Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Intermediate product ‘non-woven fabric' captively consumed in manufacture of exempted Floor covering - duty demanded on ground that non-woven fabric was being sold in the market - Stay granted: CESTAT

THE applicants are engaged in the manufacture of Jute backed Floor Coverings which are exempted from the payment of duty.

The case of the Revenue is that the applicants were manufacturing an intermediate product viz. Non-woven fabric and apart from consuming the same in the manufacture of exempted Floor Covering were also clearing the same in the market. A total Central Excise duty demand of Rs.1,62,33,344/- was raised under various SCNs in respect of intermediate product i.e. Non-woven fabric captively consumed.

Income Tax

Whether for claiming exemption under section 54F, construction of new house within three years and completion of substantial part is sine-qua-non - YES: ITAT

THE issues before the Bench are - Whether the action initiated u/s 147 can be challenged before the appellate authorities without challenging the same before the AO, particularly in a case where the return of Income is only processed - Whether for claiming exemption under section 54F, the construction of new house within three years and completion of the substantial part is sine-qua-non. And the verdict goes against the assessee.

Service Tax

Mere payment of ST liability by agent under wrong head of Advertisement Agency Service does not meant that service tax liability has not been discharged - Proceedings by way of issuance of SCN and adjudication was not warranted - order set aside and appeal allowed: CESTAT

IN this set of facts, service tax liability has been discharged by Matrix on the above said activity cannot be denied merely on the ground that it has paid under Advertisement Agency Service. As M/s Matrix has paid the service tax under the category of Advertisement Agency Service that does not mean that M/s Matrix has not paid service tax on behalf of the appellant. By mere paying the service tax liability under wrong head does not meant that service tax liability has not been discharged. The allegation of the revenue that service has been rendered by appellant but has not discharged the service tax liability is not sustainable as per section 65(7) of the Finance Act, wherein the ‘assessee' means a person liable to pay service tax and includes his agent. In this case, appellant has appointed M/s Matrix as her agent to discharge her service tax liability on her behalf and same has been discharged by M/s Matrix.

See our columns Tomorrow for the judgements