Jurisprudentiol- Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Service Tax realized from clients but not deposited in Government treasury - Conscious disregard to law -there is no alternative to prevent future recurrence by appropriate dose of penalty - Tribunal

IT is true that modern criminology does not encourage the imposition of severe or savage sentences against criminals, because the deterrent or punitive aspect of punishment is no longer treated as a void consideration in the administration of criminal law. But it must be remembered that ordinary offences with which the normal criminal law of the country deals are committed by persons either under the pressure of provoked and unbalanced emotions, or as a result of adverse environments and circumstances, and so, while dealing with these criminals who, in many cases, deserve a sympathetic treatment in a few cases, are more sinned against than sinners, criminal law treats punishment more as a reformative or corrective than as a deterrent or punitive measure.

Income Tax

India-Brazil DTAA - assessee is a shipping company - income arising out of transportation of cargo by feeder vessel to mother vessel not eligible for treaty benefits if vessels are not owned, leased or chartered to assessee; If cargo is shifted to another vessel owned by consortium of shippers at mid-way port, benefits to be allowed for income attributable to onward voyage

INDIA has Double Taxation Avoidance Agreements with most of its key trading partners. But there is so much of variety in these agreements that some of the litigations become a trend-setter. For instance, the expression 'Operation of Ships' has a different connotation in the context of India-Brazil tax treaty than the one generally seen in the case of OECD Model Tax Convention. And that is how the assessee, a shipping company, partly lost the case before the Tribunal. Distinguishing the expression 'Operation of Ships' in this context the Tribunal held that the benefits will be admissible only if the ships are owned or leased or chartered to the assessee. If the assessee simply books cargo and the same is transported by vessels owned by others, the assessee cannot claim benefits of the tax treaty under Article 8. Since the goods were transported by feeder vessels to mother vessels, not owned by the assessee, the income arising from such activities has been held to be taxable in India.

Customs

ISD calls at local call rates - Customs angle - Goods imported by STPI unit diverted - Confiscation of goods and penalty confirmed - Duty payable even if goods are not redeemed - no penalty on firm and proprietor:

THE installed equipments were used for unintended and unauthorised purposes. Using these imported equipments and the facility provided by STPI and using the MTNL lines taken in the name of a telemarketing company, they have operated as a parallel Telecom authority. It is clear case of violation the conditions of the Notification No 140/91-Cus dated 22-10-91 and therefore, the goods are liable for confiscation.

See our columns Monday for the judgements