Jurisprudentiol - Friday's cases

By Vijay Kumar

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

How review by Committee of Chief Commissioners/Commissioners should not be done - CESTAT holds mere appending the signatures in note sheet is not review - Rejects revenue appeal on this preliminary ground.

WITH the lofty objective of improving the quality of review by the department, the concept of review of the orders by the Committee of Commissioners or Committee of Chief Commissioners as the case may be was introduced. But in practice, the review is done by the Inspector / Superintendent of review Section and the next process is only appending the signatures by the next level officers. The Committees do not sit nor deliberate the issues.In this appeal by department, the respondent raised a preliminary objection about the review order and the Tribunal called for the file.

Income Tax

Whether when assessee specialises in transforming raw food materials into therapeutic food by adopting customised processes, it cannot be denied Sec 80IB benefits - YES: ITAT

THE assessee is a partnership firm which is registered as a Small Scale Industry. The assessee was exclusive suppliers of food packets for the "mid day meal scheme" of the Government. For this purpose, it was converting raw food material into therapeutic food in packets. The assessee claimed deduction u/s 80IB. The AO disallowed the entire claim of deduction u/s 80IB after detailed discussion. The CIT(A) too rejected the assessee's claim on the reasoning that the list of ingredients submitted by the appellant as raw materials & final product did not indicate that any new product had come into existence. Different food items (raw materials) had been merely ground & mixed together, the chemical composition had not changed intrinsically. The constituents of the final product were separate. The issues before the Bench are - Whether when the assessee specialises in transforming raw food materials into therapeutic food by adopting customised processes, it cannot be denied Sec 80IB benefits and Whether the computation of deduction u/s 80IB as made by the assessee is erroneous when the assessee has removed the interest paid on partners capital which has resulted into enhancement of profit. And the verdict partly goes in favour of the assessee.

Service Tax

Appellant undertook activity of registration of car on behalf of the buyers with RTO authorities - for this purpose they collected amounts from buyers for payment of various statutory dues - on ‘excess' amounts collected demand is made of ST under category of ‘BSS' - when a customer purchases a car from dealer and services are rendered in relation thereto, it cannot be said that services have been rendered in relation to business or commerce - prima facie demand under ‘BSS' is not sustainable in law - Stay granted: CESTAT

MY Car Pune Pvt. Ltd. is an authorized Maruti Suzuki car dealer in Pune.

Since the motorcar is to be registered prior to delivery of the same, they undertook the activity of registration of the car on behalf of the buyers with the RTO authorities. They collected amounts from buyers for this purpose, which are used for payment of the various statutory dues and sometimes they have collected excess amount.

The department is of the view that the amount collected in excess is liable to Service Tax under the category of ‘Business Support Services'. Accordingly, a notice was issued and after due process of law, a demand of Service Tax of Rs.3,27,406/- was confirmed for the period January, 2010 to February, 2011 along with interest thereon and also imposing penalties.

See our Columns Tomorrow for the judgements