Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

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

CESTAT vs CESTAT - Tribunal has authority to review whether Committee of Commissioners has formed an opinion or not on legality of orders passed by Commissioners and given adequate reasons for filing appeals – Tribunals are empowered to find if orders are reviewed within stipulated time – Order passed by Co-ordinate bench of Tribunal recalling interim order of Tribunal is per incuriam.

LAST week TIOL reported an extraordinary judgment passed by the Bench headed by the President of CESTAT in CCE, Bhubaneshwar-II Vs M/s Bhushan Ltd [2009-TIOL-203-CESTAT-DEL] wherein the order passed by the East Zonal Bench was recalled. It was observed that Tribunal is only competent to hear appeals filed against orders of the Commissioners and it does not have the jurisdiction to review the orders of the Committee of Commissioners/Chief Commissioners. While analyzing that decision, we at TIOL raised a pertinent question and commented as follows:

“Whether Miscellaneous Applications can be filed and entertained by another Bench of the Tribunal for recalling an order passed by a different Bench? Can one Bench of a Tribunal recall an order passed by another bench of the Tribunal?

While there are numerous instances where Tribunals have recalled their own earlier final orders by allowing ROM applications and even Apex Court in Sunita Devi Singhania Hospital Trust vs. Union of India [2008-TIOL-235-SC-CUS] observing that the Tribunal has an inherent power to recall its own order subject to sufficient causes shown in this regard, it is not legally clear as to whether an order passed by one Bench of the Tribunal can be recalled by another Bench”.

Income Tax

Transfer Pricing – in the OECD guidelines, it is permissible to take profit of similar transaction or enterprises not only of the period under consideration, but also for next or previous year or take the average of such profit. This, however, is not permitted under the Indian Regulations on Transfer Pricing. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. - ITAT

For the relevant financial year in which the international transaction took place, is to be considered for comparability analysis. Under the proviso, data for period not being more than two years prior to financial year in which international transaction was entered, may also be considered, if such data reveals facts which could have an influence on the determination of transfer prices. Under the proviso, there is no scope to consider data for a subsequent assessment year. The assessee has not been able to reveal any facts to bring the case within the above proviso.

Service Tax

'Input Services Distributor' is not like a dealer - eligibility or otherwise of service tax credit has to be examined at the end of input service distributor only - Matter remanded for determining eligibility: CESTAT

THE appellants are registered under the category of "input service distributor". During the verification of ST-3 return filed by them, it was found that appellants were not eligible for credit of service tax incurred in respect of tour/travel, hotel and other services, in view of the fact that they cannot be related to the goods manufactured by the appellants. The Original Adjudicating Authority dropped proceedings but the Commissioner (Appeals) on appeal filed by the Revenue allowed the appeal holding that services of event management, tour/travel agent, hotel, courier and other categories like AMC of air-conditioner, recruitment agency, etc. are eligible for credit.

Revenue is in appeal before the Tribunal.

See our columns tomorrow for the judgements