Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Valuation - Goods manufactured with moulds supplied by purchaser and other goods procured from nominated suppliers - Not Job work - Rule 10A of Valuation Rules not applicable - CESTAT

ACCORDING to the Job Worker definition, in terms of Rule 10 A, any person to enter within its ambit of the definition should satisfy three requirements viz. (i) he should manufacture or produce goods (ii) he should do it on behalf of a principal manufacturer and (iii) he should do it from any inputs or goods supplied by the principal manufacturer or by any other person authorized by him.

Income Tax

Income tax - Whether when assessee takes over running business of partnership firms, availing benefits of Ss 80IB/80IC, such benefits available to undertakings can also be availed by new owner for unexpired period - YES: ITAT

THE issues before the Bench are - Whether when assessee decides to allot sweat equity shares to its employees free of cost, it is entitled to claim the fair market value of ESOP as expenditure - Whether mere non-allotment of the shares pending completion of certain formalities makes such expenditure contingent liability; Whether when the assessee takes over running business of partnership firms, availing benefits of Ss 80IB/80IC, such benefits available to the undertakings cannot be availed by the amalgamating company for the unexpired period; Whether the change in ownership of the undertaking would disentitle the successor the benefit of deduction under Ss 80IB/ 80IC of the Act for the unexpired period; Whether AMC charges received by the assessee which are directly relatable to the business of manufacturing, commissioning and erection of cooling system, is eligible for deduction u/s 80IB/80IC of the Act and Whether deduction u/s 80IB/80IC of the Act is allowable on assembling the bought out items in order to make available the whole unit in a running condition at the site of the company/plant. Answers to these questions partly go in favour of the assessee.

Customs

Conversion of Free Shipping Bills to DEPB Shipping Bills - Restrictions and conditions laid down in CBEC Circulars in context of conversion of free Shipping Bills to Shipping Bills under export promotion schemes have a proper rationale and same are intended to curb mis-utilisation of export benefits - Tribunal should not overlook such restrictions or nullify same - CESTAT

RESTRICTIONS and conditions which have been laid down in the CBEC Circulars i.e., 4/2004 and 36/2010 in the context of conversion of free Shipping Bills to Shipping Bills under export promotion schemes have a proper rationale and the same are intended to curb mis- utilisation of export benefits and the Tribunal should not overlook such restrictions or nullify the same. When a well laid procedure is in place and all other claimants of DEPB benefit are following that procedure and are filing DEPB Shipping Bills, it does not stand to reason as to why the appellants want to circumvent that procedure and file a free Shipping Bill initially and ask for substitution later on without giving sufficient reason.

See our columns Tomorrow for the judgements