Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

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

Refund arising out of finalisation of provisional assessments in Customs - Larger Bench holds bar of unjust enrichment is not applicable for period prior to amendment of Sec 18 of Customs Act

THE reason for such reference to the Larger Bench was that the Tribunal had found that in the case of CC, Ahmedabad v. Reliance Industries Ltd. 2006-TIOL-1415-CESTAT-MUM it was held that irrespective of the amendment of the provisions of Section 18, refund of customs duty would be subjected to principles of unjust enrichment. For arriving at the above conclusion, the Bench has taken note of the Supreme Court's decision in the case of M/s. Sahakari Khand Udyog Mandal Ltd. v. Commissioner 2005-TIOL-48-SC-CX-LB. Since the decisions of the Tribunal relied on by the importer in their favour have been rendered after the Reliance Industries Case, without considering the same, the matter was referred to the Larger Bench

Central Excise

Amount paid under Rule 6 of CCR, 2004 recovered from customer – no cause for action under Section 11D of CEA - Tribunal grants stay

ALTHOUGH the assessee was generous enough to pay the 8% on the “additional consideration”, the Pune-III Central Excise officials felt that this was not enough. They wanted to recover the aforesaid amount of additional consideration of Rs.23,01,641, so collected by the appellant, under Section 11D of the Central Excise Act and also impose penalty for this misfeasance. The demand was confirmed and also upheld by the Commissioner of Central Excise (Appeals), Pune-III in September 2008 showing scant regard to the Larger Bench decision and the Board's Circular that were in existence during the material time.

Income Tax

Transfer Pricing - transactions with AEs - determination of ALP - TNM Method cannot be used for comparing operational margin at entity-level; Revenue is wrong in treating CUP Method as most preferred method in all cases - Tribunal rejects both methods for infirmities and remands the same to AO

TRANSFER Pricing disputes are essentially fought on large ocean of facts and details. This is one chapter of income tax where the facts overpoweringly overshadow the law points. These characteristics of TP cases come out more emphatically in the latest decision of the ITAT where the Tribunal has held that the methods deployed by both the assessee choosing TNMM for working out profits with its associated enterprises (AEs) and the Revenue insisting on the CUP method as the first and foremost method to be preferred over others were apparently in error.

See our columns tomorrow for the judgements