Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Interest u/s 11BB of the CEA, 1944 is to be paid immediately after expiry of three months from the date of receipt of the refund application and if there is any subsequent litigation that does not bar the assessee to claim the interest from that date : CESTAT

IN all the six appeals (three filed by the Revenue and the other three by the party) the only issue is whether the interest on delayed refund (u/s 11BB of the CEA, 1944) is to be paid to the party immediately after expiry of three months from the date of receipt of the application of refund under section 11B of Central Excise Act, 1944.

'Inserts' missing from bonded warehouse despite tight security – no cause for remission of duty in respect of goods lost in theft – liability of an assessee to pay interest on duty is a statutory liability which requires to be honoured by the assessee without insisting on specific demand : CESTAT

In the instant case, the assessee even failed to prove theft of the goods in question. They chose to pay duty on the goods after the order of adjudication was passed by the original authority, which was not a payment under protest. Disappearance of the goods from the bonded warehouse is an admitted fact. What was pleaded by the appellant was only theft and nothing else. In the absence of proof of theft, there can be no inference other than clandestine removal of the goods without payment of duty. In other words, the substantive allegation raised in the show-cause notice stands substantiated. The demand of duty stands confirmed.

Income Tax

Income Tax – non payment of TDS – prior to 1.6.2007, individuals were not liable to deduct TDS; outright purchase of goods is not contract, not liable for TDS – when TDS was not deductible, disallowing expenditure is not correct: ITAT

THE provisions of s.194C(1) do not apply to the case of the present assessee being an individual for the assessment year under dispute; the amended provisions of s.194C(1)(k) brought on the Statute applicable prospectively w.e.f 1.6.2007 & the assessee was under no obligation to deduct tax while making the payment (s). Since the assessee was under no obligation to deduct tax, her case doesn't fall within the ambit of s. 40 (a) (ia) of the Act. the lower authorities were not justified in disallowing the sum of Rs.30,33,838/-.

Service Tax/CENVAT Credit

No bar on taking CENVAT credit on input services by SSI units working under exemption Notification 8/2003 CE - CESTAT

IN this case, Notification specifically provides for denial of credit of duty paid on inputs, but does not provide for denial of CENVAT credit on input service. It has to be noted at this stage that in respect of capital goods also, the credit is allowed even during the period of exemption to SSI Manufacturers and this is because Notification does not provide for denial of CENVAT credit on capital goods. Therefore, it is obvious that if the intention was to deny the benefit of CENVAT credit of service tax paid on input services to the assessee availing SSI exemption, input services would have been specifically excluded, as in the case of inputs. Since the Exemption Notification does not put such conditions, the appellants are eligible for the CENVAT credit of service tax paid on inputs services.

See our columns Tomorrow for the judgements