Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Gums/Waxes & Recovered oil/fatty acids arising during manufacture of Refined Rice Bran oil are entitled to the benefit of exemption notf. 89/95-CE - waste exempted in public interest vide said notification is necessarily only such waste which is marketable, excisable and dutiable because grant of exemption from duty would only arise if goods are otherwise dutiable - appeals allowed: CESTAT

THE Appellant is engaged in the manufacture of Refined Rice Bran Oil, SH 1515 9040 and is liable to nil rate of duty vide Notification No. 3/2006-C.E dated 1.3.2006. Crude Rice Bran Oil contains certain impurities knows as Gums, Waxes and Fatty Acids. To produce Refined Rice Bran Oil meeting the standards as laid down in the Food Regulations, these impurities are compulsorily required to be removed and the same are removed by as residues in the form of Gums / Waxes and Recovered Oil / Fatty Acids. The Appellant had been clearing these residues without payment of excise duty claiming exemption under Notification No. 89/95-C.E. dated 18.5.1995 which exempts ‘waste, parings and scrap' arising in the course of manufacture of exempted goods.

Income Tax

I-T-Whether provision of section 50C has no application where transfer of immovable property is on account of sale of stock - YES: ITAT

THE issues before the Bench are - Whether the profit and gains from the sale of asset held as stock in trade, is liable to be taxed as profit and gains from business or as capital asset and Whether the provision of section 50C has no application where transfer of immovable property is on account of sale of stock. And the verdict goes in favour of the assessee.

Service Tax

‘Packaging Services' - as per Fertiliser (Control) Order, 1985, packaging is a statutory requirement - activity of packaging would form an integral part of manufacturing activity u/s 2(f) of CEA, 1944 and cannot be viewed as a service activity- strong prima facie case in favour - Stay granted: CESTAT

THE appellants are engaged in providing packaging activity services in relation to fertilizer manufactured by M/s. Zuari Industries Ltd., Goa, for which they received consideration.

The department was of the view that the activity undertaken by the appellant would come within the purview of "packaging services" as defined in Section 65 (76b) of the Finance Act, 1994 and, therefore, the appellant was issued a SCN demanding service tax of Rs.3,20,47,239/- for the period 16/06/2005 to 31/03/2010. Such a large amount of demand met with confirmation at the hands of the CCE, Goa along with interest and penalty.

See our Columns tomorrow for the judgements