Come June and it's time yet again to face the taxman. In fact, for millions of income tax assessees, this time every year begins an exercise to collect and compile whereabouts of their income. This year too the same drill has to be followed, but with a change. SundayET gives a lowdown on what you must know before you file your returns this year.

Get the right form

From assessment year 2007-08, the income tax department has introduced eight new forms, four of which are for individuals and Hindu Undivided Families. First, one should visit the portal, www.incometaxindia.gov.aayin to confirm which form one needs to fill up. "For instance, with Form 2D or 'Saral', available till last year, being withdrawn, salaried individuals having no other income will be required to submit details in the new form ITR1.

Similarly, for those having rental income, they will need to fill up ITR 2," clarifies Vikas Vasal, director, KPMG India, a leading tax advisory firm worldwide. The latest forms can be downloaded from income tax department website mentioned above.

Count your income sources

kar An individual may get income from different bhasources such as salary, house property, profits and gains of business or profession, capital gains, and income from other sources (include earnings not falling under any of previous heads, that is, interest on securities, lottery winning and others). When you compute your total income, it is a mandatory requirement to calculate income from each of these sources separately since the tax treatment is accordingly van .

Exemptions available group

Exemptions are available under different heads of income and as well on total income. This is an important aspect of filing returns since it helps an individual reduce his net income and maximise savings. A deduction from gross total income is granted if investment is made in specified areas.

The investments eligible are — LIC premiums, contribution to Public Provident Fund scheme, Employee Provident Fund, certain pension funds, medical insurance premium, interest on loan taken for higher education and others. Deduction up to Rs 1,00,000 from gross income is available.

Clubbing of income

You should not forget to add income of a close relative like spouse or minor child, if any, while filing returns. This is an important rule of clubbing the income. It is a wrong perception that one can reduce tax liability by showing business income aayor expenses in name of a close relative. The only exception to this rule is if a close relative possesses technical or professional qualifications and the income is solely due to application of his/ her technical knowledge and experience.

Current tax slab rates

The slab rate you fall into kar depends on the particular case. For bhaexample, income up to Rs 1.35 lakh for women is exempt from tax, while in case of elderly above 65 years of age, earnings up to Rs 1.85 lakh is tax-free. For individuals not falling in these categories, no tax has to be paid on an income of up to Rs 1 lakh while 10% is paid on income ranging between Rs 1 lakh and Rs 1.5 lakh, 20% on Rs 1.5 lakh to Rs 2.5 lakh and 30% on Rs 2.5 lakh and above. Further, a 2% education cess will be applicable to van all.

Calculation of group TDS

Throughout the year, an individual pays advance tax or tax deducted at source. One must gather all the transactions where an individual paid advance tax before filing returns.

Annex ure attachment

From this assessment year, an individual isn't required to attach any document (including TDS certificate, i.e., Form 16 and 16A) with the form, regardless of whether a refund is claimed. "Now you need to write down the relevant details in the tax form itself," explains Vinod Gupta, a renowned chartered accountant.

Scrutinise form

Go through the documents and details thoroughly to see that nothing is missing. For example, the PAN number should be quoted carefully. One must make sure that one is writing the same name that appears on one's PAN card.

"Further, one must be very careful disclosing the transactions reported in the Annual Information Return (AIR) since the IT department will match banks, registrars, RBI, Mutual funds records with your return forms to find those who don't declare such investments," says Vasal.

Acknowledgement receipt

The new form is not required to be submitted in duplicate. After competing the form, acknowledgement slip attached with this form should be duly filled. The duplicate returned by the I-T department, duly acknowledged, serves as proof of the details of income submitted by assessee.

Don't forget the due date

Individuals having only salary income and non-corporate assessees who don't need to get their accounts audited need to file their returns before the due date that is July 31. Or else obligatory interest at 1.25% per month of tax due is payable beyond the due date.

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Disclaimer: The mail is general information and may be the compilation of statutes, circulars, notifications and case laws. Care has been taken to make the contents of this mail error free. However, we expressly disclaim all liability of whatsoever. Information are purely an opinion and in any case it should not be construed as statement of law, and always referred relevant the Act & Rule in this regards. Since, the contents in this mail are dynamic in nature, members are advised to go in for periodical updates in their own interest. To subscribe the group send mail to aaykarbhavan-subscribe@yahoogroups.com

Disinvestment Secretary, Shri P.V. Bhide takes over as Secretary, Deptt. of Revenue, Ministry of Finance tomorrow. Shri Bhide is a member of the Indian Administrative Service of 1973 Batch-Andhra Pradesh Cadre. He has also served as Additional/Special Secretary, Ministry of Home Affairs, Govt. of India.

Shri Bhide had earlier worked as Director in the Department of Economic Affairs and was deputed to the World Bank during 1988-92 as Technical Advisor. In the State Government, he has served in various capacities including Finance Secretary & Energy Secretary. He was also CMD in APCO and Godavari Fertilizers & Chemicals Ltd.

Both the Boards – Central Board of Direct Taxes and Central Board of Excise & Customs under Deptt. of Revenue will have new Chairmen from tomorrow. Shri B.M. Singh, IRS 1970 Batch, will take over as Chairman, Central Board of Direct Taxes. He succeeds Ms Indira Bhargava who retires this afternoon. Shri S.K. Shingal, IRS (C&CE) also of 1970 batch, will take over as Chiarman, Central Board of Excise & Customs succeeding Shri V.P. Singh who relinquishes the charge of the post on his superannuation.

BSC/BY/DN-275

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Disclaimer: The mail is general information and may be the compilation of statutes, circulars, notifications and case laws. Care has been taken to make the contents of this mail error free. However, we expressly disclaim all liability of whatsoever. Information are purely an opinion and in any case it should not be construed as statement of law, and always referred relevant the Act & Rule in this regards. Since, the contents in this mail are dynamic in nature, members are advised to go in for periodical updates in their own interest. To subscribe the group send mail to aaykarbhavan-subscribe@yahoogroups.com

The Institute of Chartered Accountants of India (ICAI) is said to be  all set to introduce a course nomenclatured Accounting Technician  (AT) — probably just below a CA (Intermediate) and a bit distant  from a full-fledged Chartered Accountant. Irrespective of the  designation, which would take a bit of getting used to, and the fact  that ATs do exist worldwide (Ireland, for instance, has an Institute   for Accounting Technicians), its relevance to the Indian context  needs to be looked into.

Relevance in India

The CA course in India is considered to be a half-marathon. This,  coupled with the fact that the pass percentage averages the batting  averages of some of the tail-enders of the Indian cricket team,  makes the course all the more intriguing. Despite changes in the  syllabi over the last few years and a major alteration in the course  too, it still remains a challenge to many.

However, the course has earned the respect of industry and the  public, even a CA (Intermediate) — self-styled a semi-qualified — is  able to obtain a decent job. In many cases, they do not have the  mental strength to bend that much extra to complete the course.  However, they would have a first-mover advantage over the ATs since  they have a better perspective. In case it is envisioned that the   ATs would be at par with such people, it is a risk for the ATs since  their scope for career advancement is stifled.

The blockbuster growth of Indian accounting software such as Tally  has created a separate market for Tally Accountants — a direct  threat to the AT. While a B.Com is considered to be only a basic  qualification now, an M.Com could also give the proposed ATs a run  for their money. Institutes such as the Institute of Certified  Financial Analysts of India (ICFAI) which teach students the  fundamentals of accounting are possible competitors too.

The picture abroad

In Ireland, the course for ATs has been there for some time now. For  applicants who are below 21 years of age, five passes in ordinary  papers or four passes, of which at least two in higher level papers,  are needed. The applicants must pass the English paper and either  the mathematics or accountancy papers. Applicants who are above 21  years of age are called mature students and in case they have work   experience or recommendation from their employer, they can enrol for  the course. The UK has a course which enables one to get the  Certified Accounting Technician (CAT) certificate. A direct  comparison with other foreign countries such as the UK would not be  right as we should accept the fact that their accounting history and  regulators are much more evolved.

Would it work?

The last thing one would expect is that the AT should not go the way  of the Tax Return Preparers (TRPs) introduced in last year's Budget — one does not see enough TRPs to justify their profession being  legalised. While the intent behind conceptualising an AT is good,  its practical utility would depend on their passing the test that  all accountants need to, namely, the test of time. The ICAI would  need to do something about the AT course that separates it from the   rest of the competition — an USP that cannot be matched.

Mohan R. Lavi

(The author is a Hyderabad-based chartered accountant.)

SUPREME COURT OF INDIA

Commissioner of Income-tax, Udaipur v. Hindustan Zinc Ltd.

Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock - Assessment year 1996-97 - Assessee company was engaged in business of producing zinc concentrate which was utilized by it captively - During assessment year 1996-97, zinc concentrate got accumulated to certain extent - Since domestic consumption of accumulated stock was not possible assessee decided to export same - Assessee estimated/valued net realizable value of stock by adopting London Metallic Exchange Price (International price), which was lower than Weighted Average Cost (WAC) by Rs. 27.08 crores, despite in past it had been valuing closing stock of zinc concentrate for captive consumption at WAC - Assessing Officer observed that auditors' report indicated that if accounting policy of earlier years was to be followed then in that event profits would have increased by Rs. 27.08 crores and, accordingly, added back Rs.27.08 crores to income of assessee for financial year ending on 31-3-1996 - Whether if fall in price has effect of merely reducing prospective profits, there would be no justification to discard valuation at cost - Held, yes - Whether in view of auditor's report, instant case was not case of reduction in anticipated loss, it was case of reduction in prospective profits and, therefore, assessee's valuation could not be sustained - Held, yes

FACTS

The assessee was a Government company engaged in the business of producing zinc concentrate which was utilized by the assesse captively.   During the assessment year 1996-97, certain stock of zinc concentrate got accumulated. It was not possible to consume the said quantity as the accumulated stock containing low metal content and high impurity level of silica. Since domestic consumption of the accumulated stock was not possible the assessee decided to explore the possibilities of exporting the accumulated stock. Thereafter the assessee with the permission of the Government estimated/ valued, the stock by adopting the London Metallic Exchange Price (International price) which was lower than the weighted average cost (Domestic price) by 27.08 crores on 31-3-1996 despite in part it had been valuing the zinc concentrate for captive consumption of weighted average cost. The assessee, accordingly, claimed reduction in value on basis of LME price. The Assessing Officer observed that the auditors' report indicated that if the accounting policy of the earlier years was to be followed then in that event the profits would have increased by Rs.27.08 crores and, accordingly, added back Rs. 27.08 crores to the income of the assessee for the financial year ending 31-3-1996.

On appeal, the Commissioner (Appeals) partly allowed the case of the assessee. On further appeal, the Tribunal deleted the addition made to the income of the assessee. On writ, the Division Bench of the High Court upheld the order of the Tribunal.  

On appeal to the Supreme Court:

HELD

The Supreme Court in the case of CIT v. British Paints India Ltd. [1991] 188 ITR 44/ 54 Taxman 499 has held that it is a well-recognized principle of commercial accounting to enter in the profit and loss account, the value of the stock-in-trade at the beginning and at the end of the accounting year at cost or market price, whichever is the lower. Where the market value has fallen before the date of valuation and where the market value of the article on that date is less than its actual cost, the assessee is entitled to value the articles at market value and, thus, anticipate the loss which he may incur at the time of the sale of the goods. Supreme Court, has, further, held that the correct principle of accounting is to enter the stock in the books of account at cost unless the value is required to be reduced by reason of the fall in the market value of the goods below the original cost. Ordinarily, therefore, the goods should not be written down below the cost price except where there is an actual or anticipated loss. On the other hand, if the fall in the price is only such as it would reduce merely the prospective profit, there would be no justification to discard the initial valuation at cost. [ Para 9]

The narrow controversy involved in the instant case was whether the assessee was right in writing down the inventory (zinc concentrate) below the cost price by estimating its net realizable value at LME price and not by estimating its net realizable value at the domestic price. There was no dispute in the instant case that as on 31-3-1996 the international prices of zinc concentratres were lower than the domestic prices thereof. Further, in the past the assessee had been valuing zinc concentrates at net realizable value at the domestic prices. It was for that reason that auditors in their report had categorically stated that if the net realizable value stood estimated in accordance with the past accounting policy (at domestic prices) the profits of the company would have been higher by Rs. 27.08 crores. The report of the auditors was not erroneous as it sought to be urged on behalf of the assessee. There was no rectification of the said report. In British Paints India Ltd's. case (supra), the Supreme Court has held that if the fall in the price has the effect of merely reducing the prospective profits (which appeared to be the instant case if one looked at the auditors' report) there would be no justification to discard the valuation at cost. Therefore, the instant case was not the case of anticipated loss, it was the case of reduction in the prospective profits.    [Para 10]

For the above reasons, the Tribunal had erred in deleting the additions made in the assessment. Accordingly, the appeal was to be allowed and the impugned judgment of the High Court was to be set aside.  

In the ITAT, Mumbai Bench 'I', special bench

Income-tax Officer, Ward -19(3)-4, Mumbai v. Ms. Sushila M. Jhaveri

Section 54, read with section 54F, of the Income-tax Act, 1961 - Capital gains - Profit on sale of property used for residential house - Assessment year 1995-96 - Whether exemption under sections 54 and 54F is allowable in respect of one residential house only - Held, yes - Whether if assessee has purchased more than one residential house, then choice would be with assessee to avail exemption in respect of either of houses provided other conditions are fulfilled - Held, yes - Assessee sold a residential flat and reinvested total sale consideration in purchasing two independently located residential flats - Assessee claimed exemption under section 54 in respect of total long term capital gain arising from sale of residential flat - Whether assessee was entitled to exemption in respect of investment in only one flat of her choice   - Held, yes  FACTS

The assessee was owner of a residential flat situated at Mumbai. During the previous year, the assessee had sold the said flat and reinvested the total sale consideration in purchasing two residential flats independently located at different locations in Mumbai. The assessee claimed exemption under section 54 in respect of total long term capital gain arising from the sale of the residential flat at Mumbai. The assessing officer held that exemption was available only in respect of investment in one residential house. The Assessing Officer, therefore, allowed exemption under section 54 in respect of the house, which permitted higher exemption.

On appeal, the Commissioner (Appeals) following the decision of the Mumbai Bench of the Tribunal rendered in the case of Ratanchand Murarka v. Jt. CIT [IT Appeal No. 4485 (Mum.) of 1999, dated 12-9-2001] held that exemption was available in respect of investment made in both the flats.

On revenue's appeal:

HELD

Section 45 which is charging section uses the expression 'transfer of a capital asset'. Here the word 'a' means 'every', since capital gain of each capital asset has to be computed depending upon the period of holding. Exemption from the levy of capital gain tax is provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F and 54H as is apparent from section 45 itself. Perusal of the provisions of sections 54, 54B, 54D, 54E, 54EA, 54EB and 54F clearly reveals that the legislature has used the words 'a' and 'any' with reference to investment of capital gain/ sale consideration in certain asset or assets. The legislature was not oblivious regarding the meaning of these two words. The word 'any' has been used by the legislature in sections 54B, 54D, 54E, 54EA and 54EB while the word 'a' has been used in sections 54 and 54F. This clearly shows that the legislature intended different meanings to be given to these two words. A close reading of these sections shows that legislature intended to allow exemption in respect of investment in more than one asset by using the word 'any'. Section 54E allows exemption in respect of investment in any specified asset'. Explanation 1 to section 54E defines the 'specified asset'. It includes various assets in which investment can be made by the assessee who are eligible for exemption under section 54E. There is nothing to indicate that investment is restricted to any of the specified assets. Had the legislature intended to restrict investment in any one of the specified assets, it would have used the words 'in any one of the specified assets' instead of 'in any specified asset'. This clearly shows that the word 'any' has been used where the legislature intended investment in more than one asset. Similarly, in section 54EB, the legislature has used the words 'in any of the assets specified by the Board'. Similar is the position in section 54EA. Section 54B and section 54D also use the word 'any other land' and 'any other land and building' respectively. The expression 'any other land' is an expression of widest amplitude and, therefore, its meaning cannot be restricted to any one piece of land. On the other hand, the legislature has used the word 'a' in sections 54 and 54F. Had the legislature intended for investment in more than one asset, it could have easily used the words 'in any residential house' in sections 54 and 54F instead of the words 'a residential house'. Superfluous words are not used by the legislature. Different words 'a' and 'any' have been deliberately used by the legislature to convey different meanings. Therefore, the legislature used the word 'a' where it intended investment in one residential house only and used the word 'any' where it intended investment in one or more assets. [ Para 8]

Thus, the intention of the Legislature was to allow exemption under sections 54 and 54F in respect of investment in one single residential house. [ Para 9]

Therefore, the exemption under sections 54 and 54F would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential house and consequently, the assessee would be entitled to exemption. [ Para 11]

In the instant case, the investment was made in two flats located at different localities in Mumbai. Accordingly, the assessee was entitled to exemption in respect of investment in one house only of her choice. The Assessing Officer had already allowed exemption in respect of house, which permitted higher exemption. Therefore, the order of the Commissioner (Appeals) was to be reversed on this issue and the order of Assessing Officer was to be restored. [ Para 12]

Editor's Note:-

It was also held by the Tribunal that brokerage paid by the assessee was to be allowed while computing capital gain as the assessee produced proof of payment along with her bank statement.

SUPREME COURT

2007-ITS-844-SC-COMMISSIONER OF INCOME TAX, NEW DELHI -Vs- ORIENTAL FIRE & GENERAL INSURANCE CO. LTD , Dated: May 18, 2007

The tax which is payable is on the assessees income after the income is determined. This cannot, therefore, be considered as an expenditure for the purpose of earning any income or profits. The ratio of Birla Cotton Mills case is not applicable in the present case

2007-ITS-843-SC-SRI T ASHOK PAI -Vs- COMMISSIONER OF INCOME TAX, BANGALORE , Dated: May 18, 2007

There must be a positive income resulting in tax before any penalty could be levied continued to exist. The penalty imposed was in 'addition to any tax'. If there was no tax, no penalty could be levied. The return filed declaring loss and assessment made at a reduced loss did not warrant any levy of penalty within the meaning of Section 271(1)(c)(iii) with or without Explanation 4."

2007-ITS-842-SC-M/s AMBICA INDUSTRIES -Vs- COMMISSIONER OF CENTRAL EXCISE , Dated: May 18, 2007

Decision rendered by the Tribunal shall be binding on all the authorities exercising its jurisdiction under the said Tribunal.

2007-ITS-841-SC-DILIP N SHROFF -Vs- JOINT COMMISSIONER OF INCOME TAX, MUMBAI , Dated : May 18, 2007

Levy of penalty under Section 271(1)(c) is discretionary in nature - unless there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable or the part of the assessee to conceal his income so as to evade income tax thereon may not be correct.

2007-ITS-840-SC-ASSISTANT COMMISSIONER OF INCOME TAX -Vs- RAJESH JHAVERI STOCK BROKERS PVT LTD , Dated: May 23, 2007

So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued.

2007-ITS-839-SC-COMMISSIONER OF CUSTOMS (PORT), CHENNAI -Vs- M/s TOYOTA KIRLOSKAR MOTOR PVT LTD , Dated: May 17, 2007

The price actually paid or payable refers to the price for the imported goods. Thus the flow of dividends or other payments from the buyer to the seller that do not relate to the imported goods are not part of the customs value.

2007-ITS-838-SC-M/s CONTINENTAL PROFILES LTD -Vs- COMMISSIONER OF CENTRAL EXCISE, NEW DELHI , Dated: May 21, 2007

Actuators are classifiable under Heading 85.01 of CETA

2007-ITS-837-SC-COMMISSIONER OF AGRICULTURAL INCOME TAX -Vs- M N MONI , Dated: May 18, 2007

Agricultural tax - Merely because different view on facts may be available to be drawn, that cannot be a ground to interfere with the findings of fact recorded by the authorities - Matter remitted for fresh considertion

2007-ITS-836-SC-RAVINDRAN AND PETER JOHN -Vs- THE SUPERINTEDENT OF CUSTOMS , Dated: May 14, 2007

It cannot be said as a general principle of law that the illegality of the seizure would in all cases prove fatal to the case of the prosecution. – confession alone is not sufficient for conviction

2007-ITS-835-SC-COMMISSIONER OF INCOME TAX, PUNE -Vs- SHIRKE CONSTRUCTION EQUIPMENT LTD , Dated: May 17, 2007

Exports profits - Sec 80HHC benefits - HC holds Sec 80HHC is a self-contained code in itself and is an independent Section and no set off against business losses of earlier period u/s 72 to be allowed - Sec 80AB governs Sec 80HHC, and set off of unabsorbed business losses of earlier years is permissible for determining business profits

2007-ITS-834-SC-COMMISSIONER OF INCOME TAX -Vs- P MOHANAKALA , Dated: May 15, 2007

HC misdirected itself and committed error in disturbing concurrent findings of facts of all lower authorities - Gifts of over Rs 1.7 Cr to be assessed as income u/s 68 - Assessees failed to discharge the onus of proving authenticity of transactions

2007-ITS-833-SC-M/s RELAX SAFETY INDUSTRIES, MUMBAI -Vs- COMMISSIONER OF CUSTOMS, (IMPORT), MUMBAI , Dated: May 9, 2007

Ear plugs imported as plastic cups in 1994 - Confiscation upheld

2007-ITS-832-SC-COMMISSIONER OF CENTRAL EXCISE INDORE -Vs- M/s CETHAR VESSELS LTD , Dated: May 15, 2007

Erection of boiler at site – excisability – matter remanded to Tribunal for considering facts in the light of

2007-ITS-831-SC-M/s TAARIKA EXPORTS -Vs- UNION OF INDIA , Dated: May 7, 2007

Failure to fulfill export obligation – DGFT's order upheld – penalty reduced to 20 Lakhs from 45 lakhs

2007-ITS-830-SC-COMMISSIONER OF CENTRAL EXCISE, JAIPUR -Vs- M/s MAHAVIR ALUMINIUM LTD , Dated: May 11, 2007

Process of conversion of Aluminium Ingots into Aluminium Billets during the intermediate stage by the process of re-melting and adding other alloys amounts to 'manufacture' .

2007-ITS-829-SC-COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR -Vs- M/s SAURASHTRA CHEMICALS LTD , Dated: May 9, 2007

Capital goods received prior to 1.4.2000, installed after that date – only 50% credit eligible – balance 50% not eligible even in subsequent years

2007-ITS-828-SC-COMMISSIONER OF CUSTOMS, MAHARASHTRA -Vs- M/s GALAXY ENTERTAINMENT (I) P LTD , Dated: May 8, 2007

Import of Bowling Alley - technical and installation fee - no to be included in the value

2007-ITS-827-SC-V K PURI -Vs- CENTRAL BUREAU OF INVESTIGATION , Dated : April 27, 2007

Disproportionate assets - Customs officer can be tried by Delhi Court even if he had not worked in Delhi

2007-ITS-826-SC-M/s NEW SWADESHI SUGAR MILLS -Vs- COMMNR OF CENTRAL EXCISE, PATNA , Date : March 03, 2007

Central Excise - Valuation - State Govt fixes upper ceiling of price for sale of molasses - Assessee clears it at cheaper rates - Revenue demands duty based on the price fixed by the State Govt under Molasses (Control) Order - Fixation of upper ceiling means freedom to the assessee to sell at any price less than the outer limit and such a price to be the normal price under Sec 4(1)(a) of the Central Excise Act - Tribunal's order set aside

2007-ITS-825-SC-M/s SPAN DIAGNOSTICS LTD -Vs- COMMISSIONER OF CENTRAL EXCISE, SURAT , Dated: April 30, 2007
Monoclonal Antibodies (MAB) and Pregnancy Test Card fall under Chapter Heading 30.02

2007-ITS-824-SC-COMMISSIONER OF INCOME TAX, COIMBATORE -Vs- M/s LAKSHMI MACHINE WORKS , Dated: April 25, 2007

Sec 80HHC - Excise duty and sales tax cannot form part of 'turnover'

2007-ITS-823-SC-M/s LARSEN AND TUBRO LTD -Vs- COMMISSIONER OF CENTRAL EXCISE, PUNE-II , Dated: May 2, 2007

Excisability of PSC girders - When in the original notice no allegation of suppression of facts had not been made, the same could not have been made subsequently as the facts alleged to have been suppressed by the appellant were known to them."

2007-ITS-822-SC-M/s PRAGATI SILICONS PVT LTD -Vs- COMMISSIONER OF CENTRAL EXCISE, DELHI , Dated: April 26, 2007

Plastic name plates for motor vehicles fall under Chapter 87 and 39

2007-ITS-821-SC-BELLARY STEELS AND ALLOYS LTD -Vs - COMMISSIONER OF CENTRAL EXCISE AND ANR , Dated : March 7, 2007

Demand of Rs. 3 Crores; pre deposit of 1 Crore ordered – application made to BIFR – three months time granted

2007-ITS-820-SC- M/s VIRLON TEXTILE MILLS LTD -Vs- COMMISSIONER OF CENTRAL EXCISE, MUMBAI, Dated : April 17, 2007

EOU – if DTA sales against rupee are allowed the benefits of notification No. 2/95-CE, DTA supplies, which are at par with physical exports, cannot be denied the same benefits.

2007-ITS-819-SC- M/s ADHUNIK FOOD PRODUCTS (P) LTD, U P -Vs- COMMISSIONER OF CENTRAL EXCISE, MEERUT, Dated :April 20,2007

'Puffs' prepared from cereals cannot fall within the item 'Prasad/prasadam

2007-ITS-818-SC- COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I -Vs- CHENNAI PETROLEUM CORPN. LTD, Dated: April 19, 2007

Central Excise - electricity generated from RFO which was captively consumed by the refinery was not liable to duty.-Entry No.34 of Notification No.75/84 read with the clarificatory circular clearly spells out that the assessee would be entitled to the benefit of exemption on LSHS to the extent it is used in Thermal Power Plant located within the refinery area for generating electricity which in turn is used in the process of manufacture of petroleum products

2007-ITS-817-SC- COMMNR. OF CUSTOMS, MUMBAI -Vs- CHAMPALAL J. JAIN, MUMBAI, Dated: February 5, 2007

Although there is some substance in the submission advanced by learned Additional Solicitor General appearing for the Revenue, but on facts we find that the finding recorded by the Tribunal is a finding of fact which does not call for any interference. The special leave petition is dismissed.

2007-ITS-816-SC- M/s MATSUSHITA TELEVISION & AUDIO (I) LTD -Vs- COMMISSIONER OF CUSTOM, Dated: April 12, 2007

Customs valuation - Under Rule 9(1)(c) of the Valuation Rules, 1988, only such royalty which is relatable to the imported goods and which is a condition of sale of such goods alone could be added to the declared price.

2007-ITS-815-SC- SREE RAMAKRISHNA SOAPNUT WORK -Vs- SUPDT. OF CENTRAL EXCISE, Dated : February 28, 2007

Manufacture - Assessee undertakes process of pulverisation of 'Shikakai Pods' into 'Sheekakai Power' - Inference of 'Manufacture' under the Central Excise Act depends not only on concepts. It depends on facts and circumstances of each case.The word `manufacture' after that amendment includes any process incidental or ancillary to the completion of a manufactured product; and which is specified in relation to any goods in the Section or Chapter Note of the Ist Schedule to the Central Excise Tariff Act, 1985, as amounting to manufacture. The amendment to Sec.2 (f) introduced the words "

2007-ITS-814-SC- MUKESH TIKAJI BORA -Vs- UNION OF INDIA, Dated: April 11, 2007

It is a trite law that all documents which are not material are not necessary to be supplied. What is necessary to be supplied is the relevant and the material documents, but, thus, all relevant documents must be supplied so as to enable the detenue to make an effective representation which is his fundamental right under Article 22(5) of the Constitution Of India, 1950. Right to make an effective representation is also a statutory right. (See: Sunila Jain v. Union of India and Anr. 2006 (3) SCC 321

2007-ITS-813-SC- BHAGUBHAI DHANABHAI KHALASI -Vs- THE STATE OF GUJARAT , Dated: April 5, 2007

Cofeposa - part of the impugned order whereby and where under the Division Bench refused to grant leave to the appellant to ventilate his grievances before an appropriate forum cannot be sustained. This appeal is allowed to the aforementioned extent.

2007-ITS-812-SC- COMMISSIONER OF INCOME TAX, KOLKATA -Vs- MUKUNDRAY K SHAH, Dated: April 10, 2007

Concept of deemed dividend under Section 2(22)(e) of the Act postulates two factors, namely, whether payment is a loan and whether on the date of payment there existed "accumulated profits". These two factors have to be correlated. This correlation has been done by the Tribunal coupled with the fact that all withdrawals were debited in the capital account of the firm leading to the debit balance of Rs.8.18 crores. The High Court has erred in disturbing the findings of fact.

2007-ITS-811-SC- COMMISSIONER OF CUSTOMS, MUMBAI -Vs- M/s CLARIANT INDIA LIMITED, WORLI, Dated: March 29, 2007

Merely because the two parties are related to each other will not amount to undervaluation per se. It will depend on the facts and circumstances of each individual case. Rremanded the matter to the adjudicating authority which would decide the matter de novo in accordance with the Customs Valuation Rules, 1988.

2007-ITS-810-SC- ZUARI INDUSTRIES LTD -Vs- COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, Dated: March 29, 2007

Captive power plant – assessee is right in its contention that, in this case, 6 MW Captive Power Plant is one of the items out of 14 items constituting capital goods required for the substantial expansion of the fertilizer project, and, therefore, it fell under serial no. 226(i) as goods required for the fertilizer project entitled to the benefit of nil rate of duty.- once an essentiality certificate was issued by the sponsoring authority, it was mandatory for the Revenue to register the contract

HIGH COURT

2006-ITS-2559-HC-(ELT-209/184)-COMMISSIONER OF C. EX. JALANDHAR -Versus- INDO GERMAN FABS. , 15-9-2006

Violation of any requirement per se does attract penalty - Mens rea is normally required to be shown for imposition - Rule 173Q(1)(b) of erstwhile Central Excise Rules, 1944 - Rule 25 of Central Excise Rules, 2002.

2006-ITS-2558-HC-(ELT-209/175)-A.M. HANDICRAFT -Versus- UNION OF INDIA , 15-9-2006

Penalty - The petitioners have failed to produce anything to show even in the writ petition filed in this regard that any export had been made by them nor have produced the copies of DEEC books, shipping bills, realization certificate in support of fulfilment of export obligation prima facie to show that there is prima facie case in favor of petitioners. In totality of facts and circumstances, no illegality or irregularity or such procedural unreasonableness can be called from the order which will entail interference under Article 226 of the Constitution.

2006-ITS-2557-HC-(ELT-209/173)-VIPUL OVERSEAS P. LTD. -Versus- DIRECTORATE OF REVENUE INTELLIGENCE , 27-9-2006

Release of goods - Provisional release of goods subject to certain conditions allowed by High Court in respect of earlier consignment - However, conditions to be complied with changed in relation to another consignment .

2006-ITS-2556-HC-(ELT-209/015)-MK INTERNATIONAL -Versus- UNION OF INDIA , 7-9-2006

Seizure - Freezing of bank account permissible when supported by some statutory provision and procedure for effecting such seizure has to be fair and reasonable -- Bank account cannot be seized for indefinite period - Respondent directed to release bank account unless any other appropriate order justifying seizure of bank account is passed - Section 110 of Customs Act, 1962. .

2006-ITS-2555-HC-(ELT-208/503)-COMMISSIONER OF CENTRAL EXCISE -Versus- MALBRO APPLIANCES P. LTD. , 14-9-2006

Penalty - First proviso to Section 11AC of Central Excise Act, 1944 providing for penalty of 25% if duty demanded paid within 30 days of order - Respondent paid duty in impugned case before assessment order and even before issue of show cause notice - Plea of Revenue seeking imposition of penalty equal to duty amount rejected.Appeal dismissed

2006-ITS-2554-HC-(ELT-208/499)-M.S. INTERNATIONAL LTD. -Versus- UNION OF INDIA , 11-9-2006

Appeal - Restoration of - Tribunal directed pre-deposit of Rs. 5 crores against duty demand of Rs. 19.7 crores and equal amount of penalty - Pre-deposit not paid and appeal dismissed for non-compliance - - Since there is an interim order that has been operating in favour of the petitioner for the last four years and the amount involved is extremely high, it will be in the interest of justice if the appeal is heard by Tribunal without insisting on pre-deposit. Petition allowed

2006-ITS-2553-HC-(ELT-207/645)-COMMISSIONER OF CENTRAL EXCISE -Versus- INTERGRAPH TECHNOLOGIES , 15-9-2006

Penalty - Quantum of penalty is discretionary and exercise of jurisdiction by Commissioner (Appeals) in reducing penalty, is proper - No substantial question of law arises out of order of Tribunal - Sections 11AC and 35G of Central Excise Act, 1944. .

2006-ITS-2552-HC-(ELT-207/500)-INTERNSIL P. LTD. -Versus- UNION OF INDIA , 27-9-2006

Writ petition - Alternative remedy - Pendency of writ for long time is not a ground for entertaining it on merits regardless of effective alternative remedy - Article 226 of Constitution of India. Petition dismissed

2006-ITS-2551-HC-(ELT-207/357)-RAJESH KUMAR SHARMA -Versus- UNION OF INDIA , 15-9-2006

Compounding of offence - Quantum for compounding - Computation of - Rule 5 of Customs (Compounding of Offences) Rules, 2005 provides amount up to 20% of market value of goods or Rs. 10 lakhs, whichever is higher .Petition dismissed

2006-ITS-2550-HC-(ELT-207/343)-SUPER TECH AGRO OILS PRIVATE LIMITED -Versus- GOVERNMENT OF INDIA , 26-9-2006

Detention of goods - Provisional release of goods - Delay in finalisation of matter causing loss to petitioner - Union of India directed to pass an order one way or other after considering stand of petitioner and if goods are required to be detained for any valid reason, same to be conveyed to petitioner - Section 110 of Customs Act, 1962.

2006-ITS-2549-HC-(ELT-207/194)-KRISHNA UDYOG -Versus- UNION OF INDIA , 6-9-2006

Import of duty free vanaspati oil from Sri Lanka under Free Trade Agreement (FTA) - where an importer had sent entire payment in advance before the date of issue of public notice, shall also be entitled to import duty free vanaspati oil from Sri Lanka as has been permitted by the respondents to the persons, who had opened irrevocable Letter of Credit before the date of issue of public notice.Petition allowed

2006-ITS-2548-HC-(ELT-207/181)-UNION OF INDIA -Versus- PRECITEX RUBBER INDUSTRIES LTD. , 19-9-2006

Reference to High Court - Demand - Limitation - Jurisdiction to issue notice - Commissioner only whether can issue notice under Section 11A(1) of Central Excise Act, 1944 in cases of fraud, collusion or any wilful misstatement or suppression of facts - Decisions of Apex Court that only Collector could issue notices in such cases based on provisions as they stood before amendment by Act No. 18 of 1992 - Language of Section 11A(1) ibid different after amendment of 1992 - C.B.E.&C. Circular No. 3/92. CX. 6, dated 14-5-1992 instructing that Collector to issue and decide demands notwithstanding ame

2006-ITS-2547-HC-(ELT-207/040)-LIGHT ENGG. CORPORATION -Versus- UNION OF INDIA , 1-9-2006

Settlement Commission - Jurisdiction - Disclosure of liability - Commission is justified in not entertaining an application where full and true disclosure is not made by an assessee, which is a sine qua non for entertainment of application by Commission - Section 32E of Central Excise Act, 1944. Petition dismissed

2006-ITS-2546-HC-(ELT-207/036)-BIG APPLE COMPUTERS -Versus- COMMR. OF CUS. & C. EX., HYDERABAD-II , 8-9-2006

Appeal to High Court - Territorial jurisdiction - Appellant situated in Andhra Pradesh and original order passed by Commissioner of Customs, Hyderabad - Cause of action occurred in Hyderabad - Karnataka High Court at Bangalore has no territorial jurisdiction despite impugned order passed by South Zonal Bench of Appellate Tribunal having Headquarters at Bangalore - Section 130 of Customs Act, 1962. Appeal dismissed

2006-ITS-2545-HC-(ELT-203/185)-COMMISSIONER OF CUSTOMS -Versus- JSW STEEL LTD. , 7-9-2006

EXIM - DEPB - DGFT temporarily suspended DEPB rates w.e.f . 27-3-2004 on certain steel items including items exported by appellants - Suspension revoked prospectively w.e.f. 12-7-2004 - No infirmity in Tribunal's order allowing benefit of conversion from DEPB Scheme to DFRC Scheme to respondents on the basis that they were otherwise eligible and satisfying necessary conditions, and similar benefit was given to other parties who had exported similar goods in the meanwhile. - there is no occasion to raise the kind of question which is sought to be raised, namely whether the CESTAT has correctly i

2006-ITS-2542-HC-(S.T.R.-005/010)-AMAR JYOTI PACKERS -Versus- COMMISSIONER OF CENTRAL EXCISE , 28-9-2006

Writ jurisdiction - Stay/Dispensation of pre-deposit - Financial hardship - If the corporate veil is lifted the persons who are in actual control of Amar Jyoti Packers will have to pay the impugned demand. No grounds to interfere under Article 226 of the Constitution of India are made out.

2006-ITS-2540-HC-(S.T.R.-004/257)-L.V. SANKESHWAR -Versus- SUPERINTENDENT OF C. EX., JAYANAGAR , 22-9-2006

Tour operator - Service tax on tour operators and contract carriage operators challenged - Contended by petitioners that vehicles rented out and no service provided - Vehicles involved in impugned case are contract carriages Petitions dismissed