Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Importer filing an Advance B/E for import of vehicle and requesting that matter be adjudicated as they are not able to produce Type Approval Certificate (TAC) - letter issued by Ministry dated 13.05.1955 cannot be relied upon in matter as the same was issued when Sea Customs Act was in force - Commissioner is empowered to adjudicate advance Bill of Entry: CESTAT

THE appellant filed an Advance Bill of Entry for import of a new vehicle from Dubai. The appellant requested the Commissioner of Customs (Import) for adjudication of the said Bill of Entry and also submitted that as the appellant is not able to produce Type Approval Certificate which is required as per ITC / Policy Conditions for import of new car the assessment be made as per Customs Manual 2010-11 and as per Circular No. 22/97-Cus dated 04.07.1997.

Income Tax

Whether trade discount is nothing but Commission and same is liable to TDS u/s 194H - NO: HC

THE assessee, the Chief Treasury Officer, Agra, has questioned the legality and validity of the order passed by the Income Tax Officer (TDS), Agra passed under section 221(1)/221(1A) of the Income Tax Act whereby the Chief Treasury Officer was held as assessee in default having failed to deduct and pay the tax under section 194-H of the Income Tax Act, 1961 from commission. A tax liability along with interest amounting to Rs.2,77,648/- was created by the order dated 31st of March, 2002. The Revenue had conducted a survey in the office of the petitioner under section 133A and thereafter proceeding was initiated under section 221(1)/221(1A) of the Act on the allegations that the assessee sold general stamp papers, court fee stamps, copy stamps and other stamps either to the public directly or through licensed stamp vendors at a price less than 1% of the value of such stamps which amounted to 'commission' within the meaning of section 194-H of the Act. The assessee having failed to deduct the tax at source on the said 'commission amount' to which it was obliged under section 194-H of the Act, was assessee in default. The case of the assessee was that the it was not giving any commission to the stamp vendors. But the sales were made at discount of one per cent on cash purchases of stamp papers etc. by licensed vendors as per provisions of Rule 157 read with Rule 161 of U.P. Stamp Rules, 1942.

Service Tax

Appellant is mere lessor of land, plant and machinery owned by him - if agreement does not provide for transfer of assets at end of lease, such leasing activities would not fall under category of financial lease coming under "banking and financial service": Appeal allowed: CESTAT

THE appellant entered into a lease agreement for lease of land, building, plant and machinery and other equipment including rolling mills owned by them to M/s. FACOR under an agreement dated 20/05/1998, renewed from time to time and valid up to 31/01/2004. As per the lease agreement, the consideration was fixed at Rs.2.50 lakhs per month plus 1/3 rd of the net profit made by FACOR on operation of the plant.

The department was of the view that the activity undertaken by the appellant is financial leasing and, therefore, would be liable to service tax under the category of "banking and financial service".

See our Columns Tuesday for the judgements