Jurisprudentiol – Friday's cases

By Vijay Kumar

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

LUT is valid for export of all excisable goods i.e dutiable as well as exempt – CENVAT credit cannot be denied on exempted export goods - CESTAT

THIS method of adjustment, both from the point of Government and the assessee is to allow the assessee to take CENVAT credit on the inputs used in the export products and allow the assessee himself to adjust it for payment of duty on other products. If the adjustment is not possible, CENVAT credit is refunded in cash. This appears to be the Scheme of Rule 5 of the CENVAT Credit Rules, 2004. With a view to achieve this object, the Central Government has specifically enacted Rule 6(6)(v) of the CENVAT Credit Rules, 2004 to the effect that the bar created by Rule 6(1) will not apply for goods exported.

Income Tax

Indo-UAE DTAA - Article 13 - assessee is individual resident of UAE - makes capital gains - Revenue denies it - taxability of capital gains in one of contracting states is not necessary to avail treaty benefits in other contracting state - assessee's appeal allowed: ITAT

THE assessee, a resident of United Arab Emirates claimed benefit of Article 13(3) of the Indo-UAE tax treaty in terms of which capital gains on alienation of shares are 'taxable only in the Contracting State of which alienator is resident'. However, relying on the decision ofthe AAR in the case of Cyril Eugene Pereira's, which holds that "an individual who is not liable to pay tax under the UAE law cannot claim any relief from the only tax which is payable in India under the agreement" and that "the provisions of Double Taxation Avoidance Agreements do not apply to any cases where the same income is not liable to be taxed twice by the existing laws of both the contracting states", the Assessing Officer declined the tax treaty benefits to the assessee.

Customs

Re-Export of goods and Duty Drawback - Proof of inward remittance of proceeds for re-export is not essential for grant of Duty Drawback under Section 74 of Customs Act: – High Court

IN a Landmark decision, the Madras High Court had held that proof of Inward remittance of the proceeds for the re-export is not essential for grant of Duty Drawback under Section 74 of the Customs Act 1962, read with Re-Export of Imported Goods (Drawback of Customs Duties) Rules, 1995.

Service Tax

Appellant renting their premises to bank and persisting with them to pay service tax but same was paid belatedly – upon receipt, tax immediately deposited in treasury – No cause for Penalty in view of s. 80 of Finance Act, 1994 – CESTAT

THE Bench after considering the submissions observed that the undisputed fact remained that Service Tax on ‘Renting of Immovable Property” was a new levy and moreover the facts were similar to that involved in CCE, Nasik vs. A.B.International [2007-TIOL-1561-CESTAT-Mum] wherein the CESTAT had after observing that the tax collected from the service receivers was paid given the benefit of section 80 of the Finance Act, 1994 to the appellant and dropped the penalty demand.

See our columns Tomorrow for the judgements