Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Education Cess would be leviable ONLY on such portion of customs duty as is not exempt under DEPB scheme and not on full amount as is sought to be demanded by department: HC

REVENUE has contended that Education Cess is not exempt under Notification No. 45/2002 and the importer therefore cannot pay the same on imports made under the DEPB scheme. Under the impugned clarificatory circular, Government has provided that such Education Cess will also be adjusted against credit in the DEPB scrip. If Education Cess is not part of the exemption as contended by the respondents, how can it be adjusted against the credit in DEPB scrip by enforcing the condition of the Exemption Notification? This is a legal fallacy.

Income Tax

Income tax - Whether voluntary cash assistance received from non-resident parent for recouping losses and restoring negative net worth, is a capital receipt, exempt from tax - YES: Delhi HC

THE issues before the Bench are - Whether voluntary cash assistance received from parent company for recouping losses and restoring negative net worth, is a capital receipt, exempt from tax; Whether only assistance or voluntary payments received from government out of public funds and not from private parties, is considered as capital receipt and whether it is only the purpose of the assistance and not the mechanism, is the conclusive test to determine the nature of such receipts. And the verdict goes in favour of the assessee.

Service Tax

ST - Difference in figures of receipts shown in IT return and ST-3 return – for same period after CERA conducted Audit and pointed out short payment, Internal Audit party did reconciliation and worked out lower demand which appellant paid – in such a situation duplication of demand by confirming SCN based on CERA objection is not warranted – Matter remanded: CESTAT

THE appellant is engaged in providing taxable services under the category of "Business Auxiliary Services".

See our columns Tomorrow for the judgements