Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Inputs on which credit taken could not be cleared to EOUs without reversal of Credit or payment of duty - Clearance to EOU cannot be equated with export under bond: CESTAT Larger Bench

THE inputs cleared as such by the appellants to 100% EOUs cannot be deemed to have been manufactured by the appellants; the supplies (which are deemed exports) cannot be treated on par with export under bond for the purpose of Rule 57F; There is no warrant or justification to extend the instructions dated 31-12 1996 issued by the Ministry/Board to cover supplies to 100% EOU which are treated as deemed exports for certain purposes under EXIM Policy; The appellants are not entitled to remove the inputs without reversal of the credit or payment of equivalent amount of duty.

Income Tax

Double Taxation treaty with Canada - Consultancy for National Highway Authority of India- fees to be treated as for included services; taxable at 15%; tax payable by the assessee does not exceed the tax deductible at source – no interest: ITAT

INTEREST u/s 234B is chargeable provided the assessee, who is liable to pay advance tax u/s 208 has failed to pay such tax. Thus, the pre-condition for levy of interest u/s 234B is the liability to pay advance tax u/s 208. Under Section 208 of the Act, advance tax shall be payable where the amount of such advance tax payable as computed in accordance with provisions of Chapter XVII is Rs.5000 /- or more. The advance tax will be computed as per Section 209 on the Act. Under section 209, the assessee is to estimate his current income and find out the tax payable therein as per sub clause (1) of Section 209(1) Under clause (d) of sub section (1) of Section 209, the income-tax calculated under clause (a) is to be reduced by amount of income-tax, which would be deductible at source during the said financial year. Thus, the assessee can take credit of the tax deductible at source. Whether the tax is deductible @ 15% or 20% is to be decided by the payer and not the payee i.e. the assessee.

Service Tax

Dispute in availment of CENVAT credit on input services by a manufacturer – whether appeal required to be filed in form EA-3 or ST-5

THE issue involved is regarding denial of CENVAT credit on input services and therefore an appeal in ST-5 format appears to be maintainable more-so when an appeal in ST-4 form was admitted by Commissioner(Appeals). The show cause notices are therefore discharged. It is however made clear that no view is being expressed on the merits of the case as to whether a demand relating to denial of credit on input services is required to be raised under section 11A of Central Excise Act, 1944 or section 73 of the Finance Act, 1994.

Income Tax

Non-resident Co - acquires stocks - pays interest for delayed offer as per SEBI diktat - capital gains - expression 'cost of acquisition' need not be construed in narrow sense - also to include interest payment made for shares prior to actual transfer

FOR anybody, making capital gains is a pleasant experience. But its computation for income tax purpose is a painful one. It is a ticklish subject in the Income Tax Act. What makes it more complex is the number of variables which may be added to the cost of acquisition of the asset.

See our columns tomorrow for the judgements