Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Supplies to SEZ Developer – amendment to Cenvat Credit Rules retrospective – Stay granted: CESTAT

THE controversy is; when goods are supplied from the DTA to the SEZ Developers, there is no excise duty; if there is no excise duty, they were required to pay 10% as per Rule 6 of the Cenvat Credit Rules. This was not required if the goods were supplied to a unit in the SEZ –but unfortunately the Developer was not included. The bright Central Excise Department started demanding this 10% from suppliers of SEZ Developers, while from the other side the Customs officers wanted to collect Export Duty!

Income Tax

Assessee's contract as CEO of subsidiary of US Company terminated - compensation - assessee claims as capital receipt for restrictive covenants - sum received against termination of contract is profit in lieu of salary u/s 17(3)( i ) and is taxable: ITAT

PAYING compensation for sudden severance with the employer company is a common phenomenon in today's globalised economy. But what should be the tax treatment of such compensation? This is the moot question before the Tribunal in this case and the ITAT has held that the sum received by the assessee on termination of his contract as CEO of a subsidiary of an American company was the profit in lieu of salary under section 17(3)( i ) of the Act and is very much taxable and revenue receipt.

Customs

Import of Obscene goods – Who decides obscenity ? - Expert's opinion not applicable to Customs Act: CESTAT

IMPORT of any obscene book, pamphlet, paper, drawing, painting, representation, figure or article is prohibited. Now who decides what is obscene? The Customs Officer at the counter, the CBEC or the Ministry? What appears obscene to one officer may not be obscene to another! Is the importer supposed to go round finding the obscenity standards of Customs officers?

In this case before the CESTAT, the appellants imported certain toys and games, which were promptly confiscated by the Customs as obscene.

See our columns Tomorrow for the judgements