Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Kutch Exemption - CENVAT Credit erroneously used for service tax paid back - No infirmity – no prejudice is shown to have been caused to revenue in any manner whatsoever - Revenue Appeal Dismissed: High Court

IT is not in dispute that the assessee had in its Cenvat Credit account total credit of Rs.2.7 crores out of which amount of Rs.20 ,19,827 /- was utilized for payment of service tax. It is also not the case of the revenue that the central excise duty liability which was required to be discharged had not been discharged because the amount had been utilized for payment of service tax. The Tribunal has found as a matter of fact that service tax was paid by the assessee not only from cenvat credit account but subsequently also from PLA account with interest. Thus no prejudice is shown to have been caused to the revenue in any manner whatsoever.

Income Tax

Sec 36(1)(vii) - Can payee treat TDS deducted but not deposited in Govt account by payer as bad debt? - Yes, assessee is entitled to treat it as bad debt in books and claim the same by writing it off: ITAT

THE issue before the Tribunal is - Whether TDS deducted but not deposited in government account by the payer can be treated as debt by the payee. Whether payee which is entitled to credit for TDS deposited, can write it off such bad debt if payer fails to deposit the same in the treasury. YES, says Tribunal.

Service Tax

Mandap Keeper – Cost of Food supplied cannot be deducted under Notification No. 12/2003 – Only abatement under Notification No. 1/2005 can be allowed - Predeposit ordered: CESTAT

LEVY of sales tax or VAT on the value of food catered by a mandap keeper under State legislation does not alter or affect the levy of service tax under Finance Act, 1994; Taxable services u/s 65 (105)(m) of the Finance Act, 1994, not only includes providing of mandap premises on a temporary basis for organizing any official, social or business functions, but also includes other facilities and services provided in relation thereto including catering; Appellant's argument that because Sales Tax/VAT has been imposed on catering is illogical since service aspect of catering activity has been intended to be taxed by the taxing entry of section 65 (105) (m) of the Finance Act, 1994.

See our columns tomorrow for the judgements