Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Commercial Training or Coaching Service - Explanation added by Finance Act, 2010 with retrospective effect from 01.07.2003 in definition clarifies that term ‘commercial' appearing in relevant definition only means that such training or coaching is being provided for a consideration whether or not such training or coaching is conducted with a profit motive - No prima facie case on merits or on limitation - Pre-deposit ordered of Two Crores: CESTAT

THE appellant is a society registered under the Societies Registration Act, 1860 and is also registered under Bombay Public Trusts Act 1962. The society runs numerous educational institutions, 21 of which were taken note of by the Department in the proceedings. In a show-cause notice dated 12.12.06, the department invoking the extended period of limitation required the appellant to pay service tax of over Rs. 35.65 crores for the period from 1.7.03 to 31.3.06 in terms of section 65(105)(zzc) of the Finance Act, 1994 read with section 65(27) of the Act.

Income Tax

Income tax - Sec 194H - Discount offered by cellular companies to distributors of SIM cards and Recharge coupons in terms of lower MRP for promoting pre-paid connections amounts to commission - Revenue's demand for TDS and interest upheld: Kerala HC

A streak of bad luck continues for the Vodafone Essar Cellular Ltd. Close on the heels of the Bombay HC decision, it has lost the battle over the issue of Whether discount paid by it to distributors on SIM Cards and Recharge Coupons is for sale of goods or for service rendered. Whether such discount offered by charging lower MRP of SIM cards and Recharge Coupons amounts to 'commission' within the meaning of the term contained under Explanation (i) to Sec 194H. And the HC has held that it is nothing but commission u/s 194H.

Central Excise

Central Excise - Manufacture - Whether process of cutting or matting in rollform and stitching edges so as to convert them into floor mats would amount to manufacture - Matter referred to Larger Bench in view of conflictingdecisions : CESTAT

THE assessee is engaged in the manufacture of ‘floor mats' out of tufted carpet rolls. The Commissioner (Appeals) upheld the demand by classifying the goods under CET Sub heading 5702.19 and denying the benefit of exemption under Notification No 8/2002 CE. The assessee contended that they only carry out the process of cutting of matting in roll form and stitching the edges so as to convert them into floor mats and this process does not amount to manufacture. However matter goes to Larger Bench due to conflicting decisions on this issue.

See our columns Tomorrow for the judgements