Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Leviability of tax being an issue for decision, matter has to go before Division Bench: CESTAT

THE issue relates to leviability of service tax on a transaction which took place abroad under the reverse charge mechanism under Section 66A of the Finance Act, 1994. The appellant has discharged the tax and interest liability under protest and the stay application is with respect to the penalty levied on the appellant. Leviability of tax being an issue for decision, the matter has to go before the Division Bench in view of the provisions of Section 35 D(3) of the Central Excise Act, 1944.

Income Tax

Income tax - Whether when a chamber of commerce and industry derives income from services rendered to members and non-members, same is to be treated as 'business' warranting satisfaction of conditions u/s 11(4A) even though it has no profit motive - NO: Delhi HC

THE issues before the Bench are - Whether when a trade, professional or similar association, such as a chamber of commerce and industry dervies income from services provided to members and non members, the same can be considered as "business" warranting satisfaction of conditions u/s 11(4A), even though it is engaged in charitable activities and has no profit motives; Whether for the purpose of claiming exemption u/s 11, the dominant purpose test i.e. profit motive or charitable motive which needs to be applied, and not merely the generation of surplus; Whether charitable activities must be carried on in such a manner that it does not result in any profit, even though when earning profit is only incidental to such activity; Whether when there is identity between the contributors and participators in the surplus of the association, the surplus is ought not to be taxed under the general principles of mutuality and Whether in terms of section 28(iii) the mutuality principle is destroyed, when the assessee is deriving income or making profits as a result of rendering specific services for its members in a commercial way. And the decision goes in favour of the assessee.

Central Excise

As there is no requirement for deposit of redemption fine for hearing appeal before Tribunal, therefore, question of waiver of redemption fine for hearing appeal does not arise: CESTAT

AS per the provisions of Sec. 35F of the Central Excise Act, the requirement for filing the appeal is to deposit duty and penalty only and the Tribunal is empowered to waive the deposit of duty demanded and penalty levied. As there is no requirement for deposit of redemption fine for hearing the appeal before the Tribunal, therefore, the question of waiver of redemption fine for hearing the appeal does not arise. In view of this, there is no merit in this application and the same is dismissed.

See our columns Monday for the judgements