Jurisprudentiol – Wednesday's cases
Central Excise
Intention of customer whose brand name is affixed on goods is not relevant and so long as goods manufactured for a customer bear the brand name of that customer, SSI exemption would not be available: CESTAT
INTERESTINGLY, in the present case, the allegation is exactly opposite - the department found fault in the assessee paying "normal" rate of duty on "branded" goods.
The appellant manufactures car alarm system, power window circuit, car security system, car cassette players and speakers, CCTV camera, transmitter-receivers, etc. under their own brand name as well as under the brand name " Maruti " of Maruti Udyog Ltd. ( MUL ).
No, the demand of duty was not on these ‘branded' goods but on those goods which were cleared under concessional rate of duty by availing Cenvat in terms of SSI notification 9/2003-CE. It is the case of the department that the assessee could not have paid ‘normal' rate of duty on these purportedly ‘branded' goods as these were not "branded goods" in the first place as defined in the notification and, therefore, their clearance values too should have been added while computing the aggregate value of Rupees one crore and if this had been done, the assessee would have crossed the turnover limit much earlier and the other goods could not have been cleared at concessional rate of duty but at normal rate.
Income Tax
Whether when assessee is engaged in R&D in material science and process technology, and is also a STPI unit involved in software development, Sec 10A benefits can be denied on the ground that its activities are IT-assisted and not IT- enabled - NO: ITAT
THE issues before the Bench are - Whether when the assessee is engaged in the research and development activity in the areas of material science and process technology, and is also a STPI unit involved in software development, the Sec 10A benefits can be denied on the ground that its activities are IT-assisted and not IT-enabled; Whether its alternate claim u/s 80IB ( 8A ) can also not be allowed and Whether when the cases laws relied on by the assessee are not considered in the orders of the lower authorities, it can be said that the assessee had not been given proper opportunities to present his case. And the answers go in favour of the assessee.
Service Tax
Commission paid to foreign service provider - before enactment of s. 66A of FA, 1994 on 18.04.2006 no authority vested by law to levy service tax - so also since commission remained unpaid on 31.03.2006, same too would not be within the purview of demand - cum-tax benefit also requires consideration - no penalty for the period prior to 18.04.2006 - Matter remanded: CESTAT
THE short issue is leviability of Service Tax on the commission paid to the foreign service provider. In adjudication proceedings a liability of Rs.72.18 lakhs along with associated penalties and interest was confirmed against the appellant by the Commissioner of Service Tax, Delhi .
The appellant is before the CESTAT and submits that -
++ in view of the decision of the Supreme Court in Union of India v/s. Indian National Ship owners Association () confirming the decision of Bombay High Court () before enactment of Section 66A (w.e.f 18.04.2006) there was no authority vested by law to levy service tax on a person who is resident in India, but who receives services outside India and resultantly a demand of Rs.20.01 lakhs will not sustain;
++ further , since a commission of Rs.93.41 lakhs remained unpaid to the foreign service provider as on 31.03.2006, as evident from the balance sheet, the same too would not be within the purview of service tax demand as it relates to service provided before 18.04.2006;
++ the appellant had paid service tax of Rs.49.03 lakhs and the same is required to be appropriated against the balance service tax liability;
++ that cum-tax benefits are also to be extended to the appellant;
++ Board's Circular No. dated 8.10.2001 (as withdrawn vide Circular No. dated 10.05.2007) is also cited in support.
Until Tomorrow with more DDT
Have a Nice Day
Mail your comments to vijaywrite@taxindiaonline.com