Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.CESTAT

CESTAT has no power to impose pre-conditions for de-novo adjudication: Madras High Court

As per Section 129B of the Customs Act, the Tribunal is vested with the power either to confirm or modify or annul the decision of order appealed against. In the facts of the case, the Tribunal did not think fit either to confirm or modify or annul the decision appealed against, but thought it fit with supporting reason, to refer the case back to the authority, which passed such decision or order. In the absence of any power vested on the Tribunal to impose condition, rather a pre-condition for setting aside the order appealed against, the pre-condition imposed by the Tribunal can only be regarded as arbitrary, and without any statutory backing. The terminology "as it thinks fit" cannot be interpreted independently without having any regard to the subsequent terminology used in the provision such as confirming, modifying or annulling the decision. The terminology "as it thinks fit" would only mean to empower the Tribunal either to confirm or to modify or to annul the order appealed against. That would not clothe the Tribunal with the power to refer for the purpose of remitting back the case with a direction to conduct de novo enquiry by imposing pre-condition.

Income Tax

Payment received by foreign Company in respect of software and provision of services of installation, testing and training shall be taxable under Income Tax Act read with DTAA: Advance Ruling

THESE two applications have been filed by the Airports Authority of India (‘AAI’), which has been established under the Airports Authority of India Act, 1994. The applicant is a public sector undertaking, but has filed these applications in the capacity as a ‘resident’, seeking ruling on the tax liability of a non-resident US company, namely, Raytheon Company (‘RC’) with which it has entered into two separate contracts. Under these contracts, RC will provide software documentation, software, hardware, installation, testing, training, etc., to the applicant.

Service Tax

Transfer of technical know-how–Tribunal has consistently held that this is not Consulting Engineer's service-Revenue by its conduct has created confusion and chaos in mind of assessee regarding classification of service: CESTAT

This conduct of the department was enough to create confusion in the mind of the appellants as to which of the two taxable services would cover the present case of transfer of technology ( Para 3)

The fact remains that they have already paid the tax with interest and are entitled to CENVAT credit of the tax, creating a revenue-neutral situation. In the circumstances, in our considered view, the appellants are entitled to the benefit of Section 80 of the Finance Act, 1994, whereunder the penal provisions of Sections 76 & 78 are not to be invoked against a person who failed to pay service tax within the prescribed time due to reasonable cause

Central Excise

Larger Bench delivers powerful blow–There is no provision in Central Excise Act and Rules allowing suo motu taking of credit – filing of refund claim u/s 11B is a necessity to examine whether claim is hit by bar of unjust enrichment

The appellant's contention that refund in respect of duty paid twice cannot be considered as refund of duty and is only the accounting error does not appeal to us as the debit entry made in the accounts is towards payment of duty only and therefore refund of these amounts has to be considered as refund of duty only. The PLA account and the credit accounts are required to be submitted to the department and any correction carried therein, need to have department's sanction. We also note that the law relating to refund has been fully analyzed by the Apex Court in the case of Mafatlal Industries which makes it very clear that all types of refund claim be there of excess duty paid or otherwise are to be filed under section 11B and have to pass the proof of not passing on the incidence of duty to others. The recent decisions of Hon'ble Supreme Court in the case of Sahakari Khand Udyog and Others clearly laid down that all refunds have to pass through doctrine of unjust enrichment, even if it is not so expressly provided for in the statute.

See our columns Tomorrow for the judgements