Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Audit conducted in year 2009 and demand raised in respect of GTA service which applicant paid - later in October, 2010 SCN issued for period 2005-06 onwards demanding ST of Rs.6.35 Crores on gross amounts received in respect of various contracts of Erection, Installation & Commissioning - Prima facie applicant has strong case on issue of time bar: CESTAT

THE applicants are providing taxable services under erection, commissioning and installation of power stations to various Electricity Boards and also to other customers. Applicants are paying service tax on 10% of the value of the material used in respect of the erection, commission or installation where the service provider is the State Electricity Boards. Applicants are paying 15% on the contract amount received from other customers.

The Revenue is demanding service tax of Rs. 6,35,71,242/- after taking into consideration the gross amount received in respect of the various contracts.

Income Tax

Whether assessee is entitled to exemption u/s 54 in respect of purchase of tenancy rights in a residential property - NO: ITAT

ASSESSEE sold a bungalow and purchased tenancy rights in two flats. Assessee claimed exemption u/s 54 of the Act because of the investments made in acquisition of the tenancy rights. AO observed that the exemption u/s 54 in respect of capital gain from sale of residential house property was available only when the assessee purchased or constructed a new residential flat. Assessee purchased only tenancy rights. The issue before the Tribunal is - Whether the assessee is entitled to exemption u/s 54 in respect of purchase of tenancy rights in a residential property. And the answer goes against the assessee.

Central Excise

Notfn. 23/2003-CE - Applicant exporting concentrated ceramic colours and clearing diluted ceramic colours to DTA by claiming the benefit of Notification - Revenue denying benefit on ground that what is cleared to DTA is not similar - similar goods means which are similar or which belong to same class of goods exported - Prima facie benefit of notification available - Pre-deposit of dues waived and stay granted: CESTAT

THE applicant is a 100% EOU and engaged in the manufacture of ceramic colours. The applicant got permission to sell the goods in DTA and the applicant cleared the goods to DTA by availing the benefit of Notification 23/2003-CE. The benefit of the Notification is being denied on the ground that the goods cleared to DTA are not similar to the goods exported. Accordingly, a demand of Rs.1.37 Crores was confirmed along with interest and penalties by the CCE, Belapur. The applicant is before the CESTAT with a Stay application.

See our columns Tomorrow for the judgements