Indirect Taxes

1. Commissioner of Customs, Mumbai vs. Bussa Overseas Properties Limited {2007 (216) ELT 659 (S.C.)}

In the present case the Department has preferred the above Appeals to the Supreme Court on the basis that the assessee has undervalued the goods. The Department has alleged that the CIF declared value was not 6.26 ( pounds) lakhs, but it was around 7.82 (pounds) lakhs, on the basis that the said sum of Rs 1.56 (pounds) lakhs constituted the balance amount subsequently paid partly in cash and cheque by assessee to foreign buyer. The Apex Court held that the Department was not able to substantiate their claim of undervaluation. The Department was trying to rely on unsigned Xerox copies of the documents in support of their case. The Apex Court hence held that there was no merit in the civil Appeals filed by the Department and as such the same were dismissed.

2. Commissioner of Central Excise, Mumbai vs. Laljee Godhoo & Co {2007 (216) ELT 514 (S.C)}

In the present case, the Department has filed an Appeal against the order of the CESTAT. The short question which arose in the present Appeal was that , ‘whether the process to which the raw asafoetida (hing) is subjected to, resulting in the formation of ‘compounded asafoetida’, constitutes “manufacture” under the Central Excise Act, 1944. The Apex Court held that it has been rightly held by the CESTAT that there was no chemical change brought about by the aforestated process. The product at the starting point of the process and the product at the terminal point of the process remains the same. The Apex Court hence held that the Hon’ble CESTAT was right in holding that as the essential character of the product remains the same and constant. Therefore there was no ‘manufacture’. The twin tests applicable for making the goods excisable are manufacture and marketability. As the first test has not been satisfied in this case, there was no manufacture involved in the process. Therefore the CESTAT was right in holding that the ‘compounded asafoetida’ was not exigible to excise duty. As such the Apex Court held that there was no merit in the Appeals and thus the Civil Appeals were dismissed.

3. Commissioner of Central Excise, Kolkata vs. G.A. Danielli India Limited {2007 (216) ELT 528 ( Tri- Kol)}

In the present case, the authorization given by the Committee of Commissioners for filing Appeal with CESTAT was held to be improper. It was held that the authorization did not bear a date and no where did it give an opinion that the impugned order was not legal or proper, nor any reasons were given for coming to such an opinion. As such the impugned authorization was held invalid and the Appeal filed was held not maintainable.

4. Vardhman Acrylics Limited vs. Commissioner of Customs, Jamnagar {2007 (216) ELT 529 (Tri–Ahmd)}

In the present case, the issue involved related to quantum of interest in terms of section 61(2) clause 2(ii) of Customs Act, 1962. The Revenue charged the interest in terms of the Notification No. 10/2001-Cus (N.T.) dated 1st March, 2001 issued by the Central Government in terms of section 61 fixing the rate of interest as 24% per annum, in respect of clearances of warehoused goods. The interest calculated by the authorities was paid by the appellants, however they subsequently claimed refund of the same on the ground that the rate of interest under section 61(2) (ii) of the Act cannot exceed the rate of interest fixed under section 47. The above plea of the appellant was rejected on the ground that by challenging the quantification of interest , the appellant was seeking to challenge the Notification itself. The Hon’ble CESTAT that to do the same, other remedies were open to the Appellants. The Hon’ble CESTAT further held that the issue stood decided by the Board and the rate of 24% was within the range prescribed under section 47.As such the appellant Appeal was rejected.