Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Merely because manufacturer has discharged his duty liability along with interest and penalty equal to 25% in terms of s.11A(1A) of CEA, 1944, proceedings against co-noticees cannot be held to be conclusive in nature - CESTAT

THE Commissioner (Appeals) set aside the penalties imposed upon the respondents u/r Rule 26 of CER, 2002 on the ground that the respondents are employees, authorised signatories/directors etc. of the main manufacturing units, who have discharged duty liability along with interest and penalty equal to 25% of the duty in terms of provisions of section 11A(1A) of the CEA, 1944. By adverting to the 1st proviso of section 11A(2), he has held that if full duty demanded along with interest and penalty equal to 25% of the duty specified in the notice is paid within 30 days of the receipt of notice, the proceedings in respect of such person and other persons to whom notices are served shall be deemed to be conclusive as to the matter stated in the notice.

Income Tax

Whether when loan advanced by JV partner for purchase of capital assets is converted into share premium of loss-making assessee company, same can be treated as trading receipt - NO: ITAT

ASSESSEE was a joint venture between ‘F' and ‘O', a Government owned trading organization from Russia. Assessee was not doing any activity for last six years due to heavy losses. AO made addition for loan converted into shares, share application money and for liabilities converted into share capital and premium. Assessee contended that it received outstanding share application money and other loans from foreign collaborator. Due to heavy losses, promoters agreed to convert share application money and other loans outstanding in the books of account for enhancement of share capital to the extent of authorized capital available and balance as share premium account enabling the company to get it closed under Simplified Exit Scheme as the company had already disposed off its trawlers in the previous years.

Service Tax

Co-operative society promoted by six banks to provide training to employees of member banks to efficiently handle business of the banks - banks pay charges to society - whether liable to ST under category of "Commercial Coaching or Training"- Pre-deposit waived and Stay granted: CESTAT

THE appellant is a co-operative society promoted by six different banks like Oriental Bank of Commerce, Bank of Baroda, Punjab and Sind Bank etc. They provide training to the employees of these member banks. They also provide training to employees of other banks in the field of banking which enables the employees to efficiently handle the business of the banks of which the trainees are staff. The benefit of the training accrues to the Banks, which send their employees for training and pay the appellant.

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