COMMISSIONER OF INCOME TAX DELHI Vs. VIKAS CHEMICALS

JUDGEMENT

(1.) IN this appeal by the Revenue relating to assessment year 1992 -93, by order dated 7th August, 2002, the following substantial question of law was admitted for hearing: -

(2.) THE respondent -assessee, a partnership firm, was engaged at the relevant time in manufacture of organic chemicals. Under an agreement dated 9th June, 1987 with M/s India Craft, the respondent - assessee purchased 630 metric tonnes Isobutanol by sale on high -sea basis. The said India Craft had procured the consignment of Isobutanol from Netherlands against REP license issued in their favour. The respondent -assessee upon import applied for clearance of goods under REP licence, but the goods were detained. This resulted in litigation between the respondent -assessee and Customs authorities. The goods in question were sold in an auction on 14th March, 1989 pursuant to the direction of the Supreme Court. In the meanwhile and as directed, adjudication proceedings under the Indian Customs Act, 1962, (Customs Act, for short) were held whereby, redemption fine of Rs.90,00,000/ - and penalty of Rs.10,00,000/ - was imposed on the respondent -assessee, which on appeal was reduced to Rs.45,00,000/ - and Rs.2,00,000/ -, respectively.

(3.) LEARNED counsel for the respondent -assessee has, however, relied upon decision of this Court in Usha Micro Process Controls Ltd. Vs. Commissioner of Income Tax, : (2013) 204 DLT 664. The said case also related to payment of redemption fine and reference therein was made to the judgment of the Madras High Court in Commissioner of Income Tax Vs. N.M. Parthasarathy, : [1995] 212 ITR 105 and decision of the Supreme Court in Prakash Cotton Mills Pvt. Ltd. Vs. Commissioner of Income Tax (Central), Bombay, : [1993] 201 ITR 684.