Jurisprudentiol - Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Can a 100% EOU export finished goods on payment of duty under claim of rebate under Rule 18? - Madras High Court orders cash refund of duty paid.

WHILE a 100% EOU can procure the raw materials and capital goods without payment of duty, there is no such facility as far as input services are concerned. But the EOUs are allowed to take credit of such service tax paid. This particular EOU had accumulated such CENVAT Credit of service tax and utilized it for payment of duty on finished goods exported. The EOU claimed rebate of such duty paid under Rule 18 of the Central Excise Rules, 2002. The rebate claim was rejected by the department on various grounds like, the goods manufactured by EOU are exempted under Notification No 24/2003 CE dated 31.03.2003, and as per Section 5A (1A) of the Central Excise Act, 1944, the EOU should avail exemption and cannot opt to pay duty.

Income Tax

Whether submission of audited accounts per se would oust jurisdiction of AO to pass a direction for special audit u/s 142 - NO: HC

THE issues before the Bench are - Whether the submission of audited accounts per se would oust the jurisdiction or authority of the AO to pass a direction for special audit u/s 142; Whether when a Government company provides unsatisfactory response to the queries and the show cause notice issued u/s 142 pursuant to discrepancies noticed by the AO, a special audit is rightfully warranted; Whether there can be any violation of principle of natural justice, when the assessee was duly served with a show cause notice, before issuing direction for special audit; Whether the expression 'accounts of the assessee' can be given a narrow interpretation, so as to confine it to only the accounts of the assessee; Whether the proceedings u/s 142 (2A) is strictly a judicial proceeding and requires elaborate reasoning and Whether when the opportunity has been given to the assessee along with proper reason for framing the opinion that the nature of the accounts is complex and in the interest of the revenue, special audit is necessary, the approval granted by the Commissioner cannot be said to be mechanical and without application of mind. And the verdict goes in favour of the Revenue.

Service Tax

CENVAT Credit on common area management, maintenance or repair service; employee mediclaim insurance; cab services; and car parking - eligible: CESTAT

CENVAT credit availed by the appellant for common area management, maintenance or repair service; employee mediclaim insurance; cab services; and car parking are eligible for the claim of CENVAT credit. The conclusion by the adjudicating authority to the contrary in the order under appeal is thus unsustainable and is accordingly quashed.

See our Columns Tomorrow for the judgements