Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

CENVAT Credit - Credit is admissible on inputs used in goods manufactured under job work byavailingexemptionunder Notification No 214/86 CE. - High Court

REVENUE was in appeal before the High Court on the following question of law:

(i) “Whether goods cleared without payment of duty under notification No.214 /86-CE dated 25.03.86 are not ‘exempted goods' as mentioned in the Rule 6 of theCENVATCredit Rules 2004?

(ii) Whether provision of Rule 6 of theCENVATCredit Rules 2004 regarding disallowance ofCENVATCredit on the inputs used in the manufacture of final product which are exempt from duty, are not attracted in case of goods cleared without payment of duty under notification No.214 /86-CE dated 25.03.86?”

Income Tax

Sec 80RR - Whether when Salman Khan, film actor, follows cash system of accounting, he can claim Sec 80RR benefits for payment received in advance for stage show to be organised without any evidence of agreement - Whether he can claim deduction for legal expenses not related to his profession - NO, says ITAT

THE two issues before the Tribunal are - Whether when the assessee, a film actor, follows the cash system of accounting, he can claim Sec 80RR benefits for the payment received in advance for a stage show to be organised without furnishing any evidence of an agreement and whether disallowance is warranted for legal expenses incurred to defend the assessee in criminal proceedings when assessee fails to prove that such expenses were in relation to his profession. And the answers to both the questions are ‘NO'.

Service Tax

Jungle cutting service is an input service as the appellant is required to keep surroundings of factory bacteria free to ensure that finished goods are not contaminated - Picnic Service does not have any nexus with business activity hence credit denied : CESTAT

THE appellants have been denied input service credit on the following services holding that these services have no nexus with the manufacturing activity of the appellant hence they are not entitled to take input service credit, as per rule 2(l) of the CENVAT Credit Rules, 2004.

a) Outdoor Catering Services availed in guest house.

b) Garden maintenance basis.

c) House keeping at Guest House.

d) House keeping at factory

e) Picnic and jungle cutting.

See our columns Tomorrow for the Judgements