Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Absolute confiscation should be an exception rather than a rule – Diana Air Gun although prohibited for import can be allowed to be redeemed on payment of redemption fine: Tribunal

ONE Alfred Menezes and one Vithal Chopdekar imported Air guns of brand make “Diana” in their baggage and declared the same to the Customs authorities.

The lower authority ordered confiscation of the impugned goods with an option to redeem the same on payment of redemption fine and personal penalty and appropriate duty. Both aficionados discharged the duty liability and also paid redemption fine, personal penalty and cleared the said air guns.

Revenue was not pleased with this “firing” and took up the matter in appeal to the Commissioner(Appeals) arguing that these are prohibited items of import and hence the lower authority had erred in allowing them to be redeemed inasmuch as they ought to have been absolutely confiscated.

Income Tax

Claim for deduction of business expenses incurred by Managing Director on behalf of company not acceptable when expenses incurred by MD in initial stages were reimbursed by company in subsequent year: ITAT

INCORPORATION of the company and appointment of the Managing Director for running the business alone are not sufficient to record a finding that business has been set up during the accounting period unless there is specific evidence that the activities for which the company is set up are undertaken by the company - Appellant s claim that business commenced in the year of incorporation and appointment of Managing Director not acceptable when expenses incurred by the Managing Director in the initial stages were reimbursed by the company in the subsequent year - Not entitled for claim of business expenses in the AY relevant to year of incorporation

Central Excise

Credit on Cast iron moulds – Amending notification 70/2003-CE(N.T) extending full CENVAT credit on moulds and dies not retrospective in nature: Tribunal

CIRCULAR NO. 747/53/2003- CX dated 22.9.2003, only states that full CENVAT credit of duty paid on moulds and dies shall now be available to the manufacturer in the first year of acquisition itself, and the credit on moulds and dies received in the factory already, before this amendment (in September 2003), may be allowed as per the provisions existing earlier.

See our columns Tomorrow for the judgements