Jurisprudentiol – Friday's cases

By Vijay Kumar

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

CENVAT Credit cannot be varied at recipient's end - Commissioner(Appeals) cannot proceed to decide case solely with reference to a Circular of Board regardless of case law cited by assessee – Matter remanded by CESTAT

THE appellant had taken CENVAT credits totalling to Rs.8,04,213/- during the period from December 2003 to March 2005 on the strength of invoices issued by the input suppliers. Those invoices indicated the amounts of duty provisionally paid based on provisional assessments. When those provisional assessments were eventually finalized in favour of the assessees who could accordingly claim refund of the excise duty, the department came out with a show-cause notice against the appellant who used the inputs in the manufacture of their final products after availing input duty credit. This show cause notice proposed to recover “excess credit” availed by the appellant. It also proposed a penalty on the party.

Income Tax

Assessee is broadcasting Co - hires satellite transponders from non-residents - payments without TDS - Since there is a process involved in uplinking and downlinking of signals in footprint area it is nothing but royalty - even if UK Co is intermediary, it makes no difference as it was in control of transponders - AO's decision to apply rigours of Sec 40(a)(i) upheld: ITAT

THE Broadcasting Sector has rapidly been growing in India. In a couple of years there are going to be more than 800 TV Channels across the country in various languages. More channels certainly mean existence of larger business baskets. But the same could not have been said about their contribution to the exchequer. However, after the Special Bench decision in the New Skies Satellite case, it has for the time being become a certainty for the Revenue to collect additional revenue from this sector. Apart from the tax on profits, the issue involved is the applicability of TDS u/s 195 on 'Transponder Hire Charges' payments made to the non-residents. The unique point in this case as pleaded by the assessee was that the payments were made to a third party which did not own the satellite hosting the transponders.

Customs

SVB- Review Order passed in haste refusing to allow importer to represent matter through legal practitioner – Violation of principles of natural justice- Order passed by SVB quashed – High Court

THE importer is a company engaged in the manufacture of Fuses and Fuse Components and imports goods from associated companies abroad. In terms of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Export Goods) Rules, 1998 (CVR) the importer was registered with Special Valuation Branch (SVB) of the Customs Department at Chennai Customs House. An investigation was registered under the Customs Valuation Rules and accordingly 1% Extra Duty Deposit (EDD) circular was issued.

See our columns Tomorrow for the judgements