Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Short payment of ST by govt. telecom company - Amounts paid by customers inclusive of service tax were always in Government account and this is just a matter of adjustment of money from one account of GOI to another account of GOI - there is no need to collect any interest in case of delay in deposit of service tax – Penalty also correctly waived – Revenue Appeals rejected: CESTAT

THE Commissioner (Appeal) set aside the order of the adjudicating authority on the ground that the assessments were provisional and there were excess payments by the respondent for the subsequent period which had not been finalized. He also held that since the appellant was a Department of Government of India (GOI), during the relevant period interest and penalties are not maintainable.

Income Tax

Income tax - Whether provisions of Sec 14A are applicable to expenditure incurred for earning dividend income from investments in foreign companies - NO: ITAT

THE issues before the Tribunal are - Whether when assessee receives dividend both from foreign and domestic companies, interest expenditure incurred can be averaged and disallowed in terms of section 14A to the proportion of dividend income received from domestic companies, even though investment in shares were out of substantial free reserves and not from borrowings and Whether provisions of Sec 14A are not applicable to expenditure incurred to earn dividend income from investments in foreign companies.

Central Excise

Service Tax on outward transportation of clinker cleared from Sonadih plant at specific rate of duty to depot at Nipania railway siding from where it is transported by rail to appellants cement factory at Jojobera - Definition of "place of removal" in s. 4(3)(c) of CEA, 1944 is relevant only when goods are chargeable at ad valorem rate - correctness of Board letter 137/3/06-CX dated 2/2/06 allowing such credit is doubtful - Prima facie credit not allowable – Pre-deposit ordered of disputed Cenvat Credit: CESTAT

THE appellant manufactures cement clinker and cement in their factory at Sonadih and avail Cenvat Credit. The clinker manufactured at Sonadih plant is stock transferred on payment of duty by road to depot at Nipania railway siding from where it is transported to the appellant company's Jojobera cement factory by rail. The cement manufactured at Sonadih plant is cleared on payment of duty to their cement depot from where the same is sold.

See our columns Tuesday for the judgements