Jurispruden tiol – Tomorrow's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
After losing Jayanti Food Processing case, Revenue now loses Kraftech Products case, Aero Pharma Case Alfa Packaging Case and that too with costs in Apex Court
LAST year, it was in the Jayanti Food Processing case & others [] that the Apex Court held that the assessees claim of assessment under Section 4 of CEA'44 in case of Ice Cream sold in bulk or for that matter Kitkat supplied under contract to Pepsico for being supplied free with 1.5 litre of Pepsi as sales promotion was perfectly legal. As for the bunch of appeals filed by Revenue seeking assessment under Section 4 of the CEA'44 as against the assessment adopted by the assessees under Section 4A of the CEA'44, the Apex Court in polite terms & without imposing any costs told the Revenue that there was no merit in their desperate arguments & hence dismissed them.
So, what does this year hold for the Revenue on Section 4A valuation front – nothing but the same old story!
When it takes three years to notify the Determination Rules under section 4A even after we first highlighted the Gujarat Gold Coin case [], one can, but naturally see the sincere “determination” of the Board in plugging the loopholes in the law.
Customs
Smugglers get Inspector arrested – a 23 year ordeal ends with justice from Supreme Court
The Policemen of the State Government colluding with smugglers and making life difficult for the Customs officers is a common occurrence in many places. Here is a case where they arrested an IB Sub Inspector on charges of smuggling. He was found innocent both by Customs and the trial court. The IB instead of supporting their officer, dismissed him from service!
NAMAN SINGH SEKHAWAT, the Respondent in this appeal by the State was working as a Sub-Inspector in the Intelligence Bureau. His principal function was to identify and collect sources of information from the locality in regard to anti national activities.
On or about 5th August, 1983, the respondent accompanied by the driver of an official jeep bearing Registration No. RSN 939, went to a place known as ' Ramsar Gagaria Road ' in the District of Barmer. There, he allegedly found a large number of smuggled goods. While bringing the same in his jeep for their delivery to the Customs Authorities it was intercepted by a Jonga Jeep, which was being driven by one Bhoor Singh , a known smuggler, accompanied by the Head Constable Bhori Das and Constable Kirta Ram of the concerned Police Station. They were brought to the Police Station and arrested inter alia on the charge that the respondent, in conspiracy with the smugglers had been taking the smuggled goods in his official jeep.
He was found innocent by the Customs and the Court. But the story does not end here, it rather starts here.
For 23 long years, the poor SI had to fight! The Supreme Court has given him back the job, but who will give him back the precious years lost and the agony he and his family must have undergone? It is really difficult to protect oneself from State tyranny. Thank God, we have the Supreme Court!
Service Tax
Input Service Credit – Since showrooms of manufacturer are the ‘place of removal', service tax paid on input services up to that stage are available for Cenvat credit: Tribunal
THE appellant manufactured shoes in their factory premises and cleared the same on payment of duty to their own retail outlets. For manufacture of such goods, they availed Cenvat credit of the duty paid on the inputs and also on the input services. Scrutiny of the records revealed that they had availed Cenvat Credit on input services like retail agents commission, selling agents commission, advertising expenses, clearing and forwarding charges, telephone and internet, courier and postage charges etc. It was found by the lower authorities that the Service tax paid on the services availed by the appellant were in the nature of post manufacture i.e subsequent to the clearance of the goods from the place of removal and hence were found to be ineligible for availment of such input stage service tax credit.
A notice was issued to the appellant, requiring them to show cause as to why the Cenvat credit amounting to Rs.78,50,491/- availed and utilized by them during the period October 2005 to March 2006 should not be demanded & penalty & interest imposed.
The adjudicating authority disposed of the notice as proposed & the appellant is before the Tribunal.
Income Tax
Income Tax – deduction u/s 80IB - profits and gains from any business of industrial undertaking - no direct nexus required between activity of an industrial undertaking and profits and gains
THE short question in this Revenue appeal before the High Court is with regard to the claim of deduction by the Assessee on customs duty drawback of Rs.42,92,725/- under Section 80-IB of the Income Tax Act.
The Assessing Officer declined to grant a deduction by relying upon the decision of the Supreme Court in Commissioner of Income Tax v. Sterling Foods. [the decision of the Supreme Court related to import entitlement under the Export Promotion Scheme of the Government of India and on the interpretation of Section 80-HH of the Act.]
Assessee preferred an appeal before the Commissioner of Income Tax (Appeals) who set aside the order passed by the Assessing Officer by holding that Sterling Foods did not apply to the facts of the case and the language used in Section 80-HH of the Act was materially different from the language used in Section 80-IB of the Act.
Until Monday with more DDT
Have a nice day.
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