Jurisprudentiol - Monday's cases

By Vijay Kumar

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

ST - From budget-speech and Circulars issued by Board at various points of time, what emerges so far as Life Insurance is concerned is that prior to 1.5.2011 Service Tax was leviable on risk premium and nothing else - If that be so, it is not understood as to how various charges collected by insurer in addition to risk premium can be taxed under ‘Life Insurance Service' - sweeping observation by adjudicating without examining matter - order set aside and matter remanded: CESTAT

THE appellant is registered under ‘Insurance Auxiliary Service', ‘Life Insurance Service', ‘Renting of Immovable Property' and ‘Business Support Services'. Audit of the records of the appellant company revealed that during the financial year 2004-05 to 2008-09 , the appellant had not included income earned in the nature of - (a) Recovery of Agency Processing Fees, (b) Lapse Charges, (c) Back Dating Alteration Charges, (d) recoveries on Look in and (e) Policy Reinstatement Fees, in the gross taxable value.

Income Tax

I-T - Whether when banks have seized assets of assessee and auctioned same to highest bidders, assessee can still claim notional depreciation - NO: ITAT

THE issues before the Bench are - Whether depreciation u/s 32 is an allowance for natural wear and tear of the assets; Whether when the banks have seized the assets of the assessee and auctioned the same to the highest bidders, the assessee can still claim notional depreciation and Whether when due to one-time settlement, assessee considered the amount of interest outstanding as paid first, no disallowance can be made u/s 43B particularly when for the principal amount which remained unpaid is already offered by the assessee. And the verdict partly goes against the assessee.

Excise

CENVAT Credit - Inputs received from 100% EOUs - Restriction under Rule 3(7)(a) of CENVAT Credit Rules is not applicable to clearances made by EOU under Sl No 1 of Notification No 23/2003 CE: CESTAT

THE appellant argued that the provisions of Rule 3(7)(a) prescribing a formula for determining Cenvat credit available in respect of inputs received from a 100% EOU are applicable only when the inputs received, from a 100% EOU have suffered duty under S.No.2 of the Notification No. 23/2003, as all the provisions of this sub-rule are in respect of inputs received from 100% EOU on which the duty has been paid under S.No.2 of the table to the Notification No. 23/03-CE, that since in this case the inputs, had suffered duty under S.No.1 of the notification, the provisions of the rule 3(7)(a) are not applicable.

See our Columns Monday for the judgements