Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Whether notes of accounts can be basis for AO to pass an order u/s 142(2A) for conducting special audit - NO: Delhi HC

THE assessee, Delhi Development Authority, is a statutory body/authority created by the Delhi Development Act, 1957, to promote and secure development of Delhi. The AO issued the direction for special audit in the case of the assessee in respect of each of the AYs for 2003-04 to 2009-10. The grounds for initiation of special audit in most of the years were similar. It was the contention of the petitioner assessee that the order of special audit in respect of 2003-04 formed the basis of the subsequent orders. The assessee had filed these writ petitions against the AO and the Director of Income Tax (Exemptions)/Commissioner of Income Tax (Exemptions) who had given directions or approval for initiation of special audit u/s 142(2A) of the Act.

Service Tax

IPR Services - Agreement provides for requirement of appellant's permission for transfer of technical knowhow by licencee to any other person who wishes to manufacture same product by using process developed by appellant - Appellant has not made a prima facie case for waiver - pre-deposit ordered: CESTAT

THE agreement provides for requirement of appellant's permission for transfer of technical knowhow by the licencee to any other person who wishes to manufacture same product by using the process developed by the appellant herein. This itself would indicate that there is no permanent transfer of intellectual property right to the licencee in the agreement. Be that as it may, the appellant has not made out a prima facie case for complete waiver of pre-deposit of the amounts involved.

Central Excise

Hangers are nothing but packing material in which fabrics have been placed - even if it is held that these are not inputs, since these goods were exported along with man-made fabrics on payment of duty they are rightly entitled for credit - CESTAT

THE appellant is a manufacturer of man-made fabrics. For the purpose of manufacture of these final products, the appellant had imported hangers, sample booklets, etc. containing designs and drawings of the fabrics to be manufactured. The appellant availed CENVAT credit of the additional duty of Customs paid on the said inputs. After manufacture, the appellant exported the goods under a claim for rebate of duty under Rule 18 of the CER, 2002. The department says it is at a loss to understand as to how ‘hangers' and ‘booklet' could be considered as inputs under the CENVAT Credit Rules.

See our columns Monday for the judgements