Jurisprudentiol – Monday's cases

By Vijay Kumar

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

In view of mutually contradictory claims by appellants before original authority, CESTAT and High Court, costs of Rs. 25,000/- imposed and matter remitted to CESTAT for verification of facts: HC

IN the ordinary course, on account of the inconsistent stand taken by the assessee at every stage, the appeal would not have been entertained. However, with a view to ascertain the truth regarding the plea of provisional assessment, the order of the Tribunal is set aside and the matter is restored back to the file of the Tribunal subject to payment of costs of Rs. 25,000/-. It is further directed that the Tribunal should decide the matter afresh after recording a finding as to whether the clearances during the relevant period were in fact made under Rule 9B.

Income Tax

Income tax - Whether compensation in form of standing charges received by assessee for remaining idle is eligible for deduction u/s 80IC - NO, rules Delhi HC

THE issue before the Bench is - Whether compensation in form of standing charges received by assessee for remaining idle is eligible for deduction u/s 80IC - Whether such charges can be said to have been derived from manufacturing of the undertaking. And the verdict goes against the assessee.

Service Tax

Commercial and Industrial Constructions Service - Definition of Commercial and Industrial Construction Service permitted Appellant to exclude cost of Construction of Dam, Road, Tunnels from Gross amount covered by EPC Contract - Larger Bench decision of Tribunal in BSBK Pvt. Ltd relied on - Stay Granted: CESTAT

DEMAND is on Construction of Dams, Roads, Tunnels and Bridges done by the Appellant in connection with execution of Composite Contracts awarded by various agencies. Appellant contented that entire activity of obtaining approvals from Government and financial Institutions, obtaining other statutory clearances, preparation of Tender Documents, Site Clearances, Topographical Survey, Construction of Temporary buildings etc. to finishing work on Dams, Roads and other structures was undertaken under a Single Composite Contract. Appellant contended that they were entitled to exclude Dams, Roads, etc. from the taxable value in terms of the Definition of Commercial and Industrial construction service under Section 65 (25b) of the Finance Act, 1994. Appellant relied on the decision of the Larger Bench decision of the Tribunal in the case of CCE, Raipur Vs. BSBK Pvt. Ltd.

See our columns Monday for the judgements