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By Vijay Kumar

Customs CHA

Customs - CHA licence - Commissioner Chennai cannot suspend licence issued by Vizag Commissioner - Permission could be withdrawn after due process of law : CESTAT

COMMISSIONER of Customs (Port - Import), Chennai suspended the operation of CHA Licence issued by the Commissioner of Customs, Visakhapatnam.

Tthe reasons stated by the Commissioner for suspending the operation of the CHA licence are not supported by the indisputable facts of the case and the Commissioner's order cannot be sustained for a moment.

Central Excise

Refund, rebate and drawback - too many SCNs and conflicting orders - Bombay HC remands case to Tribunal

THE petitioner filed a refund claim on 30/3/2004 claiming refund of Rs.5,45,942/-. By a show cause notice dated 16/6/2004 the Dy. Commissioner of Central Excise, Ichalkaranji called upon the petitioner to show cause as to why the refund claim of Rs.5,27,396/- out of Rs.5,45,942/- should not be rejected as time barred. By a corrigendum dated 3rd September, 2004 an additional ground was added to the show cause notice dated 16/6/2004 and the petitioner was called upon to show cause as to why the refund claim should not be rejected under Rule 5 of the Cenvat Credit Rules, 2000 in view of the fact that the petitioner had availed drawback/Rebate. By an order dated 29th October, 2004 the adjudicating authority sanctioned refund of Rs.18,546/- and rejected the claim in the sum of Rs.5,27,396/-.

Income Tax

Bonus shares received by Trust cannot be said to be funds invested - Device of piercing the veil of legal entity of a HUF to find out person in actual control of its functioning is unknown to this branch of tax law : Delhi HC

Unknown beneficiaries of a Trust?

A question before the Tribunal was whether these trustees were holding the shares for the beneficiaries. The Tribunal then proceeded to answer this question by holding that the beneficiaries were known and therefore it cannot be said that the trustees were holding the shares beneficially for them.

"A transfer cannot be made directly to an unborn person, for the definition of transfer in section 5 is limited to living persons. Such transfer can only be made by the machinery of trusts. Possibly, to express this distinction, the expression "for the benefit of" has been used, since the trustees, being the transferees, hold the property for the benefit of the unborn person."

Service Tax

Service Tax - Advertising Service - Incentive received from media, not taxable : Tribunal

THE appellants were covered under the category of advertising agencies. The Audit found that they had collected incentives from M/s. Malayala Manorama. The Revenue has considered these receipts as extra commission and had proceeded to recover Service Tax on these amounts by invoking larger period.

The appellants pleaded before the original authority that they had not billed nor collected the amount of RS. 6, 52, 27,619/- from the clients and this cannot be taken as the value of the taxable services provided by the agency. They had also stated that the broadcasters gave agency commission through trade discount on percentage basis at 15%.

See our columns tomorrow for the judgements