Jurisprudentiol – Monday's cases

By Vijay Kumar

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

CENVAT Credit on Capital Goods - During relevant period only 50% credit allowed even if Capital Goods are removed as such in same year: High Court

THE question of law is as:- "Whether the Hon'ble CESTAT has committed an error of law in holding that the provision prevalent after 01.03.2002 and prior to 01.04.2000 would be deemed to be in operation during the period when Rule 4(2)(a) and (b) of CENVAT Rules 2001 was in force by relying upon Section 21 and 24 of the General Causes Act 1897."

Central Excise

PP woven bags used for packing and transporting imported raw sugar from port of import to factory are not admissible for CENVAT Credit as inputs: CESTAT.

THE appellants imported raw sugar through Kandla port. The raw sugar was imported in loose condition. The appellants procured duty paid PP woven bags and used these bags for packing and transporting the raw sugar from the port to the factory. The raw sugar was processed in the factory and the processed sugar was cleared on payment of duty. The appellants availed CENVAT Credit of the duty paid on the PP woven bags used for packing the raw sugar. Proceedings were initiated to recover the credit and the original authority confirmed the demand and the same was upheld by the Commissioner (Appeals).

Income Tax

Article 366 of Constitution - Transfer of 'right to use' is deemed sale irrespective of transfer of 'possession': Karnataka High Court

THE income tax department has lost many royalty battles over the issue of 'right to use'. Various Tribunal benches have ruled that the sale of copyrighted articles does not attract provisions relating to royalty of the Income Tax Act. In this case the issue before the HC is - Whether in view of the provisions of Article 366(29A) clause (d) of Constitution, a transaction of transfer of “right to use” is a deemed sale irrespective of the transfer of “possession” of such goods of which right to use has been transferred to the transferee.

See our columns Monday for the judgements