Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Taxability of reimbursable expenses on travel local accommodation, etc. incurred by a Consulting Engineer has been under dispute from early stage from which said service was made taxable - action of appellant in not including same in gross value is bona fide - impression of appellants was backed by instructions from CBEC - suppression cannot be alleged for invoking extended period - Appeal allowed: CESTAT

FOR the purpose of deciding this appeal, it is sufficient to examine whether extended period of five years could have been invoked for issuing such demands. In view of the clarification issued by CBEC and the decisions relied by the appellants, the action of the appellant was bona fide and suppression cannot be alleged for invoking extended period of time for demanding such service tax. The appeal is allowed on this ground.

Income Tax

Whether interest u/s 234D is chargeable on excess refund granted for an assessment year prior to June 1, 2003 but assessment proceedings go beyond cut-off date - YES: HC

THE issues before the High Court are - Whether insertion of Explanation 2 to Sec 234D is declaratory and thus, would apply with retrospective effect - Whether a declaratory amendment makes no change in law but merely clarifies what the law always was - Whether the interest u/s 234D is chargeable on excess refund granted for an assessment year prior to 1/6/2003 but the proceedings go beyond the cut-off date - Whether the provisions of Sec 234D would have any retrospective operation qua refunds granted prior to 1/6/2003. And the answers go in favour of Revenue.

Central Excise

Evidences unearthed by department in investigation are several and overwhelming and each piece of evidence corroborated other - once department by way of evidence has shown that transactions are not genuine, onus of proving that transactions are genuine lay on appellants which they had failed to do miserably - Credit rightly denied by adjudicating authority: CESTAT by Majority.

WHILE the dealers' invoices show the price of iron and steel scrap varying from Rs. 6750/- to Rs. 7,500/- PMT, the original manufacturer's invoices show the price varying from Rs. 8,000/- to Rs. 10,500/- PMT, and hence, this proves that the assessees did not receive the same duty-paid goods purportedly sent by the ship-breakers at Alang. The Counsels for the appellants contended that this ground is not taken in the show-cause notice. The concerned invoices are part of the relied upon documents. As an adjudicating authority, the Commissioner is required to examine the relevant records. In that process, if the Commissioner has found that dealer's invoice price is less than that of manufacturer, no fault can be found with the Commissioner's findings. The Commissioner's findings on this count cannot be said to have gone beyond the show-cause notice.

Happy Ganesh Chaturthi

See our columns Tomorrow for the judgements