Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Manufacture of goods containing alcohol - Activity outside purview of levy of Service Tax under Business Auxiliary Services: CESTAT

THE appellants manufacture excisable ‘P or P medicines' falling under sub-heading 3003.10 of the Central Excise Tariff. In addition they manufacture the impugned goods, namely, Waterbury's compound, Listerine mouthwash and Coolmint Listerine Mouth wash on job work basis for M/s Pfizer Ltd. The impugned goods contain alcohol and are hence not excisable under the Central Excise Act, 1944. However, they are chargeable to duty under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955 (MTPA). Duty under the MTPA is levied by the Central Government but collected and appropriated by the State Governments.

The department is of the view that this activity attracts Service Tax under the category ‘Business Auxiliary Service'.

Income Tax

Sec 32 - Whether assessee is entitled to depreciation on assets of a unit which was not used in business for a long time but was a part of block of assets - YES, rules Delhi High Court

THE issue before the High Court is - Whether assessee is entitled to depreciation on assets of a particular unit which was not used in business for a long time. Whether when such assets are part of the block of assets, it is open to Revenue to question its use in the business. And the verdict goes against the Revenue.

Customs

Order passed by Commissioner of Customs (Appeals), reviewed by officers having no jurisdiction in matter - Revenue appeal not maintainable: CESTAT

THIS is an interesting case where the Revenue in its hurriedness to file an appeal against an order of the lower appellate authority first got the order reviewed by the jurisdictional Commissioner forgetting that such orders are to be reviewed by a Committee of Commissioners. So it did just that. Unfortunately the Committee that signed the review order was not the one that was supposed to be legally constituted in terms of the Notification issued by the Central Government u/s 129A of the Customs Act, 1962. The end result of this fiasco was that the appeal was dismissed by the CESTAT.

See our columns Tomorrow for the Judgements