Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Citi Bank group has entrusted the processing of banking transactions electronically to appellant - since computerized data processing is specifically excluded from scope of BAS, question of confirmation of demand under BAS prima facie does not arise: CESTAT

THE appellants are engaged in providing various services to M/s Citi Bank and allied entities in India and abroad. They undertook collection and sales services, call center services and computerized data processing services for the client.

On the collection and sales services they have been discharging service tax liability under 'Business Auxiliary Services (BAS)' w.e.f 01/07/2003 and on call center services they have been discharging service tax liability under BAS w.e.f 01/03/2006 as the said service was exempt prior to 01/03/2006.

In respect of computerized data processing services, they have been discharging service tax under the category of 'Business Support Services' w.e.f 01/05/2006 when the said service was brought under tax net.

Income Tax

Whether any TDS obligation arises on interest payable on ECB when same has been exempted by CBDT - NO: ITAT

THE issues before the Bench are - Whether expenditure originally shown as Capital Work in Progress can be later claimed as revenue expenditure for income tax purposes upon commencement of the commercial production; Whether any question of TDS liability on interest payable on External Commercial Borrowing can arise, although when the same has been specifically exempted by CBDT u/s 10(15)(iv)(c); Whether when the deployment of the funds borrowed has been already verified by the Department at the time of granting the exemption, the exemption granted u/s 10(15)(iv)(c) continues to apply and Whether when there is no question of TDS liability, section 40(a)(i) has no application. And the verdict goes in favour of the assessee.

Customs

Self propelled tug imported for petroleum operations and necessary certificate obtained from Ministry - Tug was used for salvage operations for 22 days due to an oil spill resulting from collision between two vessels in Mumbai port - benefit of notification cannot prima facie be denied on ground that there has been an alleged violation of condition - Pre-deposit waived and stay granted: CESTAT

WHAT is more important - containing the oil spill which had resulted in the Mumbai Port operations coming to a standstill or debating whether this would amount to violating the conditions of exemption notification under which the Tug was imported?

For the appellant, it was the first option but for the Customs authorities it was the second one.

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See our Columns Monday for the judgements