Jurispruden tiol – Monday's cases

By Vijay Kumar

Customs

Import of second hand photocopiers – no question of law involved in Tribunal reducing RF and penalty: Madras High Court

THE first respondents imported old used photocopiers and filed bills of entry for clearance of the goods under OGL . The value of the goods as invoiced by the Overseas Supplier was declared in the bills of entry. These imports were made subsequent to the amendment of Para 2.17 of the Foreign Trade Policy by which the import of second hand photocopiers would be allowed only against a specific licence. After presentation of the bills of entry by the first respondent importers, the goods were subjected to examination by Officers of Customs, as also by a local chartered engineer. The Chartered Engineer appraised the value of the goods to be higher than what has been declared by the importer. On the basis of the result of investigation, the Department issued show cause notice to the importers calling for their objections as to why the imported goods should not be confiscated for want of import licence, as to why penalty should not be imposed on the importers and as to why the value appraised by the Chartered Engineer should not be adopted for the purpose of assessment.

Income Tax

Income Tax - Sec 222(1) - attachment of property - if property was never shown in name of petitioner's father, it cannot be attached for father's tax arrears : Bombay HC

AT the centre of the dispute is the Sec 222(1) of the Income Tax Act. This section is invoked by the Tax Recovery Officer to recover dues from defaulting taxpayer. To make up for the same, a Tax Recovery Officer is empowered to attach and sell the taxpayer's movable and immovable property. And this is what was done in the instant case but thanks to the matrix of unique facts and circumstances, the Revenue lost the case. How?

Central Excise

Rule 16 of CER , 2002 - Returned goods subjected to process resulting in emergence of waste and scrap - lesser duty paid on clearance – since no specific manufacturing process was carried out, assessee is required to reverse credit taken on returned goods : Tribunal

MAYBE, it's time for bringing an amendment to Rule 16 of the CER , 2002. As is known, rule 16 allows a manufacturer to take Cenvat credit on the “final products” returned to his factory, after they have been initially cleared on payment of duty, for the purpose of being re-made, refined, re -conditioned or for any other reason. The rule further states that if the process to which the goods are subjected to does not amount to manufacture, the manufacturer shall pay an amount [ cenvatable ] equal to the Cenvat credit taken & in any other case he shall pay duty at the rate applicable on the date of removal and on the value determined under section 3 or section 4/ 4A of the CEA '44 , as the case may be.

As to what would be the position if the goods that were returned have been subjected to a manufacturing process that went haywire resulting in the generation of scrap, which too is excisable?

Would there be a problem if the assessee discharges Central Excise duty on this manufactured “scrap” & which invariably would on the lower side vis-à-vis the Cenvat credit taken in the first place?

See our columns Monday for the judgements