Jurisprudentiol– Thursday's cases

By Vijay Kumar

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

BAS - commission paid to sales agents – input service – entitled for credit – demand and penalty set aside - CESTAT

Any input service used by the manufacturer, whether directly or indirectly in or in relation to the manufacture of final product and clearance of final product from the place of removal, stands eligible for availing as credit.

Income Tax

A provision for deduction, exemption or relief should be construed reasonably and in favour of the assessee. VRS payment, subject to limit of Rs.5 Lac, is exempted from tax, even if the payment is made in installments to be paid in subsequent years – High Court

salary or benefit in lieu of salary payable to an employee opting for voluntary retirement is chargeable to tax under Section 15 (a) as soon as it became due, though not paid. The amount so received is exempted from being charged to tax to the extent of Rs.5 ,00,000 /- by the reason of Section 10 ( 10C ) of the Act. Even if the payment is stretched over a period of years, the same would not become chargeable to tax in any subsequent assessment year.

Central Excise

Supplementary invoices – interest – Demand of interest set aside based on a Five Member order [that was never delivered]: CESTAT

The dispute was, whether the assessee is liable to pay interest under Section 11 AB of the Central Excise Act by treating the differential duty paid on the supplementary invoices as duty short paid. The matter was referred to Larger Bench in 2008-TIOL-575-CESTAT-MAD .

The Larger Bench referred the matter to a still Larger Bench of Five Members in the Lucas case - 2008-TIOL-1843-CESTAT-MAD-LB.

It seems this Five Member Bench has not delivered its order and may not deliver it at all as more than four months have elapsed after hearing. But the Mumbai Bench of the Tribunal has passed an order relying on this non-existent order of the Five Member Bench.

See our columns Tomorrow for the judgements