Jurisprudentiol – Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Whether when assessee-Trust receives donation vide post-dated cheque encashable in next accounting year and also fact that donor claims such donation only after cheque is honoured, it can still be said that assessee violated provisions of Sec 13(2)(b) - NO: Apex Court

DURING the relevant accounting year, the assessee had, by way of donation, received two cheques for a sum of Rs.40 lac each from M/s Apollo Tyres Ltd. One of the cheques was dated 22nd April, 2002 and yet it was given in accounting year 2001-2002 i.e. before 31st March, 2002. The said cheque for donation was received by the assessee before 31st March, 2002 but was honoured after 1st April, 2002. In the assessment proceedings, the AO held that with an intention to do undue favour to M/s Apollo Tyres Ltd., the cheque dated 22nd April, 2002, given by way of donation for a sum of Rs.40 lac had been accepted by the assessee and receipt for the said amount was also issued before 31st March, 2002. According to the AO, many of the trustees of the assessee trust were related to the directors of M/s Apollo Tyres Ltd. and so as to give undue advantage under the provisions of Section 80G, the cheque had been accepted before 31st March, 2002 although the cheque was dated 22nd April, 2002. Thus, by accepting a post dated cheque and by giving receipt in the earlier accounting year, the assessee trust had done undue favour.

Central Excise

CENVAT Credit taken on imported cocoa beans - Cocoa shells arising during manufacture cleared without payment of duty - invocation of rule 6(2) of CCR, 2004 for recovery of amount of 5% on ground of availment of CENVAT credit on common inputs is prima facie improper as cocoa shells is waste - pre-deposit waived and Stay petition allowed: CESTAT

THE applicants imported cocoa beans and paid 4% CVD and claimed the credit of CVD paid. During the course of manufacture, cocoa beans are retrieved from the shell and shells are discarded. The applicants are selling the cocoa shells in the open market without payment of duty. The case of the Revenue is that the CENVAT credit is availed on the common inputs and since cocoa shells are cleared without payment the applicants are liable to pay 5% of the value of exempted cocoa shells cleared without payment of duty under Rule 6(2) of CENVAT Credit Rules, 2004.

Service Tax

Maintenance and Repairs by Central Railway of Railway sidings owned by private parties under agreements - Railways are not collecting any statutory fee but are collecting service charges for services rendered - Liable to Service Tax - appellant has not made prima facie case in favour for waiver of dues - pre-deposit ordered of Rs.1.62 Crores: CESTAT

THE appellant is Central Railway. They undertook maintenance and repairs of Railway sidings owned by private parties under agreements entered into with such owners. The revenue was of the view that the activities undertaken by the Railways comes under the taxable service of "management, maintenance and repair services" as defined under section 65(105)(zzq) of the Finance Act, 1994 read with section 65(64) ibid with effect from 16/06/2005. SCNs were issued demanding service tax of Rs.2.51 Crores & Rs. 74.22 lakhs for the period 2005-06 to 2007-08 and for the period 2010-11 respectively and were confirmed by the CCE, Nagpur along with interest and penalties.

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