Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Imposition of penalty u/s 11AC of CEA, 1944 is not sustainable if there has been no determination of duty under section 11A(2) of CEA, 1944: CESTAT

FOR imposition of penalty under Section 11AC, it has to be first established that duty has been short-paid or short-levied or non-paid or non-levied and such short-levy or short-payment or non-levy or non-payment is on account of fraud, suppression of facts, collusion, willful mis-statement of facts or contravention of any of the Rules with an intent to evade payment of duty. As regards demand for interest, liability to pay interest will arise the moment there is a delay in payment of duty and such liability will accrue even when the liability is discharged on assessee's own ascertainment of duty and duty liability can be discharged on such own ascertainment in terms of provisions of Section 11A(2B) of the Central Excise Act

Income Tax

Whether wheeling charges paid for transmission of electricity can be construed as rental income within provisions of Sec 194I - NO, rules ITAT

ASSESSEE is a Public Limited Company, doing trading of electricity - it purchased power from the generators of electricity and sold the same to the distribution companies which in turn distributed the powers to consumers. The assessee for the purpose of carrying power from the generation point to the end of distribution companies utilized the transmission lines of some company and paid them - During the course of assessment proceedings the AO was of the view that payments made by the assessee were in the nature of rent and hence attracted the provisions of section 194I and hence the assessee ought to have deducted TDS on these payments.

Service Tax

Appellant registered under category of Insurance Auxiliary Services and paying Service Tax on behalf of insurance agents as deemed service provider - CENVAT Credit taken of such payments and utilized - Prima facie case in favour - Stay granted: CESTAT

IT was observed that the appellant had utilized input service tax credit in respect of service tax on insurance auxiliary services. The department was of the view that since the appellant is only a recipient of the service and is not providing any output service, they cannot utilize any input service tax credit for payment of service tax on Insurance auxiliary service.

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