Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Inputs used in dutiable and exempted Goods – Tribunal's Remand order to verify fact of proportionate reversal challenged by Revenue - Appeal Dismissed

REVENUE is in appeal against a remand order by the CESTAT. Demand came to be confirmed against the respondent-assessee in terms of provisions of Rule 6(3)(b) of the Cenvat Credit Rules, 2004 (the Rules) on the ground that the assessee having availed of input credit in respect of common inputs used in the manufacturing of excisable as well as dutiable goods was required to pay 8% of the price of the exempted goods at the time of clearance of the finished goods. Against the order made by the Commissioner, the assessee preferred appeal before the Tribunal, which came to be disposed of by remitting the matter to the Commissioner for verifying the correctness of the reversal and directing that any shortfall of reversal would be made good by the appellant.

Income Tax

Sec 41(1) - waiver of loan amount by bank - assessee not entitled to exclude it from income as it is not cessation of trading liability nor has assessee acquired any capital assets: ITAT

THE issue before the tribunal is - Whether the assessee is entitled to exclude the loan amount waived off by the bank as income in its hand u/s 41(1) as the same has not been in the nature of cessation of any trading liability and also the failure to prove that the loan was utilised for acquiring any capital asset. And the answer is NO.

Service Tax

Towers and pre-fabricated buildings - prima facie not capital goods or inputs – Stay orders are not precedence - pre-deposit ordered - CESTAT

THE principles laid down by the Larger Bench in Vandana Global Ltd . case is that CENVAT Credit on the capital goods is necessarily intended to be provided in respect of movable goods. Prima facie, neither the tower nor the pre-fabricated building have the characteristic of movability to grant CENVAT Credit.

See our columns Monday for the judgements