Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Valuation – Section 4A of the CEA, 1944 - Toothpaste cleared in combination pack with a Toothbrush inserted in carton at premises of marketing agent – Toothpaste manufactured by assessee to be valued only on its MRP and not of combination pack –demand and penalty set aside - CESTAT.

TOOTHPASTE is admittedly an item notified under section 4A of Central Excise Act, 1944, whereas toothbrush was not so notified though, in respect of both these items, there was a requirement under the Standards of Weights and Measures Act, 1976 and the Rules made thereunder to declared on the package the retails sales price of the goods; Toothbrush was chargeable to ‘nil' rate of duty during the material period;

Income Tax

Carrying cash of Rs. 65 Lakhs is not an offence, but investigation agencies like Income tax cannot be faulted for their bona fide actions in trying to find out source and use; In such a situation, rights of passenger will have to yield to public interest - Income Tax Department apologises for causing inconvenience.– Premature leakage to media on pending investigation, not correct - Supreme Court

IN this interesting case, a US returned computer engineer has taken the Income Tax officers right up to the Supreme Court for harassing him and he argued his own case in the High Court and the Supreme Court.

Income Tax Department apologises for causing inconvenience: The department's additional affidavit dated 23.11.2009 expressed regret for the inconvenience caused to the appellant and also assuages the apprehension felt by appellant that he would be harassed for having taken the department to court. The remedial action by the department and the expression of regret serves and achieves the purpose of appellant filing the writ petition.

Service Tax

From face of bills, it cannot be determined as to what purposes mobile phones are being used - No statement of any employee is on record with regard to use of phones - Assessee has given phones to employees for use of business purpose only, which was never controverted by lower authorities through any evidence – Credit of ST allowed- CESTAT

WHETHER CENVAT credit is available on Mobile Phone Services is now become an agonizing issue. Coupled with the fact that the credits involved are paltry enough to be given the boot at the threshold stage itself, it is surprising that the see-saw of eligibility continues to haunt an assessee.

In the present case, the lower authorities demanded CENVAT Credit of Rs.30,755/- from the appellant for the period January to July 2005 and they have also imposed on them equal amount of penalty. The demand is on telephone service, more particularly mobile phone service. After verification of the mobile phone bills produced by the assessee, the original authority came to the conclusion that the mobile phones were used not only for business purposes but also for personal purposes.

See our columns Tomorrow for the judgements