Jurisprudentiol- Tommorow's cases

By Vijay Kumar

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

Provisional assessment - Rule 7(4) of the CER, 2002 - Interest is required to be paid even when the differential amount is paid before the finalization of the assessment- CESTAT LB

THE reference was, accordingly, answered thus -

• In the case of provisional assessment under the Central Excise Rules, 2002, interest is required to be paid from the first day of the month succeeding the month for which such amount is determined.

• Interest is required to be paid even if the differential amount is paid before the order, under the rule 7(3) of the said Rules, is issued finalizing the assessment

The same issue was also recently decided by the Larger Bench of the Tribunal, Chennai, in the case of Bimetal Bearings Ltd. vs. CCE, Chennai [2008-TIOL-1821-CESTAT-Mad-LB] and where a similar conclusion was arrived.

Income Tax

Interest proceeds received from the bank had to be treated as income from other sources as it had no direct or immediate nexus with the export business; Netting cannot be allowed as this was paid as interest on over draft facility, which was, utilized in the export business- High Court

THE assessee/respondent, who is a 100 EOU of readymade garments had surplus funds which were put in a fixed deposit with the bank. The said fixed deposits, in the assessment year in issue, earned interest in the sum of Rs 23,14,800/-. The assessee who was required to furnish a bank guarantee to the AEPC for procurement of export quota, prevailed upon the bank, to furnish a bank guarantee, which was, secured by the fixed deposit held with the bank. The bank guarantee furnished on behalf of the respondent/assessee by the bank was a pre-condition for allotment of an export quota by the AEPC.

Service Tax

Refunds - claiming refund without challenging assessment - when there is no provision for assessment, there is no question of challenging it - the very basis given by the Tribunal, simply has no legs to stand. High Court

IT may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3, (sic) there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc.

See our columns tomorrow for the judgements