Jurisprudentiol – Tuesday's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
Written off inputs in books of account – Payment of CENVAT Credit taken - Notification 26/2007-CE(N.T) dated 11.05.2007 is prospective in operation - CESTAT.
The Bench on a careful examination of the submissions observed that the appellant's case is squarely covered by the Tribunal's decisions in the case of Bharat Heavy Electricals Ltd. and Audco India Ltd. vs. CCE, Chennai and the reliance placed by the Revenue representative to the case of Asiatic Gases Ltd. was not applicable to the case. It was also held that Notification no. 26/2007–CE(N.T) dated 11.05.2007 does not have any retrospective effect as it was introduced on 11.05.2007.
Income Tax
Sec 28(i) - assessee receives subsidy from UNDP under Montreal Protocol to phase out environment-damaging ODS - a part of subsidy is towards meeting incremental operational costs - since it is for meeting additional operational expenditure, it is taxable revenue receipt: ITAT
FOR the income tax purpose, a subsidy or a compensation is a capital receipt. But not all subsidies. Before deciding so, one needs to look at critical characteristics of such receipt closely linked to the purpose for which it is paid. In the present case, the Indian company receives a sum as subsidy for phasing out environment-damaging Ozone Depleting Substances (ODS) under Montreal Protocol from UNDP. Now the question is - whether it is to be treated as revenue receipt or capital receipt?
Customs
Justice after 18 years – Bombay High Courts directs the Customs to pay the value of goods with interest at 6% to the petitioner – also awards cost of litigation.
The revenue departments often shy away from giving the legitimate benefits to the trade and procrastinate the issues on the presumption that they are doing a great favour to the nation by saving some revenue, only to be directed by the courts later to compensate the victims with not only the amount, but also interest. In this case, the HC even ordered the payment of cost of litigation to the petitioner.
Until Tomorrow with more DDT
Have a nice day.
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