Jurispruden tiol – Tomorrow ' s cases Legal Corner Icon — the image was hosted by the publisher and was not captured.

By Vijay Kumar

Customs

Where the assessees are not guilty of suppression of facts, collusion or wilful misstatement of facts, extended period of limitation cannot be invoked – Supreme Court

The respondent M/s M.M.K. Jewellers is a unit in Santacruz Electronics Export Processing Zone, engaged in the manufacturing of plain/studded/ unstudded gold jewellery for export from directly imported gold or from the gold procured from MMTC in terms of Notification No. 196/87- Cus dated 5.5.1987 which was further amended by Notification No. 155/92- Cus dated 30.3.1992 and Notification No. 177/94- Cus dated 21.10.1994. The said notification, inter alia, permitted graded percentage of gold wastage or loss depending on the value addition achieved, on the jewellery of the description specified therein, and provided that scrap, dust or sweepings may be forwarded to the Government Mint by the importer for conversion into standard gold bars and returned to the said zone in accordance with the procedure specified by the Commissioner of Customs in this regard. Amongst other conditions, the said notification required that the importer shall maintain a proper account of import, consumption and utilization of the goods and of exports made by him. Public Notice No.2 /1988 dated 28.7.1988 issued by the Commissioner of Customs, Airport in terms of the notification required the units in SEEPZ to maintain registers as per proforma .

Penalty under section 114A is imposable only when the demand is confirmed under the proviso to section 28(1) of the Act. In view of the clear findings of the Commissioner that the respondent-assessees are not guilty of suppression of facts or are guilty of collusion or misstatement and, therefore, duty cannot be imposed by invoking the extended period of limitation. When the duty itself cannot be imposed, no order of imposing the penalty under section 114A of the Customs Act can be sustained.

Central Excise

Since special discount was not available to other buyers of the same class, the same cannot be considered as permissible deduction: Tribunal

CONSIDER this – a manufacturer gives a discount of 20% to their high profile customers & gives an even higher discount of 35% to another of their customers with a condition that he will promote the sale of the products purchased by carrying advertisement & sales promotion activities etc.

The Revenue alleged that this excess discount quantum was not permissible & accordingly a duty demand was raised & confirmed.

Income Tax

Deduction claimed for commissions paid for sales promotion - AO proves commissions were only adjustment entries - Penalty upheld by ITAT

IN a very rare case of penalty, the Tribunal has confirmed the levy of penalty against the assessee for claiming bogus commission as deduction and for deliberately furnishing fake documents. While finding that mens rea is established in this case, the Tribunal has upheld the levy of penalty u/s 271(1 )( c) and also Sec 273(2)(a).

See our columns tomorrow for the judgements