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Central Excise
Classification sought by appellant in original proceedings cannot be rejected and alternative classification imposed which is not proposed in SCN – Tribunal grants Stay from recovery of duty of Rs 3.32 Crore
FRANKLY speaking, we do not exactly know what the excisable goods in question are. That's because the order does not make any reference to the same. Be that as it may, the adjudicating authority has come to the conclusion that the appellant's products are classifiable under Chapter heading 2108.99 attracting 16% ad valorem duty and hence confirmed the duty of Rs.3.32 crores and imposed equivalent amount of penalty and ordered for recovery of the interest.
The appellant is now before the Tribunal with a Stay application.
It is their contention that the goods manufactured would not all fall under Chapter heading 2108.99 as held by the adjudicating authority in view of the Tribunal decision in the case of Helios Food Additives P. Ltd. vs. CCE , Pune wherein it is held that these products are not classifiable under 2108.99 that even assuming that the goods are classifiable as contended they may not be covered under Section 4A of the CEA '44 since they are for industrial consumption as held by the Supreme Court in the case of Jayanti Food Processing P. Ltd. [ ] last but not the least, the demand is baked short viz. partly time barred.
Income Tax
Assessee obtains foreign currency loan and pays finance charges - Income Tax disallows as manufacturing failed to commence in FY - Since commitment charges were paid for borrowed funds for business purpose, it's allowable u/s 36(1)(iii) : Supreme Court
THE two major questions before the Apex Court were,
1) Whether "commitment charges" can be allowed as deduction under Section 36(1 )( iii) of the Income-tax Act, 1961?
2) Whether "charges" paid to COFACE is similar to payment of interest under Section 36(1 )( iii) of the Income-tax Act, 1961 and, therefore, has to be allowed as deduction?
The assessee had borrowed Rs 30 Crores from IDBI which in turn was refinanced by COFACE which foreign company had charged interest, commitment charges and insurance charges payable by the assessee. The said "commitment charges" was upfront payment. The Revenue disallowed the same but the Tribunal allowed the claim under Sec 37 of the I-T Act. The HC confirmed the Tribunal decision and thus the case came before the Apex Court .
Having examined the contract between IDBI and the assessee and perused the decision of the Apex Court in the case of Addl. Commr . of Income-tax v. Akkamamba Textiles Ltd. (1997) 227 ITR 464, where it was held that commission paid by the assessee to the banker and the insurance company was admissible deduction under Section 37, the Bench simply allowed the first question in favour of the assessee and against the Revenue. The Bench also clarified that the earlier SC decision allowed deduction u/s 37 and not u/s 36(1 )( vii), and in this case the Tribunal had allowed the claim u/s 37 and not only u/s 36(1)(iii).
Sales Tax
It is not open to revenue officers to say that the Board circular is not binding on them. This would lead to chaos and indiscipline in the administration of tax laws : Apex Court
Tax administration is a complex subject. It consists of several aspects. The Government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other hand. Today, Governments have realized that in matters of tax collection, difficulties faced by the business have got to be taken into account. Exemption, undoubtedly, is a matter of policy. Interpretation of an Entry is undoubtedly a quasi-judicial function under the tax laws. Imposition of taxes consists of liability, quantification of liability and collection of taxes. Policy decisions have to be taken by the Government. However, the Government has to work through its senior officers in the matter of difficulties which the business may face, particularly in matters of tax administration. That is where the role of the Board of Revenue comes into play. The said Board takes administrative decisions, which include the authority to grant Administrative Reliefs. This is the underlying reason for empowering the Board to issue orders, instructions and directions to the officers under it.
Kerala Sales Tax – AO bound by Departmental circular, but assessee is not : Supreme Court
HERE is government contradiction at its best - in the matter of exigibility to tax, the Department took the stand that field latex and centrifuged latex were different commodities and when it came to the question of exemption/concession, the same Department contended that the two commodities were same. – And before the same Court!
It is no doubt true that, the AO is bound by the directions issued by the Commissioner even with regard to the terms used in the exemption Notification(s). However, as held in our earlier judgment in the case of Kurian Abraham Pvt. Ltd., circulars/orders issued by the Commissioner are not binding on the assessee.