Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Supply of pipes to Water Supply Project - exemption not restricted to the first storage point; available to subsequent points: CESTAT

THE respondents were awarded with contract for the manufacture and supply of pipes for Krishna Drinking Water Supply Project-II by M/s. Hyderabad Metro Water Supply and Sewerage Board. They claimed exemption from payment of appropriate Central Excise Duty under Notification 6/2002-CE dated 01.03.2002 as amended by Notification No.47/2002-CE dated 06.09.2002. The assessments were done on provisional basis. The point at issue is the entitlement of the said pipes to the benefit of the exemption notification. Based on Board's instruction dated 28.10.2005, the Revenue restricted the exemption Notification only up to the first storage point. In other words, from the water treatment plant the exemption was available only up to the first storage point and not to the subsequent storage point. Consequently, while finalizing the assessment, the Original Authority confirmed the duty demand.

Income Tax

Income earned by filing bogus TDS certificates and collecting refunds from Revenue - IT Act treats legally earned and tainted income alike - illegality of income earned by resorting to fraudulent means has no bearing on taxability - it is taxable: Madras HC

WITH Satyam saga unfolding new dimensions of the billion-dollar fraud every day and making people curiouser and curiouser about the end-result, here is a simple question for TIOL netizens - what is the colour of the money 'earned' by fraud? And the most common answer is likely to be - it is a tainted or illegal money. The second limb of the question is that can such illegal money if recovered be assessed in the hands of Ramalinga Raju under the Income Tax Act? If yes, can it be said that the State is becoming a party to the illegal act of Mr Raju by sharing his booty?

And the court verdict is likely to be, if one goes by the ratio of the decision given in a similar case of fraud albeit tiny in size, that such a tainted income is taxable.

Service Tax

Manpower supplied to software units - whether taxable under Manpower recruitment and Supply service or exempted as consulting engineer service? - CESTAT grants stay

THIS appeal raises an interesting issue. When manpower is supplied to a client, whether they are providing the Man power supply service or ‘the service provided by such manpower supplied?' To put it in less confusing terms, the appellant has been supplying manpower to the reputed software firms like Infosys and TCS. The charges were collected on the basis of mandays/manmonths. The question is whether they are rendering manpower supply service or rendering technical assistance in the discipline of software engineering.

See our columns Tomorrow for the judgements