Jurisprudentiol- Tomorrow's cases

By Vijay Kumar

Central Excise

Cenvat Credit not available on Welding Electrodes used for repairs and maintenance - judicial propriety requires that Bench follows law declared by Larger Bench and not to adjudge correctness or otherwise of the same : Tribunal

SOMETIMES some things never show any sign of change. As they say, change is constant!

If we are not wrong, a great majority of the decisions in our library concern credit on inputs & the one figuring prominently is "Welding Electrodes".

So, what is the case that is being reported. It goes thus - the assessee is engaged in the manufacture of Cement and availing the facility of Modvat credit on duty paid inputs. The dispute relates to availability of Modvat credit in respect of Welding Electrodes which are used for re-welding or furnishing and rehabilitating/repairs of parts of machinery and equipments that get dilapidated during the manufacturing process.

Central Excise - Rural area for purpose of SSI exemption eligibility - who decides?

THE Central Government for the purpose of allowing SSI exemption to units set up in rural area, vide Explanation (H) of Notification No.8 / 2003CE Dated: 1.3.2003 as amended, defined the term "rural area" to read:

" rural area" means the area comprised in a village as defined in the land revenue records, and excluded

i . the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, or

ii. any area that may be notified as an urban area by the Central Government or a State Government.

Here is an interesting case decided by CESTAT in favour of the assessee

Income Tax

Relief for British Airways; ITAT holds since AO recorded no satisfaction in assessment order, initiation of penalty proceedings u/s 271 was bad in law

The assessee British Airways PLC , is a company incorporated in United Kingdom and is a tax resident of that country. It is mainly engaged in the airline business and has been operating in various countries including India . During the assessment years under consideration, the business so carried on in India comprised of ( i ) Operation of aircraft in international traffic for transportation of passengers, goods and mail to and from India and (ii) Rendering of engineering and ground handling services to aircrafts operated by other airlines. The profit derived by the assessee company from the business of operation of aircrafts in international traffic was undisputedly not taxable in India in view of Article 8 read with Article 7(9) of the Double Taxation Avoidance Agreement between India and United Kingdom (in short "the DTAA ") which provides that such profit shall not be taxed in the source country i.e. India and the same was thus taxable only in the residence country i.e. United Kingdom in terms of Article 7(1) of DTAA . However, the issue of contention is with regard to the profit derived from the business of provision of engineering and ground handling services to other airlines , which according to the AO, was not covered within the ambit of Article 8 of DTAA and the appellant company contended that the profit so derived by it from the business of provision of engineering and ground handling services to other airlines was not taxable in India as the same was also exempt from tax under Article 8 of DTAA .

Tomorrow is a holiday - In fact Government of India is on a long vacation - we will be back with more DDT on Monday

See our columns on Monday for the judgements