Jurisprudentiol – Tuesday's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
Meaningful interpretation to be given to provisos contained in section 11AC of the CEA, 1944 – since appellant has already reversed the CENVAT credit and paid interest, penalty imposable u/s 11AC is 25% of duty – CESTAT
WE recently reported the Tribunal decision in R.R.Oomerbhoy Pvt. Ltd. vs. CCE, Aurangabad () where the Bench held that since the provisions of section 11A(2B) of the CEA, 1944 prohibit issuance of show cause notice for demanding duty under sub section (1) of section 11A, there is no question of determination of duty under sub-section (2) and consequently invoking section 11AC is erroneous. This decision has, it is learnt, already ruffled quite a many feathers in the department.
Be that as it may, the present order in all likelihood is also heading in the same direction.
Income Tax
TDS - payments made to Hong Kong-based law firm - are legal services covered under 'technical services' u/s 9(1)(vii) or it is professional service covered under Sec 44AA or S 194J? - Legal services are technical services and payments are liable to TDS as India had no DTAA with HK at that time: ITAT
DO legal services fall within the definition of 'technical Services' as per Explanation 2 to Sec 9(1)(vii) of the Income Tax Act? If we go by the Special Bench decision in the case of Mahindra & Mahindra Ltd it is technical service and is very much covered under Sec 9(1)(vii) and even DTAA between India and the UK. However, the counsel in this case argues that the legal service is covered under Sec 44AA as the Legislature has used the legal, medical, engineering or the profession of accountancy as different from technical consultancy. He further referred to section 194J to contend that the fees for professional services has been separately mentioned as distinct from fees for technical services. Referring to E xplanation to section 194J he submitted that "fees for technical services" has been defined to have the same meaning as in Explanation-2 to section 9(1)(vii). He further relied on the judgment of the Madras High Court in the case of Skycell Communications Ltd. and Another vs. DCIT () to contend that the technical services should not be mixed with legal services.
Customs
Duty free goods imported by STPI unit installed in MTNL premises for testing and possible sale – STPI scheme misused – exemption not allowed – confiscation, duty and penalty upheld – even foreign supplier penalised for abetment: CESTAT
STP unit in software technology park is allowed to import the goods as specified in this notification free of duty for the purpose of development of software, data entry and data conversion, data processing, data analysis and controlled data management call centres services for export out of India and this exemption is subject to the conditions specified in the notification.
Until Tomorrow with more DDT
Have a nice day.
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