Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Pledge of shares of Group Co received by Mukesh Ambani as security for interest-free loan to own company - Whether, without creation of pledge papers, it changes nature of transaction from pledge to sale, liable to be treated as deemed income subject to tax? - NO, says Tribunal

THE issue before the Tribunal is -Whether a pledge of shares of a group company received by the assessee as security for making an interest free loan to his own company, without creation of pledge documents, changes the nature of the transaction from a pledge to a sale, liable to be considered as deemed income subject to tax. Another query is - Whether bye-laws of SEBI (Depositories & Participants) Regulations 1996, Depositories Act and NSDL, to create a valid pledge of shares and to effect delivery of such shares in dematerialised form, are mandatory in nature or directory. The Tribunal's answer is NO.

Central Excise

Notification 1/95-CE granting exemption to goods supplied to a 100% EOU is an end use based exemption - officer-in-charge of appellant's unit has no jurisdiction to re-determine or re-open the classification approved by officer-in-charge of supplying unit: CESTAT

THE appellant is a 100% EOU engaged in the manufacture of cotton yarn. They applied for CT-3 certificate for procuring ‘mobile storage system' under notification no. 1/95-CE dated 04.01.95. The jurisdictional officer-in-charge of the appellant unit issued the CT-3 certificate dated 20.06.1997 and based on the said certificate Godrej & Boyce Manufacturing Co. Ltd., who are the manufacturers, cleared the mobile storage system consisting of various parts and components falling under chapter 7216.50 & 7326.90 and the appellant received the same.

See our columns Tomorrow for the judgements