Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Whether the Commissioner having once determined Annual Capacity of Production, can, on discovery of new and additional evidence/material, which assessee failed to disclose or suppressed, can redetermine same? - Tribunal directed to state and refer this question to High Court: HC

HIGH Court directed the Tribunal to state and refer following question under Section 35H of the Central Excise Act, 1944 to this court.

Whether the Commissioner having once determined the Annual Capacity of Production, can, on discovery of new and additional evidence/material, which the assessee failed to disclose or suppressed, can redetermine the same?

So, now the CESTAT is required to state and refer the above question to the High Court, within 120 days. Thereafter, the High Court will again hear the matter and give its opinion and send it back to the Tribunal. Then the Tribunal will give its order on the appeal based on the High Court's findings. And this order can be again appealed to the High Court.

Income Tax

Whether cess and cess surcharge fall within characteristics of tax even if they do not become a part of Consolidated Fund of India and it is not allowable u/s 43B - NO: Delhi HC

THE issues before the Bench are - Whether the claim of expenditure on the basis of accrued liability to pay cess and cess surcharge under the Tamil Nadu Panchayats Act, 1958 could be disallowed by invoking Section 43B of the Income Tax Act; Whether from the Memorandum explaining the provisions in the Finance Bill, 1988, it can be safely concluded that the word “cess or duty” inserted in section 43B by amendment is not retrospective in nature; Whether the cess and cess surcharge fall within the characteristics of a tax, when they do not become part of the consolidated fund, but a part of the special funds; Whether tax collected is used for general public purpose whereas cess is for a specific purpose; Whether deposits received by the assessee from buyers on refundable basis towards possible levy of sales tax on packing charges and freight amounts to either collection "as sales tax" or collection "by way of tax" and Whether such amount can be considered as trading receipt and liable to be disallowed u/s 43B. And the verdict goes against the Revenue.

Service Tax

Information and tracking of delivery schedule, managing distribution & logistics, received from outside India is correctly classifiable under the category of "Management Consultancy Services" & not "Business Support Services": CESTAT

THE appellant is registered in respect of the taxable services such as Transport of the goods by air/road, Courier agency services, Management consultancy services and Online information and Database access and retrieval services.

During the course of audit, it was noticed that the appellant had classified the services, namely, information and tracking of delivery schedule, managing distribution & logistics, received from outside India, under the category of "Management Consultancy Services" and the appellant had availed CENVAT Credit of the Service Tax paid on these services under Rule 6(5) of the CENVAT Credit Rules, 2004.

See our Columns Monday for the judgements