Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Maintenance of application software already licensed and installed in the computer systems of the banks – Department holding that service tax payable under ‘Management, maintenance or repair services' - Activity correctly classifiable as ‘information technology service' and same is exigible to service tax with effect from 16.05.2008 - Appeal allowed: CESTAT

THE question for consideration before the CESTAT is whether the service rendered by the appellant to their clients (banks) during the period of dispute (09/07/2004 to 30/04/2006) is taxable under the head ‘management, maintenance or repair service' in terms of Section 65 (105) (zzg) of the Finance Act, 1994.

Income Tax

Sec 37 - Whether sum paid towards withholding tax liability can be allowed as expenditure - NO, says ITAT

THERE are two issues involved in this case. The first one is - Whether the amount paid towards tax withholding liability can be allowed as expenditure. And the Tribunal's answer is NO. The second issue is - Whether the payment made in violation of garnishee notices issued by the DRT for payment of overdue sum of a bank is allowable. NO is again the Tribunal's answer.

Central Excise

CENVAT Credit - LPG which is used to run Canteen maintained for workers under Factory Act, 1948 is an input under the CCR, 2004: CESTAT

THE respondent is the manufacturer of Scooters who have availed CENVAT credit on Liquefied Petroleum Gas (LPG). The LPG was also used by them in their canteen for providing meal to the workers and staff members. An inspection was done at the premises of the respondent and an objection was raised that the quantity of LPG which is used in Canteen is not eligible for Credit as it is not used in or in relation to the manufacture of final products. The respondent was asked to reverse inadmissible credit of LPG used in the canteen. Same was confirmed by the adjudicating authority.

See our columns Tomorrow for the Judgements