Jurisprudentiol–Monday's cases

By Vijay Kumar

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

Loss of raw materials during course of storage in factory premises – Appeal against order of Commissioner (A) does not lie before Tribunal: Tribunal dismisses appeal

DEPARTMENTAL Representative raised a legal point on the maintainability of the appeal by contending that the appeal involves loss of raw materials during the course of storage in factory premises. He submitted that under Section 35B of Central Excise Act, 1944, in all type of loss cases, the Tribunal has no jurisdiction to hear the appeal arising out of the order of the Commissioner (Appeals).

Income Tax

Indo-USA tax treaty - air transport - taxability - income from transportation of cargo in international traffic by aircraft owned, chartered or leased by other airlines is not exempt from taxation in India under Article 8 unless it falls under pool system; Even inland transportation connected to such transportation not to be exempt: ITAT

THE Indo-US tax treaty is one of the most litigated DTAAs in India. And, within the treaty, the two most litigated sections are relating to the fees for included services or royalty and income from shipping and air transport. In the latest decision the Tribunal has held that the transportation of cargo in the international traffic through the aircrafts owned, chartered or leased by other enterprises would be outside the scope of Article 8(2) of the DTAA and consequently would not be exempt from taxation under Article 8(1) unless such transportation falls under para 4 of this Article. Further, the inland transportation connected with such transportation would also not be exempt under Article 8. However, such profits would be considered as business profits under Article 7. Therefore, the matter has been remanded to the AO for fresh examination in the light of Article 7 of the Treaty.

Customs

Refund without challenging assessment - fact that no reasoned order was passed will not make assessment order invalid and assessee eligible for refund: Bombay High Court

THE fact that the assessing officer has failed to pass a speaking order would not invalidate the assessment order so as to file refund claim and seek refund of duty paid on the enhanced value as per the assessment order. In other words, pendency of the application seeking a speaking order would not entitle the appellant to seek refund of duty paid as per the assessment order. It is well settled by the decisions of the Apex Court in the case of Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd that so long as the assessment order stands the question of granting refund does not arise at all. The argument of the appellant that unless an appealable speaking order is passed, the importer cannot file an appeal against the assessment order, is without any merit. Assessment order passed on the bill of entry is an appealable order and the same can be challenged even in the absence of a speaking order. In other words, in the absence of a speaking order, it cannot be said that the assessment order is not appealable. Where an assessment order is passed without giving reasons and in spite of repeated requests reasoned order is not passed, proceedings can be initiated for setting aside the assessment order passed on the bill of entry.

See our columns Monday for the judgements