Jurisprudentiol–Friday's cases

By Vijay Kumar

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

Central Excise - Duty and interest paid before Show Cause Notice – Penalty is 25% not because of any discretion of Tribunal or Court, but as per proviso to Section 11AC : Tribunal is required to take into account the correct rationale of law as per statutory provisions rather than following the judicially condemned approach – High Court

THE conclusion reached by the Tribunal is correct. However, it seems that the reasoning followed by the Tribunal is not in accordance with the law. The amount of 25% imposed as penalty is not because any discretion is vested in the Court or the Tribunal but because of 1st and 2nd provisos incorporated by the Parliament w.e.f. 12.5.2000. Therefore, the Tribunal should not have committed the same error that merely because the amount of duty has been deposited before the issuance of show cause notice that imposition of penalty becomes illegal or lenient view was required to be taken.

Income Tax

Income tax - CoD approval - if Indian PSU is held as an agent of non-resident company and there is revenue implication for Indian entity, CoD permission is required: ITAT

FOR a dispute involving two Govt departments or PSUs or even State PSUs, the Apex Court decision in the case of ONGC Vs CCE (2002-TIOL-196-SC-CX) is an authoritative guideline. All Courts have been directed not to entertain any case unless Committee on Disputes (CoD) approval is granted to the parties to pursue the litigation. But what about a case where a Govt Department or a PSU is held as an agent of a foreign company which provides certain services to the Indian entity and their income becomes a subject of dispute for its taxability in India? Does the Govt Department or the PSU need to take CoD approval for the same as well?

Service Tax

CENVAT Credit - Outdoor Catering Services employed in factory canteen is an Input Service - adjudicating and appellate authorities in the department have got to scrupulously follow the binding judicial precedents for the sake of administering justice in their proceedings: Tribunal

What can one say about a Commissioner (Appeals) who refuses to follow a Larger Bench decision of the Tribunal and endlessly argues that had the points being taken by him agitated before the Tribunal by the Revenue representative, the outcome would have been different. Obstinacy coupled with scant disregard to judicial discipline, one may say. And more importantly, a sure recipe for inviting strictures.

See our columns tomorrow for the judgements