Jurisprudentiol – Monday's cases

By Vijay Kumar

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

CENVAT Credit available on Banking & Financial Services, Courier services, Telephone Services and Business Auxiliary Services but not on Catering Services and Insurance Services: CESTAT

++ Banking & Other financial services:- entitled to avail input service credit

++ Catering Service:- if the amount of catering service has been recovered from the employee same is not entitled as input service credit.

++ Courier Services:- input service credit on courier service is allowed.

++ Insurance Services:- insurance of family members of the employees has no concern with the business of manufacturing of the appellant. Credit denied.

++ Maintenance and Repair of Garden:- credit on these services is allowed.

++ Telephone Services (Land Line):- credit cannot be denied merely on the ground that the said telephone installed outside the factory premises. Therefore, input service the credit is allowed.

++ Business Auxiliary Services:- hall has been hired by the appellant for a training program of employees which is very much relating to the business of manufacturing of the appellants. Hence, the credit on this service is allowed.

++ Maintenance and Repairs:- photocopy machine has been used by the appellant in their business of manufacturing. Therefore, the credit on this service is allowed.

Income Tax

Sec 69C - Whether when Revenue detects unexplained expenditure in name of Doctors of assessee-hospital, additions can be made in hand of hospital only after Doctors deny receiving such payments - Yes, rules HC

THE assessee is a major hospital located in the middle of the city. During the search, the Department noticed unaccounted collection of fees in the name of doctors and distribution of the same to various doctors serving the hospital whether as regular employees or as consultants. In the course of enquiry, the assessee accepted the collections but contended before the department that they had distributed the entire amounts to the doctors in whose name the collections were made and no part of it was retained as their income. However, the Department rejected the explanation offered by the respondent and assessed the entire amount as unexplained expenditure falling u/s 69C.

Central Excise

Payment of duty by manufacturer under protest cannot be treated as a protest by purchaser of goods: CESTAT

SECL filed a refund claim in November 1996 under section 11B claiming to be the buyer of the goods who had borne the incidence of duty during the period from April 1987 to Feb, 1994 but the same was also rejected.

On appeal, the Commissioner (Appeals), while holding that the refund is admissible on merit and the same is not time barred for the reason that duty has been paid by M/s ICL under protest, credited the refund amount to the Consumer Welfare Fund on the ground that the bar of unjust enrichment would apply.

See our columns Monday for the judgements