Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Exemption to goods cleared to projects financed by JBIC - Clearances on certificates by Project Authorities - No extended period of limitation; Duty can be demanded even in revenue Neutral situations: CESTAT by Majority

THE question of revenue-neutrality for non demanding of the duty is not envisaged under the provisions of Section 11A. Hence the question of revenue-neutrality could not arise in this case, though assessee may be eligible for the benefit of the terminal excise duty paid by them on the project from the DGFT authorities, subject to the provisions and the conditions of the refund as has been envisaged by the DGFT authorities.

Income Tax

Whether profit from sale of shares intended as investment in books and treated as short-term capital gains, can be construed as business income on basis of frequency and magnitude of transactions - ruled in favour of Revenue by ITAT

THE assessee is a Private Limited Company engaged in the business of dealing in shares and securities. The assessee had switched from trading to the investment based business following a resolution passed by its Board of Directors in March 2005, stating that all transactions related to delivery based shares were to be carried out only on investment account. Accordingly, during the year, the assessee had not made any fresh purchases of shares in respect of trading. Through a software used by the assessee, all the trading transactions were automatically bifurcated on a day-to-day basis, as an investment or a speculative activity depending on when the contract for share purchase was squared up, whether on the same day without taking delivery or in a few days after taking delivery. Thus the assessee had a scrip wise analysis for every listed company share on a day to day basis.

Service Tax

When case detected, tax paid along with interest - since there is no communication in 'writing' to department about payment of service tax, issuance of SCN u/73 of FA, 1994 and imposition of penalty u/s 76 is proper: CESTAT

THE provisions envisaged payment of service tax before the notice is issued and information regarding such payment in writing to the service tax officer so that notice need not be issued. In the instant case, the appellant has not intimated the payment of service tax to the Central Excise officer though they have filed the return for October 2006 to March 2007 on 5.10.2007. There is no communication in the said return about the tax liability that has been discharged by them amounting to Rs.1,30,477/- for the period from October 2006 to December 2006.

See our columns Tomorrow for the judgements