Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Appellant is providing catering services at the behest of M/s L&T to their employees at the rates specified by L&T and payment for the same is made by L&T on monthly basis - prima facie the service rendered by the appellant amounts to ‘outdoor catering service' and on the consideration received for rendering the service appellant liable to discharge ST liability - Pre-deposit of 2.84 Crores: CESTAT

IN the present case the catering service is provided at the behest of M/s. L&T to their employees at the rates specified by M/s. L&T. Payment for the said service is also made by M/s. L&T on monthly basis based on the bills raised by the appellant on M/s. L&T. In addition to that, M/s. L&T compensates the appellant by way of subsidy for any loss incurred by the appellant in rendering the said service. From the nature of the transaction, as cited above, it is clear that the service is provided by the appellant to M/s. L&T Limited and not to the employees of M/s. L&T Ltd. Service recipient is the person who pays for the services received and it is M/s. L&T who is making the payment in the present case and, therefore, it is clearly established that the service is rendered to M/s. L&T Limited and to nobody else. Merely because the service has been rendered at the premises provided by M/s. L&T, it cannot be said that the service is not ‘outdoor catering'.

Income Tax

Whether one time conversion charges paid by assessee to municipal authorities for converting industrial unit into commercial, are to be treated as revenue in nature - NO: ITAT

THE assessee company is engaged in running sweet shops and fast food restaurants in various parts of Delhi. The AO made disallowance u/s 14A to the extent of Rs 53,918/- and also disallowed an amount of Rs.22,19,954/- which was paid by assessee company to MCD on account of conversion of its rented outlet from industrial unit to commercial unit. Further an amount of Rs 66,500/- was paid by assessee in respect of its rented showroom at ChandniChowk as one time parking charges to MCD. The AO considered expenditures to be of enduring benefit to the assessee.

Customs

Specification of ITC HS code in the various documents/licences issued by the DGFT is not an empty formality but a legal necessity - Product under import is classifiable under CTH 7309 and since the EPCG authorization covers goods under CTH 8437, the benefit under the EPCG scheme cannot be extended - Appeal dismissed: CESTAT

THE appellant imported 5 set of goods declared as "GSI Grain Storage Bins NCL 78-2004 with Bin accessories" seeking the benefit of EPCG scheme under notification NO. 103/09-Cus dated 11/09/2009 read with EPCG authorization. The noticee sought assessment under CTH 8437 10 00 where the applicable rate of duty is 7.5% basic + Nil CVD +2%Edn. Cess +1% Higher Edn.Cess + 4% SAD. The said tariff heading applies to "Machines for cleaning, sorting or grading seed, grain or dried leguminous vegetables".

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