Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Appellants were eligible for CENVAT credit for amount paid as ST and, therefore, this is a situation which was revenue neutral - by not paying ST immediately, appellants have lost more than Rs.26 lakhs paid as interest - no service recipient would evade payment of ST and become liable to pay interest which cannot be taken as credit - Penalties Set aside: CESTAT

THE Appellants are engaged in providing Port services. Proceedings were initiated against the appellants on the ground that they are liable to pay Service Tax on commercial charges paid by them for availing External Commercial Borrowings (ECB) under "Banking and Other Financial Services" during the period from 2005-06 to June, 2010. After submitting the details in response to the query made on 21.08.2010, appellants promptly paid the Service Tax of Rs.1,75,74,654/- with interest in September/October, 2010 and informed the DGCEI. Obviously not content with the promptness, proceedings were initiated inter alia for imposition of penalty and against the order imposing the same the appellant is before the CESTAT.

Income Tax

Whether when assessee has built units having area below 1000 sq. ft. but it has also offered option to combine two flats exceeding 1000 sq feet, it loses claim to Sec 80IB(10) benefits - YES: ITAT

THE issues before the Bench are - Whether when the assessee has built units having area below 1000 sq. ft. but it has also offered the option to combine two flats exceeding 1000 sq feet, it loses claim to Sec 80IB(10) benefits; Whether the assessee can be given Sec 80IB(10) benefits on pro rata basis for flats having an area of less than 1000 sqft and Whether when the projections/elevations area implies that there are extended area and can be utilized as carpet area, the said extended area of projections/elevations/balconies are to be included while admeasuring all the flats for the purpose of section 80IB(10). Tribunal dismisses Assessee's as well as Revenue's appeals.

Central Excise

Once duty on final products has been accepted by department, CENVAT credit availed need not be reversed even if activity does not amount to manufacture: CESTAT

IF you do not pay any duty by claiming an exemption, they breathe down your necks saying that the exemption has been wrongly availed. But these allegations are, more often than not, bordering on the innovative and intelligent kind. On the other hand, if you pay duty, they say that the process/activity does not amount to manufacture u/s 2(f) of the CEA, 1944 and that you are paying duty un-necessarily merely to pass CENVAT credit to the consignee.

This reverse psychology is ingrained so much in the Revenue formations, particularly the Audit groups, that there may hardly be any Central Excise Commissionerate in the country that does not have a ‘case' belonging to the said category.