From our Legal Corner – Monday’s cases

By Vijay Kumar

Central Excise

Deemed credit is nothing but CENVAT credit and if the assessee has paid the duty amount after availing deemed credit benefit during the forfeiture period under rule 8 of the CER, there is no cause of recovery or imposition of penalty - Tribunal.

AS to what constitutes payment of Central excise duty during the forfeiture period through “Account Current” was the subject matter of interpretation till the day the 'so called lacunae' was corrected by amendment to rule 8 of the Central Excise Rules, 2002 by insertion of a new sub-Rule 3A w.e.f 01.04.2005

Income Tax

Power to waive/reduce interest and penalty - needs to be exercised judiciously, fairly, reasonably, objectively and not arbitrarily - Section 273A(1)(a) requires a disclosure of full and true income and not the filing of valid returns: Bombay High Court

The Commissioner, essentially after applying his mind to facts and circumstances of the case needs to pass speaking and reasoned order after taking into consideration the scheme and object of the Section 273A including the elements like; a. Voluntary act of filing return in good faith; b. Full and true disclosure of income; c. Payment of the tax; and d. Cooperation. Once the case is made out for waiver/reduction, the Commissioner needs to exercise the powers in favour of the assessee.

Customs

Interest is payable on goods cleared from a warehouse after expiry of 90 days though the goods are cleared under DEPB: CESTAT

IN terms of Section 61(2) of the Customs Act 1962, where any goods remain in a warehouse beyond the stipulated period of 90 days, the importer is liable to pay the interest at the rates specified in Section 47. But, in cases where the ex-bond bills of entry are filed by claiming exemption from payment of customs duty, is the importer required to pay any interest?