Jurisprudentiol–Tuesday's cases

By Vijay Kumar

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

Where amount to be recovered is for a period beyond normal period of limitation, it is necessary that ingredients for invoking longer period of limitation under section 11A should be alleged in show-cause notice and established by Revenue: CESTAT

THE appellant is a registered manufacturer and also undertakes job work. The job-worked goods are cleared to the principal manufacturer in terms notification 83/94-CE without payment of duty. Incidentally, the assessee uses common cenvatted inputs for manufacture of goods on his own account which were cleared on payment of duty and those manufactured on job work basis.

Income Tax

Indo-Korea DTAA - NRC has project office in Mumbai - works on multiple projects but for less than 9 months - Project office cannot be held as Permanent Establishment as a PE begins to exist only when an enterprise commences business through a fixed place - Provisions of Article 5(3) override provisions of Article 5(1) and 5(2) of tax treaty: ITAT

FOR taxing income receipts of a non-resident company, having a Permanent Establishment (PE) is one of the pre-requisites. In this case, involving a Korean MNC, the Tribunal has held that merely because the assessee has a project office in Mumbai and it does initial correspondence with a prospective client for an engineering contract, it cannot be termed as a PE. PE begins to exist only after an enterprise commences its business through a fixed place. The Tribunal has also held that the provisions of Article 5(3) are specific as compared to those of Articles 5(1) and 5(2) of the Indo-Korean DTAA, so as to override the provisions contained in Articles 5A (1) and 5(2).

Customs

Rate of duty on time expired warehoused goods – if extension is applied and pending, duty cannot be demanded by applying rate of duty on date of expiry of warehousing period: CESTAT by majority

THE appellant is a 100% EOU . The unit imported certain inputs for which the warehousing period was extended up to 29 th November 2001. Subsequently also they applied for extension of warehousing period, but there was no response from the department. Finally in 2003 the appellant removed the goods on payment of duty. Revenue demanded duty by applying the rate of duty as on 29 th November 2001 whereas the appellant contended that the rate of duty applicable is the rate as on the date of payment of duty in 2003. The Commissioner (Appeals) confirmed the revenue's contention and the matter reached CESTAT.

See our columns Tomorrow for the judgements