IndLaw - Latest judgments on Indirect Tax from the Supreme Court of India, High Courts and tax tribunals

Judgments

Punjab Aromatics vs State of Kerala [SUPREME COURT OF INDIA, 30 Apr 2008]
Kerala General Sales Tax Act, 1963; Constitution o India, art. 286(1)(a) - Whether heating red oil to specified degree and then filtering it to remove impurities amounts to consumption/use of red oil in the manufacture of sandalwood oil attracts levy under s. 5A of KGSTA, 1963? - Held, by adding of impurities sandalwood oil becomes red oil, therefore, there was no consumption of red oil in the manufacture of sandalwood oil - Word "consumption" in the Explanation to art. 286 of the Constitution as it stood before the Constitution (Sixth Amendment) Act, 1956 has to be read in a manner different from the act of consumption in the generally understood sense - Appeal allowed.

Orient Ceramics and Industries Limited vs Commissioner of Customs, New Delhi [SUPREME COURT OF INDIA, 29 Apr 2008]
Appeal u/s. 35L(b) of the Central Excise Act, 1944 to challenge order rejecting the appeal filed by appellants against order of Commissioner of Customs imposing penalty of Rs. 10, 00, 000/- on the appellants and holding goods to be porcelain glazed tiles which were ordered for confiscation having been imported without license - CRCL in its report stated that samples satisfied the conditions as laid down in respect of glazed tile - Held, imported goods were not unglazed but glazed which was classifiable under tariff heading 6908.90 - License of import for such goods was required, as per policy, before importing which the appellants admittedly did not have - Since, the material which goes into production in the ceramic tiles and porcelain tiles is different, in the absence of any material to show that the tiles manufactured by the appellants were porcelain tiles made out of kaolin and petuntse, it cannot be held that the tiles imported by the appellants were other ceramic articles falling under tariff entry 6914.10 - Appeal dismissed.

Commissioner of Central Excise, Meerut vs Motherson Sumi Systems Limited and Others [SUPREME COURT OF INDIA, 24 Apr 2008]
Central Excise & Salt Act, 1944 - Allegation that respondent was not paying duty on the free supplies received by it from their buyers and thus suppressed the information with the intention to evade payment of duty - Held, in view of the fact that the point on merits is concluded against the revenue and in favour of the assessee by a judgment of this court in the case of International Auto Ltd. v. Commissioner of Central Excise, Bihar reported in 2005 (183) ELT 239(SC), dismissed the appeals filed by the revenue - Appeals dismissed.

Union of India and Others vs Inter Continental (India) [SUPREME COURT OF INDIA, 23 Apr 2008]
Excise - whether the end-use verification of the products is necessary for availing the benefit of concessional rate of duty? - Held, department could not, by issuing a circular subsequent to the notification, add a new condition to the notification thereby either restricting the scope of the exemption notification or whittle it down - Appeal dismissed.

(1) Aban Loyd Chiles Offshore Limited and Another; (2) Jindal Drilling and Industries Limited and Another; (3) Great Offshore Limited and Another vs Union of India and Others [SUPREME COURT OF INDIA, 11 Apr 2008]
Customs Act, 1962 - Whether oil rigs engaged in operations in the exclusive economic zone/ continental shelf of India, falling outside the territorial waters of India, are 'foreign going vessels' as defined by s. 2(21) and are entitled to consume imported stores thereon without payment of customs duty in terms of s. 87? - Held, as the goods were being taken to a territory which would be deemed to be a part of the territory of India though the goods have left the territorial waters, the same would be exigible to levy of duty when they are taken and consumed within the deemed territory of India - There would be no customs duty or any other duty levied while the goods are in transit to the deemed territory of India by any other country although they have gone out of the territorial waters of India - Appeal dismissed.

Commissioner of Customs, Mumbai vs J.D. Orgochem Limited [SUPREME COURT OF INDIA, 10 Apr 2008]
Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - Appeal to challenge order holding that since respondent was the only importer of the goods, they were 'the best person to obtain conclusive proof of downward pricing pattern in the international market' - Deputy Commissioner of Customs had opined that transactional value at US$ 13.2 per kg declared by the importer should be rejected and Rule 5 of the GATT Valuation Rules, 1988 should be applied ordering to load the value to US$ 18.7 per kg for goods falling under Heading 2914.69 and 2914.00 of the Customs Tariff Act, 1975 and Central Excise Tariff, 1944 respectively and for which respondent had earlier imported the same goods from the same supplier @ US$ 18.7 per kg - Issue to decide that extent of jurisdiction of the assessing officer to discard the transactional value disclosed by the importer - Held, there should be an "extra ordinary" or "special" situation so as to enable the competent authority to opine that the transactional value declared by the importer should be disbelieved; Customs Authorities are not bound by such declaration, it, however, has to rely on contemporaneous evidence to show that the invoice does not reflect the correct value - Appeal dismissed.

Tvl.Swastik Laminators By Its Partner, Umesh K.Mangal, Chennai vs (1) State of Tamil Nadu, By Its Secretary To Government, Chennai; (2) Commissioner of Commercial Taxes, Chennai; (3) Commercial Tax Officer, Peddunickenpet (North) Assessment Circle, Chennai [MADRAS HIGH COURT, 04 Apr 2008]
Writ petition to seek clarification of order passed wherein it was stated that packing material namely low density polythene or sheet and high density polythene or sheet used for packing was included under GO.Ms.No.71 dated 20.6.2005, hence the Petitioner was entitled to the said benefits from the date of the said GO and not from the original date of entry i.e. 27.3.2002 - Apex Court in Government of India and others Vs. Indian Tobacco that by reason of the amended notification, the Central Government only intended to rectify a mistake, and thus, the same will have retrospective effect and retroactive operation - Held, applying the ratio products included in GO.Ms.No.71 dated 26.2.2005 have been taken as amended to earlier inclusion dated 27.3.2002, accordingly, it is ordered that the Respondents are directed to include the said product from the date of original entry 27.3.2002 - Petition disposed of.

(1) Ajay Gulati, Delhi; (2) Jatin Kapoor, New Delhi vs (1) Union of India Through Secretary Ministry of Finance Department of Revenue New Delhi; (2) Directorate of Revenue Intelligence, New Delhi; (3) Kapil Rai, New Delhi [DELHI HIGH COURT, 03 Apr 2008]
Customs Act, 1962 - Petitions to challenge criminal prosecution initiated u/s. 135(1)(a) of the Customs Act, 1962 on same charges on which Joint Secretary (Revisionary Authority) Government of India, gave a categorical finding of facts that petitioners had not contravened any provision of Customs Act and the same were in consonance of the provision of the Customs Act and had thereby absolved them of their liability towards the personal penalties imposed on them by the lower authorities - Held, when the highest Appellate Authority has also absolved these petitioners on merits, no useful purpose will served by continuing the criminal proceedings on the same set of allegations - Petitions allowed.

Gurcharan Singh vs Directorate of Revenue Intelligence [SUPREME COURT OF INDIA, 01 Apr 2008]
Code of Criminal procedure, s. 482; Customs Act, 1962, ss. 132, 135 - Illegal claim of drawback - Application for discharge dismissed - Appeal against - Held, it is difficult to accept the submissions of appellant that prohibition must have a nexus with the payment of duty and in the event some goods are imported which are prohibited goods vis-a-vis payment of duty, then and then only the rigours of Section 135 would be attracted - As the allegations made in the complaint prima facie discloses an offence under s. 135, High Court, has correctly refused to quash the proceeding - Appeal dismissed.

(1) Sales Tax Practitioners' Association of Maharashtra and Tushar P. Joshi; (2) Bar Council of Maharashtra and Goa; (3) Bombay Small Scale Industries Association and Raksh Pal Abrol, President, The Bombay Small Scale Industries Association; (4) Maharashtra State Tax Practitioner Associations Federation, A Society Registered Under The Provisions of The Indian Societies Act Through Its President, Shri. Tukaram Baburao Shinde vs (1) State of Maharashtra Through Revenue Secretary, Ministry of Finance; (2) State of Maharashtra Through The Department of Finance and The Commissioner of Sales Tax [BOMBAY HIGH COURT, 28 Mar 2008]
The Judgment was delivered by : F. I. REBELLO1. All these petitions are being disposed of by this common judgment as the main challenge in all the petitions is to the constitutional validity of Section 61(1) and the explanation thereto, of the

Tata Chemicals Limited vs Union of India and Others [SUPREME COURT OF INDIA, 24 Mar 2008]
Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on dumped articles and for determination of injury) Rules, 1995 - Anti-dumping - Held, distinctive feature was challenge to the Customs Notification dated 27th October, 1998 - This aspect was not apparently noted by the two-Judge Bench - Order dated 24.8.2000 that determination as contemplated by r. 18 has taken place with the issuance of the Notification dated 27th October, 1998 and, therefore, the appeal could be maintainable to CEGAT - Appeals before CEGAT were clearly maintainable when challenge was to the determination made is clear from the issuance of the Notification dated 27th October, 1998 - Order accordingly.

Anirudh Singh Katoch vs Union of India and Others [DELHI HIGH COURT, 20 Mar 2008]
Arms Act, 1959 - Baggage Rules, 1998 - r. 8 - Customs Act, 1962 - Appeal to challenge order dismissing writ petition filed to seek quashing of detention order and release of firearms but permitted appellant to take back detained firearms and if appellant exercised such an option, the said firearms would be released to him as and when he chose to go abroad with the condition that he would not be permitted to bring the same into India - Whether non-resident Indian on transfer of his residence to India can be permitted to bring more than one firearm under provisions of the Arms Act or the Rules framed thereunder or the existing Baggage Rules? - Held, person on transferring his residence to India is allowed in his baggage used personal and household articles to the extent mentioned in Column 1 of Appendix 'F', other than those listed in Annexure-1 or Annexure-2, which means, that the person is not eligible to import the goods listed in Annexure-1 or Annexure-2 to Appendix 'F' - Only upto one firearm can be cleared on production of a valid license under the Arms Act and on payment of the appropriate duty on the said firearm, in view of exclusion of firearms under Rule 8 read with Appendix 'F' of the Baggage Rules and para 2 of the notification No.137/90 Cus. dated 20th March, 1990; release of this one firearm is by virtue of the exercise of powers by the Central Government, as vested in the Central Government under Section 11 of the Arms Act, and the Central Government having by circular No.63/95-Cus. permitted the release of one firearm under the 'Transfer of Residence Form Revision' to the person concerned - Appeal dismissed.

Commissioner of Central Excise, Vapi vs Kraftech Products Inc [SUPREME COURT OF INDIA, 14 Mar 2008]
Standards of Weights and Measures (Packaged Commodity) Rules, 1977; Central Excise Act, 1944 - Interpretation of r. 34 - Held, r. 34 contains an exemption clause - Exemption clause would apply if the commodity is sold by weight or measure, subject of course to the condition that the net weight of the commodity is 10 gms. or less - This legal requirement in this case also stands complied with - Once it is held that the Rules have no application in respect of the commodity as marketed and sold by the respondent, s. 4A of the Act will have no application - The appellate authority as also the Tribunal, therefore, were right in their decisions - Appeals disposed of.

International Metro Civil Contractors, New Delhi vs (1) Commissioner of Sales Tax/Vat, Delhi; (2) Deputy Commissioner Sales Tax/Vat Special Zone, New Delhi [DELHI HIGH COURT, 14 Mar 2008]
Petition to challenge orders by which jurisdiction in respect of Petitioner for assessment year 2000-2001 onwards under Delhi Sales Tax on Works Contract Act, 1999 and Central Sales Tax Act, 1956 was transferred to Deputy Commissioner (Special Zone), by which revisionary powers u/s. 46 of Delhi Sales Tax Act, 1975, which was repealed on 31st March, 2005, were delegated to Deputy Commissioner (Special Zone) and notice by which Deputy Commissioner (Special Zone) sought to exercise his (delegated) revisionary jurisdiction to call for and examine record/proceedings pertaining to assessment of Petitioner under Works Contract Act and DST Act - Whether any proceedings for revising assessment order were at all initiated by Revenue before 31st March, 2005 when DST Act and Works Contract Act were repealed? - Whether proceedings initiated by Revenue were saved by DVAT Act on repeal of DST Act and Works Contract Act on 31st March, 2005? - What is the effect of the omission, in DVAT Act, of power to revise assessment that was available to Commissioner u/s. 16 of Works Contract Act r/w s. 46 of DST Act? - Held, process of revisionary proceeding, not having been initiated by Revenue, dies natural death on repeal of DST Act and Works Contract Act, unless right of Revenue is otherwise saved by DVAT Act - By virtue of s. 106(2) of DVAT Act since previous operation of DST Act and Works Contract Act was saved, assessment order being transaction past and closed under those statutes, was also saved; power of revision being only enabling power and not substantive right, it is not saved by s. 106(2) of DVAT Act, which only saves a 'right' or an 'entitlement', both being synonymous - Fresh power of revision was conferred on Commissioner by amendment brought about to DVAT Act on 16th November, 2005 when s. 74A was inserted in that Act but this did not resuscitate or resurrect the long-dead revisionary power conferred on Commissioner u/s. 46 of DST Act; it had no retrospective effect - Revisionary power conferred on Commissioner by s. 74A of the DVAT Act with effect from 16th November, 2005 has not yet been delegated to anybody, thus, it is quite obvious that the order dated 16th January, 2006 transferring jurisdiction over Petitioner to Special Zone cannot have any relation to the power to exercise revisionary jurisdiction - Petition allowed.

Gharda Chemicals Limited vs State of Maharashtra and Others [BOMBAY HIGH COURT, 14 Mar 2008]
The Judgment was delivered by : HON'BLE JUSTICE R. S. MOHITE1. Rule, By consent of the parties rule made returnable forthwith and parties are heard.2. This writ petition filed by M/s.Gharda Chemicals Ltd. (hereinafter referred to as the

Commissioner of Customs, Visakhapatnam vs Hygrdse Pellets Limited [SUPREME COURT OF INDIA, 13 Mar 2008]
Customs - Barge hire charges - Valuation - Held, barge hire charges were incurred by the Respondent-herein for unloading from Mother Vessel on to the barge after the customs barrier stood crossed and, therefore, the barge hire charges, were not includible in the assessable value of the imported goods - Appeal dismissed.

Commissioner of Customs, Mumbai vs M.M.K. Jewellers and Another [SUPREME COURT OF INDIA, 11 Mar 2008]
Customs Act, 1962 - Non- accounting of gold or the wastage - Demand of duty - Held, appellant cannot invoke the extended period of limitation in view of the Commissioner's categoric findings that no case of collusion, wilful misstatement or suppression of facts has been brought out in the show cause notice so as to invoke the provisions of s. 114A - Penalty under s. 114A is imposable only when the demand is confirmed under the proviso to s. 28(1) - Duty cannot be imposed by invoking the extended period of limitation - When the duty itself cannot be imposed, no order of imposing the penalty under s. 114A can be sustained - Appeal disposed of.

Geo Technology Foundations and Construction vs Commissioner of Central Excise, Pune [SUPREME COURT OF INDIA, 07 Mar 2008]
Central Excise Act, 1944 - Appellant manufactures PSC girders at site to be used in the construction of Railway Bridge for Konkan Railways - Larger Bench held that the benefit of Notification No.59/90-CE cannot be extended to PSC girders as they are goods which are not manufactured at site for construction of buildings - Appeal against - Held, as the facts alleged to have been suppressed by the appellant were known to the department, in that view of the matter the extended period of limitation under s. 11-A of the Act has no application - Appeals disposed of.

Commissioner of Central Excise, Jaipur vs Dugar Tetenal India Limited [SUPREME COURT OF INDIA, 07 Mar 2008]
Central Excise Act, 1944; Central Excise Rules, 1944 - Assessee is engaged in the manufacture of photographic chemicals - Benefit of exemption under Notification No. 175/86-CE - assessee was not eligible for the benefit of exemption Notification as they had cleared their product affixed with the brand name of another person - Demand of duty of Rs.32, 25, 465/- against the assessee by invoking the extended period of limitation - Appeal against - Held, declaration of the assessee in the classification list that the brand name "Tetenal" was owned by them was a willful mis-statement/suppression of facts with the intent to evade payment of duty with ulterior motive to avail benefit - Notification No. 175/86-CE stipulates that benefit of exemption will not be available to the goods on which the brand name of another manufacturer is affixed and the said manufacturer is not entitled to the small scale exemption, so that the benefit of small scale exemption should not be misused by manufacturers manufacturing goods for different persons - Appeal dismissed.

(1) Lohia Sheet Products; (2) Lohia Brass Private Limited vs Commissioner of Customs, New Delhi [SUPREME COURT OF INDIA, 05 Mar 2008]
Customs Act, 1962, s. 130-E - Benefit of the exemption notification no.8/96- CE - Whether the scrap imported by appellants is chargeable to 'NIL' rate of additional customs duty under s. 3 of the Customs Tariff Act 1975? - Held, it is a matter of fact that duty was paid by the appellant at the time of import of waste or scrap - Mere fact that the goods were imported would not make any difference - Intention behind grant of exemption under the notification was to prevent the duty being paid at two stages - Appellants would be entitled to the benefit of the exemption - Appeals allowed.

Rexnord Electronics and Controls Limited vs Union of India and Others [SUPREME COURT OF INDIA, 04 Mar 2008]
Customs Act, 1962, ss. 127A r/w 127H - Whether the term "interest" used therein would include within its fold interest payable under the bond furnished by the appellant before the Director General of Foreign Trade? - held, if any interest became payable under the Act, indisputably the Settlement Commission, will have the requisite jurisdiction to grant immunity in respect thereof either wholly or in part - All penalties, fine and interest, it goes without saying, must, however, be enforceable under the Act - Interest payable under the bond is not an interest payable under the Act - Power of the Settlement Commission is relatable to waiver of partial or full amount of interest only under the Act - Appeal dismissed.

Commissioner of Central Excise, T.N vs Vinayaga Body Building Industry Limited [SUPREME COURT OF INDIA, 04 Mar 2008]
Central Excise Tariff Act, 1985; Central Excise Act, 1944 - Whether a maxi cab should be classified under the respective tariff heads, i.e., 87.02 to 87.05 or under the Chapter Heading 87.07? - Held, finding that assessee manufacture bodies for user thereof for maxi cabs with seating capacity of 12 persons excluding the driver is a finding of fact - Only because the manufacturers of chassis had classified them under Sub-Heading 8702.90, the same having regard to the independent manufacturing activities carried on by the respondent, was not decisive - Question in regard to payability of duty what is relevant is the seating capacity for which the registration certificates had been granted and not the opinion of the manufacturer of the chassis - Appeal allowed.

Moriroku Ut India Private Limited vs State of Uttar Pradesh and Others [SUPREME COURT OF INDIA, 03 Mar 2008]
U.P. Trade Tax Act, 1948 - Whether amortisation cost of toolings was includible in the sale price of auto components as in the case of excise duty under Central Excise Act, 1944? - Held, excise duty is a levy on a taxable event of "manufacture" and it is calculated on the "value" of manufactured goods - It is not concerned with ownership or sale - Liability under the excise law is event-based and irrespective of whether the goods are sold or captively consumed - Under the excise law, the liability is there even when the manufacturer is not the owner of raw material or finished goods - High Court had erred in holding that the amortization cost calculated in terms of r. of the Excise Valuation Rules, 2000 is includible in the sale price of auto components sold by the appellant - Appeal allowed.

Commissioner of Central Excise, Jaipur vs Scan Synthetics Limited [SUPREME COURT OF INDIA, 28 Feb 2008]
Central Excise Tariff Act 1985 - Determination of assessable value in respect of intermediate product, i.e., the textured yarn manufactured and consumed captively by the respondent in the manufacture of final product, i.e., dyed yarn - Whether the assessee had undervalued the textured yarn consumed captively in the manufacture of dyed yarn? - Held, assessable value of the captively consumed grey yarn would be on the basis of the price at which the grey yarn was sold by the assessee to unrelated buyers in wholesale at the factory gate - Assessee had produced a number of invoices showing the sale to such independent buyers - Finding recorded by the Tribunal is a finding of fact which cannot be interfered with - Appeal dismissed.

Kalidas Sheet Metal Industries Private Limited vs State of Kerala [SUPREME COURT OF INDIA, 28 Feb 2008]
The Judgment was delivered by : J. M. PANCHAL1. These appeals are directed against judgments rendered by the High Court of Kerala at Ernakulam in Tax Revision Case Nos. 467 of 2000 and 10 of 2001 by which the view taken by the Assistant Commissioner

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