Jurisprudentiol – Monday's cases

By Vijay Kumar

Income Tax

No limitation u/s 201 - Revenue loses case against non-resident company as Delhi HC upholds Tribunal's view of a reasonable limitation period of four years

IN the latest case decided in the case of NHK Japan Broadcasting Corporation, the Delhi High Court has pointed out the inadequacies in the TDS provisions of Income Tax where Sec 201 of the Act does not prescribe any limitation period under which orders holding an assessee in default may be passed by the Assessing Officer. The Tribunal has in various cases taken a view that where limitation is provided under the Act a reasonable period time period must be read in by the courts. A reasonable time frame of four years from the end of financial year has been read in as a limitation under which orders u/s 201 may be passed by the revenue. Although a contra view was taken by the Tribunal in the case of Thai Airways International Public Co. Ltd. (2005-TIOL-74-ITAT-DEL), but the controversy was by and large set at rest by the orders of ITAT in the case of the assessee itself in which after considering all the above precedents a view in favour of assessee was taken. And this view of the Tribunal was upheld by the HC which found it quite reasonable.

Central Excise

Exempted refined edible oil cleared in tin cans/plastic jars – credit availed on tin sheets & HDPE granules – rule 6 of CCR , 2004 applicable, but no penalty under rule 15 for misfeasance of rule 6 – Tribunal.

The assessee is before the Tribunal with the following submission –

++ That there is no question of invoking rule 6 of the CCR , 2004 in the facts of the case & the duty that is required to be paid is on the plastic jars, tin containers viz. the packing material as these captively consumed goods are not entitled for the benefit of the notification 67/95-CE as the final products viz. Refined edible oils are exempted from central excise duty.

++ Even otherwise, as against the demand of 10%, they had paid an amount of Rs.4.38 lakhs before issuance of the notice & the balance amount paid thereafter & that penalty under rule 15 of the CCR , 2004 is not envisaged in cases concerning payment of 10% amount

Supplementary invoices raised & differential duty paid thereon – later, it is detected that higher price was wrongly fixed – since duty already recovered from customers, no cause for refund – Tribunal.

When it comes to supplementary invoices, the Revenue always tries to play the big brother for it wants interest too. No doubt, although the Tribunal in case of Rucha Engineering [2006-TIOL-885-CESTAT-Mum] had held there is no question of paying any interest under section 11AB , the Revenue took the matter to the Bombay High Court in Central Excise Appeal no. 42/2007 only to find that the HC also affirmed the Tribunal decision.

"To invoke provisions of Section 11AB of Central Excise Act, 1944 there must be an order of determination of duty under Section 11A ( 2) ibid or else duty must be paid on own account in manner prescribed under Section 11AB (2) ibid - No case of any non-payment , short levy or short payment as envisaged under Section 11A (1) ibid - Section 11AB (1) ibid not applicable" – this is what the Tribunal had held.

In the present case, the story went a step further. The assessee paid differential duty on the supplementary invoices issued on account of subsequent upward revision effected under amended purchase orders & the consignee took the credit.

Later, it was detected that the price was wrongly fixed & such a differential duty was not required to be paid at all!

See our columns Monday for the judgements