Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Cost of special packing viz. catch cover not to be included in valuing Physician Samples as the value is arrived at on pro-rata price of regular pack – CESTAT

THE cost of special packing in which the physician's samples are packed gets recovered from the customer in the cost of regular pack which would include all the expenses incurred by the manufacturer for selling the product in the market.

Income Tax

STPI unit - export of software - if exports proceeds are realised after a time lag, assessee can file rectification application u/s 155(11A) to avail Sec 10A benefits: ITAT

EXPORT is a business fraught with unpredictability and huge risks. Export proceeds getting stuck for long even after exports accomplished is one of the most common perils of this business. Now the issue is that can Revenue allow exports benefits against such unrealised exports proceeds within the time limit? What if the exports proceeds of previous years are realised after a time lag? While deciding the case of a software exporting STPI unit the ITAT has held that if the exports proceeds are realised, the assessee can file rectification application u/s 155 (11A) within a period of four years from the end of the previous year and the AO is bound to consider the exports proceeds realised as a part of exports turnover for allowing Sec 10A benefits.

Customs

100% EOU - Permission for advance DTA sales against fulfilment of future export obligation - When Development Commissioner determines that export obligation as not fulfilled, exemption benefit for DTA sales not available – Demand of duty and imposition of fine and penalty confirmed – CESTAT by majority

THE appellant, a 100% EOU in Kandla Free Trade Zone, had obtained the Development Commissioner's permission for clearance of 25% of their production to the Domestic Tariff Area (DTA) as advance DTA sales against an undertaking to fulfil export obligation prescribed for the first year of production and also achieve the prescribed value addition. Subsequently, the appellants cleared goods valued at Rs.1 ,15,86,475 /- to DTA availing the benefit of Notification No.2/95-CE dtd. 4/1/1995. Subsequently, the Development Commissioner held that the appellant had failed to fulfil the export obligation and imposed a penalty of Rs. 5 lakhs.

See our columns tomorrow for the judgements