Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Even after receipt of show-cause notice, appellant continued default and it was only after more than one year since receipt of the SCN that they started paying service tax - Bona fides not proved - Pre-deposit of penalty ordered: CESTAT

DURING the period of dispute, the appellant had provided outdoor catering service to the clients, viz., The National Institute of Bank Management (NIBM) but did not pay service tax in respect of the catering charges received from the client. They were not even registered with the department as ‘Outdoor Caterers' and obtained the registration only in March 2007 only at the instance of the department.

Income Tax

Income tax - Exports – Assessee runs two units and incurs foreign travelling expenses – AO finds expenses were for promotion of Andhra unit but debited to Mumbai unit – Apportions expenses on the basis of turnover – No infirmity in AO's action: ITAT

WHEN there are different units of a business entitled to different exemptions or deductions, there is a temptation to arrange the affairs in such a way that the income of the unit entitled to greater deduction is increased while that of the other unit is reduced. This is a very common practice involving various incentive sections which still litter the Income-tax Act. Nevertheless, the assessing authorities can not rely on mere surmises and conjectures to deny the exemption claimed. The present case is a good example of the same.

Customs

Typographical error in mentioning quantity of goods in IGM vis-à-vis that cited in Bill of Lading - Invoking provisions of Ss. 111(f) and (g) of the Customs Act, 1962 for confiscation of goods appears improper – Matter remanded : CESTAT

THE appellant, a steamer agent, filed an Import General Manifest (IGM) mentioning the quantity of the goods as 1920 kg instead of 19200 kg reflected in the corresponding Bill of Lading. They pleaded that it was a typographical mistake and filed an application for amendment of the IGM. Seeing that the Customs authorities were inclined to invoke penal provisions, the steamer agent sought waiver of show-cause notice and requested for a lenient view.

See our columns Tomorrow for the judgements