Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

CENVAT Credit - Service Tax paid by Airport Authority of India is an Input Service: CESTAT

THE issue in this case is whether the appellant is entitled to the availment of CENVAT credit for the service tax paid/reimbursed to the Airport Authority of India for availing of the services of Airport Authority of India in connection with the operation of the Aircraft owned by the appellant.

Income Tax

Indo-USA DTAA - non-resident provides engineering support and factory acceptance test along with supply of satellite network equipment - AO treats payment as fees for included services - merely providing technical services without 'making available' any technical skill is not covered under Article 12 of DTAA ; it is business profit but not taxable as non-resident has no PE in India: ITAT

THERE is nothing new in this case. The assessee is a tax resident of the USA, and enters into an agreement with an Indian company for providing equipment and satellite network communication system services alongwith installation and commissioning services. Although the assessee offers all types of payments for taxation in India but not the Project management and engineering support services and Factory acceptance test as they were provided outside India. However, the AO disagrees and treats the consideration paid for the same as fees for included services as per Article 12(4) of the DTAA .

Central Excise

Duty collected by assessee from their customers and not paid to Revenue worked out in Show Cause notice – section 11D enforceable as recovery provisions made with retrospective effect – CESTAT orders pre-deposit

THE short facts are that the lower authorities have demanded Rs.7 ,75,358 /- from the appellant under section 11D of the Central Excise Act for the period 1995-96 to 1997-98, and have also imposed a penalty of Rs.1.00 lakhs .

It is the case of the appellant that they did not recover any excess amount of duty from their customers during the above period than that what was paid by them to the exchequer after availing concessional rate of duty under SSI notification and hence no demand is sustainable under section 11D of the Act.

See our columns Tomorrow for the judgements