From our Legal Corner - Tomorrow's cases

By Vijay Kumar

Central Excise

Cenvat Credit eligibility is to be determined with reference to dutiability of final product on date of receipt of capital goods : CESTAT Larger Bench

The Larger Bench of the Tribunal has concluded that the Ace Timez decision discusses the manner in which the credit is to be availed as per rule 4(2)(a) & (b) but does not discuss eligibility in terms of Rule 6(4) of the Cenvat Credit Rules & moreover it does not consider the Tribunal's earlier decisions in Surya Roshni and Grasim Industries.

In short, the reference was answered by holding that Cenvat Credit eligibility is to be determined with reference to the dutiability of the final product on the date of receipt of capital goods.

A Special recap : The Appellate Tribunal in the case of Surya Roshni [2003-TIOL-277-CESTAT-DEL] held that eligibility of the capital goods to Modvat credit should be determined at the time when capital goods are received by the manufacturer. Subsequent becoming of the finished goods as dutiable could not revive the question of admissibility of Modvat credit, the Tribunal added. Incidentally, the Civil Appeal of the assessee was dismissed as non-maintainable by the Apex Court.

The act of sitting over judgement of appellate authority by a subordinate would be tyranny - such high-headedness should be brought to an end : Tribunal

''THE whole order passed by the ld. Assistant Commissioner was misconceived and was in fragrant violation of law as well as earlier direction dated 28.01.2005, Further, order dated 30.05.2005 demonstrates that the ld. Assistant Commissioner has sat over the appellate authority to replace appellate decision by his own decision when the interest was not at all required to be collected from the Respondent and such high headedness should be brought to an end without allowing that to prevail because innocent public shall be the worst sufferer for the mischief of such Authority and that should be deterred to secure end of justice"

Income Tax

Rate of tax on long term capital gain for NRIs computed under first proviso to Sec 48 would be 20%, not 10% : ITAT

THE following ground has been raised by the assessee in this appeal: "On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming that Long Term Capital Gain arising on account of sale of a Listed Security is to be taxed at 20% and not at 10% as per the proviso to section 112. He ought not to have gone so."

See our columns Tomorrow for the judgements