Jurisprudentiol - Friday's cases

By Vijay Kumar

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

For mere storage of imported goods/excised goods, appellants cannot claim Central Excise registration under Rule 9 of Central Excise Rules, 2002 - CESTAT

THE appellants, are manufacturers of goods falling under chapter 82 of the Central Excise Tariff Act, 1985. The appellants are registered with the Central Excise department at three different galas at three different places. These different galas are numbered as Unit I, Unit II and Unit III. Examination of the records maintained by the assessee revealed that there is no manufacturing activity undertaken at Unit no. III and the said Unit is for storing of imported raw materials which are then stock-transferred to Unit II. Since Cenvat Credit is taken in Unit III, the full amount of credit is reversed while stock-transferring the inputs to Unit II. Investigation conducted revealed that due to shortage of space in their manufacturing unit, they took Central Excise registration for Unit III but no manufacturing activity was undertaken in the said Unit III except for certain minor activities such as checking and inspecting the raw materials received in respect of the quality.

Income Tax

Whether when assessee is given licence to manufacture denatured spirit but also manufactures arrack under compulsion for supplies to Govt, assessee in such a case loses entitlement to investment allowance u/s 32A - NO, rules HC

THE assessee claimed investment allowance which was allowed by the ITO. The CIT on scrutiny found that investment allowance cannot be allowed as the petitioner manufactured rectified spirit and denatured spirit and also sold arrack after diluting the rectified spirit. Therefore, in exercise of powers u/s 263 of the Act, the CIT revised the order on 26.02.1990, aggrieved by which, the assessee filed an appeal.

The ITAT allowed the appeal holding that item 1 of Eleventh Schedule disqualifies manufacture of only potable liquor from claiming investment allowance and that the rectified spirit and denatured spirit do not come within the purview of item 1. Aggrieved by the order of the ITAT the Revenue sought a reference to the High Court.

Service Tax

Merely because appellant has also provided a driver, it does not mean that contract is not for renting of cabs - Pre-Deposit ordered: CESTAT

AS per the agreement, the appellant should supply medium buses having 46 sitting capacity of 30 numbers and mini buses having 32 sitting capacity of 20 numbers, and these buses should comply with the specifications prescribed. The tenure of agreement is for a period of 5 years from the date of permission to ply the buses on PCMT permit granted by RTO, Pune. The hired buses will be registered with RTO Pune in the name of PCMT as lessee and will operate as stage carriers within the operational area of PCMT. Each medium bus will operate 6000 km per month and each mini bus will operate 5500 km per month subject to reasonable daily operation. The PCMT shall have the right to collect the fare charges and the appellant contractor shall not have any right to claim over the cash collection for any reason, either on the fare charges or on the luggage charges collected from the passengers. The appellant has to provide along with the bus, a driver possessing valid driving licence and medically fit.

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