Jurispruden tiol – Tuesday's cases

By Vijay Kumar

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

Stand taken by department at cross-purposes – Revenue neutral exercise – Commissioner (A) has proceeded on a basis extraneous to the SCN – Tribunal is well within its powers to entertain plea of revenue neutrality - CESTAT

THE Appellants manufacture Electronic Balances falling under Chapter Sub-Heading 9016 and are availing the facility of Cenvat credit on the duty paid inputs. For the manufacture of Electronic Balances, the Appellants send inputs such as inductor coil, hybrid circuits, heat sink thermistors etc. to M/s. Leo Circuit Boards Pvt. Ltd. , and M/s. Hermes Electronics under the cover of Job Work challan as per procedure laid down in Rule 4(5)(a) of Cenvat Credit Rules. The said inputs so supplied by the Appellants for processing under job work were being fitted on PCBs by both M/s. Leo Circuit Boards, Turbhe and M/s. Hermes Electronics, Turbhe and were subsequently cleared to the Appellants on payment of Central Excise duty.

Income Tax

Indo-Korean DTAA - whether business income of Korean Company could be charged to tax at a rate higher than that applicable to a domestic company - re-assessment - Assessee pleads non-discrimination Article 25 - assessee's case falls within meaning of expln 2(c)(ii) of Sec 147 - reopening justified: ITAT

FOR assessment years 1995-96 and 1996-97, the issue of application of higher tax rate applicable to foreign companies as against the lower tax rate applied originally by the Assessing Officer was not at all a reason for reopening the assessment under section 147/148. Hence the reopening of he assessments was held to be invalid and the order of the CIT(A) was confirmed. However, on the second issue i.e. whether the Assessing Officer was justified in applying higher rate of tax to the business income of the assessee,the Tribunal, following its own order in the case of the same assessee for subsequent years, decided the issue in favour of the Revenue and against the assessee. The Department's appeal was, therefore, partly allowed.

Service Tax

Training imparted through specialized software to enhance skills in specialized bioinformatics, genome and proteome analysis to professionals from related disciplinary fields – Claim of exemption as vocational training institute made for first time – Matter remanded to original authority to verify claim: CESTAT

THE appellants entered into an agreement with a US firm for procurement of specialized software products under license for research in the field of pharmaceuticals, biotechnology and bioinformatics. A license was also obtained to impart training on such software to students holding graduate and post graduate degree in biology, genetics, biotechnology etc. The certificates were issued to the students by the US firm on successful completion of their training.

The authorities proceeded against them for levy of service tax under the taxable service category of ‘commercial training and coaching service'.

FERA

Once the retraction of a confessional statement takes place the burden to prove that the statement was voluntary is on the prosecution: High Court

THERE is nothing on record which may go to show that any evidence has been led on behalf of the respondents to rebut the contentions of the petitioners that the alleged confessional statement which is the sole evidence relied upon by the prosecution had not been obtained without torturing the petitioner and further that the said statement was not retracted immediately. Rather, there is an admission on the part of the respondents that the said statement had been retracted. There is also no corroboration of the said statement. This matter was listed for clarification on 15.12.2009 when again counsel appearing for the respondents accepted the position that there is nothing on record to show that any evidence has been led on behalf of the respondents to rebut the case of the petitioners that the confessional statement was recorded under duress.

See our columns Tomorrow for the judgements