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Case Laws
Showing 261 to 280 of 342 Records
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1996 (11) TMI 82
Issues:
1. Jurisdiction under Section 35A of the Central Excises and Salt Act, 1944.
2. Barred by limitation - revision of earlier decision dated 7-4-1971.
3. Liability to pay duty for the period between 16-3-1976 and 2-6-1977.
Jurisdiction under Section 35A:
The appellant received a show-cause notice alleging goods were cleared without duty assessment. The Central Board sought clarification on the decision or order to be revised. The notice did not specify a decision but referred to the officer(s) permitting clearance without duty assessment. The Collector of Central Excise had earlier held the goods were not liable to duty on 7-4-1971. The notice was time-barred if intended to revise the 1971 decision. The duty claimed was for a period after the 1971 order, and the revision was based on the 1973 notice, not the subsequent amendment. The Supreme Court held that the invocation of jurisdiction under Section 35A was not justified due to lack of specificity and being time-barred.
Barred by Limitation - Revision of Earlier Decision:
The appellant argued that the show-cause notice was barred by limitation as it did not specify the decision or order to be revised. The notice referred to the officer(s) permitting clearance without duty assessment, which was based on the 1971 decision that the goods were not liable to duty. The Court found that if the notice was intended to revise the 1971 decision, it was clearly time-barred. Additionally, the duty claimed was for a period after the 1971 order, and the revision was based on the 1973 notice, not the subsequent amendment. Therefore, the Court held that the exercise of jurisdiction under Section 35A was not justified.
Liability to Pay Duty for the Period 16-3-1976 to 2-6-1977:
The Supreme Court allowed the appeal and set aside the orders dated 13-4-1976 and 30-1-1979 to the extent of holding the appellant liable to pay duty for the period between 16-3-1976 and 2-6-1977. The Court made no order as to costs in this matter.
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1996 (11) TMI 81
The Supreme Court upheld the Customs, Excise & Gold Appellate Tribunal's decision that parts like Pistons and Gaskets are not assessable to C.V. duty under Tariff Entry 34A but fall under the residuary Entry 68. The Tribunal's decision was based on the predominant user test. The Court dismissed the appeals on merits and left the question of refund pending further decision on unjust enrichment.
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1996 (11) TMI 80
The Supreme Court allowed the appeal, set aside the order under appeal, and remanded Appeal No. CD (SB) (T) 588/79-B2 to the Tribunal for fresh consideration. The parties can submit necessary evidence and copies of a related case. No costs were awarded.
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1996 (11) TMI 79
Issues Involved:
1. Reclassification of cotton canvass and duck fabrics under the Central Excise Tariff Act, 1985.
2. Validity of the orders issued by the Assistant Collector of Central Excise.
3. Alternative remedy of appeal under Sections 35 and 35B of the Central Excises and Salt Act, 1944.
Issue-wise Detailed Analysis:
1. Reclassification of Cotton Canvass and Duck Fabrics:
The petitioners, a leading textile company, had initially classified and cleared cotton canvass and duck fabrics under Tariff Item 19-I(i) of the erstwhile First Schedule to the Central Excises and Salt Act, 1944. After the Central Excise Tariff Act, 1985 came into force, the petitioner filed classification lists under Chapter Headings 52.05/52.06, which were approved by the Assistant Collector of Central Excise. The petitioners argued that the reclassification proposed by the officers, which led to higher excise duties, was contrary to the provisions of the Act and the Statutory instructions of the Government of India. They contended that the reclassification discriminated against them, making their products costlier compared to other manufacturers.
2. Validity of the Orders Issued by the Assistant Collector of Central Excise:
The petitioners sought to quash the orders issued by the Assistant Collector of Central Excise, which proposed the reclassification of their products. The respondents opposed the claims, arguing that the petitioners had an alternative remedy of filing appeals against the impugned orders. The respondents also contended that classification issues are pure questions of fact and should be addressed by the authorities, not the courts. The petitioners countered by citing Order No. 10/93 issued by the Central Board of Excise and Customs, which classified the disputed fabrics under Heading No. 52.06 of the C.E.T., and a subsequent Trade Notice No. 42/93 issued by the Collector of Central Excise, Madurai, which supported their classification under Heading 52.05.
3. Alternative Remedy of Appeal:
The court noted that the petitioners had an alternative remedy of appeal under Sections 35 and 35B of the Act. The court referred to a Division Bench judgment in "Madura Coats Limited v. Collector of Central Excise, Madurai," which held that interference under Article 226 of the Constitution is not warranted when an alternative remedy exists. The court emphasized that the statutory scheme provides a comprehensive appellate mechanism, including appeals to the Supreme Court under certain circumstances. The court concluded that the petitioners should avail the alternative remedy of appeals, and dismissed the writ petitions, directing the petitioners to file appeals within 30 days.
Conclusion:
The court dismissed the writ petitions, holding that the petitioners should avail the alternative remedy of filing appeals against the impugned orders. The court directed the appellate authorities to decide the appeals on merits and in accordance with law, without considering the question of limitation. All contentions of the parties were left open to be urged before the appellate authorities.
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1996 (11) TMI 78
Issues:
Challan as a demand for excise duty, violation of natural justice in issuing challan without assessment under Section 11 of the Central Excises and Salt Act.
Analysis:
The case involved three writ petitions seeking to quash a challan for excise duty assessment and return of seized documents. The petitioner, a manufacturer of aluminium circles, claimed exemption under a General Notification. The third respondent conducted a search and seized documents, directing the petitioner to pay duty without assessment. The petitioner argued that the challan itself constituted a demand, violating natural justice and lacking initiation under Section 11 of the Act.
The petitioner contended that the challan served as a demand for excise duty. However, the court found that the challan did not explicitly contain a demand or consequences for non-payment. The absence of specific language indicating a demand or penalty rendered the petitioner's argument unconvincing. The court highlighted the necessity of clearly notifying individuals of any potential civil or penal repercussions for non-compliance with directions or orders.
Regarding the violation of natural justice, the court emphasized that without a clear indication of civil or criminal consequences for non-payment in the challan, there was no breach of natural justice principles. The petitioner's apprehension of facing penalties for non-payment was deemed unwarranted. The court underscored the importance of initiating proceedings under Section 11A of the Act, which requires issuing a notice and conducting an inquiry before further action.
The Additional Central Government Standing Counsel argued that the challan did not signify a demand, and proceedings were yet to commence under Section 11A. The court agreed, dismissing the writ petitions. It clarified that if there were any violations of the Act or principles of natural justice during future proceedings, the petitioner could seek appropriate relief through the court. The dismissal of the writ petitions was accompanied by no order as to costs, concluding the judgment.
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1996 (11) TMI 77
The Supreme Court allowed the appeal, setting aside the order under appeal related to excise duty assessments made in 1975 and 1976. The Revenue's reliance on Rule 10A was not supported by evidence, leading to the appeal's success.
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1996 (11) TMI 76
The respondent claimed exemption under an Exemption Notification for job work of supplying corrugated boxes. High Court ruled in favor of respondent. Supreme Court dismissed Revenue's challenge, citing a previous case where the Notification was analyzed and held to support job workers charging only for work done. Appeal dismissed, no costs awarded.
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1996 (11) TMI 75
Whether the imported goods fall within the description `lining material' or "fabrics, made from man-made fibres/yarns" falling at Item 25 of the List of Non-permissible Items for import under Appendix 4?
Held that:- It is not clear that the majority view of the Tribunal in this behalf is not based on basic authorities even if the expert opinion of consumers of such material is ignored. It is rightly pointed out that if the opinion evidence adduced on either side is ignored and if the opinion of the Textile Commissioner is also brushed aside as the Collector had done, what is left to be considered is the relevant Policy and the Collector's subjective satisfaction; that is, his own expertise. The majority after examining the basic authorities and after pointing out how the Collector's expertise based on Shri Sharma's opinion ran contrary to the basic materials, has rejected his conclusion. The approach adopted by the majority could not be said to be erroneous in any manner whatsoever. Besides, as stated earlier, this being a question of fact we see no reason why we should take a different view than the one taken by the majority. We, therefore, come to the conclusion that the material in question is lining material. Appeal dismissed.
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1996 (11) TMI 74
Demand of duty on yarn - Held that:- In view of the fact that an excisable item comes into existence with the manufacture of a single ply yarn it becomes liable to pay excise duty at that stage itself. The respondent cannot be allowed to contend that the levy of excise duty is postponed to a point of time when the yarn is removed after doubling or multifolding. The liability to pay excise duty arises at the first stage itself, namely, at the time of manufacture of single ply yarn. This being so the demand raised by the Assistant Collector was not invalid. Against assessee & would be liable to pay the aforesaid amount of ₹ 35,190.96 plus interest the rate of twelve per cent per annum thereon.
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1996 (11) TMI 73
Issues involved: Determination of whether the process undertaken by the appellant constitutes "manufacture" under Section 2(f) of the Central Excises and Salt Act.
The judgment pertains to an appeal where the appellant manufactures polyester fibres and tops from duty paid waste, which is covered by item 18 of the 1st Schedule of the Act. The appellant argued that the waste generated during the manufacturing process was not liable to duty again as the input and output were identical waste. The Customs, Excise & Gold (Control) Appellate Tribunal held that there was a definite process of 'manufacture' u/s 2(f) of the Act, as the resultant waste, although having similar physical and chemical properties as the original waste, underwent a reaction of depolymerisation and repolymerisation, making it a distinct product. The Tribunal concluded that the physical and chemical characteristics being the same, the resultant waste was indeed manufactured.
The Supreme Court, concurring with the Tribunal's findings, held that since the physical and chemical characteristics of the original waste and the resultant waste were the same, the resultant waste could not be considered as a distinct or different commodity from the original input. Therefore, the Court allowed the appeal, setting aside the judgment and order under appeal, with no order as to costs.
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1996 (11) TMI 72
The Supreme Court allowed the appeals, setting aside the Tribunal's decision. The appellants were entitled to the benefit of the Exemption Notification No. 30/81-C.E. The Tribunal's decision was based on the appellants not owning the factories where woollen fabrics were produced, but this ground was not raised earlier in the proceedings. The Revenue must issue a notice to show cause if they believe the appellants are not eligible for the exemption due to not owning the factories. Tax paid or deposited should be refunded to the appellants, and no costs are awarded.
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1996 (11) TMI 71
Issues:
The judgment involves determining whether the recording of sound on magnetic cassette tapes constitutes manufacturing for the purposes of Tariff Item 59 of the Central Excise Tariff. The majority view of the Tribunal held that the appellant was engaged in the manufacture of excisable goods, while the dissenting Member took the view that no manufacturing process was involved.
Issue 1: Majority View vs. Dissenting View
The majority view of the Tribunal was that the appellant was engaged in the manufacture of goods excisable under Item 59 of the Central Excise Tariff, while the dissenting Member held that no manufacturing process was involved. The dissenting Member emphasized that no new substance emerged from the recording of sound on the tapes, and thus, there was no transformation resulting in a new and different article. The dissenting Member argued that despite the recording of sound, the tapes remained "articles of a kind used for sound recording." This meant that the tapes could have the sound erased and be reused for recording other sound, indicating that no new article was created through the recording process.
Issue 2: Interpretation of Tariff Item 59
Tariff Item 59 of the Central Excise Tariff pertains to articles used for sound or sound and image recording. The Tribunal's majority judgment did not elaborate on how the recording of sound on tapes could amount to manufacturing under this tariff item. However, the dissenting Member in detail analyzed the issue and concluded that the recording of sound on the tapes did not constitute a manufacturing process. The dissenting Member's analysis focused on the lack of emergence of a new substance and the tapes remaining suitable for repeated use, indicating that the recording process did not result in the creation of a new excisable article under Tariff Item 59.
Issue 3: Precedent and Legal Interpretation
In a previous case before a two-Member Bench of the Tribunal, a similar question had arisen regarding the recording of sound on tapes. The Bench preferred to follow the dissenting view, stating that the recording of sound on tapes did not fall within the definition of manufacture. The Bench reasoned that the recording process did not enhance the value of the tapes as they were already duty paid, and the recording did not create a new excisable article. This precedent supported the dissenting Member's interpretation in the present case.
Conclusion:
The Supreme Court, concurring with the dissenting Member's view and the precedent set by the earlier Tribunal case, held that the recording of sound on magnetic cassette tapes by the appellant did not amount to a manufacturing process under Tariff Item 59. Therefore, the appeal was allowed, the order under appeal was set aside, and no costs were awarded in this matter.
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1996 (11) TMI 70
The Supreme Court dismissed the appeal against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal. The issue was whether Rule 9(2) applied to the appellants' case. The majority view of the Tribunal was that the appellants did not disclose the manufacture or use of the article in question, leading to a breach of Rule 9(1) and justifying a notice under Rule 9(2). The appeal was dismissed with no costs.
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1996 (11) TMI 69
The Supreme Court upheld the Customs Tribunal's decision that the totaliser system at the race course was not subject to excise duty as it was embedded in the earth and not considered 'goods'. The appeal by the Revenue was dismissed with no costs.
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1996 (11) TMI 68
Whether `Printed Aluminium Labels'(hereinafter referred to as "labels") manufactured by the appellant are `products of the printing industry' within the meaning of Notification 55/75-C.E., dated 1-3-1975 issued under Rule 8(1) of the Central Excise Rules, 1944?
Held that:- The label announces to the customer that the product is or is not of his choice and his purchase of the commodity would be decided by the printed matter on the label. The printing of the label is not incidental to its use but primary in the sense that it communicates to the customer about the product and this serves a definite purpose. This Court in Rollatainers case held that "what is exempt under the notification is the `product' of the printing industry. The `product' in this case is the carton. The printing industry by itself cannot bring the carton into existence". Let us apply this above formula to the facts of this case. The `product' in this case is the aluminium printed label. The printing industry has brought the label into existence. That being the position and further the test of trade having understood this label as the product of printing industry, there is no difficulty in holding that the labels in question are the products of the printing industry. It is true that all products on which some printing is done, are not the products of printing industry. It depends upon the nature of products and other circumstances. Therefore, the issue has to be decided with reference to facts of each case. A general test is neither advisable nor practicable. We are, therefore, of the opinion that the Tribunal was not right in concluding that the printed aluminium labels in question are not `products of printing industry'. Appeal allowed.
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1996 (11) TMI 67
Whether, in the event of the contravention of a post-importation condition of an import licence, it was open to the Customs authorities [to] confiscate imported goods under Section 111(o) of the Customs Act?
Held that:- The communication of the Central Board of Excise and Customs, dated 13th May, 1969 refers to the breach of the condition of a license and suggests that it may not be possible to take action under Section 111(o) in respect thereof. It is true that the terms of the said Exemption Notification were made part of the appellants' licences and, in that sense, a breach of the terms of the said Exemption Notification is also a breach of the terms of the license, entitling the licensing authority to investigate. But the breach is not only of the terms of the license; it is also a breach of the condition in the Exemption Notification upon which the appellants obtained exemption from payment of Customs duty and, therefore, the terms of Section 111(o) enable the Customs authorities to investigate. Appeal dismissed.
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1996 (11) TMI 66
Whether mono vertical crystallisers are `goods' upon which excise duty under the provisions of the Act can be levied?
Held that:- Where the assembly and erection was done by the customer, there was no occasion for it to send to the appellants a debit note. The fact that there was no debit note in respect of one customer could not reasonably have led the Tribunal to conclude that in the case of that customer a complete mono vertical crystalliser had left the appellants' factory and that, therefore, mono vertical crystallisers were marketable. The Tribunal ought to have remembered that the record showed that mono vertical crystallisers had, apart from assembly, to be erected and attached by foundations to the earth and, therefore, were not, in any event marketable as they were.
Having regard to the material on record, we come to the conclusion that mono vertical crystallisers are not `goods' within the meaning of the Act and therefore, not exigible to excise duty. In favour of assessee.
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1996 (11) TMI 65
Whether silicone oil imported by the appellant is covered for the purpose of deciding the countervailing duty payable thereon by Central Excise Tariff Item 15A(1) or not?
Held that:- Silicone oil manufactured by them would squarely be covered by Tariff Item 15A(1) while so far as silicone emulsion and other silicone preparations are concerned as they are made by using silicone oil or other components of silicone they would not be covered by Tariff Item 15A(1) but would be covered by Tariff Item 15AA. But in no case they would be covered by Tariff Item 68 which is a residuary Item. The judgment and order of the Tribunal as challenged by the said appellants will stand modified accordingly as above.
In this case as detention order dated 31st January, 1986 was based on the order of the Tribunal which is partly set aside by us the respondent is directed to re-issue appropriate detention order, if found necessary, in the light of recomputation of excise duty liability during the relevant period as held hereinabove
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1996 (11) TMI 64
Issues Involved:
1. Justification of the enhancement of penalties under section 271(1)(c) of the Income-tax Act, 1961.
2. Determination of concealed income with reference to original returns versus returns filed in response to notices under section 148.
3. Validity of penalties imposed for the assessment year 1973-74.
Issue-Wise Detailed Analysis:
1. Justification of the Enhancement of Penalties under Section 271(1)(c):
The primary issue was whether the Appellate Tribunal was justified in confirming the enhancement of penalties made by the Appellate Assistant Commissioner under section 271(1)(c) of the Income-tax Act, 1961. The penalties were initially levied by the Income-tax Officer for concealed income for the assessment years 1966-67, 1968-69, 1969-70, and unexplained investment for the assessment year 1973-74. The Appellate Assistant Commissioner enhanced these penalties based on the returns filed in response to notices under section 148, which showed "nil" income, despite the original returns showing positive income.
2. Determination of Concealed Income:
The court had to determine whether the concealed income should be based on the original returns or the returns filed in response to notices under section 148. The assessee argued that the original returns, which disclosed certain incomes, should not be ignored simply because "nil" income was shown in the subsequent returns filed under section 148. The court agreed with this argument, stating that the original returns are not rendered useless or inconsequential after reassessment proceedings. The court emphasized that the penalty should be computed based on the original returns, as they disclosed the income initially, and what is disclosed cannot be said to have been concealed.
The court referenced the Supreme Court's decision in CIT v. Onkar Saran and Sons [1992] 195 ITR 1 (SC), which established that penalties should be computed based on the law applicable at the time of the original return, not the reassessment. The court concluded that the original returns should form the basis for determining the extent of concealment and the quantum of penalty.
3. Validity of Penalties for the Assessment Year 1973-74:
For the assessment year 1973-74, the court found that the penalty was rightly imposed by the Appellate Assistant Commissioner on the difference between the income disclosed and the income assessed. The court did not find any issue with the penalties imposed for this year, as the unexplained investment was correctly identified and penalized.
Conclusion:
The court concluded that the Income-tax Appellate Tribunal erred in affirming the decision of the Appellate Assistant Commissioner based on the incomes shown in the returns filed in response to notices under section 148. The original returns should not be ignored for determining concealed income. Therefore, the question was answered in the negative, in favor of the assessee and against the Revenue for the assessment years 1966-67, 1968-69, and 1969-70. However, for the assessment year 1973-74, the penalties were upheld, favoring the Revenue.
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1996 (11) TMI 63
Issues:
1. Interpretation of trust deed clauses regarding beneficiaries and tax liability under Wealth-tax Act.
2. Determination of whether beneficiaries are known and shares are determinate for wealth tax assessment purposes.
Analysis:
The case involves an application by the Revenue under section 27(3) of the Wealth-tax Act, 1957, requesting the court to direct the Income-tax Appellate Tribunal to refer specific questions of law. The questions pertain to the determination of the sole beneficiary and tax assessment under sections 21(1) and 21(4) of the Act for the assessment year 1979-80. The dispute arose from the valuation of assets held in trust and the entitlement of Smt. Oolia Kulsum as the sole beneficiary following the death of Prince Moazam Jah Bahadur.
The Commissioner of Wealth-tax (Appeals) held that Smt. Oolia Kulsum became the sole beneficiary after the death of Prince Moazam Jah Bahadur and that the assets were taxable under section 21(1) of the Act. The Revenue challenged this decision before the Income-tax Appellate Tribunal, which upheld the Commissioner's order. The primary contention was whether the beneficiaries were determinate and known, justifying assessment under section 21(1) rather than section 21(4) of the Act.
The trust deed clauses 5 and 6 specified the trustees' obligations to accumulate income until the death of Prince Moazam Jah Bahadur and then distribute it to Sahebzadi Oolia Kulsum during her lifetime. The clauses outlined a clear succession plan for the distribution of income among specified beneficiaries. The court emphasized that the beneficiary, Smt. Oolia Kulsum, was explicitly named in the trust, indicating a determinate interest, contrary to an indeterminate beneficiary scenario.
The court highlighted the distinction between sections 21(1) and 21(4) of the Act, emphasizing that section 21(1) applies when beneficiaries are named and determinate, whereas section 21(4) is relevant for cases with indeterminate beneficiaries. In this case, the interest of Smt. Oolia Kulsum was contingent on specific events, making her interest definite and defined, not indeterminate. Therefore, the Tribunal's decision to apply section 21(1) was upheld, and no referable question of law was found to arise from the Tribunal's order.
Ultimately, the court dismissed the wealth-tax case, affirming the Tribunal's decision and concluding that Smt. Oolia Kulsum was the sole beneficiary with a determinate interest, warranting assessment under section 21(1) of the Wealth-tax Act for the relevant assessment year.
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