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Customs
Customs - no prosecution if departmental proceedings are dropped on same set of facts: Delhi High Court
THE Petitioner Nos. 1 and 2 companies are engaged in the business of distribution of medicines. These Petitioners inter alia imported IV Cannulas viz. Vasculon, Neoflon, and Venflon at nil rate of customs duty against proper Bills of Entry taking benefit of the Exemption Notification No. 23/98 Cus. On 23rd August 1998 the Customs raided the godowns of Petitioners 1 and 2 and seized certain medicines all of foreign origin valued at Rs. 1,31,45,000/-. Alleging that there was a misdeclaration of the goods and therefore a fraudulent evasion of customs duty, the Customs initiated proceedings both departmentally as well as in the criminal court. A show cause notice dated 18th February 1999 was issued under Section 124 of the Customs Act, 1962 to which the Petitioners replied. Meanwhile a complaint dated 19th May 1999 was filed in the court of the ACMM for the offences under Sections 132 and 135(1) (a) of the Customs Act, 1962.
Central Excise
Tribunal sets aside Rs 6 Cr plus demand confirmed by CCE , Pune, says Department cannot blow hot and cold at the same time.
A cursory glance at the issue and one may feel that the Revenue needs to be taught the basics of the Credit Scheme all over again. Is NACEN listening? Harsh words, one may say, but we are helpless!
The short facts go thus –
++The appellants are engaged in the manufacture of Hydraulic Cylinders, Hydraulic Pumps and parts thereof falling under Chapter heading 84 of the Central Excise Tariff Act, 1985.
++They procure the inputs either domestically or import the same. Such inputs are used in the manufacture of hydraulic pumps, valves, cylinders etc. The appellants avail credit of duty or CVD paid on the inputs, as the case may be.
++They also import parts and spares of hydraulic pumps, valves, cylinders etc. for sale as such in India . In such cases also, the appellants avail credit of CVD paid on such parts and spares of hydraulic pumps, valves, cylinders etc.
++The appellants did not have separate inventory control system for such imported goods used in production and in respect of imported goods sold as such. In other words, the inventory control system and the central excise records were common.
++The common pool of credit is used for payment of duty on manufactured goods as well as goods sold as such . In the case of the imported goods sold as such, the assessable value based on the sale price was always more than their landed cost.
This, the department felt was blasphemous inasmuch as a demand notice was issued in the year 2006 to deny credit of Rs.6,64,40,668/- being the CVD availed during the period July 2001 to July 2005 on the goods imported on the ground that these goods were sold as such in India without using them in the manufacturing process. This amount also included the Cenvat component of Rs.14,61,839/- being the credit availed on imported parts & spares lying in the factory on the day of visit on 17.08.2005 & which were to be sold as such.
Customs
Valuation – royalty - cost of technical know-how is included if same is to be paid, directly or indirectly, as a condition of sale of imported goods : Supreme Court
M/s Ferodo India Pvt. Ltd ("buyer") is a subsidiary of M/s T & N International Ltd., UK and are thus related, which is not in dispute in this Revenue appeal.
The buyer is the manufacturer of brake liners and brake pads in India . On 8.9.1995, a technical assistance and trade mark agreement ("TAA") was entered into between the respondent (buyer/licensee) and M/s T & N International Ltd., UK (foreign collaborator/licensor). Under the said agreement,
1. the licensor claimed to be in possession of certain secret processes, formula and information.
2. the licensor agreed to permit manufacture of brake liners and brake pads (licensed products) by the licensee.
3. the licensor agreed to disclose the relevant secret processes, formula and information to the licensee.
4. the licensee was required to import/buy raw material and capital goods from the licensor.
5. the licensee was obliged to pay a licence fee along with royalty, based on the net sales value of licensed products sold, consumed or otherwise disposed of.
Income Tax
No deduction for provision of bad and doubtful debts u/s 36(1)(vii) : ITAT
QUITE often, Revenue ' s decision to dispute either settled decision or clear-cut statutory provisions are found to be bad in taste by the judicial forums. But not the latest case, decided by the Delhi Bench of Tribunal in the case of Maruti Countrywide Auto Finance Ltd, an NBFC. The Revenue ' s move to appeal against the CIT (A) decision to allow the provision for bad and doubtful debts u/s 36(1)(vii) has finally not turned to be bad at all! In view of the Explanation inserted vide FA, 2001 w.e.f 1.4.89 to Sec 36(1)(vii) the Tribunal has ruled in favour of the Revenue by observing that allowing deduction for the provision for bad and doubtful debts has clearly been explained to be not the intention of the legislature.