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By Vijay Kumar

Central Excise

In the case of goods cleared by 100% EOU and sold in India whether with or without permission of the Development Commissioner, the assessment shall be made under proviso to Section 3(1) of the Central Excise Act, 1944 and the exemption under Notification 125/84CE shall not be applicable - Larger Bench of Tribunal.

The issue referred to the Larger Bench was whether the goods which are cleared by 100% EOU clandestinely and without any permission are eligible to full exemption under Notification No. 125/84-CE and whether such goods are to be assessed under the provisions of main Section 3(1) of the Central Excise Act or under the proviso to Section 3 of the Central Excise Act. The reason for such a reference was that the referring Bench observed that there were conflicting views on the issue viz. decisions of the Tribunal in Modern Denim Ltd. and in the case of Sterlite Optical Technologies Ltd.

Customs

Overvaluation of export goods - penalty on CHA upheld - CESTAT

This is an appeal by a Custom House Agent against a penalty of Rs. 50,000 imposed on him for overvaluation of export goods.

The contention of appellant is that he filed the shipping bills as per the instructions of the exporter. There is no evidence on record to show that appellants are in any way concerned with over-invoicing of the goods or he has got something extra than their charges. The contention is that as the appellants filed shipping bills at the instruction of exporter and all the documents were signed by the exporter, therefore, the appellant as CHA are not liable for penalty.

Service Tax

Service Tax - User fee collected by airport from international passengers not liable to tax under airport services - in fact no service at all provided to passenger : CESTAT

THE appellant M/s. Cochin International Airport known as CIAL are providing various services to air passengers and have been registered with the Central Excise department. They collected an amount of Rs. 500/- from each outgoing international passenger. As this amount was not included for payment of Service Tax, Revenue proceeded against them demanding Service tax. The Adjudicating Authority held that the amount collected as 'Users Fee' at the rate of Rs. 500/- per outgoing international passengers would form part of the assessable value for the purpose of payment of Service Tax on the 'Airport Services'. He held that the said amount is having nexus with the services that were being provided to the passengers. He confirmed the demand of over Rs. 2.8 Crores with an equal penalty.

Income Tax

Deduction for repairs - To decide applicability, test is not whether expenditure is revenue or capital in nature, which test has been wrongly applied by the HC, but whether expenditure is 'current reapirs' - Concurrent findings of CIT(A), Tribunal and HC overruled

THIS group of civil appeals is to decide the extent and scope of Section 31(i) of the Income Tax Act, 1961 as it "Stood during the accounting years ending 31.3.1993 and 31.3.1994. which was as follows:-

"31. Repairs and insurance of machinery, plant and furniture.- In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed-

(i) the amount paid on account of current repairs thereto;

(ii) the amount of any premium paid in respect of insurance against risk of damage or destruction thereof."

See our columns tomorrow for the judgements