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Customs
Goods cleared from warehouse for home consumption on payment of duty – duty paid goods retained in the warehouse as they are highly inflammable – subsequent increase in duty not applicable to these goods as they are no more warehoused goods : SC
WHAT is the relevant date for payment of Customs duty on warehoused goods? Revenue's attempt to collect more duty ends up in having to pay interest.
This is a revenue appeal before the Supreme Court. The respondent imported Superior Kerosene Oil ( SKO ) on 15.5.1998. At that time, the duty payable on SKO was only CVD of 10% adv. The imported SKO was stored in a private warehouse belonging to IBP. On 20.05.1998 and 28.05.1998, ex-bond bills of entry were filed for release of the goods for home consumption. Appropriate duty was paid and the officer in-charge made an endorsement on the bills of entry for release.
As SKO is a highly combustible material and cannot be taken out to store elsewhere, the respondent made an application to the Assistant Commissioner of Customs for permission to store the duty paid released goods in the same warehouse – tank. The respondent was also registered as a Central Excise Dealer to issue invoices for Modvat purposes. In the Central Excise Registration Certificate, it was clearly mentioned that the SKO would be stored in the tank belonging to IBP.
Income Tax:
Subsidiary reimburses non-resident parent company for mobilisation and demobilisation charges - if TDS not deducted on payments, provisions of Sec 40(a)(i) are attracted : ITAT
WITH India getting rapidly integrated to the global economy, making payments either for services or reimbursement to a non-resident company or individual has become common for the India Inc. But what has not become common is the practice of deducting tax at source ( TDS ) under Sec 195. And this case is illustrated best in the latest decision of the ITAT which has held that it is obligatory for the payer to a non-resident company to deduct TDS u/s 195 without going into any other aspect with regard to nature and taxability of the payment and rejected assessee i.e. payer's contention that reimbursements made by it were not in the nature of income in the hands of payee. As to the consequences of such non-deduction of TDS , it held that provisions of Sec 40(a)(i) are attracted as per which, any claim of such amount will not be allowed as deduction during computation of income of payer and can be claimed only on deduction and deposition of such tax which though is subject to subsequent assessment by the A.O.
Central Excise
It is not open to Excise authorities to doubt decision of competent authority under SWAM - 210 litres Barrel of Lubricating Oil not to be assessed under Section 4A of Central Excise Act : Tribunal
ASSESSING excisable goods under section 4A simply because they are notified does not make sound legal sense – as if legality always matters to the excise formations.
The assessee is a manufacturer of lubricating oils [Heading 2710 90] the same are notified goods for assessment based on MRP under Section 4A of the CEA '44. In respect of goods packed in sizes of 500ml, 1 ltr, 2 ltrs 5 ltrs, 50 ltrs etc., the assessee is paying central excise duty based on the retail sale price affixed on the packs viz. u/s 4A. However, when it came to assessment of 210 ltrs of lubricating oils, the assessee contended that since the same is a wholesale pack no retail price need be affixed hence paid duty by assessing the same in terms of Section 4 of the CEA '44.
Naturally, this was objected by the Revenue the adjudicating authority too held that the 210 ltr barrel cannot be held to be a wholesale package in terms of Rule 2(x)(ii) of SWAM Rules, 1977 that it is rightly required to be assessed in terms of section 4A of the CEA '44.