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Income Tax
Revenue loses Transfer Pricing case against Cargill India but ITAT holds law does not require AO to record satisfaction u/s 271G before initiating penalty unlike Sec 271(1) - sets aside penalty of Rs 40 Crore for glaring infirmities in notices issued u/s 92D (3)
TRANSFER PRICING ( TP )
is no doubt a new form of taxation but going by its rapid evolution India can certainly boast of occupying a unique place on the global fiscal map. And the major component of the credit for a healthy growth of this law goes to our judiciary which has evidently shown rare grasping power and maturity in handling these mega revenue cases. TIOL has consistently been reporting and commenting on the various dimensions of TP law which has genuinely grabbed its exulted place within the arms of the Income Tax statute, on the strength of its humongous revenue implications. In the latest case although the Revenue has lost the battle but it has also got the 'prize' of a clear-cut legal roadmap, lucidly elaborated by the ITAT President, Mr Vimal Gandhi , himself. Even a cursory glance at the order reveals that the Tribunal has taken extraordinary pain in explaining the intent of the legislature in sculpting the various provisions of the TP laws, and this decision would prove to be a quality educational material for training IRS officers of all ranks who handle TP cases.
Customs
ARA decision not binding on Tribunal: CESTAT
Can an importer avail exemption under both Customs Notification No. 21/2002 and CE notification No. 6/2002? This is the issue before the Chennai bench of the Tribunal. The issue is not new to the Bench.
Earlier in Commissioner of Customs Vs . Ind Bharath Energies - , the tribunal had held that it was not possible.
But the Advance Ruling Authority, on a similar issue in the case of Enercon ( India ) Ltd .- made the following observations on the Tribunal's order in the Ind Bharath case,
The question there was whether the 'steam turbine' can be brought within the ambit of item 16 of List 9 of a similar C.E. notification. It was held that steam turbine by itself does not produce energy and therefore do not fall within the description 'waste conversion devices producing energy'. Item 13 with which we are concerned is of wider import. As already noticed, not only the finished product, namely, wind operated electricity generators but also its components and parts including rotor and wind turbine controller are specifically mentioned. As regards the observations of the learned Tribunal that wherever the legislative Authority intended to give liberty to an importer under any exemption notification of their choice, such intent would have been expressed explicitly, we must say that it is too broadly stated. The Tribunal was interpreting a notification which specifically enabled the importer to claim relief under any other notification. The observations of the Tribunal must be confined to and understood in that context
Central Excise
Goods cleared for jobwork - any activity which is incidental or ancillary to manufacture of final product to be regarded as manufacturing activity – no question of law, much less a substantial question of law arises in revenue appeal : Madras HC
THE respondent had received raw materials like masticated rubber and carbon black etc. from M/ s.Taurus Industrial Corporation and M/ s.Jayton Polymers under Rule 57 F (2), for further processing and return to the suppliers. After processing, the processed pre-cured tread rubber were cleared to the raw material suppliers under Rule 57F (2) challans . The Department was of the view that as the goods processed at the premises of the respondent were fully manufactured goods they should have paid the full duty while clearing. Since this was not done, the Department viewed that the respondent had contravened the provisions of Rule 57F (2) with an intent to evade payment of duty. A show cause notice was issued proposing to demand duty and imposing penalty, which culminated in an order of adjudication passed by the Commissioner, by which, the he demanded duty and further imposed penalty also. That order was carried on appeal to the CESTAT .
Service Tax
Appellant, a State Finance Corporation, having paid Service tax liability along with interest before issuance of SCN - Provisions of Section 80 of Finance Act, 1994 can be invoked – No cause for imposition of penalty : Tribunal
IT is good that the provisions of Section 83 of the Finance Act, 1994 concerning Service Tax do not cover under its umbrella the provisions of Section 35B of the CEA '44 . Reason being that the second proviso to Section 35B of the CEA '44 stipulates that the Tribunal has the discretion to refuse to admit an appeal if the duty, penalty or fine is less than fifty thousand rupees.
In fact, in the case of Asiatic Enterprises [ ] , the Tribunal was required to pass a meticulous order in this regard simply because the DR had raised this point come to the conclusion that in Service Tax matters, Tribunal can also hear cases involving tax amounts below Rs 50,000/-.
Until tomorrow with more DDT
Have a nice day.
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