Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Additional Charge Commissioner (or for that matter any Commissioner) has no locus standi to file appeal before Tribunal as they are not appointed by notification by Board - CESTAT

THIS is a decision of the Tribunal that can have far reaching consequences, including the closing down of the Tribunal for some time. If this order of the Tribunal is given effect to, all the benches of the Tribunal can be closed down, for according to the Tribunal there is no validly appointed Commissioner in the Country who has the locus standi to appeal or defend in the Tribunal. The Board has not appointed a single Commissioner.

FEMA

FEMA – failure to import after obtaining foreign exchange – Penalty justified: Calcutta High Court

VIOLATION which has been done by the appellant/petitioner, cannot be stated to be a technical violation and it is well-settled law that contravention of the said Act or Foreign Exchange Regulation Act, 1973 has created a strict liability. The violation of these two Acts would come within the meaning of economic offence and cannot be treated as technical offence.

Income Tax

Deduction of laboratory expenses of foreign Head Office – AO without verification disallows, CIT(A) without verification allows; Tribunal remands – mere statement of the assessee cannot be accepted without verification: Bombay High Court

ASSESSING OFFICER has without calling for any documents pertaining to the laboratory expenses come to the conclusion that the laboratory expenses would fall under the category of "executive and general administration expenses" and, therefore, ceiling prescribed under sec.44C would apply to such expenses. On the other hand, the CIT(A) without any verification by merely relying on the assessee's statement that the research and development expenditure claimed does not include the expenditure in the nature of rents, rates, taxes, salaries etc. reached the conclusion that the laboratory expenditure was not connected with the general and administrative expenditure covered by clauses (a), (b), (c) and (d) of explanation (iv) of section 44C . The Tribunal in the absence of any evidence has not reached a final conclusion whether laboratory expenses are covered under section 44C or not and has taken a very reasonable and rational view namely that the matter requires consideration.

Service Tax

Unjust enrichment - provisions of unjust enrichment as applicable under the Central Excise do not apply in the service tax cases: CESTAT

THIS is a Revenue appeal against a very detailed reasoned order by a Commissioner (Appeals) granting refund of Service Tax paid by the assessee which could not be collected from the clients. The Revenue's contention is that the assessee had got themselves registered at Mumbai. Although they had made their payments of Service Tax at Bangalore yet the jurisdiction for filing refund claim arising is at the place of registration. Another ground is that the Commissioner (A) had committed error in allowing the refund claim when the refunds are barred by Principles of Unjust Enrichment.

See our columns tomorrow for the judgements