Jurisprudentiol – Tomorrow's cases

By Vijay Kumar

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

waste and scrap arising out of cutting of M.S. Sheet Plates for making them of required size and specification, for own use in the factory for repair and maintenance of plant and machinery – excisable and dutiable: Rajasthan High Court

The repair and maintenance may require replacement of a floor sheet of machinery, which sheet may require particular specification, in its thickness, metal properties, heat and cold resistance, and so many other aspects. Likewise, it may be some pipe, some tube, some plate, some pulley, or the like, at times it may be required to be fitted by nuts and bolts, at times it may be required to be fitted by heat process, while at times it may be required to be fitted by welding process, and in those events, the bringing about of the part concerned in existence in the workshop by a mechanical process, from out of plates, sheets, channels, beams, angles, welding electrodes etc. would definitely amount to manufacturing process, and if metal waste, and/or its scrap is generated in the course of manufacturing, in our view, there is no escape from the conclusion, that such metal waste, and scrap, would be exigible to excise duty.

Central Excise

Certificate from competent authority produced to AC to avail benefit of Notification No 108/95 – Authorities accepted this and later held that Japan Bank for International Cooperation not an International Organization – Difference of opinion amongst Members on question of limitation – Matter referred to Third Member: CESTAT

CENTRAL Excise law is saddled with jinxed provisions notable among them being Rule 6 of CENVAT Credit Rules. Notification 108/95-CE dated 28.08.1995 also joined the bandwagon by courting controversies. The latest being an insertion by way of Explanation 2 in the said Notification, which has led to some eminent experts in the field to comment that goods supplied to projects in terms of this Notification would become relics fit for museums. This apart there were several litigations in the field with regard to eligibility of exemption to projects funded by certain International organizations like Japan Bank for International Cooperation (JBIC). Recently, in one such instance before the Tribunal, there was difference of opinion amongst the two Members of the Bench resulting in the matter being referred to the Third Member. The circumstances surrounding this reference have made us sit up and take stock of this particular Order.

Service Tax

Branded Medicaments containing alcohol and duty of excise paid thereon under Medicinal & Toilet Preparations Act – Prima facie applicants are producing goods for client and are covered under BAS – Tribunal orders pre-deposit of Rs.50 lakhs

JUST a fortnight ago, we reported the Tribunal decision in Rubicon Formulations [2008-TIOL-1161- CESTAT-Mum], where the Bench in a similar matter has ordered a pre-deposit of Rs.25 lakhs by the 12th August 2008.

This time it is no different as the Bench is the same, except of course, the amount to be pre-deposited is Rs.50 lakhs simply because the service tax demands are of Rs.5.50 crores.

Income Tax

Appellant is technical person with specialized knowledge - Taxes on appellant borne by employer - Conditions like employment in India as technical person, non-resident status fulfilled - Appellant satisfied conditions of s. 10(5B) and eligible for exemption: ITAT

THE Assessee was a qualified software engineer with technical expertise and experience. He was deputed to India to work as Director of Technology and was responsible for design and implementation of software projects. He worked in India from July 2001 to May 2004. Under tax equalization policy, his employer agreed to pay equalized net salary agreed to pay the income-tax payable by the assessee while on deputation. In view of this, the assessee claimed exemption u/s 10(5B) of the Act. The income-tax paid by employer on behalf of the assessee was requested to be treated as exempt u/s 10(5B) in the return submitted by the assessee. Accordingly total income returned by the assessee was Rs 45,14,090/- after claiming exemption u/s 10(5B) of Income-tax Act. The Assessing Officer disallowed the claim for exemption under s. 10(5B) on the ground that the requisite conditions therein were not fulfilled.

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