Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Since the underwriter service is to be subjected to tax under Section 66A of FA, 1994 and since in this case it was done outside India, there is no reason seen to tax impugned service - appeal allowed: CESTAT

THE appellant are manufacturers of chemicals and pharmaceuticals products chargeable to central excise duty. During 2004-2005, 2005-2006 and 2006-2007, they issued Foreign Currency Convertible Bond (FCCB) to the extent of USD 35 Million, USD 75 Million and USD 200 Million through ABN AMRO Rothschild (hereinafter referred to as ABN) and JP Morgan Securities Ltd., USA (hereinafter referred to as JP Morgan), who had acted as the lead manager to the issue and to whom payments of Rs.5,23,62,658/-, Rs.7,93,42,445/- and Rs.12,34,37,000/- respectively had been made during those years.

The department was of the view that the services of lead managers to the issue and underwritings and other banking & financial services had been received by the Appellant from offshore services provider - ABN and JP Morgan and, therefore, the appellants being service recipients are liable to pay service tax in respect of the same.

Income Tax

I-T - Whether when assessee fails to e-file TDS return for lack of verified PAN numbers although TDS deducted was deposited in time, such delay warrants penalty u/s 272(2)(k) - NO: ITAT

THE issue before the bench is - Whether when assessee fails to e-file TDS return for lack of verified PAN numbers although TDS deducted was deposited in time, such delay warrants penalty u/s 272(2)(k). And the verdict goes in favour of assessee.

Central Excise

Penalty under Rule 25 only on (a) producer; (b) manufacturer; (c) registered person of a warehouse; or (d) a registered dealer - Revenue Appeal Dismissed: HC

IT is pertinent to note that Rule 25(1) specifically mentions four categories of persons:- (a) producer; (b) manufacturer; (c) registered person of a warehouse; or (d) a registered dealer. These four categories of persons are also mentioned at the end of Rule 25, where the liability of penalty has been spelt out. It is, therefore, clear that the penalty can be imposed on such persons only. The respondents are neither producers nor manufacturers of the said Prabhat Zarda nor are they the registered persons of a warehouse in which the said zarda had been stored. The respondents are also not the registered dealers. That being the case, no penalty can be imposed on the said respondents.

See our Columns Tomorrow for the judgements