Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

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

CBEC vs CESTAT – Board Member again summoned by CESTAT

It indicates the state of utter confusion that is prevailing in regard to making statutory appointments for carrying out various statutory functions under the Customs, Excise and Service Tax Law. The level of ignorance of the Key Personnel manning the administration side of an important statutory body like the Central Board of Excise and Customs vested with statutory powers and functions under the Indirect Tax Laws become self-evident.

Since Shri B.K.Gupta, Member of the Board has failed to file a proper affidavit as earlier directed; and as the deposition of the Officer deputed by him does not meet the requirement of law; and further, as the reason given by Shri Gupta for exemption from personal appearance is far from satisfactory, Shri B.K.Gupta, Member is directed to appear in person and depose before this Bench on the next date of hearing on 20.8.2008.

Commissioner(Appeals) does not have the power of remand – he lost it by Finance Act, 2001, says Tribunal

WAY back in the year 2001, w.e.f 11.05.2001 to be precise, the Central Government made an important substitution in Section 35A of the Central Excise Act, 1944 [parallel s.128A of Customs Act, 1962] and that concerned sub-section (3). It reads : “The Commissioner(Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against:”

Earlier, sub-section (3) read – “The Commissioner(Appeals) may, after making such further inquiry as may be necessary, pass such order as he thinks fit confirming, modifying or annulling the decision or order appealed against, or may refer the case back to the adjudicating authority with such directions as he may think fit for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary:”

The Department was of the strong view that this substitution took away the power of remand which was earlier available to the Commissioner (Appeals).

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 asset was valued by the independent valuer and certified by the Chartered Accountant and after completion of the lease period, the asset is to be re-delivered to the lessor. The essential characteristic of a sale is that the propriety in the goods passes to the buyer and it is not necessary that the assets should physically move to the buyer in order to constitute a valid sale. It is purely a business decision of the assessee to earn income by way of lease rentals. The decision to purchase and lease it back to the seller is therefore business decision of the assessee on which the department cannot sit in and decide the way the business could be done. It is the assessee's arm chair exclusively.

See our columns Tomorrow for the judgements