Jurisprudentiol–Monday's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
Payment of 8% amount under Rule 57 CC of the Central Excise Rules, 1944 on exempted by-products – CESTAT differs with the Larger Bench ruling in Rallies India case.
DOES the Larger Bench decision have binding effect though the same is conflict with the Supreme Court decision in case of M/s Swadeshi Polytex Limited? (Wherein it was held that set off cannot be denied against inputs used on the ground that methanol, a by-product is non excisable). This question came up before the CESTAT earlier in case of M/s Sterlite Industries Ltd 2007-TIOL-1589-CESTAT-MAD and the matter was referred to the Larger Bench.
Income Tax
India-USA DTAA - supply contract for hardware and software to Indian GSM operator - transfer of right to use of software loaded on equipment without consent to duplicate or adapt or use in public is mere sale of copyrighted article - payments cannot be treated as royalty either under I-T Act or under DTAA : ITAT
FOR the Revenue, taxing software-related income has literally become a waterloo. Every time it gets an opportunity to tax an income arising out of transfer of customised software by a non-resident to an Indian company it does not lose heart in fighting another waterloo. But as long as the Tribunal's Special Bench decision in the case of Motorola Inc () stands or the law remains the same, the final outcome of such waterloos is the same - payments arising out of transfer of right to use of software alone or loaded on any equipment is not royalty income taxable either under the Income Tax Act or the Indo-USA tax treaty. Reason: such transfer is a mere sale of a copyrighted article and not transfer of copyright. Unless the transfer grants a right to the user to duplicate the same or adapt the same or use the same in public, it cannot be treated as transfer of copyright. And any income emanating from such an exercise cannot become royalty income taxable u/s 9(1)(vi) or under Article 12 of the DTAA.
Customs
Department's appeal in a case where party's appeal already decided – Doctrine of Merger not applicable if the issues are different: matter remanded to reconsider in view of the Court's decision in - Bombay HC
EVEN if the Appeal preferred under Section 35B has been disposed of, an appeal can still be preferred pursuant to direction issued under Section 35-E, if in the appeal disposed of, the entire order was not the subject matter of the Appeal.
Until Monday with more DDT
Have a nice Weekend.
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