Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

ST paid on outward transportation - Liquid Oxygen, Nitrogen and Medicinal gas delivered to buyers in cryogenic tanks maintained at sub-zero temp and mounted on goods transport vehicles - CENVAT Credit allowed: CESTAT

The short question is whether CENVAT credit of the Service Tax paid for GTA service availed by the assessee for outward transportation of the final product viz. liquefied gases from factory to the buyers' premises during period February to September, 2005 is admissible to them.

Income Tax

Assessee's claim of foreseeable losses to be allowed irrespective of method of accounting in terms of AS-7: ITAT

After considering the arguments from both sides, ITAT held that the contention of the assessee regarding allowability of foreseeable loss is to be accepted in principle in view of decisions rendered in CIT vs. Woodward Governor India (P) Ltd. 2007-TIOL-418-HC-DEL-IT, Metal Box Co. of India Ltd. vs. Their Workmen and Gopal Purohit vs. DCIT . However, for the purpose of quantification and calculation of said losses in terms of AS-7, the issue is restored to file of A.O for both the AYs.

Central Excise

Interest is compensatory in nature and different from penalty – No interest is payable if CENVAT credit is not utilised: High Court

The appellant wrongly availed CENVAT Credit and utilised nearly 5.7.crores for payment of duty. A case was registered against assessee by the DGCEI and the assessee approached the Settlement Commission after paying Rs 4 crores in PLA and the remaining amount from CENVAT account. The Settlement Commission passed an order inter alia for payment of interest. The appellant sought a clarification from the Settlement Commissioner where interest has to be computed from the date of taking credit or from date of utilising the same for payment of duty. It was clarified by Settlement Commission that the date of taking credit is relevant for computing the inertest. The appellant challenged the said order in WP before the HC.

See our columns Tomorrow for the judgements