Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Circular No.98/2008 ST dated 4.1.2008 does not help revenue - CESTAT holds construction service is input service for service of renting of immovable property.

CREDIT of duty paid on inputs is available when the inputs are used for providing an 'output service'. Therefore, there is a need to say that the inputs have been used for providing an 'output service'. In the case of 'input service', the definition includes input services used by a provider of taxable service for providing an output service. Therefore, the definition of input and input service are parimateria as far as the service providers are concerned. In this case, without utilizing the service, mall could not have been constructed and therefore the renting of immovable property would not have been possible.

Income Tax

Whether business can be said to have been set up from date when one of categories of business activities among various commences and it is not necessary that all categories of activities must commence simultaneously - NO: ITAT Special Bench

THE issues before the Special Bench are - Whether business can be said to have been set up from the date when one of the categories of business activities among various activities is started and it is not necessary that all the categories of its business activities must start either simultaneously or that the last stage must start before it can be said that the business was set up; Whether flow of revenue is a condition precedent for coming to a conclusion that business of the Assessee has been set up and Whether it is open to the Revenue to challenge the constitution of Special Bench. And the verdict goes against the Revenue.

Central Excise

It is settled law that when a principal manufacturer gets his goods manufactured from job worker on job work basis and transaction between them are on principal to principal basis, it is job worker who would be liable to pay duty and not principal manufacturer - Prima facie case in favour - Pre-deposit of Rs.31 Crores duty waived and Stay granted: CESTAT

IMPORTED Gambier sent by appellant to job worker for processing - gambier extract processed by job worker and returned to appellant - same is blended with Katha which is cleared at nil rate of duty - Duty demand on gambier extract raised on appellant - It is settled law that when a principal manufacturer gets his goods manufactured from a job worker on job work basis and the transaction between them are on principal to principal basis, it is the job worker who would be liable to pay duty and not the principal manufacturer - Prima facie case in favour - Pre-deposit of Rs.31 Crores duty waived and Stay granted

See our columns Tomorrow for the judgements