Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Can appeal of one appellant be dismissed because another appellant did not make pre-deposit? NO: HC

ONCE the Tribunal had waived the condition of pre-deposit of penalty imposed u/r 25 of CER, 2002 on the registered dealer for the alleged supply of "invoices" without material, there cannot be an automatic dismissal of his appeal on account of non-payment of the pre-deposit of the CENVAT credit allegedly fraudulently taken by the manufacturer - Tribunal could not have reviewed its earlier order - order set aside and Tribunal directed to hear appeal on merits.

Income Tax

Whether cash payments made to agents are deemed direct payment to milk producers as per clause (f) of Rule 6DD - Whether cash payments made to milk producers are outside provisions of Sec 40A(3) - YES: ITAT

ASSESSEE is engaged in the business of purchasing milks, and after processing, selling the milk and milk products. Assessee purchased milk in cash for Rs. 23.78 crores. AO disallowed 20% of the cash payments u/s 40A(3) stating that as per the vouchers produced payments had been made to some persons who in turn had split payment to various persons. Initially it was stated that the payments were made to employees. On verification it was found that only some of the persons were employees and the balance were claimed as agents and relief under rule 6DD item-‘L' was claimed. On enquiry, it was further observed that no commission was paid and they were not the agents of the assessee company but procured milk for the sake of their own business and sold it to the assessee company. The claim that payments were made in places where banking services were not available was not acceptable as banking facilities were available in nearby centres.

Service Tax

Appellant's claim before the lower authorities that relied upon documents be supplied were summarily dismissed - since alleged impersonator had been interacting with recipient of service and service recipients were making payment for services rendered, these documents may be needed by appellant for defending his case of non-liability of Service Tax - natural justice violated - Appeal allowed by way of remand: CESTAT

A demand of Service Tax has been confirmed along with interest and various penalties are imposed on the appellant on the ground the appellant had provided services under the category of Security Agency services and has not discharged the Service Tax liability.

Since the lower appellate authority dismissed their appeal, the security agency is before the CESTAT and the submissions are very surprising.

Not a simple case of evasion…its impersonation.

See our columns Tomorrow for the judgements