Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Notification No. 67/95-CE provides exemption only for inputs used in or in relation to manufacture of final product whereas definition of "input" under CCRs is wide - benefit of exemption is not available in respect of Naphtha captively consumed for purpose of generating electricity used for lighting refinery road, canteen and administrative office - Demand upheld: CESTAT by Majority

THE appellants have set up a cogeneration power plant where steam/electricity are generated by firing the gas turbine generators and stage Naphtha is used as fuel for the Gas Turbine Generators in the cogeneration power plant. The appellants are claiming the benefit of Notification No. 67/95-CE in respect of the Naphtha. The demand is raised on the ground that the electricity so generated is being used in the manufacture of dutiable as well as exempted final product and also for refinery road lighting, canteen and administrative office in the refinery.

Income Tax

Whether when an allowance claimed by assessee involves a question of law, it cannot be disallowed by treating it as a mistake u/s 154: SC

THE issues before the Apex Court are - Whether when an allowance claimed by the assessee involves a question of law, the same cannot be disallowed by treating it as a mistake u/s 154 and Whether when the assessee claims Sec 80IA benefits before adjusting carry-forward losses based on a HC decision, although the issue was later settled against the assessee, it can be said that allowing the assessee's claim was a mistake and the same can be corrected u/s 154. And the verdict goes in favour of the assessee.

Service Tax

Maharashtra Industrial Development Corporation is a public authority and activities performed by them are not taxable under Finance Act, 1994 - Prima facie strong case in favour - Pre-deposit waived and Stay granted: CESTAT

THE Board's circular dated 18.12.2006 relied upon by the applicant and reproduced in the impugned order provides that the activities performed by the public authority are not taxable. In view of the above Board's Circular, the applicant has prima facie strong case in their favour. Therefore, pre-deposit of service tax, interest and penalties is waived and recovery of the same is stayed during the pendency of the appeal.

See our columns Tomorrow for the judgements