From our Legal Corner – Tomorrow's cases

By Vijay Kumar

Central Excise

Whether refund can be claimed without challenging assessment order - Larger Bench says 'No'

THE interesting aspect of this Larger Bench decision is the number of Advocates representing the respondent company as against the lone SDR.

Seven Advocates set out with their arguments for having a decision in their favour by emphasizing the resulting redundancy in the provisions of Section 27 of the Customs Act if it is held that a refund cannot be claimed without challenging the assessment order. The clarifications contained in the Customs Appraising Manual were also referred to and a reminder that the Revenue officers are bound by the Board's instructions in view of the Apex Court decision in Dhiren Chemical Industries. So also, the Apex Court decision in Karnataka Power Corporation was adverted to.

Electric Power fencing system - whether excisable - matter remanded to Tribunal : Supreme Court

THE question is whether electric power fencing system by use of solar power is excisable. The Commissioner classified it in sub-heading 8543.90 as other electrical machinery and apparatus having individual functions. The Commissioner had invoked larger period in terms of Section 11A, confirmed the duty demand and also imposed like sum as penalty under Section 11AC. Penalty of rupees five lakhs was also levied on the Managing Director.

Service Tax

Commission received from foreign airlines in Indian rupees - not export of service; failure to file return was enought to invoke extended period under old Sec 73 : Tribunal

THE dispute is service tax on "Overriding Commission" (ORC) received by the appellants in Indian currency from Malaysian Airlines who had appointed the appellants as "General Sales Agent" (GSA) for India. The services rendered by the appellants to Malaysian Airlines fell in the category of "Business Auxiliary Service", which had become taxable w.e.f. 1-7-2003. The appellants had not paid the tax.

Income Tax

Reason for reopening assessment must be genuine - where assessee utilises certain sum for purposes specified in Sec 80HHD(4) and draws the same from '80HHD reserve account' it is open to assessee to utilise the fund for any purpose it deems fit and proper : Bombay HC

Under the Income Tax Act, concluded assessments can be reopened only if the assessing officer has reason to believe that the income chargeable to tax has escaped assessment. The reasons for reopening the assessments must be genuine, reliable and not imaginary or based on conjectures or surmises.

See our columns tomorrow for the judgements