Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Central Excise – Appeal is remedy against stay order of Tribunal, no writ: High Court

WHAT is the remedy for an appellant against a stay order passed by the CESTAT? It appears the answer is ‘none'.

Recently we had reported a Supreme Court case 2010-TIOL-29-SC-FEMA wherein the court had held that there is no writ remedy against a stay order of the tribunal – only remedy is appeal. But if you remember, an appeal is only on a question of law. What could be the question of law in a stay order?

Income Tax

Referral fee – commission - referral fee is eligible as business deduction in line of business activities. It is settled law that, when facts of appellant are same both in preceding year and succeeding year and even in the instant year and unless there is change in position of law, there is no warrant to disallow claim of expenditure made by appellant company: ITAT

ONCE this fundamental fact of payment of commission and allowability of commission as referral fee has been permeated through all the assessment years including the instant assessment year then the hypothesis adopted by the authorities below to hold that, commission is not an eligible deduction is not tenable solely on the principles of consistency alone. It is settled law that, when the facts of the appellant are same both in the preceding year and succeeding year and even in the instant year and unless there is change in the position of law, there is no warrant to disallow the claim of expenditure made by the appellant company. It is settled law that, in absence of any change either in facts or in law, principles of consistency itself can be made a basis to uphold the claim of the appellant company.

Service Tax

Security Agency Service - In a company which is mainly providing manpower services and having a turn over of crores of rupees and is required to pay salary etc., it is difficult to believe that no proper accounts are maintained – appellant has no case whatsoever – Pre-deposit ordered of Rs.3 Crores: CESTAT

THE appellants are engaged in providing Security Agency's services and are liable to pay Service Tax w.e.f 16.10.1998. The Revenue officers found on investigation that the appellants had not paid full amount of Service Tax on security charges collected by them. As the appellant failed to submit the details of the amount on the basis of figures in the Profit & Loss account, show-cause notices were issued demanding a total amount of Service Tax of Rs. 6,31,60,945/-. The amount was confirmed by the Commissioner of Service Tax, Mumbai along with penalties under sections 76 and 78 of the Finance Act, 1994.

See our columns Tomorrow for the judgements