Jurisprudentiol– Monday's cases

By Vijay Kumar

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

Refund of Duty paid in excess due to calculation error - when the purchaser has categorically informed that they have not availed CENVAT credit of the component of excess duty and not paid the supplier and which fact has been certified by jurisdictional Superintendent, no question of unjust enrichment: Tribunal

The refund claim has been filed by the appellant on the ground that there was a calculation error and due to which the appellant has paid excess duty. Both the authorities, while deciding the case have held that the appellant has not crossed the hurdle of unjust enrichment and they have not produced record that they have not recovered duty from their buyers.

Income Tax

Company engaged in the business of hire purchase and investments is a Financial Company; interest from delayed payment from debtors is not on account of interest on loans and advance and hence is not liable to interest tax: ITAT Spl Bench

Interest from delayed payment from debtors is not on account of interest on loans and advance and hence is not liable to interest tax. Unless the amount which is sought to be chargeable as the chargeable interest has any necessary relationship with loans and advances, such an attempt to understand the amount alone would not satisfy the requirement of justification. Interest on delayed payments would not be an interest on loan or advance and therefore would not be includible in the chargeable interest under the Interest Tax Act.

Customs

Bank guarantee to be treated as payment of duty in anticipation of the finalization of the duty liability, it cannot be regarded as pre-deposit - Refund claim hit by limitation and bar of unjust enrichment - Appeal rejected by Majority: CESTAT

This difference of opinion between the Members on the bench led to the reference of the issue to the Third Member. In the instant case, President of CESTAT himself took up the issue. After deliberating on the relevant provisions with regard to provisional assessment i.e. s.18 and the decision of the Mumbai High Court in Bussa Overseas and Properties Pvt Ltd [2003-TIOL-08-HC-MUM-CUS], it was concluded that s. 18 cannot be read in isolation and any payment by way of appropriation of the security/bank guarantee has to be treated as payment duty and hence, any amount payable or refundable to the importer (appellant) would be subject to provisions of s. 27 including those relating to time-limit for claiming such refund.

See our columns Monday for the judgements