9911796707
TMI Blog1990 (8) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... year ended 30-9-1982, corresponding to the assessment year 1983-84, the assessee imported five numbers of Roller Mills from Poland on 9-11-1981. The import was on the basis of the import licence dated 8-4-1980 on the application made on 28-8-1979 and supplier's invoice dated 31-8-1981. The assessable value of the goods was shown at Rs. 2,73,630 (at the r ate of US $ 5900 per mill). The assessee claimed that this price had been stipulated between the parties under an invoice dated 23-8-1979 taken before applying for import licence. However, the Customs Department was of the view that the prices having increased in the meanwhile, and there being no proof of actual commitment for the price quoted in 1979, the assessable value of the goods sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid out for the purpose of business and was not a permissible deduction. It was argued that infraction of the law cannot be a normal incidence of business and, therefore, the fine and penalty paid by the assessee should not be allowed to be capitalised. 5. On the other hand, it was contended on behalf of the assessee that the fine and penalty were paid only to clear the goods, particular reference was also made of the goods for the purpose of customs duty and the importation itself was not in contravention of any law since it was made on the basis of a valid import licence. It was also submitted that whatever may be the criterion for considering the penalty paid as a business expenditure, the question whether it forms part of the cost s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed and decision of the Bombay High Court that no question of law arose from the order of the Tribunal (140 ITR St. p. 1). It will be seen that the facts of the present case are not identical and we do not have the benefit of the decision of the Bombay High Court or the Supreme Court as to whether the penalty as such could be regarded as part of the price. 7. We must, therefore, necessarily decide this case on first principles. The decision in Haji Aziz Abdul Shakoor Bros.' case relied on by the Revenue is of no assistance, because that was a decision given long ago with reference to the question whether penalty paid for importing goods in contravention of the law could be regarded as an expenditure laid out for the purpose of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "cost" as observed on page 424 of Simon's Taxes, third edition, Vol. B, is not synonymous with "price". From this point of view it is obvious that when the assessee paid a fine in lieu of confiscation, the assessee could have failed to acquire the asset unless the fine had been paid. Therefore, the fine paid under section 125 of the Customs Act of Rs. 58,000 is clearly part of the actual cost of the asset, since it was an expenditure necessary to acquire the asset. 9. With reference to the personal penalty of Rs. 13,500, it was contended on behalf of the Revenue that since it was personal expenditure, it could not be related to the machinery which was imported. We are unable to accept this objection also, because even though the penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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