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By Vijay Kumar

Central Excise

Valuation - even if the parties are related, if it has not influenced the price at which goods are sold; transaction value has to be accepted – Supreme Court

Even if the STL is taken to be a related person to BTL [we are not holding so], it has not influenced the price at which goods are sold by BTL to STL . Under the circumstances, transaction value has to be accepted. Without recording any finding as to whether BTL or STL are related persons and leaving the said question open, since the product is being sold to STL at or about the same price at which it was sold to DOT and MTNL , the relationship of BTL and STL did not influence the price and, therefore, the transaction value between BTL and STL has to be accepted in the facts and circumstances of this case.

Customs

Imported goods re-exported - duty originally paid from DEPB Credit - Revenue cannot reject both refund and DEPB credit - Principle of unjust enrichment applies to Government also – Supreme Court

It is a cardinal principle of law, which has been settled by a Bench of seven Judges of this Court in the case of Mafatlal Industries Ltd. v. Union of India, that refund of a claim made by the assessee can be denied on the principle of undue enrichment if the assessee has passed of the burden to the consumers. This principle would be equally applicable to the revenue as well as it cannot have the double advantage. Applying the same principle, revenue cannot be allowed to enrich itself by denying the duty drawback as well as by refusing adjustment of duty paid by way of debit in DEPB . Admittedly, in this case the parts imported by the assessee were re-exported. Once the imported parts which were found to be defective/unusable are re-exported, assessee became entitled to either refund of the duty, if paid in cash or adjustment of the duty if paid by way of debit in DEPB book either by reversing the entry or by issuing a fresh DEPB book, as provided in the public notice dated 30.6.2000. Public Notice dated 30.6.2000 is procedural in nature and it does not make any substantive change in the policy. Procedural laws cannot be equated with substantive laws. Substantive laws are generally not retrospective unless specified to the contrary by the Legislature. Insofar as procedural laws are concerned, they may be retrospective unless shown to the contrary. Otherwise also, once the imported parts which were found to be defective are re-exported, assessee under the policy itself without reference to the public notice would be entitled for adjustment of the duty paid by way of adjustment in DEPB . The revenue cannot be permitted to take the stand that it would not refund the duty as it was not paid in cash or deny the adjustment in DEPB book after the goods have been re-exported.

Income Tax

Gold Biscuits purchased with cash - No deduction claimed, but investment made from undisclosed sources to be added: High Court

Expenditure obviously means, expenditure admissible to be deducted, from out of the income, which may include the expenditure on purchase, and the like, and the sub-section provides, that if any such expenditure is incurred after specified date, in a specified manner, then 20% of such expenditure shall not be allowed as a deduction. In the present case the assessee has not claimed any deduction of any expenditure of Rs. 3 ,88,000 /- or Rs. 7,35,000/-, and therefore, there is no question of not allowing any part of that expenditure, as deduction. Thus, the finding arrived at in this regard, by the Commissioner, and the Tribunal, cannot be said to be wrong. The investment is clearly investment, on the face of it, made from out of the funds available with the assessee, from undisclosed sources, and is unexplained investment. What happened to the sale proceeds, where that money has gone etc., are all aspects, which are alien to the present controversy. In that view of the matter, we have not been able to persuade ourselves, to concur with the finding of the Tribunal, on this question, rather the findings of the assessing officer, and the Commissioner, are the findings, in accordance with law.

See our columns Monday for the judgements