Jurisprudentiol– Wednesday's cases

By Vijay Kumar

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

Excise – Goods cleared to ship builders against certificates indicating goods as ship stores for Indian Navy – Benefit of Notification 64/95-CE not available – DGCEI has all India jurisdiction and SCN issued by officials of DGCEI under Central Excise Act not beyond jurisdiction: CESTAT

THE assessee cleared wires and cables without payment of duty to M/s Garden Reach Ship Builders & Engineers Ltd and M/s Goa Shipyard Ltd by availing benefit of exemption Notification 64/95-CE dated 16.03.1995. The exemption under this notification was availed based on the certificates issued by the respective customers that the goods under question would be supplied as stores for consumption on board a vessel of Indian Navy or Coast Guard. Revenue proceeded against the assessee on the ground that the goods supplied under the exemption notification were not put to the intended use as per the said notification. Duty demand was confirmed by invoking the extended period.

Service Tax

Service Tax – CENVAT Credit - Services undertaken like lawn mowing, garbage cleaning, collection of household garbage, harvest cutting and weeding, etc. When the appellant is under an obligation to maintain a colony, all the services received in maintaining such a colony would also be covered as input services - CESTAT

THE use of the expression “as such” indicates that list of activities given therein are only illustrative and not exhaustive. When the appellant is under an obligation to maintain a colony, all the services received in maintaining such a colony would also be covered as input services. In the light of the definition of input service, Tribunal did not agree with the Commissioner (Appeals) that the services undertaken like lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding, etc. cannot be considered as input services. When a colony has to be maintained, all the above services are to be considered as input services.

Income Tax

Income tax - Sec 54F - assessee is co-owner in a residential house - sells some shares in order to construct additional floor on existing house - claims exemption for capital gains - mere extension of existing property not to entitle assessee to benefit of exemption u/s 54F: ITAT Third Member

SECTION 54F is one of the most popular sections in the Income Tax Act. This entitles an assessee to claim exemption for long-term capital gains if the same is invested in either purchase or construction of a residential property. However, the fact in the instant case is that the assessee is a joint-owner in a residential house, and he sells some shares in the same in order to construct an additional floor on the existing house for residential purpose, and claims exemption u/s 54F for capital gains arising out of sale of shares in the same house. Revenue disallows such exemption. Even the Tribunal Members differ on the issue.

See our columns Tomorrow for the judgements