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By Vijay Kumar

Central Excise

Clearance effected under the provisions of para 9.10(b) of the Exim Policy 1997-2002 by 100% EOU against foreign exchange - Benefit of notification 2/ 95CE & 20/ 98CE available but not 125/ 84CE - Larger Bench of the Tribunal.

The appellant, a 100% EOU , engaged in the manufacture of polyester textured yarn, twisted/sized and polyester grey fabrics, was granted permission by the Development Commissioner, Kandla Special Economic Zone for sale of the goods viz. grey fabrics in DTA through EEFC account.

As per the conditions laid down in the permission, the assessees were required to pay full duties of Customs and Central Excise as applicable at the time of clearance of goods against EEFC account. However, clearances were effected against Foreign Exchange at the lower rate (6%) of Central Excise duty during the period from Feb 2002 to June 2002. Supplies of polyester grey fabrics in DTA were also effected by the assessee in terms of erstwhile para 9.10(b) of the Exim Policy 1997-2002 but at the lower rate of Central Excise duty.

The department was of the view that the benefit of Notification no. 2/95-CE dated 4.1.95, 8/97 CE dtd . 1.3.97 and 20/98-CE dated 18.7.98 was available only to clearance made in DTA under the provisions of 9.9(a), (b), (c), (d) or (f) or para 9.20 of the Exim Policy 1997-2002 whereas, the clearance has been effected by the assessees under the provisions of para 9.10(b) of the Exim Policy and, therefore, the benefit of concessional rate of duty under the above Notification was not available and duty was to be charged at full rate as prescribed under the proviso to Sec.3 of the Central Excise Act, 1944.

Income Tax

Exports of tea - Deduction u/s 80HHC - Assessee not entitled to deduction against entire composite income as only 40% of such income is chargeable and computable under I-T Act : Supreme Court

Whether Sec 80HHC deduction is to be allowed i.e. before the 60 : 40 apportionment under Rule 8(1) or from 40% profits on sales taxable as Business Income?

And the answer that has come from the Bench is that the Sec 80HHC deduction is required to be allowed after apportionment of income under Rule 8(1) of the 1962 Rule.

Principles for reckoning of the limitation period for completion of block assessment under provisions of S. 158 BE- Search and Seizures under Sec 142 of the Act- conclusive proof is required to show that the seized documents disclose concealment of any income having been earned by the assessee and not disclosed- ITAT

The assessee is a company mainly engaged in the business of investment in shares and finance. A search and seizure operations u/s 132(1) of the Income Tax Act, was conducted at the various business premises of the Mesco Group and also at the premises of its auditors M/s A.R. Associates, between the period 26.2.97 to 1.5.97. The assessee is a company related to the aforesaid group. During the search, various books of accounts and loose papers were found and seized.

See our columns Monday for the judgements