Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Appellant manufacturing Industrial gases & also supplying vacuum insulated storage tanks to customers for fixed term by charging Rs.27,500/- per month - appellant not banking company or financial institution or commercial concern in relation to banking & other financial services: CESTAT

THE appellants are supplying industrial gases to their various customers. At the request of certain customers, the appellants are also supplying vacuum insulated storage tanks on lease basis. The appellants entered into contracts with their customers in respect of the storage tanks. According to the terms and conditions of the agreement, the appellants are charging a fixed amount per month as a consideration amount for lease of the equipments for three years. The Revenue issued show cause notices demanding service tax on the ground that the appellants are providing banking and other financial services.

As the appellants are not a banking company or a financial institution including a non-banking financial company or any other body corporate or commercial concern in relation to banking and other financial services, therefore, demand is set aside.

Income Tax

Whether if assessee or its representative is not present at time of hearing, Tribunal has authority to dismiss case for default - NO: Bombay HC

THIS Court in the matter of Chemipol vs. Union of India - (2009-TIOL-676-HC-MUM-CESTAT) while dealing with the powers of Customs Excise and Service Tax Appellate Tribunal to dismiss an appeal for default has observed that though every Court or Tribunal has an inherent power to dismiss the proceeding for non prosecution yet this inherent power is lost where the statute requires the Court or the Tribunal to hear the appeal on merits. In this case Rule 24 of the Tribunal Rules mandates the Tribunal to decide the appeal on merits even in absence of the appellant after hearing the respondents. In view of the above, held that the Tribunal did commit an error in passing the order dated 6 December 2007 in dismissing the appeal on the ground of want of prosecution.

Central Excise

Valuation - Duty paid on inter-unit transfer of finished goods under Rule 8 by adopting CAS 4 - Demand of duty by including Inter Divisional Service Charges accounted for as per Accounting Standard 17 is prima facie not sustainable - Stay granted: CESTAT

THE assessee is engaged in manufacture of Printed Cartons and other packing materials and is receiving paper and paper board from their Bhadrachalam Unit. The assessee is clearing the printed cartons and other packing material to their other units for captive consumption. Thus, the duty is paid by the Bhadrachalam unit under Rule 8 by adopting CAS 4 and the assessee is also paying duty under Rule 8. The dispute is regarding the valuation of Printed Cartons.

It has been observed that there is no sale involved in the transfer of goods to other division of ITC, the valuation would be under Rule 8 of the Valuation Rules, by adopting 115% of cost of production. So, the amount of Debit Notes would not be included while determining assessable value at Bhadrachalam Unit. Then, it is difficult to accept that the said amount of Debit Notes would be included in the assessable value of the applicant herein.

See our Columns Tomorrow for the judgements