Jurisprudentiol–Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Export of services – Rebate - Without questioning credit taken, eligibility to rebate cannot be questioned; Input services used in connection with procurement of other input services has to be treated necessarily as input services; Filing of declaration only procedural – substantial benefit cannot be denied: CESTAT

THE eligibility to the credit of the duty paid on inputs and the credit of tax paid on input services are not contingent on whether the services are exported or not. It is incidental that the respondent is exporting the entire services as of now. They could as well be rendering, or may render in future, the same services to domestic customers. They could be partly providing the said services to domestic customers and could be partly exporting services. In all the situations, the criteria for the eligibility of the credit will be the same. It is clear that there cannot be two different yardsticks, one for permitting credit and the other for eligibility for granting rebate. Whatever credit has been permitted to be taken, the same are permitted to be utilized and when the same is not possible there is provision for grant of refund or as rebate.

Income Tax

payment to non-resident without TDS - Order u/s 201(1) - TDS with interest deposited - Refund ordered - interest u/s 244A - if TDS is not deposited voluntarily, interest is payable on refund: ITAT

INTEREST on refund under the Income Tax Act has always been a bone of acute contention. The question before the Tribunal was - is interest payable u/s 244A on TDS refund when the assessee was held as assessee in default under Sec 201(1) and u/s 201(1A) and TDS on remittances made to non-resident u/s 195 was deposited. And the Tribunal has observed that it is settled law that no interest is payable if TDS is deducted and deposited voluntarily. However, in this case, it has held that since the TDS was paid only after two orders were issued by the AO, treating the assessee as assessee in default and once refund was ordered by the CIT(A), interest u/s 244A is payable on the sum refunded.

Customs

Modular furniture or anti static carpet to be regarded as capital goods, entitled for benefit of exemption notification 52/2003- Cus under EOU scheme and allowed for inter unit transfer: CESTAT

ONCE goods are imported in terms of exemption notification 52/2003- Cus, Customs cannot dispute the eligibility of the said notification – Board Circular 16/07 dated 18.04.07 clarifies that even items which are listed in Sl. Nos. other than Sl. No.1 of Annexure I to notification 52/2003- Cus may be allowed the facility of IUT, if these items qualify to be considered as capital goods – No justification in demand of duty and imposition of penalties when transfer is made after obtaining permission from Development Commissioner and Customs authorities.

See our columns Tomorrow for the judgements