Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Agreement by appellant with ONGC is for charter hiring of drilling units - compensation is paid to the appellant based on the number of days during which the vessel was on charter hire and even when the vessel was not used for drilling - such an activity merits classification under ‘supply of tangible goods for use' service and not under ‘mining service' - prima facie appellant liable to pay Service Tax - Pre-deposit ordered of Rs. 5 Crores: CESTAT

THE appellant provided their rigs "Kedarnath" & "Badrinath" on charter hire basis to Oil and Natural Gas Corporation Ltd. (ONGC) and M/s. Deep Water Service India Ltd., subsidiary of M/s. ONGC for drilling operation/drilling wells in the offshore waters of India during the period July 2009 to March 2010. The department was of the view that the services undertaken by the appellant is classifiable under the category of "Supply of Tangible goods for use Services" and is taxable under Section 65(105)(zzzzj) of the Finance Act, 1994 with effect from 16/05/2008.

Income Tax

Whether when Revenue has taken a view that surrendered income belongs to individual members and not to AOP, can a different view be taken in case of AOP by taking same amount again on ground that assessee himself had originally filed return in hands of AOP - NO: ITAT

THE issues before the Bench are - Whether when Department has taken a view that surrendered income belongs to the members individually and not to AOP, can a different view be taken in the case of AOP by taking the same amount again on the ground that the assessee himself had originally filed the return in the hands of AOP and Whether penalty u/s 271(1)(C) is warranted, when the assessee has disclosed on affidavit the undisclosed income and the manner it was earned during a search operation u/s 132. And the verdict goes in favour of the assessee.

Central Excise

It cannot be said that in all cases of duty demands, department should specify interest amount also, especially when date of payment of duty on subsequent period is not known - appeal dismissed: CESTAT

NO doubt, quantum of interest has not been specified in the said order. The interest liability accrues from the due date of payment of duty till such time the payment is made. Inasmuch as the appellant had made only part payment and have not made the full amount of duty confirmed, the question of quantifying the interest amount does not arise since the date of payment of duty is not known. Interest is a consequential liability and has to be discharged by the appellant on his own whenever there is a default in payment of duty by the due date and, therefore, it cannot be said that in all cases of duty demand, the department should specify the interest amount also, especially when the date of payment of duty on a subsequent period is not known.

See our Columns Monday for the judgements