Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Outdoor Catering Service, not input service, not eligible for credit - When biscuits are not eligible for credit, how can activity of supplying biscuits be eligible? - Sensational Judgement from CESTAT

THE very foundation of CENVAT Credit on input services has been shaken up. In a combined order covering thirteen appeals, the CESTAT single Member over-ruled the Larger Bench decision and held that CENVAT Credit cannot be allowed on catering service.

Income Tax

Whether assessee, running two separate undertakings, is entitled to setoff depreciation of one undertaking, whose income is eligible for deduction u/s 80IA , with the business income of other undertaking

ASSESSEE running two units - one is engaged in the manufacturing of wires (unit 1) and is not eligible for Sec 80IA deduction. The other one is engaged in generation of power from wind mill (Unit 2) and is eligible for deduction u/s 80IA . Assessee earned income from unit 1 and setoff the same with the unabsorbed depreciation of the unit-2. AO disallowed it on the ground that the provisions of sub-section 5 of 80IA divorced the income and losses of eligible units from non-eligible units. CIT (A) affirmed the order of the AO.

Service Tax

Consulting Engineer - a duty is cast on Tribunal to consider grounds urged by parties and same has to be adjudicated: High Court

SECTION 35D of the Central Excise Act contemplates the procedure to be followed by the Tribunal whereunder the provisions of the Customs Act under Section 129(C)(1)(2)(5) and (6) have been made applicable whereunder a duty is cast on the Tribunal to consider grounds urged by the parties and same has to be adjudicated. Tribunal committed an error in not considering the ground urged by the appellant before it and as such the order of the Tribunal cannot be sustained and accordingly it is set aside.

See our columns Tomorrow for the judgements