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By Vijay Kumar

Sales Tax

Repacking of Palmolive oil into smaller packages amounts to manufacture under sales tax law, more so when the certificate was issued by the Authorities - Central Excise law is not relevant – Supreme Court

The Assessee is a Small Scale Industry certified as such by Director of Industries, Government of Pondicherry. The said certificate specifically provided that the Unit of the Assessee was exempted from payment of Sales Tax for five years vide G.O.Ms.No.15/74/FIN (CT) dated 25.6.1974. It is obvious that thereafter this tax holiday was extended from time to time. The Assessee is also registered as a Small Industrial Unit and is certified as such by the Director of Industries by his order dated 9.3.1989. The Assessee purchases Palmolive Oil in bulk and packs the oil in small packages for the purpose of selling in retail and this packing of Palmolive Oil is done in the small industrial unit of the Assessee.

Central Excise

Can repacking from bulk into retail packs change classification of product – Tribunal finds prima facie case in assessee's favour – orders remand to Commissioner(A) for fresh decision on merits.

M/s Indian Oil Corporation Ltd. were clearing “Servo 2T Supreme” in bulk to the appellants for repacking into retail packs by classifying the bulk product under Chapter Heading 27.10 and discharging duty liability under the said heading. The case of the department against the appellants is that the product falls for classification under Chapter Heading 34.03 and duty liability is to be discharged on the retail packs (repacking from bulk into retail packs) under heading 34.03.

Against the confirmed demand of Rs.34.44 lakhs & an equivalent penalty for the alleged offence committed during the period 1.11.2000 to 30.09.2005, the company packaged its appeal and went before the Tribunal along with a Stay application.

Income Tax

Mere addition agreed to by the assessees during the course of Survey u/s 133A would not empower Assessing Officer to levy the penalty: Madras High Court

THE assessees were the Directors of M/s Hotel AMS Pvt. Ltd., Kondalapatti, Salem. During the course of survey conducted on 16.11.1999 under Section 133A of the Income Tax Act, it was noticed that the company had constructed the hotel with the share capital funds said to have been floated by the Directors. On enquiry with the assessees, the assessees offered a sum of Rs.12,00,000/- as income, out of which Rs 2,00,000/- each in the name of the assessees and remaining in the name of other members in Hindu Undivided Family. The assessees also admitted that there was no source for share capital and their share in the construction amounting to Rs.2,00,000/- each can be taken as unexplained investment. The assessees filed return of income on 21.9.2001 admitting the income of Rs 2,80,000/- each. However, when notice under Section 148 was issued on 16.10.2001, return was filed admitting additional income of Rs 2,00,000/- each as their unexplained income. In the Section 143(3) proceedings made on 26.3.2003, the unexplained investment of Rs.2,00,000/- was treated as additional income and penalty proceedings were initiated for concealment of income and furnishing of inaccurate particulars. Thus orders were passed on 26.9.2003 one against M.Pachamuthu and other against Balavenkatesan, the brother of the former imposing penalty of Rs.37,400/- each under Section 271(1)(c) of the Act. The assessees being aggrieved by the same preferred appeals before the Commissioner of Income Tax (Appeals), who allowed the same and the department preferred appeals before the Income Tax Appellate Tribunal have also been dismissed not on merits but with reference to the tax effect involved in the case.

Anti Dumping

Anti-Dumping - Is the Designated Authority, if called upon to do so, obliged to carry out what is commonly known as a "sunset review" or can it decline to do so? - Who is to conduct the review? What is really the need for conducting a review? Is a sunset review mandatory? Delhi High Court answers

The Petitioner and others jointly petitioned the Designated Authority alleging that ferro alloys originating in or exported, inter alia, from China and Russia are being dumped in India. It was requested that the Designated Authority may initiate investigations into the allegations and impose anti-dumping duties under the Act.

Designated Authority decided to initiate anti-dumping investigations concerning the import of Ferro silicon originating in or exported from Russia and China. Consequently, an Initiation Notification dated 5th June, 2000 was issued to determine the existence, degree and effect of the alleged dumping of the subject goods originating in or exported into India from the subject countries.

After conducting its investigations, the Designated Authority notified its Preliminary Findings that Ferro silicon originating in or exported from Russia and China has been exported into India below the normal value resulting in dumping. The domestic industry has suffered injury caused by imports from China and Russia.

See our columns tomorrow for the judgements