Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Prosecution launched in 1989 – proceedings still at pre-charge stage – accused is 86 years old - delay has clearly deprived accused of their fundamental right to speedy trial under Article 21 of Constitution – Prosecution quashed: Delhi High Court

The delay in the instant case is purely on account of callous attitude on the part of the prosecution. The delay in the instant case has clearly deprived the accused of their fundamental right to speedy trial under Article 21 of the Constitution of India. The accused no. 2, as noted hereinabove, is 86 years of age. Accused no. 3 is 48 years of age. The matter is at the pre-charge stage. In view of the long delay, it is quite obvious that the prosecution will find it quite hard, if not impossible, to secure conviction, given the long gap of time since the prosecution first commenced.

Income Tax

Sec 44BBB - non-resident company offers profits to tax on book profit basis - Revenue insists on net profit method as followed in previous AY - Principle of consistency cannot be invoked when law itself mandates that if normal accounting is followed, assessee can offer less than deemed profits to tax: ITAT

FOR a foreign company which provides engineering and technical services to power projects in India, it is mandatory to follow deeming profit theory to offer its income to tax. This is to be done only for the income attributable to the PE as per the Articles of the concerned DTAA . However, when the law itself gives a choice to the assessee that it can opt for less than the deeming profit if it follows the normal book-keeping procedure and gets its accounts audited, can its claim for deduction of losses incurred by the branch office be rejected by the AO by invoking the principle of consistency as the assessee had followed net profit method in the previous AY?

Customs

Rebate on exempted goods exported on which duty had been paid from Cenvat account - Cenvat Credit is under dispute as final products became exempt – Credit admissible – Export under Rebate allowed – Revenue Appeal dismissed: CESTAT

This fact is not in dispute that the respondent is a manufacturer/exporter registered with the Central Excise. The duty paid inputs received by the respondent were either used in manufacturing flavouring material or as a common input for manufacture of Menthol Crystal BP/ USP and favouring material. On 01.03.2008, Menthol Crystal and Menthol BP/ USP became exempt from duty under Notification no. 4/08-CE dated 01.03.2008. Thus, duty paid on common inputs were now meant for manufacture of exempted (Menthol Crystal BP/ USP ) as well as dutiable (flavouring material) final products. It is also not in dispute that these entire final products are being exported and the same are being cleared for export on payment of duty.

On receipt of common duty paid inputs, rebate is claimed by the respondent of the duty paid goods and exportation of duty paid goods under Rule 5 for unutilized credit.

See our columns Monday for the judgements