Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Liability to pay interest on short or delayed payment of duty is mandatory – Interest under Section 75 is not penal - It is a civil liability which is inescapable: CESTAT

THE appellants, a public sector undertaking have short paid their service tax liability for which the department demanded interest. They paid the differential tax liability but did not discharge the interest liable to be paid by them on the ground that the short payment of service tax was only due to arithmetical error in calculation of service tax and not on account of any fraud or suppression with an intention to evade service tax. They also stated that they have paid some amount of service tax in excess and requested that the same may be adjusted against the interest liability to be paid by them.

Central Excise

Indorama Synthetics asked to make a pre-deposit of ONLY Rs one crore in Cenvat case by Tribunal

AN application was filed by the applicant for waiver of pre-deposit of the duty confirmed and the penalty imposed. How much, we do not know. However, they did not plead any financial hardship in their stay petition. Antithesis!

The issue involved in this case is regarding the denial of Cenvat credit to the applicants on the ground that they had availed the credit on capital goods, which were used for construction of power plant by another entity i.e Indo Rama Petrochemicals Ltd.

Grant of refund or self credit of Education cess u/s 91 of Finance Act is related to rate of duty of excise for purpose of assessment – HC cannot entertain applications u/s 35G – Only remedy open to Commissioner is to move Apex Court: High Court

EVERY time a judgment is delivered by a Tribunal or a High Court or the Apex Court with regard to the application of appropriate provisions of a statute to the facts of a given case or exercise of jurisdiction under a relevant provision of a statute or correct interpretation of the provisions of a statute, it exposes the gross ignorance of the Jurisdictional Commissioners and their ability to apply the relevant provisions of law and also their knowledge of the relevant provisions of the Statute with which they had functioned right from the day of their joining the Revenue Department. After years of experience in delivering judgments by application and interpretation of the relevant statutes or rather the lack of it, they still come a cropper. There is utter disregard to judicial precedents laid down on a principle of law and the result is sheer waste of time of the High Courts and the Apex Court . The last thing they would ever bother to do is learn from their mistakes.

Income Tax

Double Taxation Treaty not to be construed as taxing enactment; First, Revenue should see whether income of a non-resident is taxable under domestic laws, and only then visit DTAA to see if any exemption or benefit can be extended - Thailand Co bailed out from paying any tax in India as it has no PE nor opted for royalty income: ITAT

IN an interesting decision the Tribunal has observed that a Double Taxation Treaty cannot be construed as a taxing enactment. The basic principle to be adopted for taxing income of non-resident is to first look at the domestic law to discover if the non-resident assessee is taxable thereunder. If it is taxable, only then one needs to look into the treaty, if any, between India and the country in which the non-resident is incorporated to find out if there is any beneficial provision in the treaty to exempt the assessee from taxation or reduce the rigours of the domestic law. If there is such a provision in the treaty, the assessee is entitled to claim that it should be given the benefit of the treaty provisions.

See our columns Tomorrow for the judgements