Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Short receipt of molasses - loss is within the permissible limit of 1% as per Bombay Molasses Rules, 1955 - Assessee entitled to take full CENVAT credit on the quantity shown in the invoices - Revenue appeal dismissed: CESTAT

THE respondents are the manufacturer of various organic chemicals for which they required molasses as an input. The respondents are availing credit on molasses used in manufacturing of their final product. Molasses is procured from various sugar factories. It was found that the quantity of molasses received was less than the quantity mentioned in the invoices but the respondent had availed CENVAT credit on the full quantity shown in the invoices, therefore a show-cause notice was issued for reversal of CENVAT credit taken in excess against the short receipt of molasses.

Clear assertion in SCN that raw materials are non-duty paid - Benefit of notification 202/88-CE not available: CESTAT

A clear allegation to that effect was made in the Show Cause Notice with the virtual assertion that the said materials were cleared by manufacturer without payment of duty. The appellants have not made any efforts to bring on record the fact of payment of duty in respect of such materials by manufacturer.

Income Tax

Whether conduct of valid search is pre-requisite for issue of notice for making assessment u/s 153A - YES, rules High Court

ASSESSEE, a society, was created for charitable purpose to impart technical education and was registered u/s 12A. The Society had been conferred upon the status of “Deemed University” by the University Grants Commission. Pursuant to two search warrants issued in the name of ‘M', search and seizure operations were carried out in the residential premises of ‘M', the President of the Society. The questions before the High Court are - Whether when a Search is conducted u/s 132, the absence of warrant in the name of the assessee renders it invalid and whether conduct of a valid search is a pre-requisite for issue of notice for making assessment u/s 153A. And the verdict goes in favour of the assessee.

Service Tax

Toll charges collected from the users of the Highway towards 'management, maintenance or repair' service - Pre-deposit waived: CESTAT

WHERE the department itself maintained doubt on whether service tax could be levied on “management, maintenance or repair” of roads, highways etc. any bona fide belief on the part of the appellants that they might not be liable to pay service tax on such activities, cannot be suspect. If that be so, prima facie, the extended period of limitation was not rightly invoked in these cases.

See our columns Tomorrow for the judgements