SUPREME COURT OF INDIA while deciding on 31/08/09 the Civil Appeal No.5891 of 2009 in re: LIBERTY INDIA vs C.I.T. observed as follows:-

QUOTE: DEPB is an incentive. It is given under Duty Exemption Remission Scheme. Essentially, it is an export incentive. No doubt, the object behind DEPB is to neutralise ther incidence of customs duty payment on the import content of export product. This neutraliszation is provided for by credit to customs duty against export product. Under DEPB, an exporter may apply for credit as percentage of FOB value of exports made in freely convertible currency. Credit is available only against the export product and at rates specified by DGFT for import of raw materials, components etc. DEPB credit under the Scheme has to be calculated by taking into account the deemed import content of the export product as per basic customs duty and special additional duty payable on such deemed imports. Therefore, in our view, DEPB / Duty Drawback are incentives which flow from the Schemes framed by the Central Government or from Section 75 of the Customs Act, 1962, hence, incentives profits are not profits derived from the eleigible business under Section 809-IB. They belong to the category of ancillary profits of such undertakings. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_sc_ca_5891]

SUPREME COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS DEPB, export, import, incentive, neutralization

SUPREME COURT OF INDIA referred the following to a Largers Bench, while deciding the Civil Appeal No. 3159 of 2004 in re: CCEX INDORE vs GRASIM INDUSTRIES LTD : -

QUOTE: Since the issues arising in these appeals are of seminal importance and are likely to have serious ramifications on the question of determination of assessable value of the excisable goods for the purpose of levy of duty of excise, we are of the view that the following issues require consideration by a larger Bench:-
1. whether Section 4 of the Central Excise Act, 1944 (as substituted with effect fom 1/7/2000) and the definition of ‘TRANSACTION VALUE” in Clause (d) of sub-Section (3) of Section 4 are subject to Section 3 of the Act?
2. Whether Sections 3 and 4 of the Central Excise Act, despite being interlinked, operate in different fields and what is their real scope and ambit?
3. Whether the concept of ‘TRANSACTION VALUE” makes any material departure from the deemed normal price concept of the erstwhile Section 4(1)(a) of the Act?
UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_sc_ca_3159]

SUPREME COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS CENTRAL EXCISE ACT, Section 3, Section 4, Transaction value

IN THE HIGH COURT OF DELHI, while deciding on 1/7/09 the W.P (C) NO.2500 of 1982 in re: GUJARAT STATE FERTILISERS PVT. LTD vs U.O.I the Court observed as follows:-

QUOTE: The crucial terms here are sulphuric acid INTENDED FOR USE IN THE MANUFACTURE OF FERTILISERS. There are no restrictive terms cutting down the width of the phrase INTENDED FOR USE. Applying the CANON OF CONSTRUCTION mentioned earlier, i.e. that such exemption notifications are to be considered in their own terms, the Court holds that the express terms here do not make a distinction between PRIMARY and SECONDARY product or MAIN PRODUCT and BY-PRODUCT. As far back as in HANSRAJ’s case, it was ruled that:
IT IS WELL-ESTABLISHED THAT IN A TAXING STATUTE THERE IS NO ROOM FOR ANY INTENDMENT BUT REGARD MUST BE HAD TO THE CLEAR MEANING OF THE WORDS. THE ENTIRE MATTER IS GOVERNED WHOLLY BY THE LANGUAGE OF THE NOTIFICATION. IF THE TAX-PAYER IS WITHIN THE PLAIN TERMS OF THE EXEMPTION IT CANNOT BE DENIED ITS BENEFIT BY CALLING IN AID ANY SUPPOSED INTENTION OF THE EXEMPTING AUTHORITY.

The Court cannot be unmindful, here of the object of the notification which was to make fertilizers less expensive, and more widely accessible. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_wpc_2500]

HIGH COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS CANON OF CONSTRUCTION, CLEAR MEANING OF THE WORDS, INTENDMENT, TAXING STATUTE

IN THE HIGH COURT OF H.P. AT SHIMLA, while deciding on 10.4.09 the EX. REF. NO.10 of 2001 in re: SOOD STEEL INDUSTRIAL (P) LTD. vs COMMR. OF C.EX., it was observed as follows:-

QUOTE: The Larger Bench held that any manufacturer whose clearances are over Rs. 75 lacs cannot be said to avail of the benefit of the Notification No. 1/93-CE  and therefore, could not get benefit of the deemed credit order. following this order of the CESTAT, the appeal filed by the department was allowed. Hence the present petition.

In our view, the order of the Larger Bench [DAGAMBER FOUNDRY vs COMMISSIONER - 2000(118)ELT85] is not correct. The benefit of the Notification No. 1/93-CE is available to any manufacturer whose total clearances in the preceding financial year did not exceed Rs. 2 crores. The deemed credit  order clearly states that all concerns availing of exemption under notification No.1/93-CE dt 28/2/93 will be deemed to have paid duty under Rule 57-I of the Rules and the credit may be allowed to them at the rate fixed without production of any documents evidencing the payment of duty. Any manufacturer whose total clearances did not exceed Rs. 2 crores was entitled to the benefit of exemption under the Notification No. 1/93-CE. No doubt the benefits under this notification were limited to clearances of Rs. 75 lacs but this does not mean that manufacturers whose clearances exceeded Rs. 75 lacs were not availing the exemption under the notification. In our considered view, the only interpretation which can be given is that the wording used in the notification identifies the category of manufacturers who are satisfying the criteria as set out in Notification No.1/93-CE and are availing of the benefit of the said notification. The trade note limiting this benefit to those manufacturers whose clearances do not exceed Rs. 75 lacs is totally illegal and against the deemed credit order issued by the Ministry. We may also point out that though the department may be bound by its trade note, the industry is not bound by the same and has a right to challenge the same. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_hp_exref_10]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS

IN THE HIGH COURT OF CALCUTTA, while deciding on 4.3.09 the CUSTA No. 20 of 2008 and C.A. No.316 of 2008 in re: COMMR. OF CU. [PREVENTIVE], W. BENGAL vs INDIA SALES INTERNATIONAL it was observed that:

QUOTE: In our considered opinion the Court cannot insert any word in the statute since it is within the domain of legislators. Whatever the legislators think fit and proper can be legislated. The Court cannot insert any word in the legislation but Court has power to interpret the same without inserting anything.

On the contrary we feel that the power has been given by the legislators to a particular authority to act in a particular manner and the said particular authority must act accordingly and not otherwise at all.

Therefore, in our considered opinion that the Tribunal has the right to pass such order by giving an option to pay fine in lieu of confiscation of goods as has been directed to be done by them.
UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_cal_custa_20]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS DOMAIN OF LEGISLATORS, INSERT ANY WORD, STATUTE

The HIGH COURT OF JUDICATURE AT BOMBAY while allowing the petition W.P. No.3288 of 2008 in re: HAMID FAHIM ANSARI vs COMMR. OF CUSTOMS [IMPORT] NHAVA SHEVA on 6.5.09 held as follows: -

QUOTE: Imports have been done in the name of the petitioner but for some other person. In so far as respondents / Customs authorities is concerned, they have not pointed out to us any provision under the Customs Act or any Rules or Regulation framed thereunder by which the person having valid IEC Number and having paid the custom duty is prevented from importing goods. At the highest, if the petitioner has obtaimed iec number by misrepresenting the Ministry of Commerce and Industry and Director General of Foreign Trade, it is for that body to take action.

In these circumstances, in our opinion, petitioner having paid the custom duty is entitled to release of the goods. We, therefore, direct respondents to release the goods within 48 hours from today. UNQUOTE

for full text of the judgement please visit http://www.taxesinindia.com  and click on the citation taxind_2009_hc_bom_wp_3288]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS misrepresenting, VALID IEC No.

SUPREME COURT OF INDIA while deciding on 26/2/2008 the Civil Appeal No. 1603 of 2008 in re: COMMR. OF TRADE TAX, U.P. vs J.U. PESTICIDES & CHEMICAL P. LTD. held as follows:-

QUOTE: Above being the factual position, the High Court ought not to have interefered with the orders of the departmental authorities and the Tribunal, that too on the question of appreciation of the factual aspects. The High Court has not analyzed as to how the conclusions of the Tribunal as noted above suffer from any infirmity. If fact finding authority comes to certain conclusions honestly and bona fide the mere fact that Court may have a different perspective of that question cannot be a ground to interfere with the finding even though another view may be possible. Considering the limited jurisdiction exercisable under Section 11 of the Act, such a course is not available. As noted by this Court in COMMISSIONER OF SALES TAX, U.P. vs KUMAON TRACTORS & MOTORS [2002-9-SCC-379], Section 11 of the Act confers limited jurisdiction to interfere with the order of the Tribunal only on the question of law, which is required to be properly stated and formulated. In the instant case, even that has not been done. The High Court order, which is clearly indefensible, is set aside. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com  and click on the citation taxind_2009_sc_ca_1603]

SUPREME  COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS appreciation of factual aspects, honestly and bona fide, infirmity

IN THE HIGH COURT OF GUJARAT AT AHEMEDABAD, while deciding the Special Criminal application No. 1442 of 2009 on 29/07/09 in re: ESSAR OIL LIMITED vs C.B.I, it was observed as follows:

QUOTE: As regards the contention that the accused cannot be subjected to face investigation in connection with the same offense, twice over, the learned Counsel for the CBI has rightly contended that the principle of double jeopardy would not be applicable at the stage of investigation. If the said contention were to be accepted, the provision of Section 173(8) would become redundant in as much as in all cases where further investigation is carried out, the accused would plead that they cannot be subjected to investigation twice over on the principle of double jeopardy. Merely because the investigating agency carries out further investigation it cannot be said that the accused are subjected to face investigation twice over, because it is merely a continuation of the earlier investigation. Moreover investigation cannot be put at par with prosecution and punishment so as to fall within the ambit of clause (2) of Article 20 of the Constitution. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_guj_scra_7442]

HIGH COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS CBI, DOUBLE JEOPARDY, DUTY FRAUD, INVESTIGATION, OFFENCE

THE HIGH COURT OF JUDICATURE AT BOMBAY while deciding on 2/5/09 the writ petition no. 4317 of 2009 in re: SUZLON INFRASTRUCTURE LTD vs U.O.I. observed as follows:-

QUOTE: The points of difference arise on the members constituting the Bench disposing of the appeal by separate orders from which orders, the points of difference are disclosed. Under Section 35 (2) of the Excise Act, there is power in the tribunal to rectify any mistake apparent on the record and amend any order passed by it under sub-section (1) within the time frame. It is thus, clear that the order passed is different from the points for determination. Points for determination thus arise from orders passed by the appellate tribunal which orders are not enforceable because of difference of opinion on points arising from the orders. These points finally shall be decided according to the opinion of the majority of the members of the tribunal who have heard the case including those who have first heard it. The final order would be based on the opinion of the third member who answers the point of difference referred to him as that would constitute the majority opinion. The third member does not pass any order. Such member only answers the points referred. The power to rectify under Section 35C (2) is the order. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com  and click on the citation taxind_2009_hc_bom_wp_4317]

HIGH COURT JUDGEMENTS

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS Excise Act, points for determination, points of difference, Section 35(2), Section 35C(2)

SUPREME COURT OF INDIA while deciding the Civil Appeal Nos. 5554-5555 of 2009 on 17/08/09 in re: MARUTI SUZUKI LTD vs CCEX DELHI III observed as follows:-

QUOTE : Electricity generation is a separate and distinct activity. It is an independent activity. It has its own economics. It does not form part of the process in which “inputs” are tranformed into separate identifiable commodity, though it may stand connected to such processes. It may not have any concern with the manufacture of the finished product. However, it is an ancillary activity. It is an activity which is anterior to the process of manufacture of the final product. It is on account of the use of the above expression “used in relation to manufacture” that such an activity of electricity generation comes within the ambit of the definition because it is integrally connected with the manufacture of the final product. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_sc_ca_5554_55]

SUPREME COURT JUDGEMENTS

VENKATRAMAN RAGGHUPATHY, Web admin.

SUPREME COURT JUDGEMENTS activity, elelectricity, independent, separate and distinct, used in relation to