Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Valuation – jobwork by related person – Rule 8 (110% of the cost) read with Rule 11 applicable – assessee paid more duty, agrees to forfeit consequential benefit as they only want to get rid of this duty demand. - CESTAT

IN this lengthy order of about 12500 words, 12,000 words are the synopsis of the Counsel for the appellant. The Department's brief is contained in 77 words in the following para.

On the other hand, learned SDR reiterated the impugned order and submitted that the Commissioner has rightly invoked the Rule 11 for arriving at the decision regarding valuation in this case. He further submitted that there is no doubt that the job workers and principle both are related persons, but the manner in which they have dealt with each, Rule 11 of Valuation Rules is the appropriate rule under which the assessable value is to be determined.

The Tribunal's findings and order have taken up about 500 words.

Income Tax

Sec 119(2)(b) - condonation of delay - NRI assessee files refund claim - Revenue rejects on limitation ground - Word 'genuine' in phrase 'genuine hardship' should be construed liberally; if substantive justice is pitted against technicalities, substantive justice must be preferred: Bombay HC

DELAY in filing return or claiming refund is a common thread that runs through all forms of taxation. Condonation of delay in such cases becomes a major bone of contention. Revenue feels its hands are tied with rules and procedures, and it cannot condone delay beyond certain period. There are also instances where Revenue fails to take note of genuine hardship of applicants and often ignores the larger objective of law that is to do justice. This is what happened even in this case where the refund claim of the Hong Kong-based NRI was rejected for 18 months delay. However, the High Court has remitted the issue by observing that the substantive justice should not be sacrificed in favour technicalities of procedures and departmental instructions. The word 'genuine' in 'Genuine hardship' used in Sec 119(2)(b) should be construed liberally.

Service Tax

Services provided by one constituent of a HUF to other constituents of HUF not taxable – Service tax authorities having issued a single registration to HUF cannot regard constituents of HUF as separate entities and levy tax – CESTAT decision in Precot Mills Ltd 2006-TIOL-818-CESTAT-BANG followed – CESTAT

THE appellant is a constituent of a HUF viz., Ramoji Rao – HUF based at Ramoji Film City , Hyderabad . Service tax authorities proposed to levy tax on the appellant on the ground that they are engaged in providing manpower recruitment or supply agency service to other constituents of the HUF. The lower authority confirmed the service tax demand and imposed penalties.

M E R R Y C H R I S T M A S

Monday is Muharram. See our columns Tuesday for the judgements