4Jurisprudentiol – Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Rent-a-Cab operator – Notification 1/2006-ST – CENVAT Credit taken erroneously reversed with interest – Benefit of notification not to be denied – CESTAT

Although the lower appellate authority has held that reversing the credit amounts to not taking the credit, as has been held in the case of Chandrapur Magnet Wires (P) Ltd, the respondent was not liable for demand of interest and penalty but on merits also the respondent is having a good case in his favour as the demand is time barred.

Income Tax

Non-resident assessee supplies telecom equipment outside India - provides support services through subsidiary in India - since sale transaction is on principal to principal basis outside India, there is no business connection to attract deeming provisions of Sec 9(1)( i ): ITAT

THE assessee a German Company had been executing various contracts through its PE in India for many decades. During the relevant year, the assessee was asked to furnish the details of the contracts executed by it in India for turnkey project, supplies and services. Despite various reminders the assessee did not submit copies of the contracts executed in India. Copies of some contracts executed in India were collected by DCIT , Non-resident Circle, New Delhi which were transferred to the A.O. of the assessee. One such contract executed during the year was with BPL for execution of the Cellular Mobile Project on CIF basis for a total consideration of US$ 2,08,53,039, converted into Rs.74,57,04,674 . In the absence of any information about the consideration in respect of other contracts, the A.O. estimated the same at Rs.10 crores . Thus the total turnover of the Indian projects was determined at Rs 84 ,57,04,674 -. In response to the query as to why the profit be not computed under Rule 10, the assessee replied that it did not have any employees stationed in India for carrying out any activity on its behalf. It was further stated that some of its employees were deputed to Siemens Ltd. who were on their rolls under their supervision and control for the purposes of fulfilling of the obligations of the M/s. Siemens Limited, the Indian company.

Central Excise

Appeals filed in time before CEGAT , later withdrawn for filing application for Settlement – Settlement Commission rejecting application on ground of non co-operation – ROA filed before CESTAT dismissed as time barred – HC asking petitioners to pay costs for restoration of appeals – Petitioners comply and CESTAT restores appeals.

These applications filed by the appellants seek restoration of the appeals, which were dismissed on 18.09.2008. By order dated 11.2.2009 in Writ Petitions no. 401 & 403 of 2009, the Hon'ble Bombay High Court ordered that both the appeals be restored on the condition that Rs.8,000 /- shall be paid as cost to the Kirtikar Law Library, High Court, Mumbai within a period of two weeks. The present applications are accompanied by documentary proof of the above payment as also by a certified copy of the Hon'ble High Court's order.

See our columns Monday for the judgements