Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Inputs lying in stock on date on which notification exempts final product - eligible for credit: HC

EVEN though final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. A right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs, that right would continue until the facility available thereto gets worked out or until those goods existed.

Income Tax

Whether provisions of Section 50(2) can be invoked in case of land on footing that land formed part of block of assets - NO, rules Delhi HC

THE issues before the Bench are - Whether land can be said to be a depreciable asset; Whether land forms part of the block of assets even when no rate of depreciation being prescribed and whether the provision of Section 50(2) of the Act can be invoked in the case of land on the footing that the land formed part of the block of assets. And the verdict goes against the Revenue.

Service Tax

Residential flats - sale of fully built flats - not taxable before Finance Act 2010 came into force:: CESTAT

THE question involved in these appeals is whether the respondents were doing any service for the prospective buyers or were doing the construction activity for themselves and were only engaged in sale of flats with no component of service to the buyers. During the period under dispute the impugned activity did not involve any service to the prospective buyers and the construction activity undertaken by the Respondents were for their own benefit to meet the contract for sale of future flats to be constructed.

See our columns Tomorrow for the judgements