Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Appellant collecting ST from customers but not paying to government - question of showing any leniency would not arise as appellant has played a fraud on exchequer and any lenience would send wrong signals - Pre-deposit ordered: CESTAT

THE appellant provided taxable services of "GTA service, erection, commissioning and installation services, manpower recruitment or supply agency service" during the period April 2008 to March 2011. However, they did not discharge the service tax liability on these services, even though they had recovered the service tax from their customers.

A demand notice was issued for recovery of ST of Rs. 1.30 Crores. Another service tax demand of Rs. 47,51,362/- was made on account of advances received by the appellant.

The CCE, Nagpur confirmed the demands and imposed penalties and interest.

Income Tax

Whether when certain income of an 'intimately connected' assessee is held to be taxable in hand of another assessee, reassessment beyond six years cannot be initiated without affording an opportunity to another assessee - YES: HC

THE issues before the Bench are - Whether when certain income of an 'intimately connected' assessee is held to be taxable in the hand of another assessee, reassessment beyond six years cannot be initiated without affording an opportunity to the petitioner; Whether a finding in respect of a different year can also be used for the purposes of invoking the provisions of Section 150; Whether when opportunity of being heard is not provided to an assessee in case of reopening, the assessment of any other person can be reopened u/s 150, on such basis and Whether in such case, deeming fiction would remain unaffected and assessment can be reopened beyond time limit of six years also. And the verdict goes in favour of the assessee.

Central Excise

Unless an assessee claims exemption from printing MRP under Rule 34 of SWM Rules, MRP is required to be printed and assessable value has to be determined under S. 4A of CEA, 1944 - Appeal allowed: CESTAT

AS a general Rule, all packaged commodities are required to be printed with MRP and exceptions are specified in Rule 2 and Rule 34. From the observations in respect of telephone instruments and the refrigerators made by the Hon'ble Supreme Court, it becomes clear that once MRP is required to be affixed and it is affixed, the assessment has to be done under Section 4A only. Further, the provisions of Section 4A of Central Excise Act, 1944 also provide that what is required for assessment under Section 4A is coverage of the product under SWM Act and the rules there under and the requirement of marking MRP on the package. It is for the assessee to claim exemption if assessee does not want assessment to be made under Section 4A or assessee does not want to affix MRP on the package.

See our Columns Tomorrow for the judgements