Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Pre-fabricated buildings means buildings which are finished in factory or put up as elements cleared together to be assembled on site: CESTAT

IT is seen that the appellant is supplying various raw materials for the construction of greenhouse on payment of sales tax. These materials are procured by the appellant from the market and are not manufactured by the appellant. On the materials procured, only in respect of GI pipes, the appellant is undertaking certain activities such as cutting, drilling, bending etc. By undertaking these activities it cannot be said that the appellant has manufactured a new product as by cutting or drilling holes, GI pipes remain GI pipes and by bending the pipe the product remains the same except that its shape is changed.

Income Tax

Whether incentive prize won by assessee for having invested in small savings scheme falls within definition of 'lottery' and is thus to be treated as taxable income u/s 2(24)(ix) - NO, rules High Court

THE assessee subscribed to PPF which formed part of Small Savings Scheme encouraged by the Government of Punjab. The scheme provided incentive to encourage small savings to augment its resources. According to the scheme the Government issued lucky coupon on every investment of Rs. 5,000/-, which also covered investment in PPF. The assessee was also issued a lucky coupon which won the prize of 1Kg. Gold. The assessee claimed exemption in respect of the value of gold arguing that it was actually an incentive and, therefore, it was not covered by the definition of expression ‘income' within the meaning of Section 2(24)(ix).

Service Tax

There is nothing in these notifications which prevents an assessee from not availing CENVAT credit and paying service tax on 100% of the contract value in respect of one particular contract and availing abatement and not availing CENVAT credit in respect of another contract - Demand of Rs. 30 Crores set aside and matter remanded: CESTAT

IN respect of a contract where the assessee has not taken input credit prior to 01.03.2006 and input/input service tax credit on or after 01.03.2006, the assessee would be rightly entitled for the benefit under the notification no. 15/2004-ST as replaced by notification no. 1/2006 dated 01.03.2006. In a case where the assessee avails CENVAT credit, then in such cases the assessee is not entitled for abatement and the service tax liability will have to be discharged on the full value of the contract. There is nothing in these notifications which prevents an assessee from not availing CENVAT credit and paying service tax on 100% of the contract value in respect of one particular contract and availing abatement and not availing CENVAT credit in respect of another contract. In other words, there is no stipulation in the notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract.

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See our columns Monday for the judgements