Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Appellant cannot be considered as manufacturer since activity undertaken does not amount to manufacture and, therefore, not eligible to take CENVAT Credit under Rule 3 of CCR, 2004 - nonetheless, there is no dispute that duty on ‘final product' has been paid by appellants by utilizing CENVAT Credit being demanded and department has not disputed payment of duty on vehicles: CESTAT

THE main ground for denial of the credit is that there is no factory at the premises and it is only a parking slot/warehouse/godown. There are no plants, machinery, not even industrial power connection. Only activities that is being carried out in the said godown is receipt of the duty paid imported chassis, sending the same to job workers, receiving fully manufactured motor vehicle in all respect and fixing some minor accessories to meet the mandatory requirement as per the Central Motor Vehicle Rules, 1989. Appellant has no approvals from Maharashtra Pollution Control Board, MIDC, Factory Inspector, Forest department etc. and other statutory bodies etc. which are normally needed in a factory/manufacturing unit. Since there is no factory, no manufacturing activity is carried out and appellants cannot be considered as manufacturer and are therefore not entitled to the CENVAT Credit.

Income Tax

Whether when assessee's return was not yet due on date of search conducted on premises of its partner, Revenue is justified to initiate penalty proceedings as assessee's return was filed subsequent to search - NO: Madras HC

THE issues before the Bench are - Whether when the assessee's return was not yet due on the date of the search conducted on the premises of its partner, the Revenue is justified to initiate penalty proceedings as assessee's return was filed subsequent to the search and Whether when penalty proceedings were initiated against the assessee firm, Explanation 5 to section 271(1)(c) was applicable when there were no materials seized during the search indicating deemed concealment of income by the assessee. And the verdict goes in favour of the assessee.

Service Tax

Shifting of raw material or cleaning factory premises, by no stretch of imagination, can be considered as job work, so as to be eligible for benefit of Notfn. No. 08/2005-ST - appellant's submission lacks merit - Pre-deposit ordered of adjudged tax: CESTAT

AS regards the claim of the appellant that they are eligible for the benefit of Notification No. 08/2005-ST, as per appellant's own version the activity undertaken by them involved shifting of raw materials and housekeeping activities. Notification No. 08/2005-ST grants exemption on job work carried out by service provider on the materials supplied by the clients. Such job work envisages processing of material supplied by the clients. Shifting of raw material or cleaning factory premises, by no stretch of imagination, can be considered as job work, so as to be eligible for the benefit of Notification No. 08/2005-ST.

See our Columns Monday for the judgements