Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Section 80 benefit can be allowed even in cases of suppression - CESTAT

THIS is an interesting case of demand of service tax on transportation of goods by air. What makes the case interesting is the fact that demand finally survived for a period of one week, that is also because of non-availability of exemption during this short period. The service was exempted under Notification No 28/2004 ST dated 17.09.2004 which exempted the taxable service provided by an aircraft operator to any person in relation to transport of export cargo by aircraft from the whole of the service tax leviable thereon.

Section 80 provides for waiver of penalty imposed under Section 78 also - That means even under a case where there is suppression there is a scope for invoking Section 80 though such case can be rare - The very fact that Section 80 mentions penalty under section 78 shows that in exceptional cases waiver can be granted under Section 80 even when suppression is invoked - Benefit of Section 80 extended to the appellant.

Income Tax

Whether TDS obligation arises as soon as assessee makes provision for same in books and payees remain unidentifiable - NO: ITAT

THE issues before the Bench are - Whether TDS obligation arises as soon as assessee makes provision for the same in books and the payees remain unidentifiable; Whether any wrong is committed when the assessee makes provisions for TDS on unidentifiable payees in one year and writes back the same in the next year and deducts TDS while debiting the payment; Whether when certain expenditures are disallowed u/s 40(a)(i), the assessee can again be held liable to TDS on the same expenses and Whether any TDS liability u/s 194C arises on purchase of goods, packing material and expenses on clinical trials. And the verdict goes in favour of the assessee.

Central Excise

Rule 13(2) of the CCR, 2002 was invoked for imposition of penalty while issuing SCN on 19.11.2003 but since rule was already omitted w.e.f 01.03.2003, no cause for imposition of penalty: CESTAT

THE appellants are engaged in the manufacture of excisable goods such as Circuit Breakers, Instruments, Transformers etc. and avail CENVAT credit on inputs procured indigenously as well as by import when they availed credit of CVD paid. During the period in dispute the appellants procured the inputs from a 100% EOU and availed CENVAT Credit of the actual CVD amount mentioned in the invoices issued by 100% EOU. However, as per the provisions of Rule 3(6)(a) of the CENVAT Credit Rules, 2002, the CENVAT Credit in respect of such procurements were restricted to a quantum determined by the formula given therein. The departmental Audit Party pointed out the mistake and the appellants reversed the credit subsequently and paid interest of Rs. 1,31,675/- in cash. Subsequently, a show-cause notice was issued on 19.11.2003 for appropriation of the amount paid along with interest and for imposition of penalty

See our columns Monday for the judgements