From our Legal Corner - Monday's cases

By Vijay Kumar

Customs

CESTAT comes to rescue of Raj TV - issues order by Dasti to release confiscated goods provisionally

M/s Raj Television Networks, had imported 'satellite communication equipments' under EPCG scheme in the year 2003 and obtained clearance of the goods at concessional rate of duty under Customs Notification No 55/2003. SIIB of the Department found misdeclaration, by the importer, of complete equipment as parts and also found that clearance of the goods was obtained without the requisite WPC licence from the Ministry of Communication, Govt. of India. The SIIB seized the goods under Section 110 of the Customs Act, having found misdeclaration and misclassification by the importer. The investigations resulted in the inevitable finding that the equipment, not importable otherwise than under WPC licence, had been imported without such licence and cleared with the benefit of the above Customs Notification and also without satisfying the conditions laid down in the Notification.

Before rejecting the invoice price the Department has to give cogent reasons for such rejection. Strict rules of evidence do not apply to adjudication proceedings - Supreme Court

Income Tax

Double Taxation Treaty Vs domestic laws : Domestic I-T Act to prevail over for taxing profits of PE unless contrary is provided for in treaty - ITAT

It is common knowledge that DTAA means a special tax jurisdiction. But where does the domestic tax law stand in case of a tax treaty between two States? What is the scope of applicability of provisions of the domestic laws for taxation of the contracting states in computation of profits attributable to PE? This question was dealt by the Tribunal in an important order in the case of Mashreq Bank of UAE. And the Tribunal noted that unless express provisions to the contrary are provided in the agreement/treaty between the contracting states, the domestic law of contracting state will continue to govern taxation of income in respective contracting state. The issue arose due to disallowance of certain expenses claimed by the assessee from the income attributable to its PE.

See our columns on Monday for the judgements