Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

As per Joint Venture Agreement, Royalty and Licence Fee payments are liable to be made in respect of goods manufactured and sold in India and not in respect of goods under importation - Provisions of Rule 10(1)(c) of Customs Valuation Rules, 2007 are not attracted: CESTAT

THE payments made should be related to the imported goods and such payments are condition of the sale of the goods. In the present case, from a reading of the agreement, it is evident that the payments made by way of royalty or licence fee has nothing to do with the imported goods nor is it a condition of sale for the imported goods. These payments are required to be made in respect of the rubber products manufactured and sold by the licensee in India. In view of the above position, the provisions of Rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 are not attracted.

Income Tax

Whether benefit of Sec 80IA can be availed only after an industrial park scheme is framed and gazetted - YES, rules Delhi HC

THE requirement of Section 80IA(4)(iii) is that a scheme should be framed and gazetted and then only benefit can be claimed by an industrial undertaking which gets notified under the scheme. If there was no scheme in operation as the scheme had not been framed or gazetted, no benefit can be availed of by an undertaking on the basis of a prior scheme, the term and validity of which had come to an end by efflux of time.

Central Excise/Service Tax

Mobile phones in name of Director of Company - CENVAT Credit of Service Tax cannot be denied - Prima facie case - Stay granted: CESTAT

THE input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. The Board has issued a Circular allowing the CENVAT credit on mobile phones. Since the stay is only being decided at this stage, and the case is prima facie in favour of the applicant, the pre-deposit of service tax, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal.

See our columns Tomorrow for the judgements