Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Cenvat Credit allowed on Outdoor Catering Service in appeal by assessee - When there is no Cenvat Credit demand against the respondent, penalty cannot be imposed – CESTAT dismisses Revenue appeal.

THE Cenvat credit in question is the one availed of the Service Tax paid on Outdoor Catering Service and the amount involved is Rs.1,25,877/-. The original authority denied this credit saying that this cannot at all be called an ‘Input Service' in terms of the CCR, 2004. He also imposed an equivalent penalty. The large scale manufacturer took the matter to the Commissioner (Appeals) who too took a similar view excepting that he reduced the penalty to Rs.15,000/- saying that the issue concerns interpretation of the legal provisions. This was in the month of April, 2008 when the Larger Bench decision in GTC Industries was awaited.

Income Tax

Floriculture and tissue culture business – covered under agricultural income – exempted - ITAT

As is evident from a plain reading of the legal provision under section 2 (1A)(b)(i), all that is to be seen for this purpose is whether the land is subjected to land revenue or is subject to a local rate assessed and collected by the officers of the Government as on an agricultural land. There are no other conditions imposed under the statute so far the qualitative test for land is concerned. Once any one of these two tests are satisfied, nothing further needs to seen so far as the nature of land is concerned.

Customs

Department loses Rs. 9.2 crores of customs duty and major penalties due to half baked investigation and poorly drafted show cause notice – CESTAT sets aside Commissioner's order confirming duty demand and imposition of penalties

THERE were innumerable instances where Revenue lost cases due to half baked efforts put in investigation and shoddy drafting of show cause notices. Many a time investigating officers stumble upon a fantastic case which clearly points to evasion of duties but could not salvage any of it due to shoddy work in piecing together the information and bringing out the various aspects in the show cause notice and also fail to identify the parties to the show cause notice.

See our columns Tomorrow for the judgements