Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Show Cause Notice not issued by proper officer - Tribunal does not follow Supreme Court order - CESTAT is duty bound to follow binding precedent. Tribunal's approach not consistent with principles of judicial functioning: HC

THE CESTAT as a judicial body must realize the importance of the doctrine of precedent in our legal system. Deference to judgments of the Supreme Court is a matter of constitutional principle. Equally, unless coordinate Benches of the Tribunal have due deference and regard for decisions rendered by the Tribunal, the elements of certainty and consistency in the judicial process which lie at the heart of judicial functioning would be seriously disrupted. Benches of a Tribunal must conform to the discipline that the doctrine of precedent exacts. The respect which independent adjudicators in our country command has been assiduously built up over small incremental steps. Consistency and certainty is an important element in the judicial process. They are foundations of the rule of law. These are not just elements of judicial tradition but form part of constitutional principle. They are as binding as a binding precedent.

Income Tax

Whether remuneration paid to trustees can be construed as annual charge on property within meaning of Sec 24(1)(iv) - NO: Calcutta HC

BY a Will executed on July 26, 1921 one Sri Kali Das Paul, since deceased, created a Trust dedicating the properties mentioned in Schedule-'Ga' of the said Will in favour of Sree Sree Iswar Radhakishan Jew which is a regular assessee under the Act.

THE issues before the Bench are - Whether remuneration paid to trustees can be construed as 'annual charge' on the property within the meaning of Sec 24(1)(iv) - Whether such expenditure is deductible from the income of the Trust. NO is the HC's answer.

Service Tax

Since service is partly performed in India and partly outside India, service to be regarded as export - Fit case for full waiver of pre-deposit: CESTAT

THE appellant conducts a comparison of the technical data with the standards already made available by the US Company and submits a report to its parent company. The parent company in US thereafter interacts with its clients and advises further rectifications to their products. The clients in India make payments for these services to the US Company which in turn remunerates its Indian subsidiary viz., the appellant for their work.

Central Excise

Rule 10A of Valuation Rules, 2000 - fabricating bodies on duty paid chassis - whether applicants are liable to pay duty on price at which vehicles are sold by Tata Motors - Pre-deposit ordered of Rs.50 lakhs: CESTAT

IN applicant's own case the Tribunal vide Stay order dated 05.08.2008 accepted the offer made by the applicant and directed the applicant to deposit an amount of Rs.25 lakhs. After going through the argument of both the sides and particularly in view of the submissions made in the grounds of appeal, prima facie it is not a fit case for total waiver of duty. The applicants are directed to deposit an amount of Rs.50,00,000/-

See our columns Monday for the judgements