Jurisprudentiol – Monday's cases

By Vijay Kumar

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

CESTAT cannot grant equitable reliefs; assessee, under Section 11BB, can claim interest from date immediately following three months from date of appellate Commissioner's order to date of refund of duty- CESTAT

The best relief which can be given to the appellant is one based on the principles embodied in Section 11BB of the Central Excise Act. What is contained in Section 11BB is a provision for payment of interest on an amount of duty refunded under Section 11B of the Act. Where an Appellate Commissioner sanctions a refund claim in favour of an assessee but the department delays the refund, the assessee, under Section 11BB, can claim interest from the date immediately following three months from the date of the appellate Commissioner's order to the date of refund of duty

Income Tax

Claiming Depreciation on basis of fabricated documents and with no machine to install – Penalty of Rs. 6 Crores upheld – ITAT by majority.

On enquiry, the Department found that this transaction of sale was not genuine and the assessee had claimed depreciation on non-existent assets.

The Assessing Officer disallowed the depreciation claim and also initiated penalty proceedings under sec.271(1)(c) of the IT. Act.

Service Tax

Construction Service – Introduction of works contract service in 2007 does not make construction service not taxable earlier; If goods are sold along with service benefit of exemption under notification No. 12/2003 has to be allowed; If main contractor pays service tax, sub contractor need not pay (prior to 23.8.2007) - CESTAT

The old circulars cited by the counsel, although relating to other taxable services, disclose the fact that the department did not want to levy service tax from a sub-contractor of taxable service where service tax on such service was levied from the main contractor. Therefore, there is merit in the contention that the assessee should not be asked to pay service tax if they can prove that the main contractor paid service tax on the same service for the same period. For this purpose, the assessee should be given an opportunity.

See our columns Monday for the judgements