Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

Import Policy

It is trite that no man should suffer a wrong by technical procedure of irregularities. The Rules or procedures are the handmaids of justice and not the mistress of the justice – Supreme Court

It all started in 1982; a poor importer falling victim to the ignorance of babudom and he had to fight it for 26 years; the firm had been closed down and the partner had to argue the case in the Supreme Court as he had no resources to hire a lawyer! More strangely, the original order and appellate order was passed by the same person.

It is futile to fight the might or ignorance of the Government, for they can ruin you!

This case had several twists and turns before it meandered its way to the Supreme Court.

In the year 1982, M/s Rashtriya Chemicals & Fertilizers Limited (RCF), a Government of India Undertaking, floated a global tender for supply of various types of capital goods required for its Thal project.

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

Issue of debit notes by buyer for duty collected initially - Since goods are non-excisable, ratio of Larger Bench in Grasim Industries case does not apply

IN cases where the duty was initially collected from the buyers, but later found to be not payable to the department, the normal practice is to give back the duty to the buyers by way of credit notes issued by the suppliers. But when the suppliers apply for the refund of such duty paid, it is also normal practice for the revenue to seek the assessee to establish that the incidence of duty has not been passed on to the assessee. And it is now settled law by the Larger Bench in Grasim Industries case 2003-TIOL-276-CESTAT-DEL-LB that such post clearance adjustments like issue of credit notes do not establish that the incidence of duty has not been passed on to the buyer.

Income Tax

Refund of advance to foreign buyer - exchange loss - admissible deduction: Bombay High Court

THE question referred to the High Court was, “Whether on the facts and circumstances of the case, the Tribunal was justified in upholding the disallowance of the claim of the assessee for deduction on account of exchange loss of Rs.65,54,930/- incurred on remittance of advance received for supply of goods holding that the sum was paid by the assessee was not on account of commercial expediency and was not incurred wholly and exclusively for the purpose of business?”

Service Tax

Site Formation and Clearance, Excavation and Earth moving Demolition Services - Project is perceived by Sabarmati River Front Development Corporation not for purpose of restoring of water resources but for creation of promenades, recreation parks and gardens – Tribunal orders pre-deposit of One crore

THE Bench after considering the lengthy submissions observed -

• Whether the services rendered by the applicant would get covered under the exclusion clause or not, and as to whether activity undertaken by the applicant is for renovating or restoring the water resources of water bodies needs to be gone into detail as also the issue regarding the question of limitation and wrong calculation of duty, which can be done so only at the time of final hearing as the issue is a arguable one.

See our columns Tomorrow for the judgements