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By Vijay Kumar

Central Excise

Supreme Court delivers landmark decision on Section 4A of the CEA'44 – Assessees rejoice and the department mourns.

Another first from TIOL.

Bringing to you the latest and only the latest. The Apex Court disposed of 15 appeals concerning Section 4A valuation on 22^nd and we bring it to you tomorrow.

Important and mind boggling orders on Section 4A – names like Jayanti Food Processing, ITEL, Electrolux Kelvinator, KITKAT are familiar to students of Central Excise Law as they all had landmark decisions on the applicability of MRP valuation. Now the Supreme Court has solved all these problems with a masterly order. You will have to wait till tomorrow for the judgement.

Income Tax

DTAA with USA : Evidence indicating PE found subsequent to hearing - No bar on Revenue to plead admission of additional evidence under Rule 29- Issue remanded to AO : ITAT

FOR taxing a non-resident company doing business in India, the issue of PE (Permanent Establishment) is central to virtually all the disputes. Even in this case, if a PE in India is proved, the non-resident company will have to shell out tax at 48% rate. If no PE, the income completely escapes from the clutches of Indian tax authorities.

The second and perhaps the most important issue in this case is about the admission of additional evidence.

Customs

Whether amendment carried out by DGFT, whether right or wrong, can be subject matter of scrutiny and challenge by Customs – Matter referred to Larger Bench by CESTAT

DGFT has powers to amend the licence including the revalidation (obviously referring to a situation where validity has expired) and, as such, amendment would be retrospective in nature. The second question as to whether the amendment carried out by DGFT, whether right or wrong, can be the subject matter of scrutiny and challenge by the Customs authorities had been answered by the Tribunal in the case of Rama News Prints & Paper Ltd. vs. CC, Kandla holding that licensing authority has the jurisdiction and power to relax the conditions of the policy and amend the licence retrospectively to validate the import of goods already shipped or arrived and it is not open to Customs authorities to question the licensing authority's discretion exercised in issuing or amending a licence by contending that it is arbitrary or not in accordance with the Policy.

However, since a contrary view was expressed by the Tribunal in the case of Square D Textiles Exports Ltd. vs. Commissioner of Customs, Trichy & which was relied upon by the adjudicating authority, the Tribunal felt that the matter ought to be resolved by Larger Bench.

See our columns tomorrow for the judgements