Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Cenvat Credit is not deniable on inputs written off as obsolete in financial books of accounts - Rule 3(5B) inserted in CCR, 2004 by Notfn. 26/2007-CE(N.T) dated 11.05.2007 does not have retrospective operation and cannot be pressed into service for period 1996 to 2002 - Pre-deposit waived and Stay granted: CESTAT

THE demand is for the period January 1996 to September 2002. During the above period, the appellant's manufacturing units at Pune had followed the practice of writing-off obsolete inputs from their financial books of account under what are called “obsolescence provisions” for purposes of the Income Tax Act. The stock of such written-off inputs was maintained in their excise accounts.

The Commissioner, Central Excise, Pune confirmed the demand and imposed penalties and hence the appellant is before the CESTAT.

Income Tax

Penalty u/s 271(1)(c) - Can penalty be levied for mere failure to substantiate claims made and explanation offered - Partly YES, says ITAT

LEVYING penalty is a common event in the Income Tax Department but sustaining the same is a rare one! The issue in this case is - Whether penalty can be levied for mere failure to substantiate the claims made and explanation offered. And the answer is partly yes.

Service Tax

Pune District Security Guards Board constituted under Maharashtra Private Security Guards (Regulation of Employment & Welfare) Act, 1981 is prima facie not coming within definition of ‘security agency' in as much as it does not appear to be a commercial concern - Stay granted: CESTAT

DURING the year 1980-81, the Maharashtra Rajya Suraksha Rakshak and General Kamgar Union had represented to Government that about 70,000 persons are working as Security Guards in various Factories and Establishments in Greater Bombay and Thane District. These Guards are provided by Security Agencies operating in these Areas. The service conditions, however, of these Security Guards are not satisfactory and these Security Guards are being exploited in as much as that their services depend merely on the whim and sweet will of the Agencies. Most of the Security Guards receive very small portion of the amount recovered from the Employers as their wages and the balance is pocketed by the Agencies.

See our columns Tomorrow for the judgements