Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Whether commission/discount earned by acquiring bank from Merchant Establishment is liable to service tax under category of banking and financial services for period prior to 01/05/2006 - Matter referred to Larger Bench: CESTAT

THE banks are engaged in providing banking and other financial services to individuals and offer wholesale banking capabilities to corporate and institutional clients. They also provide credit card services to their customers and charge service charges on which service tax liability is discharged.

The question is whether the commission/discount earned by the acquiring bank from the merchant establishments is liable to service tax under the category of banking and financial services for the period prior to 01/05/2006.

Income Tax

Whether when EoU Unit acquires whole business of medical transcription and claims deduction u/s 10B, benefit of Sec 10A allowed by higher appellate forums is legally sustainable - YES: Madras HC

THE assessee is an industrial undertaking engaged in Medical Transcription Business. The issues before the Bench are - Whether when an EoU Unit acquires the whole business of medical transcription and claims deduction u/s 10B, the benefit of Sec 10A allowed by higher appellate forums is legally not sustainable; Whether the provisions of Sec 10A(2)(iii) will apply to this case and Whether when the assessee has been allowed the benefit of Sec 10A, any merit can be found in the AO's order to allow benefit of Sec 80HHE. And the verdict goes against the Revenue.

Central Excise

Revenue Neutrality - Goods cleared to appellant's own unit where credit is available - demand for the normal period of limitation without invoking extended period has to be upheld: CESTAT by Majority

TWO issues arise for consideration in this case. When the goods are cleared by one of the units of a company to another unit of the same company for utilization in the manufacture of another final product and the duty paid on the first unit is utilized for payment of duty on the final product, whether duty demand on the first unit on the ground that the value had not been arrived at properly can be sustained and if so whether such a demand can be sustained by invoking extending period on the ground of suppression of facts/misdeclaration and if not whether differential duty is liable to be paid within the period of limitation.

See our Columns Monday for the judgements