Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Refund of Service Tax - SEZ Unit - Jurisdictional CCE is also a member of Approval Committee and once Committee has given nexus and justification for use of such service in relation to authorized operations it was totally unwarranted on part of lower authorities to question same: CESTAT

IT is the avowed policy objective of the Government of India that exports should not bear the burden of taxes. If this policy objective has to be sub-served and the objective realized broader view of the provisions relating to refund has to be taken. Therefore, even if the appellant was not eligible for refund under Notification No. 09/2009-ST dated 3.3.2009, the appellants were certainly eligible for refund under Section 11B of the Central Excise Act, 1944.

Income Tax

Whether, to claim an expenditure on ground of commercial expediency, it is not enough to say that it was a prudent or viable commercial decision - YES: HC

ASSESSEE is a company. During assessment, AO disallowed expense incurred on the medical and foreign travelling of the Managing director and his wife. AO argued that, as the MD was not actively engaged in the business affairs of the company, it was not justified to allow deduction for such a huge expenditure. On appeal, CIT(A) allowed the assessee's claim on the ground that the claim of expenditure was on account of commercial expediency and was bona fide. Revenue's appeal to the Tribunal failed.

Central Excise

Naphtha manufactured and captively consumed in generation of electricity used in manufacture of exempted goods and also used for allied purposes viz. lighting of refinery road, canteen and administrative building etc. - benefit of notfn. 67/95-CE not available for allied purposes: CESTAT

A show cause notice was issued to the applicants denying the benefit of Notification No. 67/95-C.E. in respect of the quantity of naphtha which has been used in generation of electricity which is further used in the manufacture of exempted goods and used for certain allied facilities such as refinery road lighting, canteen and administrative building etc.

See our columns Thursday for the judgements