Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Brand owner is not required to pay any ST under the category of "Franchise Service" as clarified by Board-Appeals allowed: CESTAT

THE appellants are owners of different brands of Indian Made Foreign Liquor (IMFL) and engaged in getting the said branded alcoholic beverages manufactured from different contract bottling units (CBUs) on contract basis. The arrangement was made with CBUs through contract agreements. The arrangements provided for manufacture of branded alcoholic beverages by the CBUs with the condition that the same were supplied on sale to the specified distributors of the applicants. The agreement also provided for control of the bank account maintained in the name of the CBUs by the applicants and it was the responsibility of the applicants to provide the funds, know-how, details of raw materials and packaging materials etc. The surplus arising in the operating account of manufacture and sale which represents the profit in the business would go to the brand owner i.e. applicants.

Income Tax

Whether when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as term 'relative' is very much covered by provisions of Sec 56 - YES: ITAT

THE issue before the Bench is - Whether when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as the term 'relative' is very much covered by the provisions of Sec 56. And the answer goes in favour of the assessee.

Customs

Valuation - basis for re-determination of assessable value adopted by Commissioner is RSP at which automobile parts of well-known brands are sold by various authorized service centres- Order set aside: CESTAT

THE appellant is an importer of automobile parts. Acting on intelligence that there is ‘heavy' undervaluation of automobile parts imported, a bill of Entry dated 17/06/2010 filed by the appellant was taken up for investigation by the Special Investigation and Intelligence Branch (Export), Mumbai. A panchnama was drawn and it was observed that the consignment contained several automobile parts, most of which were unbranded and of Chinese origin and a few parts were branded and were of Korean, German and Japanese and Poland origin. It was also observed that the CIF value as well as the Retail Sale Price (RSP) declared were very low.

See our Columns Monday for the judgements