Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Access of data cannot prima facie come within purview of BAS under reverse charge mechanism - pre-deposit waived of Rs.3crores service tax and stay granted: CESTAT

THE appellant wanted to market agro-chemicals in the United States of America. In order to do that, they needed to obtain registration from United State Environmental Protection Authority (USEPA). To obtain this registration, they were required to provide technical data/information about the products. This information they obtained from the various other companies in USA by paying Data Access Fee. The department was of the view that this acquisition of technical data is liable to Service Tax under reverse charge mechanism and in the category of ‘Business Auxiliary Service' inasmuch as it constitutes promotion or marketing/sale of goods of the appellant in the USA.

Income Tax

Whether when assessee fails to maintain separate accounts for taxable and non-taxable income, no wrong can be found with CIT invoking revisionary powers to disallow interest expenditure incurred on account of non-taxable income - YES: HC

ASSESSEE earned a sum of Rs.2,85,08,419/- on account of dividend which was not taxable. The assessee earned interest amounting to a sum of Rs.2,68,75,491/-. The assessee paid interest amounting to a sum of Rs.4,49,02,775/-. No expenditure with respect to the non-taxable income was shown. Out of the interest paid by the assessee, a sum of Rs.1,33,51,132/- was shown as interest paid towards the non-taxable income. On this basis, a total loss was computed at a sum of Rs.85,93,770/- which was accepted by the Assessment Officer. The C.I.T. in exercise of power under Section 263 directed the Assessment Officer to pass a fresh order in accordance with law and to make appropriate disallowance under Section 14A of the Income Tax Act. Tribunal reversed the order of the CIT(A).

Central Excise

CENVAT credit cannot be denied on ground that manufacturer of goods has not paid duty where inputs stand received on basis of valid documents and after taking all reasonable precautions: CESTAT.

PROCEEDINGS were initiated against the respondent assessee alleging that as they have received the goods from a supplier who was not in existence, the availment of credit by the respondent was not in accordance with the law. The said show cause notice culminated into an order passed by the original adjudicating authority who confirmed the demand. The said order was challenged by the respondent before Commissioner (Appeals). It was contended by the assessee that they have availed credit on the basis of cenvatable invoices issued by the supplier. The same were duly supported with form 31 and the said trade tax form 31 has been duly checked by the Trading Tax authority of West Bengal, Bihar, UP borders before the final delivery to the respondents. The same physically entered their factory and were duly recorded in the statutory records.

See our Columns Tomorrow for the judgements