Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Denial of CENVAT Credit on Garden Maintenance Services - Statutory requirement laid down by Maharashtra Pollution Control Board to maintain 33% greenery on factory premises is of no relevance in deciding admissibility - ROM application dismissed - CESTAT.

One of the grievances raised in this application is that the appellant's contention that the subject service is covered by the inclusive part of the definition of ‘input service' given under Rule 2(l) of the CENVAT Credit Rules, 2004 has not been considered. On going through the final-order, I find that the subject service was held not to be an ‘input service' as it did not satisfy the requirements of the substantive part of the definition. Impliedly, it was held that any service which is claimed to be falling within the ambit of the inclusive part of the definition should necessarily satisfy the legal requirements embodied in the main pat of the definition.

Income Tax

Assessee is entitled to claim of depreciation on Gas Sweetening Plant which was kept ready for use during entire previous year, though not actually used due to lack of raw material – ITAT by Majority

Even after the introduction of block of assets concept, there is no change in the legal position to the effect that the assessee would be entitled to depreciation even though the assets in question were not actually put to use in the relevant previous year, but were kept ready for being put to use for the purpose of the business. The judgment of the Madras High Court on this question is in CIT vs. Vayithri Plantations Ltd. - (2003-TIOL-263-HC-MAD-IT). An assessee can claim development rebate in the year in which the asset was installed or in the immediately succeeding previous year in which year the asset was "first put to use".

FEMA/FERA

Whether Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 would be applicable and to what extent will apply to exports made in 1998 is doubtful – pre-deposit reduced – HC

The counsel for the petitioner submits that the impugned order does not notice that the adjudicating order itself records that the transactions/sales pertain to the year 1998 and, therefore, the Enforcement Directorate would not have imposed penalty under Foreign Exchange Management Act, 1999.

See our columns Tomorrow for the judgements