Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

NOTIFICATION No. 21/03-ST issued independently granting exemption from service tax on taxable service for which consideration was received in convertible foreign exchange and had nothing to do with rescission of Notification 6/99-ST: CESTAT

THE issue involved in this appeal before CESTAT was with regard to levy of service tax on advertising agency rendered by appellant to a foreign company wherein the consideration was received in convertible foreign exchange. The demand was raised on the services rendered during the interregnum between Notifications 2/03-ST dated 01.03.2003 and 21/03-ST dated 20.11.2003 and this was based on an audit report which alleged that the appellant collected under certain bills/invoices an amount of Rs. 82.89 lakhs in convertible foreign exchange during the said period.

Income Tax

WHETHER when AO fails to go into the question of whether provisions of deemed dividend are attracted in the case, it can be a valid ground for initiating reassessment - YES, rules High Court

FOR the AY 2001-02, the AO made an addition of Rs.1,56,51,570/- as deemed dividend u/s 2(22)(e) of the Act. This amount reflected the advance given by a group company, to the appellant-assessee. On appeal, the CIT (Appeals), rejected the argument of the appellant that the aforesaid amount of Rs.1,56,51,530/- reflected only a current account entry and no loan or advance was taken.

The question before the Bench is - Whether when the AO fails to go into the question of whether provisions of Sec 2(22)(e) are applicable to the case, it makes a valid ground for initiating reassessment - Yes is the HC's answer.

Central Excise

STRICTURES against Central Excise Superintendent for certifying payment of duty by a unit under compounded levy scheme - He has no authority to do so: CESTAT

IT is strange how a Superintendent could issue the certificates available on record, which was relied upon by the appellant for the claim of deemed credit. Perusal of the definition of Adjudicating Authority under section 2(a) and definition of Central Excise Officers appearing in section 2(b) of Central Excise Act 1944 does not appear to have recognised a Superintendent as Adjudicating Authority or Central Excise Officer. He was not competent to issue the certificate relied upon by the appellant for no prescription in law.

See our columns Tomorrow for the judgements