Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

CENVAT credit - Services utilized for erection and installation of Ammonia Storage Tank at port - Rule 4(7) of CCR, 2004 is to be read with definition of input service under Rule 2(l) of CENVAT Credit Rules - input services used in relation to storage of inputs outside factory will not be eligible for credit - Demand of Rs.2.78 Crores upheld and appeal dismissed: CESTAT

INCLUSIVE definition of input service also includes input services used in relation to storage upto the place or removal. Storage upto place of removal will include the storage of final products and not storage of inputs because whenever legislature wanted to give the benefit, in respect of inputs it has done so by specifically mentioning as procurement of inputs and inward transportation of the inputs. Therefore, input services used in relation to storage of inputs outside the factory will not be eligible for the credit.

Income Tax

Whether when assessee is engaged in business of manufacturing fuel briquettes from bagasse, waste of sugar industry, merely because assessee pays for purchase of such waste, it loses entitlement to benefits u/s 80JJA - NO: HC

ASSESSEE, an individual, is engaged in the business of manufacturing fuel briquettes from bagasse. It had filed its ROI after claiming deduction u/s 80JJA. During assessment, AO disallowed the claim for deduction u/s 88JJA on the ground that bagasse was not a waste; it was not generated in municipal/urban limits i.e. by local authorities; it was not collected but it was purchased and the process of its manufacture had not involved any treatment or recycling of a biodegradable waste. On appeal, CIT(A) allowed the respondent's appeal. It was held in the order for both the AYs, that bagasse was purchased from sugar factories and processed by it for making briquettes to be used as fuel. Further it was held that all the conditions laid down in Section 80JJA were satisfied and the assessee was entitled to claim a deduction thereunder. On further appeal by the Revenue, Tribunal held that bagasse generated in the sugar industry was a waste and merely because it was purchased for a price, it did not cease to be a waste.

Customs

Scope of Appeal - CESTAT decision regarding Rate of Duty - Appeal against it has to be filed before Supreme Court under Section 130 E of the Customs Act, 1962: HC

ALTERNATIVE Remedy - CESTAT decision regarding Rate of Duty - Against it appeal lies to Supreme Court under Section 130 E of the Customs Act, 1962 and that remedy must be exhausted first - Followed the decision of Apex Court in the case of Guwahati Carbon Ltd. (2012-TIOL-119-SC-CUS) - Writ petition against the Decision of CESTAT before High Court is not maintainable irrespective of vast powers of High Court under Article 226 of Constitution of India.

See our columns Tomorrow for the judgements