Jurisprudentiol – Friday's cases

By Vijay Kumar

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

ST - MD of appellant company also performed job of MD of another company by devoting 20% of his time and for which he was compensated - If at all any advisory activity was undertaken by said person, demand for Service Tax can be made only on him and not on appellant company - ST demand set aside and appeal allowed: CESTAT

THE appellant had employed Shri XXX as a Managing Director (MD). Shri XXX was also employed as MD of M/s Brembo Brakes India Pvt. Ltd.Shri XXX was required to devote 20% of his time to the work of M/s Brembo Brakes India Ltd. and for the remaining 80% of the time he was required to work for the appellants. M/s Brembo Brakes India Ltd. compensated Shri XXX for his work as MD and remuneration of Shri XXX was routed through the appellant and the payment received was credited to the account of Shri XXX without retaining any part thereof.

This flow of money was detected by the department and a view was taken that the appellant rendered Management & Consultancy Services to M/s Brembo Brakes India Ltd. by lending the services of Shri XXX.

Income Tax

Whether for purpose of transfer of case u/s 127(2), mere mention of reason 'for effective and coordinated investigation' is neither vague nor insufficient - YES: HC

THE assessees were members of the same family/group companies. Search operations were carried out by the income tax authorities at their premises. Assessment proceedings arising out of such search were pending before the respective AO who were all authorities situated at Bhavnagar. The CIT, Ahmedabad passed an order u/s 127(2) transferring such pending assessments from Bhavnagar to Ahmedabad. Such orders were challenged by the petitioners before this Court. Such petitions were disposed on the assurance of the Revenue that CIT shall withdraw such order. The CIT transferred all the cases to Assistant CIT, Ahmedabad.

Central Excise

Provisions of rule 9(1)(b) of CCR, 2004 does not apply to Supplementary Invoices issued in August, 2008 in respect of Service Tax paid - applicant has made case for total waiver of dues - Pre-deposit waived and stay granted: CESTAT

THE applicant received Input service in the month of August, 2008 but the service provider did not pay the Service Tax due. Later on, the service provider paid the service tax and issued a supplementary invoice in this regard. The service tax was reimbursed by the applicant and they took the CENVAT credit of the same. It is the case of the Revenue that the credit so availed is improper in terms of rule 9(1)(b) of the CCR, 2004 which prohibits availment of credit on the basis of supplementary invoices if the duty/tax has been paid (on being pointed out) and which was recoverable on account of non-levy/short-levy on the ground of suppression, willful misstatement etc.

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