Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Electroplating of connector components on job-work amounts to manufacture - No Service Tax payable: CESTAT

THE appellant is engaged in the manufacture of various electric and electronic goods. Besides undertaking manufacture on their account, they have also undertaken electroplating of connector components for M/s. Tyco Electronic Corporation India Pvt. Ltd. Job work consists of electroplating of goods supplied by M/s. Tyco Electronic with silver or gold. The appellant was availing the benefit of Notification No.8/2005 on the ground that they are engaged in the manufacture of these goods and they were supplying the same to M/s. Tyco Electronic.

The process undertaken by the appellant amounts to manufacture and therefore they are not liable to pay service tax in view of the specific exclusion in the definition of ‘business auxiliary service' which provides that if the process amounts to manufacture, no service tax would be liable to be paid.

Income Tax

Whether expenditure incurred towards channel placement charges for broadcasting of channel on desired bands can be construed as expenditure for sales promotion or publicity - NO: ITAT

THE assessee company is broadcasting news through its four news channels, viz., Aaj Tak, Headlines Today, Dilli Aaj Tak and Tez. The assessee has incurred expenses in respect of channel placement charges which is in the nature of distribution expenses. However, the AO was of the opinion that the same was for sales promotion and attracted the rigours of fringe benefit tax (FBT). The issues before the Bench are - Whether expenditure incurred towards channel placement charges for broadcasting of channels on the desired bands is in the nature of sales promotion or publicity; Whether such payments attracts the levy of FBT and Whether channel placement charges made to third parties meets the requirement of employer-employee relationship between the assessee and such recipient. And the verdict partly goes in favour of the assessee.

Central Excise

Uttarakhand Exemption - commencement of commercial production means starting of manufacture of finished products on commercial scale, which is preceded by trial production - Pre-deposit ordered - CESTAT by majority

COMMENCEMENT of commercial production means starting of the manufacture of the finished products on commercial scale, which is preceded by trial production and installation of complete plant & machinery and on that day the plant must be ready in all respects for manufacture of finished product in commercial quantity and all raw materials, consumables, etc. required for manufacture are available. It is settled law that while considering waiver from the requirement of pre-deposit under Section 35F of the Central Excise Act, 1944, the main factor which is to be considered is as to whether the appellant have prima facie case in their favour or not and if there is slightest risk to the Revenue, the conditions must be imposed for safeguarding the interests of the Revenue.

See our Columns Tomorrow for the judgements