Jurisprudentiol-Wednesday's cases

By Vijay Kumar

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

Duty paid P.U. foam blocks [CH 39.20/39.21] cut into different sizes and shapes and cleared under CH 39.26 on payment of duty by utilizing CENVAT credit - while denying credit by holding that activity is not ‘manufacture' lower authorities have not disturbed classification - having accepted CE duty paid, appellant rightfully eligible to avail credit: CESTAT

THE appellant is manufacturing P.U. foam sheets and availing the benefit of CENVAT credit. The appellant had procured blocks of P.U. foam and cut them into different sizes and shapes and sold the same on payment of duty. The lower authorities were of the view that the appellant's activity does not amount to "manufacture" and availment of CENVAT credit on P.U. foam blocks was irregular.

SCN was issued for recovery of the CENVAT availed and imposition of interest and penalty. The adjudicating authority confirmed the demand and imposed interest & equivalent penalty.

The Commissioner (A) sided with this decision and, therefore, appellant is before the CESTAT.

Income Tax

Whether rental income derived from temporary sublease of office premises is to be treated as part of business profits eligible for Sec 10A benefits - YES: HC

THE assessee is a public limited company engaged in the business of development of software and export of software. It is a 100% EOU approved by the STP of India. The AO noticed from Schedule "M" to the financial accounts that a certain sum was shown as rent receipt. When that was sought to be clarified, the assessee stated that they were having a branch office at Canada for development of software product. They had entered into a non-cancellable lease for 36 months with the lessor from 01.06.2001 to 31.05.2004. As the company does not carry on any activity other than development of software in Canada and the letting out of the property was inextricably connected with its business operations, the rental income for the period had been claimed as forming part of Section 10A.

The issue is - Whether rental income derived from temporary sublease of office premises is to be treated as part of business profits eligible for Sec 10A benefits. And the answer favours the assessee.

Customs

Notfn. 102/2007-Cus - Refund of SAD - Goods imported in July 2008 and SAD paid - later, goods were detained by CIU for investigation - it was only after the High Court ordered provisional release in March 2010 that goods were sold and refund claim was filed - claim filed in September, 2010 within time: CESTAT

THE appellant filed two Bills of Entry, both dated July 2008 wherein 4% SAD, amounting to Rs.1,11,557/- was paid. The goods were detained by CIU for investigation.

The appellant approached the Bombay High Court and the High Court directed release of the goods on provisional basis vide order dated March, 2010. Accordingly, the goods were released against P.D. Bond issued by the Assistant Commissioner of Customs, CIU.

Thereafter, the appellant sold the goods and filed refund claim under Notification 102/2007-Cus in respect of 4% SAD on 15/09/2010. The refund claim of the appellant was rejected on the ground of limitation - it was held that the refund claim filed after 1 year from the date of payment of Customs duty, relying on Circular No. 06/2008-Cus. dated 28/04/2008, was time barred.

See our Columns tomorrow for the judgements