AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 223
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....- on account of freight and exchange variation etc. on import and export of consignment of Rubber Process Oil by treating it as fine and penalty. 2. Briefly stated the facts are that the assessee company was incorporated on 6.12.2010 as a Joint Venture (JV) Company co-owned by Indian Oil Corporation Ltd., Marubeni Corporation of Japan and Trimurti Holding Corporation of Taiwan. During the year under consideration the company has started commercial production of Styrene Butadiene Rubber (SBR) on 4th February, 2014. The assessee for the assessment year under consideration filed its return of income on 29.11.2014 declaring loss of Rs.2,24,87,78,408/-. The assessment was completed under section 143(3) of the Income Tax Act, 1961 (the Act) de....
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....assessee had imported the product which is prohibited by law, hence such expenses claimed by the assessee are not allowable. 4. On appeal the ld. CIT (Appeals) sustained the disallowance of expenses to the extent of Rs.138.98 lakhs out of Rs.195.77 lakhs after giving a relief of Rs.56.79 lakhs on account of retention charges on other imports on other goods. The disallowance of expenses sustained by the ld. CIT (Appeals) are as under:- (i) Loss on price fluctuation Rs. 58,18,874 (ii) Freight Rs. 18,62,370 (iii) Detention charges Rs. 47,16,362 (iv) Customs Compounding fees Rs. 10,00,000 (v) Customs penalty Rs. 5,00,000 TOTAL : Rs.1,38,97,606 5. The ld. Counsel for the assessee....
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....ferred above. In the testing report, the Lab reported that the sample under test does not match with aromatic oil mentioned in IS 15078:2001 and the sample has to be sent to CRCL, (Central Research Chemical Lab) New Delhi for further testing /examination. The Customs order does not elaborate any further on the matter. However, the company was not provided with a copy of the Lab report. Ld. Counsel submits that when representatives of the Company met the Custom officials for release of goods, they verbally informed that the goods are being detained on account of an internal alert Circular No. 12/2013 (which, was not available in Public Domain) issued by Add Director -CI which states that under Hazardous Waste (Management Handling and Transbo....
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....etention and demurrage charges from mounting up and mitigate the losses the assessee made the proposal before the custom official to re-export the goods. The Addl. Collector of Customs (Import) accepted the re-export subject to levy of penalty of Rs.5 Lakhs u/s 112(a) of the Customs Act and payment of compounding fees of Rs.10 Lakhs u/s 125 of the Custom Act. By the time the Custom Authorities allowed the re-export of the goods international prices of Rubber Process Oil declined. Consequentially, the company could fetch from reexport, a price for goods much lesser than the price of goods paid by it at the time of import of goods which resulted in a loss from reexport which was further increased due to appreciation of foreign exchange conver....
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....inted out that Rubber Process Oil imported by the assessee is virgin oil and not a waste material -more so a hazardous waste material as alerted in Circular Number 12/2013 issued by Addl. Director- Cl. It is also brought to your kind notice that the very circular of Addl. Director was admittedly issued on 3 September 2013, which is after placing the purchase order in June 2013 and the goods reaching the goods at the port in India on 30 July 2013. In case the imported goods were examined/ tested immediately on arrival there would have been no question of looking and relying on the internal Circular No. 12/2013 issued by the Custom Authorities. 10. Therefore, the ld. Counsel submits that the expenses incurred by the assessee on import of r....
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....2013 in respect of hazardous nature of goods declared as rubber process oil and petroleum based greece. We observe that on arrival of the cargo with rubber process oil the samples were forwarded by the Customs officials for the purpose of testing chemical composition only on 04th September, 2013 and the best results were issued on 26th September, 2013. Therefore, we observe that the rubber process oil imported by the assessee was freely importable as on the date of placing the order and also as on the date of the cargo reaching the sea-port in India. We also observe that since the customs authorities were not releasing the rubber process oil imported by the assessee and was further required for testing the samples by Central Research Chemic....