Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Valuation - Addition of Pre-delivery inspection charges (PDI) and after sales service charges collected by dealers in transaction value - manufacturing of a product and marketability thereof are inbuilt elements of scheme of AV under Section 4 of CEA, 1944 - Pre-deposit ordered of Rs.1.06 Crores: CESTAT

APPLICANTS are manufacturers of cars and selling the same through dealers throughout the country. As per the Agreement, the dealers were given fixed discount for selling cars and dealers have to provide Pre-Delivery Inspection (PDI) and two free services from such dealers' margin. The CCE, Aurangabad confirmed the demand of more than Rs.3.11 crores with “auto” penalties and interest on the ground that the charges in respect of PDI and free service charges are to be added to the 'transaction value' of the cars in view of the provisions of S.4 of the CEA, 1944 r/w Rule 6 of the Valuation Rules, 2000.

Income Tax

Whether for availing Sec 54EC benefits, assessee earning capital gains on land transfer is required to count six months period from date of receipt of sale consideration or date of transfer of property - sale consideration, rules ITAT

THE issues before the Tribunal are - Whether when assessee forms a JV with a builder for development of a property and enters into an irrevocable agreement, the date of agreement is to be treated as the relevant date for taxing the capital gains or the date of registration of the deed - Whether when it was not possible for the assessee to have invested the amounts in the specified Bonds within a period of 6 months due to non receipt of consideration, the amount can be deposited within 6 months from the date of receipt of amount and the exemption will be allowed. And the verdict partly goes in favour of the assessee.

Service Tax

Bombay Flying Club cannot fly away from Service Tax liability - Conducting Training courses in Aircraft Maintenance Engineering and Flying School (Pilot training) & overhauling work of aircrafts is prima facie taxable under Service Tax category of 'Commercial Coaching or Training Services' and 'Management, maintenance and repair Services' - Pre-deposit ordered of Rs.1.50 Crores: CESTAT

CBEC had clarified that the training imparted by the institutions cannot be considered as courses recognized by law as the institutes are not created or recognized by the law. It was also clarified that the training programmes conducted by these institutes will not be eligible for the benefit of service tax exemption under notification 24/2004-ST as the institute courses do not directly enable the trainee getting the requisite employment.

See our columns Tomorrow for the judgements