Jurispruden tiol – Monday ' s cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Supplementary invoices – Bar in availing Cenvat credit on ground that duty became recoverable on account of fraud, collusion, suppression not applicable when it is a case of Stock Transfer between units: Tribunal

The Cenvat credit has been denied to M/s Godrej Industries Ltd., Vikhroli , Mumbai, on the ground that the supplementary invoices have been issued on account of short recovery of duty by reason of willful misstatement/suppression of facts and, therefore, in view of Rule 7(1 )( b) of the Cenvat Credit Rules, 2002, the Cenvat credit is not admissible. Penalty of equivalent amount has also been imposed and the appellants have been directed to pay interest.

The Tribunal observed that the instant matter is squarely covered by the Tribunal decision in M/s Karnataka Soaps and Detergents Ltd vs. CCE , Mysore/Bangalore [ 2005-TIOL-647-CESTAT-BANG ] where it is held that the prohibition to take credit on supplementary invoices operates only in the case of sale inasmuch as in the present case also the goods covered by the impugned supplementary invoices were stock transferred from M/s Godrej Consumer Products Ltd., Malanpur , Indore to M/s Godrej Industries Ltd., Vikhroli , Mumbai.

Tribunal fails to understand why in almost every case of appeal before it, the exceptional power to waive predeposit is being sought to be invoked in a routine manner - orders pre-deposit of Rs 7.6 Cr on branded petrol 'Speed' manufactured from ordinary petrol by BPCL

THE Public Sector oil company BPCL was saddled with a demand of nearly Rs 15.2 crores towards duty on what they call “Branded Petrol” manufactured by mixing the ordinary petrol with some additives which they claim will improve the performance of the engine. A penalty equal to the duty “evaded” was also imposed.

It is expected that when the financial health of the appellant Company is sound and the adjudicating Commissioner has passed a well-reasoned and speaking order after hearing the Representatives of the appellant Company, the appellant Company should make the predeposit of the amounts of duty etc under Section 35F of the Central Excise Act, 1944 before their appeal can be heard on merit. We fail to understand why in almost every case of appeal before this Tribunal, the exceptional power of the Tribunal to waive the predeposit is being sought to be invoked in a routine manner

Income Tax

Sale and Lease Back – depreciation eligible - tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced - theory of sale and lease back had not been invented by assessee: ITAT

The theory of sale and lease back had not been invented by the assessee:

tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced. In other words, the tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced. On seeing this it appears that each transaction can be scanned under the above scanner and it is easily segregated. But it is not so easy as it appears each and every transaction are to be viewed with caution so as to identify the intention of tax planning and tax evasion. The transaction which appears to be a tax evasion can on scrutiny of series of transactions, the transacting parties, the nature of transaction, the nature of trade, the nature of machinery, etc. will decide the ultimate litmus test.

See our columns on Monday for the judgements