Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Eligibility of benefit of Notification 6/02-CE, 3/04-CE & 6/06-CE for manufacture and clearance of ductile iron spun pipes for usage beyond first storage point and also as replacements – Prima facie strong case in favour of appellants – Pre-deposit of Rs 84 Crores waived and stay granted: CESTAT

The appellants are engaged in the manufacture and clearance of ductile iron spun pipes. Revenue proceeded against the appellants denying the benefit of exemption notifications 6/02-CE, 3/04-CE and 6/06-CE on the ground that exemption for the pipes will be limited up to the first storage point only and for goods which are required only for a new plant and not for clearance as replacements. An amount of Rs. 41.30 crores was demanded towards duty along with interest from the appellant and a penalty equivalent to duty in terms of Section 11AC of Central Excise Act, 1944 and further penalty of Rs. 4 crores under Rule 25 of Central Excise Rules, 2002 was imposed.

Income Tax

Indo-UK DTAA - payments to non-resident for providing marketing support services - TDS u/s 195 - even if technical and managerial consultancy services are provided to exporter, since there is no transfer of technical skill or knowledge, condition of 'make available' under tax treaty is not satisfied - no TDS: ITAT

IT is a common practice for Indian exporters to hire non-resident agents to promote their business and procure concrete orders for supplies of goods or services in foreign markets. To perform their part of charter of duties and provide the catalytic support for deliverables, the non-resident agents also have to hire technically-qualified manpower. They also explore the possibility of expansion of the market for their products and provide management consultancy. But, do all these activities amount to providing technical and managerial consultancy services to the Indian entities? Are the payments made by the Indian exporters linked to these services said to be ''fees for included services''? Does it also include under its fold the reimbursement of expenses?

Customs

Applying incorrect rate of duty is not a clerical error u/s 154 of Customs Act - Mere filing of an appeal against order of assessment without filing refund claim within the mandatory period is not proper – Refund time barred – CESTAT allows Revenue appeal

The respondent filed a Bill of Entry dated 09.01.2007 for clearance of goods viz. Low Carbon Ferro Chrome under CTH 7202.4900 which was assessed to duty @20%+16%+2%+4% and Customs duty of Rs.6,97,597 /- was paid on 12.01.07 by the respondent. It is the contention of the importer that the CHA had committed a mistake in filing the document inasmuch as the correct duty payable is only @7.5% and they, therefore, made a request for amendment of document and furnished required information/evidence in support of their contention. The Addl. Commissioner allowed amendment of the Bill of Entry on 12.01.07 but did not refund excess amount deposited by the respondent.

See our columns Tomorrow for the judgements