Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Inputs used in a process not considered as manufacture by Department Duty paid Credit cannot be denied and duty cannot be again demanded under Section 11D: CESTAT

THE assessee took CENVAT credit on inputs which were used in a process which was considered as manufacture. The product that emerged from that process was cleared on payment of duty. This duty payment was partly by debit in PLA and partly by debit in CENVAT account. According to the department, the above process did not amount to ‘manufacture' and hence the respondent ought not to have paid duty on the product. On this basis, CENVAT credit taken on the inputs was sought to be denied. Department also wanted to collect the amount under Section 11D.

Income Tax

Sec 10AA - Whether a roadmap to guillotine tax exemption is not a condition precedent for Parliament to introduce sunset clause - NO: Karnataka HC

THE issues before the Bench are - Whether the action of Finance Minister to move a bill seeking amendment of the SEZ Act, which comes under the domain of Ministry of Commerce, lacks legislative competence; Whether it is a settled principle that there can be no permanent tax exemption or incentive in fiscal legislation; Whether a roadmap to end the tax exemption is not a condition precedent for the Parliament to introduce sunset clause; Whether Doctrine of Promissory estoppel and Legitimate expectation are the offspring of equity and flexible in nature; Whether there is a difference between the doctrine of promissory estoppel and Doctrine of Legitimate Expectancy and Whether the former is based on a legal relationship and constitutes a superior relief. And the verdict goes against the assessees.

Service Tax

Market fee collected from licencees by APMC is classifiable under BAS and same is exempted under notification 14/2004-ST - however, Service Tax payable on renting of shops in market area since appellant has paid ST along with interest within six months of enactment of Finance Act, 2012, benefit of s.80 available & no penalty is imposable Appeal allowed: CESTAT

THE appellant constructed infrastructural facilities for marketing of agricultural produce and the same was given to the farmers for marketing their produce. The appellant collected a market fee @ 1.05% under Section 73 of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963. They have also rented out shops to various traders in the market. During the period 2006-07 to 2010-11 the appellant received market fee amounting to Rs. 58,39,90,519/- and during the period 2006-07 to 2010-11 they received a sum of Rs. 70,50,487/- by way of rent from the traders who hired the shops on rent. The department was of the view that the market fee collected by APMC is liable to service tax under the category of ‘Business Support Service' and the rent received is liable to service tax under the category of 'Renting of Immovable Property'.

See our Columns tomorrow for the judgements