Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Since goods are not sought to be held liable to confiscation, penalty under Rule 26 deserves to be dropped – Penalty is also not imposable under non-existent Rule 26(2) as period involved is prior to 01.03.2007: CESTAT

THERE are two appeals before the CESTAT concerning the same Order-in-Appeal. One by the assessee seeking setting aside of the penalty of Rs. 65,000/- imposed under Rule 26 of the CER, 2002 and the other, by Revenue aggrieved by the Commissioner(Appeal)'s largesse in reducing the mandatory penalty of Rs.1,31,340/- to Rs.65,000/-.

Income Tax

Salary of Rs 14 Lakhs in 1997 to employee of charitable Trust held to be excessive: ITAT

ONE of the grounds in this appeal is in respect of the finding of the CIT(Appeals) that salary paid to Mrs. Sudha Tewari was excessive. It is mentioned that there was no material on record to come to such a finding and, therefore, the finding was a matter of inference only.

Service Tax

Collecting Service Tax from customers but not depositing with Revenue is a grave error on part of appellant which cannot be ignored – CESTAT upholds mandatory penalty

The applicant is registered under the category of Banking and Financial Services. It is alleged by the Department that although the appellant has collected the Service Tax amounts from his customers, yet he has failed to pay service tax on due dates and file ST-3 returns. In view of these contraventions, penalty under sections 76 and 77 and late fee under section 70 of the Finance Act, 1994 were proposed and the same were confirmed by the lower authorities inasmuch as a total penalty of Rs.29,938/- was imposed.

See our columns Tomorrow for the judgements