Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

CENVAT Credit - Transfer of credit to different registered premises of a Large Taxpayer - No ISD Registration required - Transfer of credit different from distribution - CESTAT

THE learned Commissioner ought to have, at the outset, determined whether the corporate office of the company was transferring the credit to the three manufacturing units or whether it was distributing the credit to them inasmuch as there is an intelligible difference between the two. In the case of a LTU, any of its members viz. manufacturers of final products and/or providers of output services receives input services under cover of invoices issued by the providers of such input services and transfers CENVAT credit of the service tax paid on such input services, wholly or partly, to other members of the LTU, under cover of “transfer challans”.

Income Tax

Whether if shareholders choose to transfer lands to purchaser of shares it would be valid transaction in law even if it avoids paying capital gains tax on such transaction - YES: HC

THE issues before the Bench are - Whether if shareholders choose to transfer lands to purchaser of shares it would be valid transaction in law; Whether when assessee is able to avoid payment of capital gains tax through such transaction, it can be said to be a colourable device; Whether the provisions of section 10(38) grant exemption on sale of long term shares only, or it can also apply in case of immovable property and Whether in case there is a doubt regarding nature of asset sold by an assessee, lifting of corporate veil is tenable as per law. And the verdict goes in favour of the assessee.

Service Tax

HSBC's Rs. 200 Crore case goes back for de novo adjudication from CESTAT

IN six appeals filed by the company and the appeal filed by the Department, the substantive issue arose as to whether the company was entitled to claim refund of unutilized CENVAT credit taken on input services which were claimed to have been used for providing their output services which were claimed to have been exported by them.

In another appeal, the question arose as to whether the assessee was entitled to take CENVAT credit on the input services at all. The issue that arose in yet another appeal was whether the assessee was liable to pay service tax, under reverse charge mechanism, on a service classified as "manpower recruitment or supply agency service" and held to have been received by the assessee from abroad.

See our Columns Tomorrow for the judgements