Jurisprudentiol-Tuesday's cases

By Vijay Kumar

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

Time spent before wrong forum is excludable for computing limitation before Commissioner (Appeals) - No error in order of Tribunal restoring appeal before Commissioner (Appeals) - Revenue appeal dismissed: HC

THE respondent is a manufacturer of excisable goods. Aggrieved by an order passed by original authority involving a demand of Rs 19,96,410/-, the respondent filed an appeal before the Tribunal instead of before the Commissioner (Appeals). The Tribunal rejected/ returned the appeal through its order, dated 28.09.2006 on the ground that it is to be presented before the Commissioner (Appeals) and not the Tribunal. Then they filed an appeal before the Commissioner (Appeals) and the same was dismissed as time barred. The respondents filed an appeal against the order of Commissioner (Appeals) and the Tribunal allowed the same by holding that time spent before a wrong forum is excludable for computing the limitation under Section 128 of the Customs Act, 1962 or Section 35 of the Central Excise Act, 1944 - 2007-TIOL-2322-CESTAT-BANG.

Aggrieved by the above order of Tribunal, revenue is in appeal before the High Court.

Income Tax

Whether when each beneficiary contributes money to assessee-Trust for earning higher returns, it can be said that beneficiaries have come together to form an AOP - NO: ITAT

THE assessee is a trust constituted under an instrument for investing the funds of the contributors in those fields where the returns are high. It had filed its return as an AOP, declaring NIL income. During assessment proceedings, the AO taxed the income of the assessee at maximum marginal rate, holding the assessee as an AOP, on the fact that the assessee had obtained the PAN under the status of AOP and had also filed the return in the same status. The AO further observed that assessee was not to be considered as representative assessee because from the perusal of the trust deed the shares of the beneficiaries did not emerge and hence in view of the provisions of section 164(1), the assessee was assessable as an AOP at maximum marginal rate but the CIT(A), on appeal, held that assessee was not assessable at maximum marginal rate merely because it has obtained PAN under the status of AOP.

The issue before the Bench is - Whether when each beneficiary contributes money to the assessee-Trust for earning higher returns, it can be said that the beneficiaries have come together to form an AOP for the purpose of Income Tax. NO is the Tribunal's answer.

Customs

Foreign Related entity - While service agreement is for rendering of management consultancy services, secondment agreement is for deputation of staff - these have nothing to do with import of raw materials nor were services received condition for sale of imported goods - order set aside: CESTAT

THE lower appellate authority has upheld the inclusion of BU fees and legal and professional fees paid by the appellant to Alcan Packaging Singen GMBH, Germany and Pechiney Plastic Packaging Inc., USA, foreign related entities of the appellant, on the raw material imported by the appellant from Alcan, Germany, invoking rule 10(1) of the Customs Valuation Rules.

The impugned orders do not specify under which clause of rule 10(1), the service charges are includible in the assessable value of the goods imported….Clauses (a) to (d) of Rule 10(1) have no application to the facts before us as they relate to totally different situations and operate in different fields. If at all, only clause (e) would be relevant. The crucial factor for application of the said clause is that the payment should have been made as a condition of sale of the goods imported.

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