Jurisprudentiol–Tuesday's cases

By Vijay Kumar

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

Amount payable in terms of Rule 57CC of CER , 1944 not recoverable under Rule 12 of CENVAT Credit Rules, 2002 – Revenue Appeal Dismissed

THE main issue is whether an amount of Rs.1 ,33,700/- being 8% of the total price of the exempted product cleared by the assessee during the period December 1997 to March 1998 could be allowed to be recovered from the assessee under Rule 12 of the CENVAT Credit Rules, 2002 by the department.

Income Tax

Dividend income - exemption u/s 10(33) - disallowance of expenditure as per Rule 8D - disallowance turns out to be more than dividend income - Can it be intention of law makers? - Plea for Larger Bench dismissed as appeal against Daga Capital Management case admitted by Bombay HC: ITAT

DIVIDEND income is fully exempt u/s 10(33) of the Income Tax Act. Normally an exemption should be a cosy affair for both the Revenue as well as the assessee. But this particular exemption has become unpopular for mothering too many litigations. And this is despite a Special Bench decision. And the reason for the same is the 'absurd' scenario which arises with retrospective application of sub-section (2) and (3) of Sec 14A and Rule 8D and disallowance of expenditure attributable to dividend income works out to be several times the sum of dividend itself?

Customs

Moser Baer loses Rs 20 Crores Case - EOUs liable to pay SAD for DTA Clearances, if exempted from Sales Tax/VAT: CESTAT Larger Bench

THE question of law to be decided by the larger Bench:

"Whether in respect of a 100% EOU availing Sales tax exemption, for determining the excise duty payable based on aggregate value of Customs duty, the element of SAD should be taken into account or not?"

The appellant is a 100% EOU having their unit in the area specified by the State Government of Uttar Pradesh for the purposes of concession from payment of Sales Tax/VAT; they are engaged in the manufacture of CDR, CD ROM, DVDR. DVD ROM falling under Chapter Heading 8523 of the Central Excise Tariff.

See our columns Tomorrow for the judgements