Jurispruden tiol – Wednesday's cases

By Vijay Kumar

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

Registration of Motor Vehicle as Taxi – Refund of duty - Benefit of notification not to be denied if the assessee has fulfilled the substantive conditions and failed to follow the procedural conditions - Beneficiary provision should be interpreted liberally – CESTAT

SUPREME Court has held that the distinction is to be made between a procedural condition of a technical nature and a substantive condition. Non-observance of the former is condonable, while that of the latter is not condonable as it is likely to facilitate commission of fraud and introduce administrative inconveniences. The Supreme Court has observed that the benefit of exemption notification should not be denied if the assessee has fulfilled the substantive conditions and failed to follow the procedural conditions and that it is not appropriate to attach equal importance to the non-observance of all the conditions.

Income Tax

Sec 195 - export of cars - assessee enters into pact with French company for impact testing - remittance - AO holds it as fees for technical services - Scope of expression 'fees for technical services' under Indo-French DTAA - payment is liable to TDS: ITAT

INDIA has signed 78 DTAAs but all of them are not the same in text and intent. Depending on the bargaining powers of a contract state, the wording and phrases are scripted for the Protocol and the Articles of the DTAA. 'Fees for Technical Services' is one of the payments which can be found in all the DTAAs but the definition for the same is not the same. In the instant case the assessee, an automobile giant, hires the services of a French company to do 'Impact Testing' of various models of its cars as per the requirements of the French Govt before the cars are exported in large number. Revenue takes the stand that the assessee is liable to TDS u/s 195(2) on remittances payable to the French company. Assessee takes the stand that there is no transfer of any knowledge and technical knowhow which may qualify the payment as fees for technical services either under Sec 9(1)(vii) or Article 13(4) of the India-France DTAA.

Customs

Original Importer does not clear the goods – Another importer stakes claim – tribunal ought not have passed the order without impleading the original importer – matter remanded – High Court

WHEN the question as to the ownership of the goods imported is substantially in issue, as such, the decision on that issue will have far reaching consequences for the determination of the release of the goods, the levy of duty, the levy of redemption fine in lieu of confiscation and for the levy of penalty for improper import. The Tribunal ought to have examined the question as to the rights of the original importer, namely, M/s Sandip Exports Limited and the present claim of the first respondent who seeks to virtually subrogate itself to that of the original importer based on certain documents stated to have been obtained from the overseas supplier.

See our columns Tomorrow for the judgements