Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Dispute on rebate coupled with classification - Where to file appeal? Confused department files appeal belatedly with CESTAT and loses same - Tribunal by majority decides against the revenue.

THE operative portion of the Jt. Secretary (RA) order rejects the Department's revision application and confirms the Commissioner Central Excise (Appeals)'s order allowing the rebate by treating the goods as classifiable under heading 73.26, the order of the Commissioner (Appeals) stands merged in the order of the Jt. Secretary (RA). Hence, no appeal against order of the Commissioner (Appeals) can be filed before Tribunal, as it no longer exists. Since what exists is the order of the Jt. Secretary (R.A.), it has to be challenged before the higher forum i.e. High Court. In a situation where the main issue is export rebate covered by first proviso to Section 35B(1) and if for deciding the issue relating to export rebate, some other issues have also to be decided, the Tribunal would not have jurisdiction and that order of Commissioner (Appeals) can be challenged only before the Jt. Secretary (RA) by filing a revision application. As Tribunal has no jurisdiction, delay in filing appeal cannot be condoned.

Income Tax

Whether when assessee while working as employee of firm controlled by him, earns salary as well as commission arising out of non-compete agreement signed between him and firm, commission paid by firm is to be treated as part of his salary - YES: HC

THE issue before the Bench is - Whether when the assessee while working as an employee of a firm controlled by him, earns salary as well as commission arising out of non-compete agreement signed between him and the firm, the commission paid by the firm is to be treated as part of his salary and not business income. And the answer goes against the assessee.

Service Tax

Prior to May, 2008, ST was payable only on receipt basis - for later period service provided does not appear to qualify as ‘Scientific & Technical Consultancy Services' - prima facie case made for waiver of pre-deposit of Rs.1.56 Crores - Stay granted: CESTAT

THE appellants submitted that -

+ the applicant has not received any amounts towards providing the above service, therefore, they are not liable to pay any service tax at all.

+ prior to May, 2008 service tax was payable on actual receipt of the amount of service rendered from the service recipient.

+ It is a fact on record that only entries were made in the books of accounts of service recipient as well as the service provider but no amount for service rendered has been recovered.

+ the adjudicating authority has classified their service of ‘technical knowhow' under the category of 'Scientific and Technical Consultancy Service' and which is improper so they are not liable to pay service tax post May, 2008 also.

See our columns Tomorrow for the judgements