Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Conversion of Free Shipping Bill into DEEC Bills - amendment can be permitted on basis of documentary evidence available at time of clearance - Conversion not allowed: CESTAT

THE appellant made a request for conversion of free shipping bills into DEEC Bills in view of the fact that they had imported components duty free for using in their manufacture of export goods and while filing ARE-2/shipping bills, they had failed to mention these facts in the relevant documents. The request has been rejected by the Commissioner and so the appellant is before the Tribunal.

Income Tax

Whether when assessee transfers its running business and obtains Right of First Refusal to start new business, compensation received from purchaser for breach of such a right is in nature of capital receipt - YES: ITAT

THE Parle Group of companies were engaged in the business of manufacturing, bottling and distribution of soft drinks and beverages under several popular brands viz., Thumbs Up, Limca, Gold Spot, Maaza, Citra, etc., and other popular brands. The Parle Group of companies entered into a “master agreement” with The Coca Cola Co. of U.S.A. (“TCCC”) on September 1993, for transfer of intellectual property rights in the nature of trade marks, knowhow, franchisee rights, etc., in respect of various brands of beverages / soft drinks owned by Parle Group.

The issue before the Bench is - Whether when the assessee transfers its running business and obtains Right of First Refusal to start a new business, compensation received from the purchaser for breach of such a right is in the nature of capital receipt. YES is the Tribunal's answer.

Service Tax

CENVAT - Whether credit is available on Inputs and Capital goods used for Constructing of Mall by contractor which Mall, shops therein, are rented out by appellant and appellant paying service tax under category of “Renting of Immovable Property” - Pre-deposit ordered of 35% of the Credit involved: CESTAT by Majority

THE appellants are owners of shopping malls which consist of various shops. As the said shops are being given on rent by them, they are registered with the Service Tax department as a service provider falling under the category of "renting of immovable property services", along with 'maintenance and repair services' and 'sale of space or time for advertisement services'.

The dispute in the present appeals relates to the CENVAT credit availed by the appellants and utilised for providing output services of 'renting of immovable property services'.

See our Columns Monday for the judgements