Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Goods cleared on payment of duty by two manufacturers from same factory premises - Duty again demanded from main manufacturer - Stay granted: CESTAT

DUTY has been demanded by the Revenue on the sole ground of difference between the quantity of the granulated slag shown in their Annual Operational Statistical Report and the quantity shown in the monthly ER-I Return filed by the Applicant during the period from July, 2004 to March, 2008. There is no other evidence of removal of goods from the factory, except the difference in the said two statements. It is not in dispute that M/s. ACC, DCSL is situated with in the same factory premises of the Applicant, as is appearing in the agreement dated 22.06.2006. Besides, it is also not in dispute that M/s. ACC, DCSL, cleared the granulated slag on payment of duty.

Income Tax

Whether payment of one time custodian charges to NSDL pursuant to statutory obligation upon assessee to enter into agreement with depository for dematerialization of securities can be allowed as revenue expenditure - YES: HC

THE issues before the Bench are - Whether payment of one time custodian charges to NSDL pursuant to statutory obligation upon the assessee to enter into an agreement with the depository for dematerialization of securities can be allowed as revenue expenditure; Whether, if, the assessee has taken over the liability of the shareholders as a goodwill measure and has paid the said amount as one time custody charges, the said expenditure is not allowable u/s 37(1) of the Act; Whether such expenditure is effective in reducing the administrative expenses of the assessee on the account of handling physical share certificates and Whether such expenses incurred squarely falls within the phrase “laid out or expended wholly and exclusively for the purpose of business”. And the verdict partly goes in favour of the assessee.

Service Tax

Commercial or Industrial Construction Service - Explanation inserted in 2010 is applicable only prospectively - CESTAT

THE appellant undertook construction of a project known as World Trade Park, a commercial complex. The assessee received advance / application money from the persons desirous of purchasing the space/shop/office. Revenue, on the assumption that assessee is liable to remit service tax under the taxable head "commercial and industrial construction" defined under Section 66(25) (b) read with Section 65(105)(zzq) of the Act, issued a show cause notice culminating into the adjudication order.

The adjudicating authority concluded that though title to the property in the office/space/shop in the WTP had not passed to the prospective buyers, since advances were received and constructions made by the assessee (by employing a construction agency), the assessee must be held to have rendered, a taxable service, Commercial and industrial construction service.

See our Columns tomorrow for the judgements