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By Vijay Kumar

Central Excise

Larger Bench rules that amount mentioned in Rule 173Q ( 1) of the 1944 Rules or Rule 25(1) of the 2002 Rules is the maximum, and not the minimum

Rule 25 of the present CER , 2002 concerning imposition of penalty carries the following clause

then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer , as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees two thousand]*, whichever is greater.

Reference to the Larger Bench has been made for providing an answer to the following question:
"Whether Rs. 5000/- is a minimum penalty that is required to be imposed in terms of Rule 25 of the Central Excise Rules, 2002?"

Cenvat Rule 6 issue goes to Larger Bench – SC decision in Chandrapur was delivered in context of rule 57C and not 57CC or rule 6 of CCR – present rule is unambiguous and clear – matter referred to LB

SC decision in Chandrapur was delivered in the context of rule 57C & not 57CC or rule 6 of CCR – present rule is unambiguous & clear – matter referred to LB as coordinate benches hold contrary views - Tribunal.

The provisions of Rule 6 are unambiguous and clear.

In terms of rule 6, the assessee who has not maintained separate inventory and has taken credit on common inputs used in the manufacture of dutiable and exempted products (except in the cases mentioned in the provisions contained in sub-rule (3 )( a)) has no option but to reverse 8% of the price of the exempted goods as per provisions of sub rule 3(b) of the said rule.

If the appellants have consciously chosen to disregard the clear and unambiguous provisions of Rule 6, which are not capable of two interpretations, they have done so at their own peril and they cannot plead clemency and mercy later on in the name of equity and pray for relieving them of the liability to pay 8% of the price of the exempted goods.

Income Tax

Income Tax cannot add to assessee's income based on CBI records, when CBI itself had dropped proceedings: ITAT

ORIGINAL return was field by the assessee on 31 st August , 1992 at an income Rs.74,190 /- and the same was assessed on 27.1.93 on the returned income. Thereafter notice u/s 148 was issued on 30 May, 2001 against which assessee filed return of income on 6.6.2001 declaring same income. The name of the assessee is Shri . Pranab Mukherjee

See our columns tomorrow for the judgements