Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Vivisection of Turnkey Contracts – ROM against Larger Bench decision – ROM Applications misconceived and devoid of merit - Dismissed: CESTAT LB

AN error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error, which strikes on mere looking and does not need long-drawn-out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness.

Income Tax

Whether interest on interest redeposited along with original sum in bank is also entitled for concessional tax rate u/s 115H - NO, rules Madras HC

THE assessee originally made investment in Bank out of the funds brought by him from abroad. Periodically, the assessee renewed the matured deposits along with the interest amount. The interest accrued thereon on the interest portion of the deposit was also taken as foreign investment eligible for concessional rate of tax in the returns filed for the A.Y 1996-97.

Customs

Undervaluation of software - Splitting of value into two transactions and non payment of Customs Duty on major part - Penalty - Intentional evasion - Microsoft and Nine resellers imposed penalty: Settlement Commission

AN intelligence developed by the Mumbai Zonal Unit of DRI indicated that Microsoft packaged software imported by various dealers, appointed by Microsoft Corporation, was undervalued at the time of Customs clearance. The importers had under declared the prices of such software to Customs and submitted invoices with suppressed prices only for Customs purposes. For the purposes of actual transactions and remittance to Microsoft Corporation, another set of invoices was prepared, which accompanied separate shipments of documents termed as software licences. These documents were either cleared from Customs by filing a separate bill of entry under chapter 49.07, availing 'Nil' duty benefit under notification no. 21/2002 dated 01.03.2002 or were simply forwarded to the dealers by email or the amounts actually invoiced were remitted by the dealers without the knowledge of Customs. No duty of Customs was paid on such amounts of invoiced price.

See our columns Tomorrow for the judgements