Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

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

Rule 5 of Valuation Rules, 2000 - Freight charges shown on invoice were an approximation vis-à-vis that actually collected from buyer - deduction of freight cannot be denied in its entirety by contending that only the actual, if shown on invoice, is allowable: Tribunal

THERE is no requirement that the actual cost incurred should be shown and once the amount shown is the actual recovered from customer, then the requirement of Rule 5 stands satisfied because ultimately the deduction has been claimed of the actual cost of transportation and not the average cost of transportation. It is also not the case of the Revenue that the price is inclusive of freight, once freight is shown separately. In such a case, the Board Circular also does not specifically debars the deduction of freight.

Income Tax

Units are neither stocks, nor shares nor commodities as contemplated in section 43(5) - Even if they are considered to be 'speculative' in nature, losses have to be set off against profits as both are speculative in nature: ITAT

THE transactions in Units of the UTI do not fall within the purview of section 43(5) as units are neither stocks, nor shares nor commodities as contemplated in section 43(5) of the IT Act; proviso (b) to sec.43 (5) again uses the word 'stocks' and 'shares'. The word 'units' is not mentioned anywhere in the statute. Each category 'shares' 'stocks', 'commodities' are mutually exclusive and exhaustive - as it is presumed that Legislature does not use redundant/superfluous words. Thus the Income tax Act itself recognizes that 'securities' 'shares and bonds' and 'units' constitute separate and distinct categories of financial instruments. However, even if hypothetically or for the sake of argument, these transactions are considered to be 'speculative' in nature then in accordance with the provisions of sec 73(1) of the Income tax Act, the losses have to be set off against the profits as both are speculative in nature.

Customs

Clearance from bonded warehouse – licence valid at the time of import but not at the time of clearance from warehouse – importer not entitled to exemption – High Court

THE importer's right to bring in the goods duty-free depends on the Advance licence, and when the Licence is not valid on the date when the duty is to be assessed, the right of exemption ceases. The incidence of duty depends on the time of clearance, and if the licence entitling the importer to bring in goods duty free had expired at the time when the goods were cleared, the department is right in objecting to his claim for exemption from duty on the ground that he had a valid Advance Licence under the DEEC Scheme at the time of the import.

See our columns tomorrow for the judgements