Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

Central Excise

Legal Corner Icon — the image was hosted by the publisher and was not captured.Sr Executive leaving office for personal engagements - Since Appellant is a Public Ltd Co, any other authorized person could have taken steps for purpose of filing appeal – Appeal rightly rejected as being time barred: Tribunal

Take a look at the affidavit filed by the Senior Executive of the company narrating the reasons for the delay –

"That due to sudden fixing of engagement of my only sister's daughter at my native place (Kota - Rajasthan), I was forced to leave immediately from Jammu on 21st January, 2006 and immediately marriage was also fixed for 13th February, 2006. Looking to the circumstances and being only close relative from maternal side, I could not join my duties before 20th February, 2006. "

The Tribunal observed that the Commissioner (Appeals) was right in taking a view that the reasons for delay is not convincing and had correctly reached a finding that since the appellant is a corporate unit, the other persons could have taken steps for the purpose of filing the appeal.

Prosecution in Central Excise case permissible even when demand dropped by Commissioner on limitation - Board's instructions on monetary limits not binding on courts: Madras High Court

Monetary limits for prosecution: It was argued that as per Board circular F.No.208/31/97- C X.6, dated 12.12.1997, prosecution limit is Rs. 25 lakhs and as the duty here was less than that, the prosecution deserves to be quashed. The High Court was not impressed as such a circular is binding on the Department and not on the Criminal Court. . If it is a case relating to prosecution in respect of non payment of duty alone, then the circular may be utilised by the accused. But, in this case, the Prosecution is not only for evasion of duty but also for non-furnishing of the information etc., which have got nothing to do with the monetary limits mentioned in the circular

Income Tax

Income Tax loses yet another Transfer Pricing case; Tribunal re-establishes supremacy of principles of FAR; Revenue not justified in selecting oversized comparables with abnormal profit margins for adjustments

IN the latest Transfer Pricing (TP) case, a new genre of taxation within the Income Tax, the Tribunal has once again established the supremacy of the concept of FAR (Functions, Assets & Risks) in working out the Arm's Length Price (ALP). In no uncertain terms the Tribunal held that the Revenue should opt for robust and comprehensive FAR analysis for choosing comparable companies and if need be, the necessary adjustements can also be made in the operating profits of the comparable companies.

The Tribunal ruled that while comparing the controlled and uncontrolled transactions under the Transactional Net Margin Method (TNMM), the differences having tangible bearing on costs, price or profit are to be given weightage to make reasonable adjustment to eliminate them.

While holding it against the Revenue the Bench observed that the Revenue had no legitimate ground for picking up oversized companies in order to compute the average profit of the industry for TP purposes.

See our columns Tomorrow for the judgements