Jurisprudentiol–Tomorrow's cases

By Vijay Kumar

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

No question of confiscation or imposition of redemption fine as goods declared as Fuel oil by the importer and ascertained to be Waste oil by the Revenue have already been cleared, consumed or sold after payment of duty and released without any bond/undertaking – Tribunal

NOTING that the principal issue has already been decided by the Larger Bench in the respondent's (M/s Rishi Ship Breakers) own case by holding that the goods cannot be confiscated and fine in lieu of confiscation cannot be imposed if the goods are not available for confiscation (excluding the cases where the goods are initially seized and provisionally released), the Bench observed that judicial discipline required that the same be followed and without going into the merits of the case rejected the appeal of the Revenue.

Income Tax

Indo-Australia DTAA - engineering services - part of service contract executed outside India - royalty income - ratio of Apex Court decision in Ishikawajima not applicable - doctrine of territorial nexus at work - splitting of income not permissible - entire receipts are taxable in India: Advance Ruling Authority

IN an engineering service contract it is a common practice that a non-resident company partly renders the services in India and partly outside. But the million-dollar question is - whether the receipts from such a contract are taxable in India only to the extent of services utilised as well as rendered in India, and thus the services provided outside India are not to be taxed? But keeping in mind the doctrine of territorial nexus and non-application of the ratio of Apex Court decision in Ishikawajima , the Authority for Advance Ruling has held that the entire income representing royalty under the agreement is liable to be taxed in India at the appropriate rate, both under the provisions of IT Act, 1961 as well as DTAA between India Australia. The splitting up of such income is not permissible.

Central Excise

Installation charges collected in connection with sale of computers are not includable in transaction value – CESTAT

THE appellant is engaged in manufacture and clearance of computers from their factory and branches. When the computers are installed at the buyer's premises, installation charges are charged separately in the invoices. The revenue demanded central excise duty on these installation charges collected on the ground that the same is includable in the transaction value with effect from 1.7.2000 as per Section 4 of the Central Excise Act, 1944. The assessee was in appeal against the confirmation of the demand by the Commissioner.

See our columns tomorrow for the judgements

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