Jurisprudentiol – Monday's cases

By Vijay Kumar

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

There is no provision under CEA, 1944 which prohibits issuing more than one SCN to an assessee-S. 11A also does not stipulate any such thing - any number of show cause notice can be issued under said Section to an assessee-: CESTAT

THE Appellants are engaged in the manufacture of off-set printing machines. Based on an intelligence officers of DGCEI visited the official and residential premises of the appellants on 24.4.2002 and recovered various incriminating documents, computer etc. Investigations were further carried out in different parts of the country, covering about 70 customers as the off-set printing machines were being cleared on parallel set of invoices as also by not reflecting the correct value in the documents.

Before the CESTAT, the appellant submitted that they are not disputing the order on merits or quantification etc. but on the ground that the first SCN was issued on 14/01/2003 to the appellant and based upon the same intelligence and investigation the second SCN is issued on 04/01/2005 by invoking proviso to S. 11A and which is not permitted in law.

Income Tax

Whether Section 80IB(1) benefits are available to builder only if he follows 'Project Completion Method' and not 'Percentage Completion Method' - NO: ITAT

THE issues before the Bench are - Whether the deduction u/s. 80IB(10) is to be granted only to a tax payer who follows "Project Completion Method"; Whether for giving benefit of deduction u/s. 80IB(10), it is necessary to obtain completion certificate for each year of assessee's claim or it is sufficient that certificate is obtained on the completion of the housing project as a whole and Whether when the Revenue decides to tax the profit on the ground that the assessee was following percentage completion method, the deduction is also to be allowed in the same year. And the verdict goes in favour of the assessee.

Service Tax

In return for forbearance on the part of AI in not operating on certain routes, sharing domain knowledge and allowing AICL to use brand name, royalty payments were received - ST demand on the entire amount without explaining how foregoing of rights or sharing of domain knowledge would come under IPR services is not sustainable -Matter remanded: CESTAT

THE appellant entered into a Memorandum of Understanding (MOU) with its subsidiary M/s Air India Charters Ltd. (AICL) with effect from 1.4.2005 and operational from 1.3.2008. As per the said MOU, M/s AICL was permitted to operate low cost carrier flights to Gulf Sector by using Air India's International Traffic Rights to Gulf countries and AICL was also permitted to use Air India's brand name "AI" to carry out low cost carrier operations. Further, Air India was also to provide domain knowledge to AICL. In consideration thereof, AICL agreed to pay royalty of 25% of the revenue collected by low cost carriers to Air India. The department was of the view that the services rendered by Air India to AICL would come within the category of Intellectual Property Rights Services.

Accordingly, a show-cause notice took wings on 1.6.2009 demanding the Service Tax of Rs.29,74,75,042/- along with interest thereon and proposing to impose penalties.

The CCE, Thane-II confirmed the demand with aplomb. Already in the red , the appellant is before the CESTAT

See our Columns Monday for the judgements