Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

A building which has already been completed and put to use does not need any completion or finishing services - Pre-deposit waived and Stay granted: CESTAT

THE Carpenters are providing services under the category of 'Commercial or Industrial Construction Services'. They undertake interior contract work such as paneling, tiling, painting, etc. and claim that these are repair, alteration, renovation or restoration services in relation to a building or civil structure as mentioned in clause (d) of the category. They discharge service tax on the above activity after availing an abatement of 67% on the gross value of the taxable value of the service rendered, under Notification NO. 1/2006-ST dated 01/03/2006. The department was of the view that the appellant is not eligible for the said abatement for the reason that the activity undertaken by the appellant relates to completion and finishing services in respect of buildings or civil structure and falls in clause (c) of the definition of 'Commercial or Industrial Construction Services' and which is excluded from the scope of the said Notification.

Income Tax

Whether when assessee originally a sub-contractor, but subsequently becomes direct party to agreement in own right, responsible for work done and dealing with Govt on behalf of developer, cannot claim benefit of deduction u/s 80IA, merely because they have not developed entire project - NO: ITAT

THE assessee has undertaken the work on Back to Back Agreement concept under sub contract from Patel Engineering Company Limited (PEC) vide Sub-Contract Agreement for construction of Tunnel which supplies the water form River Koyna and makes it available to Power House. The issue before the Bench is - Whether when the assessee originally a sub-contractor, but subsequently becomes a direct party to the main agreement in its own right, directly responsible for the work done and dealing with the Government on behalf of the developer, cannot claim the benefit of deduction u/s 80IA, merely because they have not developed the entire project. And the answer goes in favour of the assessee.

Customs

Valuation - Since a replicated CD contains artistic/intellectual inputs, cost of the same has to be considered while charging Customs duty. Revenue appeal allowed: CESTAT

THE respondent is engaged in the business of importing and selling of DVDs. They entered into a licensing agreement with Buena Vista Home Entertainment Inc (the Licensor in short) under which the respondent acquired license/right to import and sell/distribute DVDs in respect of which the licensor held the copy right. Under the said agreement, the respondent was given the right to import from "Replicators" namely, U-Tech Medi Corporation of Taiwan and such other Replicators as the licensor may from time to time designate, DVDs for the purpose of distribution/re-sale in India.

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