Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Rule 9B of CER, 1944 - Refund - Unjust enrichment will not be applicable for refunds arising out of finalization of provisional assessments pertaining to period prior to 25.06.1999 even if assessments are finalized after 25.06.1999: Larger Bench of CESTAT

THE issue involved pertains to finalization of the assessments for the period from 1986 to 1998 pursuant to the order passed by the Gujarat High Court.

Two questions arose in the said appeal before the CESTAT.

(i) Whether the adjustment of the excess amount against the short paid amount has been correctly made?

(ii) Whether the surplus (excess) amount, after adjustment, is subjected to refund based on the amended provisions of the erstwhile Rule 9B of the Central Excise Rules, 1944 ('the Rules'), which was amended on 25th June, 1999, whereas the assessments pertain to the period 1986 to 1998, although the assessments were finalized on 14th October, 2005 by the Asst. Commissioner?.

Income Tax

Whether when assessee purchased shares for lock-in period of three years and for acquiring management rights in company, there cannot be presumption that shares were acquired with object of trading and not investment - YES: Bombay HC

THE assessee is a private limited company engaged in the business of investments. Assessee declared long term capital gain arising from sale of shares of ‘M' an unlisted company to two other shareholders of ‘M'. Assessee claimed benefit of deduction of entire capital gain as it was invested in specified bonds u/s 54EC. The issue before the Bench is - Whether when the assessee purchased shares for a lock in period of three years and for acquiring management rights in the company, there cannot be a presumption that the shares were acquired with the object of trading and not investment. And the verdict goes in favour of the assessee.

Service Tax

Pipes or pipeline does not come under category of ‘plant, machinery or equipment' and, therefore, laying of pipeline does not come within scope of ‘Commissioning or Installation Service'-Rs.3.36 cr. demand rightly dropped- Revenue appeal dismissed: CESTAT

THE respondent entered into an agreement with M/s. ONGC dated 17/03/2003 for laying of submarine pipelines for the transport of petroleum crude oil from Bombay High and Bassein Field Offshore sites.

The department was of the view that the said activity undertaken by the respondent is exigible to service tax under the category of ‘Commissioning and Installation Service' and accordingly issued a notice dated 01.10.2006 demanding service tax of Rs.3,36,33,940/- for the period 01/07/2003 to 31/03/2004.

See our Columns Tomorrow for the judgements