Jurisprudentiol–Monday's cases

By Vijay Kumar

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

Revenue succeeds in classifying 'Chilli Vinegar' under heading 2203.00 of CETA , 1985, before Tribunal, well almost

THIS is a Revenue appeal and the facts are not that chilly, except of course it concerns one green chilli finding its way, rather purposefully, into a bottle of vinegar. The respondents in these appeals are engaged in the manufacture of food items such as Soups, Noodles, and Spices etc. during the material period. During the period from April, 1996 to February 1997, they paid duty at the rate of 8% on their product ‘Chilli Vinegar' classified under heading 20.01 of the Schedule to the Central Excise Tariff Act.

Income Tax

Speculative loss – Section 73 - no difference between losses suffered in course of trading by delivery and losses in terms of book value: Bombay High Court

LOSS or profit on account of valuation of closing stock has to be treated as speculative loss and allowable as revenue loss or revenue receipt as the nature of these profits are similar to the nature of business in trading of shares: As long as the assessee is carrying on business of trading by way of purchase and sale of shares even if in respect of any financial year, there are no transaction and yet the company has stock in trade of shares, the book value will have to be considered for the purpose of considering the profit and loss in case of speculative business.

Service Tax

Tour operator – charges for hotel rooms not to be included; payment received in advance for services not taxable at that time – no tax – matter remanded: CESTAT

THE appellant is rendering services as Tour Operator in the following manner. The foreign tourists contact their local travels agents who contact Indian travel agent (the present appellant) and as per the requirements of the foreign tourists, accommodation in hotels and train tickets, air tickets were arranged by the appellant. While booking accommodation, the appellant issued instruction to issue bill for room rent alone to the appellant who will settle them. The guests pay for other expenses like food and beverages directly to the hotel. The hotel sent bill for room rent and the appellant paid the bills excluding the commission allowed to him.

Tomorrow is a holiday

See our columns Monday for the judgements