Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Club Membership is not an Input Service: CESTAT

THE Input Service conundrum continues unabated and assessees and the department leave no stone unturned to test the definition of ‘Input Service' laid down in rule 2(l) of the CENVAT Credit Rules, 2004.

In the present case, an appeal has been filed by the assessee against denial of input service credit for the service of club membership. The amount involved in the dispute is a minuscule Rs.21,012/-. Noting that the issue involved lies in a narrow compass, the Bench admitted the application and after waiver of the condition of pre-deposit, the appeal was taken for disposal.

Income Tax

Sec 14 - Whether when assessee's own funds get mixed with interest-bearing funds, onus lies on AO to establish nexus between investments made in tax-free bonds and interest-bearing funds - Yes, says ITAT

THE issue before the Tribunal is - Whether when assessee's own funds get mixed with the interest-bearing funds, onus falls on AO to establish a nexus between the investment in tax free bonds and interest bearing funds and whether AO is right to invoke powers u/s 14 without establishing such a nexus. And the verdict goes against the Revenue.

Central Excise

Assembling of photocopiers amounts to manufacture - Demand of Duty and Penalty upheld: CESTAT

THE appellants imported various parts/modules/accessories of Digital Multi Functional Printers, Copiers and Photo Copiers-cum Printers depending upon the purchase orders received from customers. The same were imported either in one consignment or in split packings comprising of various parts/modules/accessories and also procured some indigenously manufactured components. The same were stored in the approved warehouse at Rampur, where kitting activities were undertaken and such activities included assembling of all the components with the use of not only the imported parts/modules but also the indigenous components and accessories including pin-top, software, RAM, Stabilizers etc, as per the requirement and configuration given by the customers.

See our columns Tomorrow for the Judgements