Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Oxygen, acetylene, helium gases used for repair & maintenance of plant & machinery not inputs, credit ineligible – Welding electrodes used along with welding equipment are capital goods, credit eligible: CESTAT

RECENTLY (on November 30, 2009), we carried an analysis on a judgment delivered by the Delhi Bench of CESTAT in Vikram Cement vs. CCE, Indore = 2009-TIOL-1959-CESTAT-DEL where CENVAT Credit was denied on welding electrodes used in maintenance & repair of machinery by declaring that they cannot be regarded as inputs. How about considering them as capital goods? This was precisely the issue before the Delhi Bench of CESTAT in a subsequent case.

Income Tax

Transfer Pricing - Sec 92 - TPO makes adjustment - assessee alleges hearing not granted before making additions - Dispute Resolution Panel u/s 144C to afford opportunities to assessee to rebut basis of adjustment and pass speaking orders: Delhi HC

TO reduce the growing number of international taxation cases, the Finance Minister last year introduced a new mechanism of notifying Dispute Resolution Panels. A new Section 144C was inserted in the Finance Bill 2009. The TPL in the CBDT took its own time to frame the rules and notify the panels. Only recently the panels have been notified but even before the panels begin their work, the Delhi High Court has come out with the direction that the Dispute Resolution Panel will deal with the objections filed by the assessee along with support evidence to rebut the basis adopted by the Transfer Pricing Officer to arrive at arm's length price (ALP). In other words, the Panel will have to pass speaking orders.

Customs

Import of electronic goods in commercial quantity and mis-declaration of value evident based on facts - Revisionary authority empowered under s.129DD of Customs Act to modify order of re-export to order for release of goods on payment of appropriate redemption fine and penalty - No illegality or flaw in order: Madras High Court

A foreign citizen holding Philippines passport arrived in India and declared before the Customs that the value of the electronic goods carried by him in his baggage was Rs. 50,000/-. On examination by the Customs, it was found that the goods were found in commercial quantity and valued at Rs. 2.12 lakhs. The goods were proposed for confiscation and allowed the passenger to redeem the goods on payment of redemption fine of Rs. 1.06 lakhs. A personal penalty of Rs. 21,000/- was also imposed on the passenger.

See our columns Monday for the judgements