Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Services provided in relation to operation of accounts of EPFO and ESIC are not taxable under ‘Banking & Other Financial Services' - however, since appellant has paid the ST demand and are not claiming any refund, no penalty is imposable: CESTAT

THE appellant State Bank of India is providing taxable services falling under the category of 'Banking and Other Financial Services' and registered with the department. On the basis of the intelligence gathered by the officers of DGCEI it was revealed that SBI also provided taxable services in relation to operation of accounts of the Employees Provident Fund Organization (EPFO) and Employees State Insurance Corporation (ESIC) classifiable under Banking and other financial services and on which no Service Tax was being paid. Therefore, appellant was served with show cause notice on 19.10.2009 proposing to recover Rs. 9,80,215/- being service tax not paid for the period from 10.9.2004 to 31.3.2007 and interest and penalties.

Income Tax

Whether income of Trust involved in mixed activities of religious and charitable nature warrants invocation of Sec 13(1)(b) - NO: ITAT

THE assessee is a registered trust under Ss12A and 80G of the Act and had filed ROI with ‘Nil' income. The AO observed that the objects of trusts included advancement of religious as well as charitable activities. The AO referred to the observations made in Tribunal decision in case of Ghulam Mohidin Trust in the decision of Landmark group and was of the view that since the assessee trust was a mixed trust it was hit by the provisions u/s 13(1)(b) of the Act. Thus, the AO assessed the income at Rs. 8,15,58,623/-. On the contrary the assessee relied on the High Court decision in case of Barkate Saifiyah Society. The assessee argued that the major chunk of expenditure incurred was on peace conference held for creating communal harmony and to create a brotherhood among the people of all faith so as to maintain peace and harmony in the country in particular and globally in general. Thus, the activities of assessee trust were not limited to benefiting a particular caste or community. In appeal the CIT(A) was of the view that the provisions u/s 13(1)(b) was not applicable and the same could be invoked only where the objects of trust were solely religious.

Central Excise

ST paid on broadcasting service availed as CENVAT credit by applicant - based on Board Circular 01.11.1996, it appears applicant has prima facie case in favour - Pre-deposit of Rs.3.62crores waived and Stay granted: CESTAT

THE applicant is a PSU engaged in the manufacture of petroleum products. They engaged the services of four advertising agencies for preparing the advertisement for their products. These advertising agencies further engaged the services of Times Global Broadcasting Co. Ltd. for broadcasting the advertisement. The broadcasting company paid service tax in respect of taxable service provided by them and recovered the amounts from the advertising agencies. The advertising agencies also raised invoices in favour of the applicant. But obviously, the invoices carried the component of Service Tax paid by the broadcasting company and seeing this, the applicant availed CENVAT credit thereof.

See our Columns Monday for the judgements