Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Credit - dutiable and exempted goods - Demand for the period prior to 2005 - As duty was paid within the stipulated time, no interest and penalty: High Court

THOUGH the amendment was retrospective in nature, the penalty being penal in character cannot be retrospectively imposed and therefore, the tribunal has rightly set aside the order imposing the penalty. In so far as the payment of interest is concerned, as is clear from the terms of the amended provisions, it is payable in the event of the assessee not paying the amount held to be due under the order within the period stipulated therein. In the instant case even before the tribunal order, substantial amount was paid and the balance amount was paid within the period stipulated. Therefore, there is no cause for levy of interest.

Income Tax

Whether loss arising out of derivative transactions carried on recognised stock exchange in FY 2003-04 constitutes loss from speculative transaction as contemplated u/s 43(5) - NO, rules Bombay High Court

THEissues before the Bench are - Whether the loss incurred from the derivative transactions carried on, on a recognized stock exchange during the year 2003-04 would constitute loss from speculative transaction as contemplated u/s 43(5) of the Act and whether the clause (d) inserted to the proviso to Section 43(5) has retrospective effect. And the verdict goes against the assessee.

Service Tax

Maintenance of software - Not taxable before 1.6.2007 - Board's Circular No. 81/2005-S.T, not applicable: High Court

IT is clear that till the advent of the Finance Act, 2007, the information technology which included maintenance of computer software, had been outside the purview of 'business auxiliary service', especially under section 65 and the term, 'goods' in the Finance Act, 2007 has included 'computer software' under section 65(105) (zzg). However, under the impugned circular the Board placed reliance on the judgment of the Supreme Court in Tata Consultancy Service v. State of Andhra Pradesh to conclude that software being goods, any service relating to maintenance, repairing and servicing of the same is also liable for service tax. The impugned circular is declared to have no application to the petitioner, as the same is opposed to the provisions of the Finance Act insofar as it relates to imposing of service tax on software relating to maintenance, repairing and servicing under the Finance Act, 1994.

See our columns tomorrow for the judgements