Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Bank penalised under Central Excise Law for discounting export bills - clear non-application of mind and ignorance on the part of the adjudicating authority. Such an order is perverse and bad in law.: CESTAT

THIS is a Central Excise appeal and the appellant is Dena Bank. What does a bank have to do with Central Excise? One may ask. Had it been a Service Tax case, it was understandable but a CE case!

The short question involved is whether the act of discounting export bills or sending export bills for collection as part of normal banking operations by the appellant bank would render the export goods liable to confiscation and the bank liable to penalty. The liability to confiscation under excise law arises for violation of provisions of Central Excise Act and rules made thereunder. A banking transaction would not normally violate the Central Excise law or the Rules, especially when the same is carried out as part of the normal banking operations.

Income Tax

Whether when the same AO has jurisdiction to assess the searched assessee u/s 158BC and the other assessee u/s 158BD whose undisclosed income is also found in the course of such search, there is any necessity for the AO to record satisfaction as required u/s 158BD: NO, rules High Court

EVIDENCE regarding business and earning of unaccounted income by the respondent-firm were found in the course of search in the residential and business premises of Sri.Abdul Gafoor, the husband of Mrs.Souda Gafoor holding 95% of the shares of the respondent-firm, notice was issued u/s 158BD against the respondent-firm based on materials gathered in search in the business and residential premises of the respondent-firm's managing partner's husband. It so happened that since the business premises and the residence of Sri.Abdul Gafoor and his wife Mrs.Souda Gafoor who is the managing partner of the respondent-assessee were one and the same, the AO who has jurisdiction to assess the searched assessees was the same officer who has jurisdiction to assess the respondent-firm as well. So much so, there was no scope for transfer of file from one AO having jurisdiction over the searched assessee to another AO for assessment u/s 158BD as both the searched assessee and the assessee in respect of whom details of suppressed income were received, were assessable by the same AO. The Tribunal cancelled the block assessment confirmed in first appeal for the reason that AO has not recorded reasons for issuance of notice for assessment u/s 158BD.

Service Tax

Refund - argument of department that the service tax refund will be available only for services rendered on or after 03.03.2009 does not appear to have any legal basis - only requirement is that ST on the services should have been paid on or after 03.03.2009 - it is immaterial when services had been rendered - Appeal allowed with consequential relief: CESTAT

The only requirement for claiming refund is that service tax on the services should have been paid on or after 03.03.2009. It is immaterial when the services had been rendered. In other words, even if the services were rendered prior to 03.03.2009 but the recipient has paid the service tax on or after 3.3.2009, he can avail service tax refund as provided for in the Notification.

See our columns Monday for the judgements