Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Intellectual Property - Using brand name of Motorcycle Company on Oil Company's products - Taxable Service: CESTAT

THE goods manufactured by the oil companies are to be used in the vehicles manufactured by the appellant companies and have a strong connection with the same. The appearance of the trade mark "Hero Honda" and "Hero Honda 4T plus" on the oil company's products definitely indicates a connection between the said companies and the appellants product. If the oil companies would have used the said trade mark without entering into an agreement with the appellant, the same would have amounted to infringement of their right in terms of the sub-clause (4) of the Trade Mark Act. This explains the need to enter into an agreement with the appellant and for payment of royalty to them.

Income Tax

Whether benefits of Sec 80IA(4) are available only to a company and not to persons like HUF, firm and Individual - YES, rules ITAT

ASSESSEE Company claimed deduction under section 80IA of the Act as the profit and gains were from industrial undertaking engaged in infrastructure development. The same was denied by the lower authorities on the reason that the assessee had not developed any new infrastructure facility as required under section 80IA(4)(i)(b) of the Income-tax Act. According to the Revenue, the assessee had only taken up the renovation and modernisation of the existing net work/infrastructure facilities. It was also observed that as per the agreement, the assessee entered for building or constructing the whole or part of the project for which the entire investments were made by the Government and the assessee was paid ‘on running bill to bill' basis. Hence, there was no stipulation in any of the contracts that the facility built would be transferred or handed over back to the owner/employer. Being so, such contracts were not eligible for deduction under section 80IA of the Act.

Central Excise

Appellant clears parts of Drums and C.S columns on payment of C.Ex duty for erection at site - Revenue seeking valuation on contract price - Since assessee also discharges Service Tax on activity of erection and commissioning of same goods, prima facie strong case in favour - Pre-deposit waived and stay granted: CESTAT

THE contention of the applicant is that appropriate duty has been paid at the time of clearance of the goods and thereafter on the activity of erection and commissioning the applicants are paying service tax which is much more than the demand of duty in the present proceedings. Therefore, the demand is not sustainable.

As applicants are paying service tax in respect of erection and commissioning of the same goods, therefore, prima facie, the applicants have a strong case in their favour. Therefore, pre-deposit of duty, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal.

See our columns Monday for the judgements