Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Import - Section 149 of Customs Act, 1962 cannot be used to revive time expired refund claim: CESTAT

OBVIOUSLY, the appellants paid duty at higher rate than what was applicable, and they have woken up after several years and sought for refund in 2009 and did not succeed before the original authority and also before the Commissioner (Appeals). They have attempted to reopen the issue by invoking provisions under Section 149. Section 149 gives discretionary power to Customs authorities for amending the documents in certain circumstances. This provision cannot be used to revive a time expired refund claim

Income Tax

Whether non-compete fee paid for gaining substantial market share over period of seven years is to be treated as revenue expenditure - NO: Delhi HC

THE issues before the Bench are - Whether non-compete fees paid for not engaging in a similar line of business for a period of seven years can give rise to an enduring benefit of capital nature; Whether such expenses can be classified as revenue expenditure u/s 37(1) of the Act, even though the assessee has gained a substantial market share out of such non-compete arrangement; Whether non-compete right which are rights in personam amounts to a depreciable intangible asset within the meaning of rights spelt-out in Section 32(1)(ii) of the Act; Whether a right in personam enforceable only against a specified person and not against the whole word, can satisfy the nature of intangible rights mentioned in Section 32(1)(ii) of the Act and Whether for a right to be classified as intangible asset, the same must be freely alienable. And the verdict goes against the assessee.

Central Excise

CENVAT credit cannot be denied simply on ground that goods manufactured by job worker are not received in factory of applicant but after payment of duty by job worker are further used for manufacture of goods which are finally cleared to appellant: CESTAT

PROBABLY the dispute involved is the brain child of an Audit team which had to come out with an objection as large as the company itself. To cite specifics, the demand notice is worth almost Rs.3.89 Crores.

And when such an Audit objection is approved by the Audit Board headed by the Commissionerate head, it does not require rocket science to tell one as to what would be the fate of the demand notice except being religiously confirmed along with equivalent penalty and interest.

See our columns Tomorrow for the judgements