Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Modvat Credit - Credit cannot be denied only for reason that duplicate copy of invoice was not filed: HC

MODVAT credit should not be denied only on the ground that the document does not strictly comply with the said Rule but contains the details of payment dues, description of goods, assessable value, name and address of the factory or warehouse etc. This position has also been clarified by the Central Board of Excise and Customs by issuing a circular in exercise of its power under Section 37B of the Act and made it applicable to all pending cases. The submission that the Notification No.7/99 dated 9th February, 1999 would come into effect on the date of its publication i.e. 9th February, 1999 only, may be correct but the benefit of that Notification as directed by the Central Board of Excise and Customs has been extended to all the pending cases. The provision of sub-rule (2) is procedural for availing Modvat credit.

Income Tax

Whether for purpose of Sec 54EC benefits, investment of capital gains earned on sale of property cannot exceed ceiling of Rs. 50 lakh in any financial year - YES: ITAT

ASSESSEE is an HUF. It filed return of income on 29.07.2008 declaring income of Rs. 17,12,693/-. During the year under consideration, the assessee sold a property for Rs.2.47 Crores on 13.12.2007 and disclosed capital gain of Rs. 1,14,09,880/-. The assessee claimed deduction u/s 54EC in respect of Long Term Capital Gain amounting to Rs. 1.00 Crore i.e. invested in specified capital gain bond (Rs. 50.00 Lacs on 31.03.2008 + Rs. 50.00 Lacs was made on 10.06.2008). The only dispute was with regard to the next investment of Rs. 50 Lacs made on 10.06.2008, which was not considered by the AO by relying upon the Proviso below Sec.54EC which provided that investment in any financial year cannot exceed Rs. 50 Lacs. Hence, the AO was of the view that the assessee having made a claim of Rs. 1.00 Crore, exceeded the investment limit prescribed in the proviso and therefore, restricted the deduction upto Rs. 50 Lacs accordingly. The CIT(A) allowed the appeal of the assessee.

Service Tax

Persons like Poojari, cook, yoga teacher and nurse supplied by Manpower Recruitment or Supply Agency Service have no nexus with manufacture of final product - Prima facie not an input service: CESTAT

THE persons supplied like Yoga teacher, Poojari, Cook, Compounder, Nurse, helper etc. have no direct nexus with manufacture of final product. Therefore, prima facie, the applicant has not made out a case for total waiver of pre-deposit of duty. Hence, the applicant is directed to deposit an amount of Rs. 15 lakhs within a period of six weeks.

See our columns Tomorrow for the judgements