Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

CENVAT Credit taken, utilized, availed - Or is not And - Ind-Swift Laboratories distinguished - Taking of Credit redefined - No interest if wrong credit reversed: High Court

THE assessee uses the credit to make payment of excise duty on excisable product. Instead of paying excise duty, the CENVAT credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. Therefore, this is a procedure whereby the manufacturers can utilize the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non-taking of credit on the inputs.

Income Tax

Whether when assessee leases out factory and does not intent to re-start own business, rental income can still be treated as business income - NO, rules Madras HC

IT was found that the assessee had let out its factory w.e.f. 8.9.1993 with all machinery and credited the same as other income in profit and loss account and claimed the same as business income and adjusted the business losses against it. Assessee claimed that it was their practice and in the earlier assessment years 1990-91 and 1992-93 the claim of the assessee was allowed. AO assessed the income as income from other sources. CIT (A) allowed the appeal of the assessee partly holding that the lease rental income should be treated as business income and not under "other sources". ITAT also confirmed the order of the CIT (A)

Service Tax

Attachment and sale of property for recovery of dues - Pendency of appeal before CESTAT or High Court no bar: High Court

SECTION 87 of the Act in plain terms empowers the Central Excise Officer to proceed to recover the amount of demand by one or more modes mentioned therein. Section 87 (c) empowers the Central Excise Officer to distrain any movable and immovable property until the amount payable is paid. The power is not circumscribed by any condition. The condition precedent is that the amount of service tax levied remains payable when the power is exercised. The pendency of an appeal before the CESTAT or the Commissioner (Appeals) or before this Court does not in any manner whittle down the power under Section 87(c) of the Act.

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