data on a platter on a ring, Revenue did the next best thing, it could. Confirm a demand without mentioning what the demand was!

IN December 1994, Bharat Sanchar Nigam Limited was issued a show cause notice on the ground that they had not filed any classification list for goods manufactured and consumed captively. Interestingly, there was no quantification in the notice of the Central Excise duty proposed to be recovered from the company.

However, the original authority confirmed the demand and imposed a penalty. Incidentally, since there was no Central Excise duty demanded in the notice, he directed the Range Superintendent to work out the demand and ordered that the penalty would be 40% of the demand so calculated.

When rate of duty was 10%, duty paid at 12% and credit taken accordingly is not correct : CESTAT

a) The rate of duty on man-made fabrics, falling under Chapter heading 5406.22 of CETA, 1985 was reduced from 12% to 10% in terms of Notification No.07/2003-CE, dt. 1.3.2003 issued subsequent to Finance Bill 2003-04.

b) The notification No.6/2002-CE(NT) dt.1.3.02 provided for deemed credit @ Rs.66.67% of duty payable at the time of clearance of processed fabrics.

c) According to the appellant, there was confusion as to whether the reduced rate of duty of 10% should be applicable from 1.3.03 or 1.4.03.

Income Tax

Once penalties are cancelled on ground that there is no concealment, quashing of prosecution u/s 276C of I-T Act is automatic : Delhi HC

PERSEVERANCE pays! An Income Tax assessee just escaped prosecution after 15 years of relentless litigation. He was charged with undisclosed income and sought to be prosecuted. He appealed in all possible forums and finally was successful in the High Court.

See our columns tomorrow for the judgements