Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Sodium Saccharin is a 'corrosion inhibitor' as clarified by Norms Committee of Commerce Ministry - any product which is a ‘corrosion inhibitor' imported under DFIA licence is eligible for benefit of Notfn. 40/2006-Cus - Revenue appeal is devoid of merits, hence dismissed: CESTAT

THE appellant purchased a transferable Duty Free Import Authorization (DFIA) transferred in their favour by the original licence holder M/s Tata Chemicals Ltd. and imported Sodium Saccharin BP-8-16 Mesh and claimed the benefit of Notification No. 40/2006-Cus dated 1.5.2006. The benefit was denied to the respondent on the ground that whereas the licence specifies “Corrosion Inhibitor” the goods imported are “Sodium Saccharin' and, therefore, the goods under import does not satisfy the description given in the licence.

Income Tax

Whether tax exemption granted by State Govt for promoting capital investments in multiplex units, can be considered as revenue in nature, merely because assessee has received funds after commencement of operations - NO: HC

THE assessee, is engaged in the business of operating multiplexes and theaters in Pune and Baroda had, received an amount by way of exemption from payment of entertainment tax relatable to its Baroda multiplex unit. Such exemption was granted by the State Government under a scheme formulated as “New Package Scheme of Incentive for Tourism Projects 1995 to 2000”. The issues before the Bench are - Whether tax exemption granted by the State Governments under a specified scheme for promoting capital investments in the multiplex units, can be considered as revenue in nature, merely because the assessee has received the funds after commencement of its operations and Whether provision of gratuity liability of a company is required to added back to its book profit u/s 115JB, although the provision for gratuity is made on the basis of actuarial calculations. And the answers go in favour of the assessee.

Service Tax

Commissioner of Service Tax, Mumbai and officers subordinate to him are Central Excise Officers duly empowered to assess and collect service tax within their jurisdiction - s.83A envisages adjudication of not only penalty but also determination of ST liability and interest thereon - Chief Commissioner of CE can assign adjudication of ST cases to any CE officer within his jurisdiction: CESTAT

IN one of the biggest challenges to the very foundation of the superintending authority, the CESTAT, WZB was witness to a total of 41 miscellaneous applications in 40 appeals filed before it and the parties involved were a virtual who's who of the Service Industry. Suffice to say that bankers, financial advisories, Life Insurance Companies, Telecom companies, Property Developers, the Cricket Board and an acting school were the applicants and the CESTAT took all the applications together as a common issue had been raised in all these applications.

The two issues raised were -

+ Whether the Commissioner of Service Tax, Mumbai has jurisdiction to issue show-cause notice to the assessees/applicants under Section 73 of the Finance Act, 1994 and can adjudicate the said notice.

+ Whether the Chief Commissioner of Central Excise Mumbai has the powers under Section 83A of the said Finance Act to nominate any other Commissioner within his jurisdiction to adjudicate the case pertaining to Commissioner of Service Tax, Mumbai.

See our Columns Tomorrow for the judgements