Jurisprudentiol–Monday's cases

By Vijay Kumar

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

Taking MODVAT credit after six months from date of issue of Bill of Entry - debarring provisions were introduced to avoid misuse of same, where inputs are obtained after a period of 6 months from their clearance date - CESTAT

THE provisions debarring taking of credit after the period of 6 months from the date of issuance of duty paying documents were introduced with intent to avoid misuse of the same, where inputs are obtained after a period of 6 months from the clearance from the factory of the manufacturer or from the premises of the dealer etc. Inasmuch as in the present case admittedly goods were received within a period of 6 months and entries were duly made in their RG 23A part-1, it was only a question of making suitable entries in part-II register of RG-23A format.

Income Tax

Export of software – remittance not received within six months from the end of the year; RBI competent to extend the time; letter from RBI treated as implied extension - ITAT

THE assessee having applied for extension and having completed all the formalities; and in response the Reserve Bank of India having taken the remittances on record, the non-issue of a formal letter for approval, cannot be held against the assessee for none of its faults. The assessee having applied for extension and the same having been impliedly granted in substance, the benefit of section 10A has got to be allowed to the assessee on the ground that the extension is deemed to have been granted. Once the assessee has completed all the formalities and the request of the assessee for extension of time not having been rejected, if can be presumed after a reasonable time that the extension has been granted.

Central Excise

Valuation – related person - for mutuality of interest, there has to be holding of shares of each other between two companies: common accountant and common Excise manager will not make them related - CESTAT

FIRST question is as to whether the corporate veil should be lifted in this case. The Commissioner has held that since all the shares are held by the families and relatives in one company and the same group holds almost 70% of the shares in other company, they have to be treated as related persons. However what is to be seen is whether this aspect has influenced the price or not and whether there is mutuality of interest. It is not denied that the companies do not have shares in each other. It is also not denied that there are 965 share holders in MLL out of which the majority of them do not belong to family or their relatives. Tribunal in case of M/s Utkal Alloy (P) Ltd - 2005-TIOL-932-CESTAT-KOL has held that for mutuality of interest, there has to be holding of shares of each other between two companies. This factor does not exist in this case.

See our columns Monday for the judgements