Page 19 - Banking Finance July 2019

LEGAL UPDATE

LEGAL

Written contract before Accept value in bill of entry
The Supreme Court declared that the transaction value mentioned in the bill of
flat sale
entry should not be discarded unless there are con-
The developer of a residential project
trary details of contemporaneous imports or other
has a duty to
material justifying the rejection. The court stated
enter into a
so in its judgment in Century Metal Recycling Ltd vs
written agree-
Union of India.
ment for sale
with the buyer The company is engaged in the manufacture of alu-
on receiving an advance payment, minium alloys, for which it regularly imports aluminium waste as a raw mate-
the Supreme Court ruled while setting rial for self-consumption. Its grievance is that the principal commissioner of
aside the judgment of the National customs, Noida, always refused to clear consignments according to the declared
Consumer Commission which had dis- transaction value in the bill of entry. The officers insist that the firm write a
missed the appeal of a flat buyer. The letter agreeing to pay customs duty as per their valuation. Thus the firm is com-
agreement is necessary to get a loan pelled to forego its right to provisional assessment under the Customs Act. The
from a financial institution, the court court allowed the appeal stating that the order of the customs authorities was
stated in its judgment in Suman Jindal flawed and contrary to law for it did not give a good reason for rejection of the
vs Adarsh Developers. transaction value as declared in the bill of entry.

In this case, the developer cancelled
the allotment due to alleged delay in Conflict of views on excise resolved
payment. The buyer moved the con-
A conflict of views about three judgments of the Supreme Court in interpreting
sumer commission which dismissed
a rule in the Central Excise Act was resolved by a larger
its petition. On appeal, the Supreme
bench of the court in its judgment in SAIL vs Commisssioner
Court stated that the commission
of Central Excise. The question was whether interest is pay-
was wrong and asserted that even
able on the differential excise duty with retrospective effect
under the Karnataka Ownership
payable on the basis of escalation clause under Section 11AB.
Flats Act, the developer was obliged
to enter into a written agreement. This provision deals with interest on delayed payment of duty.
The developer had meanwhile sold SAIL had objected to the demand for interest on duty already
the concerned flat to a third party. paid before the rates were revised. It relied on one set of judgments. Several
The court held that it was a later other companies also had objected to such demands and moved the Supreme
sale and the original allottee had a Court. The present Bench dismissed the objections of SAIL and other after elabo-
greater claim and he should be
rately going through case law and similar provisions in the Income Tax Act and
handed over the flat.
other commercial laws.

BANKING FINANCE | JULY | 2019 | 19