Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

CENVAT Credit - Security Services provided at residential quarters of workers - not input service: HC

IN the present case, the act of providing residential quarters by the manufacturer to its employees was voluntary. Providing further security service in such residential quarters was also an act voluntary in nature. No connection between the security service provided by the manufacturer in the residential quarters maintained for the workers as having any direct or indirect relation in the activity of manufacture of the final product.

Income Tax

Sec 115WA - Whether when only 40% income of a tea company is chargeable to tax, even FBT liability arises only on 40% of expenses - NO, rules ITAT

ASSESSEE Company is engaged in the business of growing, manufacturing and sale of tea. It filed its return of income declaring 40% of FBT value on the ground that only 40% income is chargeable to tax under the Income Tax Act and hence FBT is leviable only to that extent. A.O. negated the claim of the assessee and charged FBT on 100 % of the expenses. The CIT(A) reduced the FBT to 40 %. Appeal was filed before the ITAT where the DR pointed out that FBT had nothing to do with the chargeable Income under Income Tax Act.

Customs

Import of Gold as baggage - Re-export allowed, but Customs does not release gold as penalty imposed on a third person not realized - Gold ordered to be released for re-export: HC

RESPONDENTS directed to release the goods in question for the purpose of re-exporting the same, without imposing any conditions, as per the provisions of the Customs Act, 1962. The respondents have not been in a position to show as to how the petitioners would be liable to pay the enhanced penalty imposed on Rahamathullah. Further, there is no finding that the goods in question belongs to Rahamathullah. It is also noted that the order of the Commissioner of Customs (Appeals), Chennai, dated 5.2.2010, had become final. In such circumstances, the petitioner need not be compelled to avail the appellate remedy, available under the provisions of the Customs Act, 1962.

See our columns Tomorrow for the judgements