Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

Customs

Legal Corner Icon — the image was hosted by the publisher and was not captured.Carrying gold in shoes not indicative of smuggling; it is an accepted trade practice: CESTAT by Majority

Smuggling – Burden of Proof:

It can be noticed that the burden of proof that the seized goods are not smuggled, lies on the person who claims ownership of the said seized goods.

Bills need not be of the same date – even banks issue bills after two or three days -

A lot was argued by SDR that the Bills produced by the appellants were of not the same date. The trade practices in the bullion market seem to indicate otherwise. The documents show that even today the nationalized banks, for the sale of foreign marked gold biscuits, issue the bills for the sales affected, after two to three days. If the nationalized banks are following the said procedure, than it has to be held that just because the invoices are of subsequent date it would not matter, as long as the burden of proof, that the goods are not smuggled, is discharged.

What is legal and genuine in one Revenue Department cannot be illegal for another Revenue Department:

It is also to be noted here that Income Tax authorities on the same set of evidence (based upon the information shared by customs with Income Tax Department) concluded that the transactions of purchases and sales were genuine, on the basis of documentary evidences. If that be so, then the transactions which are genuine and legal to one revenue department cannot be said being illegal for another revenue department, both working under the same Ministry.

Carrying gold in shoes – Even Customs has endorsed it:

As regards the mode of transportation of the gold biscuits in shoes, it may look odd, and it may raise a suspicion and nothing more. The mode of transportation of valuables in a covert manner has been accepted as a general practice It seems that the C ustoms department itself accepts the mode of transportation of gold biscuits in shoes, which is evident from the remarks on the Baggage receipt no 0296644 dated 1.3.2007, which is endorsed by the C ustoms officials as produced along with the miscellaneous application. It is seen from records that revenue has not adduced any evidence, even remotely, to indicate that the seized gold biscuits were of smuggled nature, while appellants have clearly demonstrated that they had licitly purchased the gold biscuits in a normal sale and purchase transactions.

Income Tax

AOP or HUF 'Notice' should be clear: Before assuming jurisdiction to complete assessment, notice has to be issued in status in which assessment is sought to be completed: ITAT

The definition of ‘person' very clearly shows that Individual, HUF , Association of Persons ( AOP ) are different persons. Before assuming jurisdiction to complete the assessment, notice has to be issued in the status in which assessment is sought to be completed. In this case, though notice was issued twice in the status of HUF , first under sec.158B C on 29.10.2001 and later under sec.158BD on 26.12.2002, but still the assessment has been completed in the status of AOP . Therefore, the assessment is without jurisdiction and void ab initio.

Central Excise

Limitation under Section 11A is not applicable to demands under Rule 223A of erstwhile Central Excise Rules, 1944: CESTAT Larger Bench

THIS case has only academic interest as the dispute relates to the erstwhile Central Excise Rules 1944. In those days of strict Control Raj, there was one rule called 223 A . The rule stipulated:

Account of stock of goods in a factory or warehouse to be taken and balance to be struck.

As often as the Commissioner may deem it necessary or proper, the stock of excisable goods remaining in a factory, warehouse or store-room registered or approved for the storage of such goods shall be weighed, measured, counted or otherwise ascertained in the presence of the proper officer; and if the quantity so ascertained is less than the quantity which ought to be found in such premises (after taking into account receipts and deliveries, and making such allowance for waste by evaporation, or other natural causes, as the proper officer may consider reasonable, and as may be in accordance with any instructions issued by the Central Board of Excise and Customs) the owner of such goods, or if the premises be a public warehouse, the keeper thereof, shall, unless the deficiency be accounted for to the satisfaction of the proper officer be liable to pay the full amount of duty chargeable on such goods as are found deficient and also a penalty which may extend to two thousand rupees.

See our columns Tomorrow for the judgements

See our columns Tomorrow for the judgements