Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Service Tax on GTA service can be paid from CENVAT account upto 18.4.2006 - But from 19.4.2006, same cannot be paid from CENVAT account - CESTAT disposes of 50 appeals relating to GTA

DISPOSING of 50 appeals in a bunch, involving the question of whether CENVAT Credit can be utilised for payment of service tax on Goods Transport Agency service, the South Zonal Bench of CESTAT held that before the amendment to Rule 2(p) of the CENVAT Credit Rules 2004, on 19.4.2006, the assessees can avail CENVAT Credit for payment of service tax on Goods Transport Agency service, but from 19.4.2006 onwards, the payment is not allowed from CENVAT account. While arriving at the above finding the CESTAT has relied on the decision in 2011-TIOL-147-CESTAT-BANG. Incidentally, these 50 appeals were pending as the matter has been referred to the Larger Bench in case of Panchmahal Steel Ltd. v. Commissioner of Central Excise & Customs, Vadodara-II - (2008-TIOL-1606-CESTAT-AHM).

Income Tax

Whether when assessee, a charitable body, has already claimed deduction for acquisition of capital assets by application of money, a further claim of depreciation on same assets would amount to double benefits - YES, rules ITAT

ASSESSEE is a charitable trust registered u/s 12A of the Act. In the return of income filed, it claimed depreciation on the assets, the cost of which were already claimed as application of money u/s 11(1). AO disallowed the depreciation claimed u/s 32 stating that the cost of asset/s having been allowed, its WDV was nil, so that there was no amount available on which depreciation could be claimed. The same would even otherwise amount to a double deduction, prohibited by law.

Central Excise

EOU - When re-warehousing certificates are issued by jurisdictional central excise officials certifying receipt of duty free materials, benefit of doubt to be extended to recipient units viz., appellants: CESTAT

ALLEGATION of complicity in diversion of duty free materials to local market resulting in imposition of penalties under sec. 112(b) of Customs Act, 1962 and Rule 26 of Central Excise Rules, 2002; Relying upon statements of alleged principal evader (supplier of goods under ARE3s) to arrive at a finding of non-receipt of goods by appellants, who are co-noticees, without any corroborative evidence, neither justified nor warranted – Levy of penalties set aside.

See our columns Tomorrow for the judgements