Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Import restrictions on marble slabs/blocks – challenge to condition of having gang saw by importers - it is not possible to hold that transition from dual policy to a unified policy was either arbitrary or irrational - decision-making process itself appears to be a well deliberated one where matters were considered at different levels. Respondents were faced with an unenviable task of accommodating several competing interests. Court cannot be expected to sit in appeal over decision of the government to introduce a requirement for eligibility for grant of an import licence and opine that one criterion is more appropriate than other - Mere inconvenience to a trader cannot by itself render the policy arbitrary or unreasonable.

IF anyone wants to make a detailed study on the history of the policy provisions on marble imports, they can't find a better case law than this. The High Court has done a detailed analysis of the policy provisions relating to import of marble slabs from 2001 to till date. After the import restrictions on marble were removed in 2001, when India became part of GATT, rough marble slabs/blocks continued to be in the restricted list. In consultation with Department of Industrial Policy & Promotion and the Ministry of Mines, a policy circular was issued on 14th March 2002 permitting import of marble against licence, to those firms who had set up manufacturing/processing unit in the country and had also imported marble in the preceding year when it was under the SIL List.

Central Excise

Duty on 'Cinder' paid under protest but collected from customers – Changing the manner of issuing invoice but retaining the ultimate price charged to customers indicates unjust enrichment - Amount correctly credited to Consumer Welfare fund: CESTAT

THE appellant is manufacturing of Viscose Filament Yarn and have coal fired boilers for generation of steam. During the course of manufacture of steam, “Cinders” (Coal ash), a by-product emerges from the coal fired boilers. The Department took the stand that the said “Cinders” is classifiable under Chapter sub-heading no. 2621.00 of the Central Excise Tariff Act, 1985 and duty was payable on the same.

Many may be aware that this unfortunate dispute came into prominence after the Union Budget of 1996. Notification 76/86-CE dated 10.02.1986 (it is still alive) exempts articles of erstwhile Tariff Item 68 as mentioned in the Schedule appended to the notification. “Cinder” figured at Entry no. 18 of the Schedule and was actually not noticed except when the same came to be omitted by amending notification 11/96-CE, dated 23.07.1996. Although the fact remains that the Apex Court had on 18.01.95 in the case of H.M.M Ltd. dismissed the Civil Appeal No. 1629 of 1988 filed by Collector of Central Excise, Chandigarh and upheld the Tribunal order holding “Cinder” as not excisable, the Revenue authorities chose to look the other way.

Income Tax

Indo-German DTAA - purchase of software from parent company - Revenue for TDS on royalty - Because of non-discriminatory clause in DTAA , non-resident cannot be subjected to provisions of Sec 40(a)(i) - depreciation on capitalised software cannot be restricted: ITAT

THE Assessee is a subsidiary of a German company. It is engaged in the business of supply of assemblies of metallurgical equipment and technical service in design and engineering. It makes payments to parent company for software installation - whether TDS u/s 195 is deductible on such payment of royalty. Whether it is fee for technical services or outright sale of software. Whether the assessee cannot be discriminated against as per Article 24(1) of the DTAA .

See our columns Tomorrow for the judgements