Jurisprudentiol-Tuesday's cases

By Vijay Kumar

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

Valuation - Import of Digi beta tapes/video tapes - payment to Singapore entity was made for rights to distribute service and has nothing to do with goods imported - appellant paying ST on distribution fees under ‘Broadcasting services' - Commissioner mis-directed himself in including value of taxable service rendered in India in value of goods imported: CESTAT

THE appellant imported 72 consignments of Digi beta tapes/beta tapes/video tapes by courier through CSI airport, Mumbai, during June to December, 2007, by declaring the value of the medium and paying duty accordingly. Investigations conducted revealed that the appellant had entered into an agreement with MSM Satellite Singapore Pvt. Ltd. called Programme Acquisition and Service Agreement. As per the said agreement, the Singapore entity is engaged in broadcasting of channels from Singapore and they regularly send foreign movies, programmes and other contents acquired by them to appellant for the purpose of distribution to channels. For the said services rendered, appellant remitted to the Singapore entity a sum of Rs.19.76crores towards their share of distribution fees collected.

Revenue is of the view that the said distribution fee is a condition of sale of the digibeta/beta masters and, therefore, the same is includible in the AV under Rule 10 (1) (c) of the CVR as royalties/licence fees for the goods supplied.

Income Tax

Whether papers suo motto called for by first appellate authority for disposing of appeal is to be construed as additional evidence under Rule 46A - NO: ITAT

ASSESSEE is a partnership firm doing the business of chitty. The assessee filed its original return of income along with audit report u/s 44AB. A search was conducted at the business premises as well as the residences of its partners and no search was conducted in the business premises of the assessee's sister concerns i.e. M/s Edassery Ceramics, ET Devassy & Sons Edassery Jewellers, St Francis Clay Works, St Francis Clay Décor Tiles and St Francis Tile Industries on the same date. The AO discovered that the funds of the assessee firm were intermingled and thus, issued notice of section 153A. During assessment proceedings, the AO made certain additions on account of investment in chitty purely on the basis of estimate.

On appeal, the CIT(A) after calling for certain documents held that the additions were made on the basis of estimate without referring to any seized document was not permissible. Before the Tribunal, the DR pointed out that CIT(A) had exceeded his jurisdiction by accepting additional evidences from the assessee.

The issue before the Bench is - Whether documents suo motto called for by the first appellate authority for disposing of appeal can be termed as additional evidence in terms of rule 46A. NO is the answer.

Central Excise

Goods removed from factory for export - Goods destroyed in fire as the truck met with an accident - No remission u/r 21 of CER can be allowed on goods destroyed after removal: CESTAT

THE appellant are a 100% EOU engaged in manufacture of handicrafts. On 08/11/07, they cleared a consignment consisting of 72 bags of handicrafts for export which was to be made through the gateway port of Mumbai. The goods were dispatched in a truck. However, on 10/11/07, the truck met with an accident in which due to fire, not only the truck but the goods loaded in the truck were totally destroyed. The appellant, filed an application for remission of duty on the goods in terms of Rule 21 of the Central Excise Rules, 2002 before the Jurisdictional Additional Commissioner, Central Excise. The Additional Commissioner rejected the application for remission of duty and the Commissioner (Appeals) upheld the Order-in-Original. The assessee is before the Tribunal.

From plain reading of Rule 21, it is clear that remission of duty in respect of the goods lost or destroyed due to natural causes or by unavoidable accident is permissible only when this loss or destruction has taken place "at any time before removal" - point of time when the loss or destruction should take place is the time before the "time of removal" and it cannot be read as "at any place before the place of removal"; they have to be read as "at any time before the time of removal"

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