Jurispruden tiol – Tomorrow ' s cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
Manufacture on job work Comparable price or cost construction method to be adopted (old valuation rules): Supreme Court
The assessee is a job worker. Raw material is supplied to it and after processing, the manufactured product is sent back to the depots of the supplier, viz., Hindustan Lever Ltd. For such products, valuation can be done on the basis of price of comparable goods under Rule 6(b)(i) or failing that under Rule 6(b)(ii) of the Valuation Rules on the basis of the cost of manufacture plus notional profit, in order to arrive at the nearest ascertainable equivalent of the price [stipulated under Section 4(1)(a)] as contemplated under Section 4(1)(b) of the Central Excise Act, 1944
Customs
Encashment of bank guarantee as security for duty in event of non-fulfilment of export obligation is not a payment of duty – refund to be granted: CESTAT
The issue before the Tribunal was whether in such a case time limit under Section 27 would apply. The Tribunal relied on the its own decision in the case of Commissioner of Customs, Chennai Vs Aristo Spinners Pvt. Ltd which was confirmed by the Madras High Court and in and held that the amount paid in lieu of renewal of bank guarantee would not attract the mischief of time limit under Section 27 of the Customs Act.
Income Tax
Transfer of technical knowhow by non-resident company - since payment was made only for right to use and not sale of technical knowhow, it is revenue expenditure: Delhi HC
THE issue before the High Court is whether the payment made for transfer of technical knowhow to a non-resident company is revenue or capital expenditure? And having perused the clauses of the agreement the Bench has held that what was transferred to the Assessee was only a right to use the technical know-how and there was no sale of the technical know-how which the Assessee could exploit. The Assessee's rights were hedged in with all sorts of conditions, clearly making it a case of right to use the technology and not sale of the technical know-how. Therefore, the payment made by the Assessee to the non-resident company was revenue expenditure.
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