Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Construction of Roads on BOT basis and collecting toll - not liable to ST under BAS - in spite of clear instructions issued by Board vide Circular 152/3/2012-ST dated 22/02/2012, which are binding on departmental officers, contrary view has been taken by adjudicating authority for reasons best known only to him - Appeals allowed with consequential relief: CESTAT

THE nine appellants were awarded contracts for the construction of roads by Maharashtra State Road Development Corporation, National Highway Authority of India, Government of Maharashtra and also Government of India. These contracts were on Build, Operate and Transfer (BOT) basis. The consideration for the services rendered under these contracts were allowed to be recovered by collection of toll charges for a fixed tenure and appropriating the same towards the cost incurred. The case of the Revenue is that collection of toll charges by the appellants under these contracts comes within the purview of ‘Business Auxiliary Services'. Notices were issued and demands for service tax along with interest were confirmed apart from imposing equivalent amounts of penalty.

Income Tax

Whether for purpose of exemption u/s 10(23), collection of donation from students by educational body amounts to profit, and thus, calls for rejection of exemption application - YES: HC

ASSESSEE is an educational society. It has filed the present writ petition against the order of the CCIT rejecting its application for exemption under Section 10(23C) (vi). It was submitted by the assessee's counsel that the CCIT having considered all relevant material documents such as the memorandum of bylaws of the Society and the rules and regulations attached thereto, in addition to, the books of accounts for the three years preceding the application, though observed that there was no monetary profits in the activity of imparting education, nevertheless, rejected the application on an unjustifiable ground that the collection of donations from pupils would amount to an act for the purpose of profit and therefore it did not fulfill the objectives mentioned in Section 10(23C)(vi).

Central Excise

In case of default, prohibition under Rule 8(3A) of CER, 2002 from utilizing CENVAT Credit account is not with reference to arrears but entire credit lying in account - assessee to pay excise duty through account current for each consignment at time of removal - Pre-deposit correctly ordered by Commissioner(A) - Petition rejected: HC

THE Petitioner was issued a SCN dated 04/01/2012 alleging default in payment of Central excise duty during the period from December 2010 to May 2011 requiring the payment of excise duty on each consignment in cash, without utilizing CENVAT Credit until payment of outstanding amount together with interest.In response to the SCN, the Petitioner replied that the prohibition from utilizing CENVAT Credit account under Rule 8(3A) of CER, 2002 is with reference to arrears and not the entire credit and, therefore, an amount of Rs.6,29,750/- has been correctly utilized.

See our Columns Tomorrow for the judgements