Jurisprudentiol–Tuesday's cases

By Vijay Kumar

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

CESTAT Larger Bench – Preliminary objection by Revenue that matters shall be referred to the Larger Bench only when a final view is arrived at by a division bench, referral at stay stage being illegal and invalid, rejected – CESTAT Larger Bench by Majority

BUT can a Coordinate Bench refer issues to a Larger Bench at any stage of the proceedings before the Bench especially at the preliminary stage when the stay applications are disposed of? This was the bone of contention raised by the Revenue before the Larger Bench constituted to dispose of matters regarding eligibility of CENVAT credit on cement and articles of iron & steel used for construction/fabrication of plant & machinery, structures required for setting up of plant & machinery.

If both the sides have not cited a decision, the Member cannot be expected to recollect the facts of such other decided cases and apply the same to the case on hand.

Income Tax

India-China DTAA - composite contract for supply of equipment and commissioning - income attributable to service contract carried out in India is only liable to TDS; Even if there is a PE, no business income under DTAA as goods were manufactured and property right transferred outside India: ITAT

COMPOSITE contracts with non-resident companies often lead Indian Income Tax authorities to lock horns for taxing the profit on the gross value of transactions. But it need not be so as decided by the ITAT in a decision involving a State Govt power generation company. It has upheld the CIT(A) order that even if the two contracts are to be treated as one, the income that can be liable to TDS is only the one which can be attributable to the service contract relating to erection and commissioning in India and not the one arising from the manufacture and supply of goods and equipments as the property rights in the goods were transferred outside India. Even if it is presumed that the non-resident had a PE in some form in India, since the equipments were manufactured outside India, no income can be attributed to such a PE and there can be no business income, taxable under the DTAA.

Customs

CHA Regulations 2004 - CBEC directed to come up with a scheme for extending same benefits as conferred upon similarly placed persons in Delhi, Punjab and Haryana - Madras High Court

THE petitioners who passed the examination under the old regulations (1984) do not have any vested right to seek exemption from passing the examination under the New Regulations - petitioners cannot claim legitimate expectation that they would be issued with licese under the old regulations - doctrine of legitimate expectation is not applicable to the petitioner's case - Challenge to the new regulations and the notification inviting applications under new regulations is rejected - however, the Central Board of Excise and Customs, is directed to examine the matter and come up with a scheme for extending to the petitioners herein, the same benefits as conferred upon similarly placed persons in Delhi and Punjab and Haryana.

See our columns Tomorrow for the judgements