Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Foreign Trade Policy

Served From India Scheme(SFIS) – Sale of a Residential Building is not covered

SALE of immovable property is as such not included within the expression 'real estate services' involving owned or lease property. The purport of the inclusion of sale of immoveable property within the expression ‘real estate services' in Division 821 of the UNCPC is only to emphasise that only the amounts corresponding to the earnings by way of brokerage or commission on such sales, and not the entire sale consideration, will qualify for the issuance of the DFCE certificate.

DFCE is a licence: a licence for the purpose of the FTDR Act is not restricted to a licence to import or export. The second part of the definition is an inclusive one. It includes a customs clearance permit and any other permission issued or granted under the FTDR Act. It is not possible to place a narrow interpretation on the word 'licence' while interpreting Section 2(g) of the FTDR Act. The DFCE certificates issued under the SFIS would indeed qualify aslicencessince they permit the holders of such certificates to avail of duty credit while making subsequent imports of freely importable goods

Income Tax

Sec 10B - Whether when a part of exports proceeds is retained outside India for carrying out exports activities, the same is to be excluded from 'exports turnover' - NO, says ITAT Special Bench

THE issues before the Special Bench are -Whether when a part of exports proceeds is utilised for carrying out exports activities outside India, the same is to be excluded from exports turnover; Whether the expenses incurred in foreign currency for onsite development of computer software at overseas client's place are to be excluded from the exports turnover and whether a part of exports proceeds which is allowed by the RBI to be retained abroad for specific exports activities is also to be excluded from the export turnover. And the verdict goes against the Revenue.

Customs

Jurisdiction of Review Committee is to be discerned from the notification 40/2005-Cus(N.T) issued by the Board – Order passed by Commissioner of Customs (Appeals), Mumbai-II first reviewed by Commissioner of Customs (Imports) and then by a Committee of Commissioners comprising Commissioner of Customs (General), Mumbai and the Commissioner of Customs (Imports), Mumbai – Neither of them have jurisdiction in the matter – Revenue appeal not maintainable: CESTAT

THIS is an interesting case where the Revenue in its hurriedness to file an appeal against an order of the lower appellate authority first got the order reviewed by the jurisdictional Commissioner forgetting that such orders are to be reviewed by a Committee of Commissioners. So it did just that. Unfortunately the Committee that signed the review order was not the one that was supposed to be legally constituted in terms of the Notification issued by the Central Government u/s 129A of the Customs Act, 1962. The end result of this fiasco was that the appeal was dismissed by the CESTAT. Read further for details.

See our columns Tomorrow for the judgements