Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Import Parity Price between Oil Marketing Companies only a notional price and has no relationship with actual selling price to independent buyers, not to be regarded as transaction value –mighty blow to Oil Marketing Companies – Duty demand of Rs. 119 Crores and equal mandatory penalty against BPCL upheld - CESTAT

Even if there was a direction from the Government, the Oil Company was required to follow Section 4 of the Central Excise Act. Penalty on PSU justified.

Income Tax

Income Tax – Stay of Penalty – when High Court had granted conditional stay, same proceedings cannot continue in Tribunal – Stay petition dismissed after 18 years – ITAT by majority

The stay application was pending for 18 years and was referred to a Third Member. Even on the questions to be referred there was difference of opinion; so both the Members referred separate questions. Somewhere during the pendency of the proceedings, the Assessee applicant died. Stay application is dismissed. Appeal is still alive though appellant is dead!

Service Tax

Service Tax - Tax on Services rendered as agent of RBI – prima facie, not taxable – Rs. 12 Crores Demand against Canara Bank stayed - CESTAT

Service tax being an indirect tax, the impugned tax is a liability borne ultimately by the customers of the bank. In this case, departments of union govt are the clients of the RBI. Therefore the exemption from tax on the activity exempt when undertaken by the RBI need not be levied when the same activity is undertaken by another bank as its agent.

The Tribunal found that the applicant bank has made out a strong prima facie case against the demand of tax, interest penalties imposed on them. So it ordered waiver of pre-deposit and stay recovery of the dues, pending decision in the appeal.

See our columns Tomorrow for the judgements