Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Appellant entering into two agreements, one for installation and commissioning of oxygen plant and another for operation and maintenance of plant - Credit taken of ST paid on Installation & Commissioning sought to be denied on the ground that Oxygen Plant is an immovable property - CESTAT not discussing this issue at all but ordering pre-deposit of 25% - order set aside and stay application restored - CESTAT to hear application expeditiously: High Court

THE impugned order directs the appellant to pre-deposit 25% of Rs.1.61 crores on the basis that there are two different agreements and therefore, credit taken under one agreement cannot be utilized in discharge of service tax payable under another agreement. This was after stating in Para 4 of the impugned order that revenue wants to deny credit on the ground that oxygen plant is an immovable property. However, thereafter this issue is not discussed at all in the impugned order.In view of the above we set aside the impugned order and restore the application for dispensing with pre deposit of service tax and penalty for hearing before the Tribunal.

Income Tax

Whether special audit is warranted u/s 12A(b) when assessee has failed to report related party transactions in audit report and assessee is involved in relatively large number of transactions - YES: High Court

IN view of the fact that the Special Audit under Section142(2A), in the present facts is warranted, no prejudice is caused to the assessee. The absence of a Special Audit in the present facts could have brought the exemption enjoyed under Section 11 by assessee in jeopardy. This is because the Audit as required under Section 12A (1)(b) is not found satisfactory then it is the special audit which would determine the correct position. Therefore, no prejudice is caused to the petitioner by subjecting its accounts to special audit.

Customs

Cus - Notfn. 21/2002-Cus - Electronic paver finisher (with sensor device) for laying bituminous pavement 7m size and above - whether it is the capacity of the machine to lay a pavement 7m size width and above that determines exemption or whether it should be the paver machine that should have a width 7m size and above - since a different view has been taken by the Co-ordinate Bench, matter referred to Larger Bench: CESTAT

AS per the notification it is not the machine which is having width of 7 meters and above but the capacity of the machine whether the machine is able to lay down pavement of 7 meters and above or not. The catalogue which is produced by the respondents clearly shows that maximum pave width is 10 meters. Therefore, in our opinion, the respondents are entitled for the benefit of the above said Notification. As there is a different view taken by the Coordinate Bench of this Tribunal in the case of Gammon India Ltd. (supra), therefore it would be in the interest of justice to refer the matter to the Larger Bench of this Tribunal.

See our Columns tomorrow for the judgements