Jurisprudentiol - Monday's cases

By Vijay Kumar

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

In matters relating to Foreign Trade Policy, it is always advisable to take opinion of the Foreign Trade authorities whose decision is final - whether DEPB licence expires in middle of month or is valid till last date of month - Customs to seek opinion from office of DGFT in matter - Matter remanded: CESTAT

THE appellant submitted release advises on 28/12/2011 for clearance of goods under three DEPB licences all of which had been validated up to 10/12/2011. As per the provisions of Foreign Trade Policy 1997-2002, if the date of expiry of a DEPB licence falls before the last day of the month, then the DEPB shall be deemed to be valid till the last day of the said month. Since in the instant case the DEPB were originally issued in respect of the exports made during August, 1997, the appellant was of the view that the licences are valid till 31/12/2011 and on the day of importation, the licence was a valid one.

The Customs authorities were of the view that as per the provisions of 2004-2009 and 2009-2014 Foreign Trade Policy the licence should be valid on the date of debit and the provisions of 1997-2002 Policy has no application. Since in the present case the licence was presented on 27/12/2011 and the licence had already expired on 10/12/2011, the benefit of DEPB will not be available, held the Customs authorities.

Income Tax

Whether FBT is leviable on promotional gifts given to customers and travel agents even if no employer-employee relationship exists in this case - NO: ITAT

THE issues before the Bench are - Whether for Fringe Benefit calculations, any free or concessional coupons provided by the employer for private journeys of his employees or their family members can be equated with the tickets given to general public, although such coupons neither confer confirmed traveling rights nor provide similar privileges provided to general public; Whether such tickets cannot be valued on the lines of "Frequent Flyer Programme" method followed by the assessee, although the same has been accepted as a correct valuation method in the previous AYs; Whether fringe benefit tax can be levied, even when there is no employee-employer relationship; Whether expenditure incurred on festival celebrations in favour of travel agents/various Govt. departments are subject to FBT and Whether FBT can be levied on promotional gift items given to customers and travel agents. And the ruling partly goes in favour of the assessee.

Central Excise

Commissioner(A) in remand proceedings enhancing demand from Rs.17,107/- to Rs.1,78,051.18 - quantum of demand cannot be justified - prima facie applicant has made out case for waiver of pre-deposit - Stay granted: CESTAT

THE Commissioner (A) does the unthinkable. In the remand proceedings ordered by the CESTAT, the Commissioner (A) raised the demand by more than ten times and imposed equivalent penalty and interest.

Let aside the issue involved in the proceedings for a moment and imagine as to what would have been the fate of the assessee had the field officers whipped him with the New Year Circular 967.

Fortunately, nothing of this happened probably because the duty amount confirmed was Rs.1,78,051.18 [paise included - s. 37D of the CEA, 1944 notwithstanding].

See our Columns Monday for the judgements