Jurisprudentiol - Friday's cases

By Vijay Kumar

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

There is nothing in notification 17/2009-ST that it should be compulsorily availed by manufacturer exporter - notification being conditional one, it is for manufacturer to decide whether to avail said exemption or not - no merit in department's contention that appellant should have availed benefit of notfn. 17/2009-ST - Denial of CENVAT Credit on Input services is not legal and proper - Appeal allowed: CESTAT

NOTIFICATION No. 17/2009 dated 07/07/2009, exempts the taxable services received by an exporter of goods and used by him for export of goods. This exemption is subject to certain conditions and one of the conditions stipulated is that no CENVAT credit of service tax paid on the specified service used for export of the said goods has been taken under the CENVAT Credit Rules, 2004. This condition clearly implies that in a case where the exporter avails CENVAT credit, he cannot avail the benefit of exemption. There is no bar stipulated in the said notification that he cannot avail CENVAT credit and the availment of CENVAT credit will be entirely governed by the terms and conditions of the CENVAT credit rules. The fact that input or input services, on which duty/tax has been paid, have been received and used in the manufacture of excisable goods which have been exported is not in dispute. In the show cause notice, the only ground taken for denying the credit is that benefit of notification No.17/2009 should have been compulsorily availed by the exporter manufacturer. The said notification being a conditional exemption notification, it is for the manufacturer to decide whether to avail the said exemption or not.

Income Tax

Whether when recourse to recovery proceedings u/s 226 is taken against a public trust, then no prior notice is warranted, although there exists no apprehension of diversion of funds - Assessee's writ allowed: HC

THE issues before the Bench are - Whether when recourse to recovery proceedings u/s 226 is taken against a public trust, then no prior notice is warranted, although there exists no apprehension of diversion of funds; Whether money recovered from the bank account of a public trust under such recovery proceedings, when appeals and stay applications are pending, amounts to abusive usage of coercive process of law; Whether in such a case an equitable relief can be granted to the assessee in the exercise of the jurisdiction under Article 226 of the Constitution; Whether the option of not serving a prior notice to the assessee in recovery proceedings u/s 226, can be applied uniformly to all cases; Whether application for stay pending before the Department needs to be disposed off expeditiously and Whether interest of the Revenue can take precedence over the fairness of proceedings, merely because it is before the quasi judicial authorities of the Department. And the verdict goes in favour of the assessee.

Central Excise

INPUTS stored in premises outside factory and which Plot is sought for inclusion in Registration Certificate - As Assistant Commissioner accepted the request and included same in Registration Certificate albeit after more than year, applicant has a prima facie strong case in favour: CESTAT

In the present case, due to paucity of space in the factory premises situated at Plot N-65, the appellant stored these ‘inputs' in Plot No. 66, and which premises they sought to include in their Central Excise Registration Certificate. To this effect they addressed a request letter to the jurisdictional Assistant Commissioner on 07.05.2010.

Perhaps, the Assistant Commissioner was too busy and, therefore, this request remained pending…pending…pending!

Someone must have got a whiff of the pending application and immediately a case was booked against the appellant and the CENVAT Credit of Rs.1,04,92,036/- was proposed to be denied.

The CCE, Nagpur completed the final rites.

See our Columns Tomorrow for the judgements