Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Once duty on final products has been accepted by department, CENVAT credit cannot be denied even if activity does not amount to manufacture: CESTAT

THE duty paid by the appellants has been accepted by the department, which is admittedly more than the CENVAT credit availed by the appellants. Therefore, following the various judicial pronouncements held that the appellants are not required to reverse the credit.

Income Tax

Income tax - Services provided by TPA to corporate hospitals are professional services liable to TDS u/s 194J - CBDT Circular No 8 of 2009 partly set aside: HC

THE issues before the High Court are - Whether the circular No. 8/2009requiring deduction of TDS when payment is made by TPA to a corporate hospital is ultra vires and contrary to Section 194J of the Act; Whether for determining as to whether the payment made is towards “fee for professional services”, the nature and character of the payment is relevant or the manner in which the payment is accounted for by the payer is relevant; Whether for the purpose of section 194J, the hospital being a corporate and hence an artificial person, cannot be said to render “professional services” and whether for the purpose of section 194J, the recipient is restricted to an individual who carries on medical profession or other professions. Although the High Court upheld the application of provisions of Sec 194J but partly set aside the Circular No 8 of 2009.

Service Tax

Abacus Training to students is recreational in nature and hence is exempt service: CESTAT

ABACUS training imparted to the teachers enables such teachers to either get employment in a franchisee imparting similar training or to open their own training centres and thereby get self-employed. Either way, the training received by them prepares them to get employment/self-employment and such training, therefore, would come under vocational training. Since vocational training comes under the exempted category of services, the demand confirmed in respect of Abacus training to teachers is also set aside along with the penalty imposed in respect of the same.

See our columns Monday for the judgements