Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Income tax - Whether, for making additions, FIR with Police is contemporaneous evidence and contents of same cannot be ignored in light of self-serving documents - YES, rules ITAT

THE issues before the Tribunal are - Whether, for making additions, FIR is contemporaneous evidence and the contents of the same cannot be ignored in the light of self-serving documents and whether human conduct and human probabilities are to be given weightage over the self generated evidences. And the verdict goes against the assessee.

Central Excise

Penalty imposed on registered dealer u/r 26 of CER, 2002 - Issue of fictitious invoices also implies taking huge amount of CENVAT credit in fraudulent manner and same is punishable under rule 13 of CCR, 2002 - though for imposition of penalty rule 13 has not been invoked, it is a settled law that mere mention of wrong provision of law is not sufficient to invalidate exercise of that power: CESTAT

ON receipt of information that the appellant as registered dealer had been issuing cenvatable invoices, enquiries were initiated wherein it was revealed that the address given in the application for obtaining Central Excise Registration was fictitious. The enquiry also revealed that though in the quarterly returns filed by the appellant they had declared nil transactions, they had actually been issuing Cenvatable invoices to the manufacturers located at Surat and Bhiwandi in respect of textile yarn, on the basis of which, the manufacturers had taken CENVAT credit amounting to Rs.4,05,93,445/- .

Service Tax

Corporate office issuing Input Service Distributor Challans using SAP system which results in factories getting immediate credit without physical receipt of challan - No prima facie cause for denying CENVAT credit – at best, interest can be demanded – Pre-deposit waived: CESTAT

DURING the course of verification of records of the appellants, it was noticed that the head office situated in Mumbai of the appellants was distributing input service tax credit among various factories located in different parts of the country by issuing Input Service Distributor challans under Rule 7 of the CENVAT Credit Rules, 2004. Further, it was also noticed that certain challans had been received in their office in the month of September, October and December 2008 but credit was availed in the month of August, September and November, 2008. On the ground that the credits were taken wrongly, CENVAT credit of Rs.76,60,985/- has been disallowed by the CCE, Nagpur and hence the appellant is before the CESTAT.

See our columns Tomorrow for the judgements