Swan Mills Ltd. vs Income-Tax Officer on 19 March, 1987
55. The departmental representative relied on the decision of the Income Tax Appellate Tribunal, Bangalore Bench, in the case of Motor Industries Co. Ltd. v. ITO 7 ITD 745, to buttress his point that there can be no liability either notional or legal unless and until a demand had been made by the appropriate authority and he argued that the show cause notices were not regular demand notices. We find that the facts of the instant case are distinguishable from the facts of the case cited. In that case, under the provisions of Customs Act, 1962, the assessee was entitled to pay import duty at concessional rates on spare parts and tools if their value did not exceed 10 % of the total value of imported machinery. But if the value exceeded this percentage, it was required to pay duty at higher rates. Section 143 of the Customs Act, 1962, also permitted the assessee to execute a bond. One of the terms of the bond is to pay the difference of duty as assessed provisionally and upon final assessment in respect of each consignment. When the assessee claimed in its income tax proceedings the amount of differential duty under the Customs Act even before the final assessment for the difference in duty was made, the same was negatived by the Tribunal. This case, therefore, is not on fours with the case in hand.