Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Putting electrolytes and charging batteries of two-wheelers before delivery to customers does not amount to manufacture of TWO-WHEELERS - It cannot be said that process undertaken by dealers is conversion of incomplete or unfinished article i.e two wheelers into complete or finished two wheelers - Appeals allowed: CESTAT

THE appellants are receiving duty paid two-wheelers in complete and finished condition from the date manufacturers. The manufacturer of two wheelers paid the duty on complete two wheelers. We find that the Revenue is not disputing the fact that even the two-wheelers cleared by manufacturer contained battery and also that the appellants are only putting electrolyte. The electrolyte is nothing but a liquid which contains ions and can be decomposed by electrolysis. After putting the electrolyte appellants are charging the batteries before delivery to the customer. It cannot be said that this process undertaken by the appellant is conversion incomplete or unfinished article i.eTwo wheelers into complete or finished two wheelers.

Income Tax

Whether any expenses incurred towards performance of duty as Development Officer for generating business on behalf of employer is permissible deduction - NO: SC

THE issues before the Bench are - Whether incentive bonus received from employer prior to 01.04.1989 is a taxable receipt and whether any expenses incurred towards performance of duty as Development Officer for generating business on behalf of the employer is a permissible deduction. And the verdict goes against the assessee.

Service Tax

Clearing and Forwarding Agent service - Cold storage charges are includable in taxable value - Appeal allowed on limitation - CESTAT

ON examination of records of the assessee for the period 2001-02 to 2004-05 it was pointed out that assessee received an amount of Rs.1,46,05,000/- from M/s Hindustan Lever Ltd. (HLL) for carrying out services of cold storage/clearing and forwarding operations of frozen products. According to department, the said service is chargeable to service tax and the demand was confirmed. On appeal, the Commissioner (Appeals) upheld the demand, but reduced penalties. Now, both the assessee and the revenue are in appeal before the CESTAT.

The assessee contended that the charges towards cold storage are in nature of rental for providing cold storage facility and incidental storage should not be confused with independent facility of providing cold storage.

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