Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Central Excise - Deductions towards freight charges were abnormal and incremental over a period of time when compared with prices adopted by other cylinder manufacturers supplying to OMCs - Inclusion of freight charges justified, duty demands upheld - Invocation of extended period of limitation in second set of notices also justified: CESTAT

THE appellant-companies are engaged in manufacture of new and empty LPG cylinders for PSU oil marketing companies and entered into agreements with these companies for supply of LPG cylinders. Prior to August 2001, the OMCs were paying freight charges equal to standard railway freight rate per cylinder, irrespective of the amount of actual freight involved in the transportation. From August 2001, the price per cylinder was fixed on gross delivery price (GDP)/net delivery price (NDP) inclusive of all taxes and freight.

Income Tax

Whether revisionary powers can be invoked without pointing out any flaws in the AO's order - NO, says ITAT

ASSESSEE Company, engaged in the broadcasting of TV programmes, filed its return of Income claiming deduction of section 80HHF. The AO allowed the claim of the assessee. While examining the records of assessment, CIT found that the AO had wrongly allowed the deduction of Sec 80HHF, as he had not adjusted the brought forward losses with the income eligible for deduction of 80HHF. CIT was of the view that the order of the AO was contrary to the law of Supreme Court declared in IPCA case (2004-TIOL-26-SC-IT). The CIT further observed that the AO should have reduced the expenses of foreign technical services incurred by assessee in foreign currency from the ambit of export turnover and total turnover.

Service Tax

Levy and collection of Income Tax is a sovereign function and issue of PAN cards is in relation to such function - Not leviable to Service Tax under the category of BAS: CESTAT

THE appellant undertakes the services of issue of PAN card (Permanent Account Number Card). For this purpose, they print, supply and distribute application forms to the applicants against payment of a fee of Rs. 5 per application form, receive PAN applications in prescribed form on behalf of the Income Tax Department, validate the applications with the checklist provided by the Income Tax department and carry out verification about the identity and address of the applicants. After receipt of PAN from the National Computer Centre of the Income Tax department, the appellant would print PAN cards and issue the same to the applicants. For these services, they charge a sum of Rs. 60/- from the applicants as authorized by the Income Tax department. The above activity is sought to be classified under the category of ‘Business Auxiliary Service'.

See our columns Tomorrow for the judgements