Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Recoveries made from credit card holders in respect of transactions done abroad prima facie covered by “credit card services” falling under clause (ii) of “Banking and other Financial Services” under section 65(12) of the Act - HDFC Bank Ltd. directed to pre-deposit Rs.74 lakhs - CESTAT

A Service Tax demand of Rs.74 lakhs under the head “Banking and other Financial Services” (BOFS) was confirmed against HDFC Bank Ltd. by the CCE, Thane-II. This demand is on certain charges collected by the bank from their credit card-holders in respect of the service through credit cards availed by them abroad. Inasmuch as when the card holders used the cards for shopping abroad, they had to pay in foreign currency and HDFC recovered from them, in addition to the exact value of the goods in foreign currency, 3.5% towards what they called “margin of profit”. The taxable value for the demand is the aggregate of this margin collected by HDFC from their credit card holders, who used cards abroad.

Income Tax

Whether lending of shares is a common practice in market? - If yes, whether lending of shares can be construed as transfer within meaning of Sec 2(47) when assessee sells out same in subsequent year and offers capital gains to tax - ruled in favour of assessee: ITAT

THE issues before the Bench are - Whether lending of shares is common practice in shares market and Whether when assessee sells out shares in subsequent year and offers capital gains to tax, the lending of shares can be construed as transfer within the meaning of section 2(47) of the Act. Verdict goes in favour of assessee.

Central Excise

Doctrine of cause of action is ordinarily applicable to civil disputes - there is no room for extending this doctrine to the field of claims for refund of Central Excise duties as Section 11B of the CEA, 1944 provides a complete machinery for claiming refund: CESTAT

THE respondent, a 100% EOU, cleared final products to the DTA on payment of duty of excise in terms of the proviso to Section 3 (1) of the Central Excise Act read with Notification No.23/2003-CE. In a letter dated 17/01/2006, the Superintendent of Central Excise pointed out a mistake in the quantification of the duty paid on the above DTA clearances [01/11/2005 to 26/04/2006] and advised the respondent to pay appropriate duty on future DTA sales and also to pay the differential amount of duty for the past period. The assessee worked out the differential amount of duty and paid the same by way of debit in CENVAT account on 24/07/2006.

See our columns Monday for the Judgements