Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

CENVAT - Rule 6 of CCR, 2004 - Since applicant has not taken CENVAT credit on input services attributable to trading activity, they are covered under rule 6(1) of the CCR, 2004 and not rule 6(2) of CCR, 2004 and hence are not liable to pay 10%/5% of value of traded goods - Pre-deposit of Rs.298 Crores & equivalent penalty waived & Stay granted: CESTAT

A demand of Rs.297,77,33,460/- (no mistake here) was confirmed by the CCE, Thane-I against the appellant along with equivalent penalty and interest on the premise that the applicants are not maintaining separate accounts for input services which have been used by them for their manufacturing and trading activities. The genesis of this order is a show-cause notice dated 07.10.2011 issued for the period September, 2006 to August, 2010.

ALMOST all the Central Excise officers have a fetish for numbers. They revel in issuing mind boggling demand notices and confirm them with aplomb. And imposing equivalent penalties is their forte. There was this officer working in the range who used to mention in his resume the figures to the last digit of the demand notices he had issued and which included those based on CERA and Audit objections and was proud to also mention that his bosses had confirmed the same with penalties and interest - no questions asked. This, he felt, boosted his grading and sure it did!

Unfortunately, never did the officer's resume of the subsequent year mention that these ‘Godzilla' demands were thrown into the dust bin by the CESTAT!

Income Tax

Whether when assessee lets out building with furniture and fixtures and their maintenance, composite rent received is to be treated as 'income from other sources' - YES: HC

THE issue before the Bench is - Whether when the assessee lets out building with furniture and fixtures and their maintenance, the composite rent received is to be treated as 'income from other sources'. And the answer goes against the assessee.

Customs

Commissioner of Customs (Export Promotion), Mumbai is subordinate to CESTAT in judicial matters - what Commissioner has done is to reconsider an issue which has already been settled in favour of appellant in previous proceedings and which is not permissible - Order not sustainable in law hence set aside and appeal allowed: CESTAT

WHAT the Commissioner has done is to re-consider an issue which has already been settled in favour of the appellant in the previous proceedings by this Tribunal, which is not permissible as the Commissioner, is subordinate to this Tribunal in judicial matters. Therefore, the impugned order is not sustainable in law.

See our columns Tomorrow for the judgements