Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Limitation - Amount Billed shown in ST-3 return cannot be considered as relevant for purpose of time limit - Time limit of one year to be computed from the ST-3 return showing amount realized: CESTAT

THE assessee did not pay service tax on the amount received as sub-contractor as he was under the belief that the main contractor would have discharged the service tax on the total value. Show Cause Notice was issued demanding service tax from them on the amounts received from the main contractor during the period from 29-09-04 to 03-03-2005. The Show cause notice was issued on 10-03-2006. The lower authorities confirmed the demand and the assessee is in appeal before the CESTAT.

On behalf of the appellants, it was strongly contested before the CESTAT that the demand was time barred.

Income Tax

Whether when assessee gets contract to develop customised software and transfers same to another company for consideration, such transfer of sale contract gives rise to capital gains: ITAT

ASSESSEE Company, engaged in the business of management and financial management consultancy, entered into contract with a company for development of some specific software. The assessee sold the same contract for a consideration to another company. During the reassessment proceedings, the AO took the view that assessee had sold the commercial right to manufacture, produce or process an article or thing and hence the gains arising out of such sale were taxable as capital gain in terms of section 55(2)(a). The CIT(A) affirmed the order of the AO.

Customs

Anti Dumping Duty should be in Dollar terms: CESTAT

NO bar to fixing anti-dumping duty in dollar terms, but payable /recoverable in Indian rupee. Such action is to be highly warranted in respect of anti-dumping duties. Anti-dumping duty is fixed after a finding that foreign goods are sold at less than their normal value in the Indian market causing injury to domestic producers. The amount of dumping margin is worked out in dollar terms as all aspects of trade are in USD. Section 9A stipulates that anti-dumping duty shall not exceed dumping margin. Thus, the law's intention and purpose is to afford a protection to the domestic industry at rates not exceeding dumping margin and injury margin. Anti-dumping duty should be fixed in dollar terms so that erosion of the quantum of protection does not take place on account of changes in the exchange rate.

See our columns Monday for the judgements