Jurisprudentiol - Friday's cases

By Vijay Kumar

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

CENVAT - Diesel Hydrogen Desulphurisation (DHDS) plant together with SRU and SSRU have to be treated as capital goods used for manufacture of marketable HSD and not as capital goods used for manufacture of exempted Sulphur - When purpose of Pollution Control Board and Environment Ministry is defeated, order of adjudication should not sustain - Credit admissible: CESTAT

DURING the period April 2000 to March 2003 the appellant were availing CENVAT credit on the inputs and capital goods. The dispute is about eligibility for CENVAT credit of the capital goods namely Sulphur Recovery Unit (SRU) and Standby Sulphur Recovery Unit (SSRU). The total CENVAT credit availed by the appellant in respect of these capital goods is Rs. 6,22,91,614/-.

The department is of the view that these capital goods are not eligible for CENVAT credit, as the same have been exclusively used for manufacture of exempted final product -Sulphur. The demand was confirmed along with interest and penalty by CCE, Rohtak.

Income Tax

Whether in case assessee bears loss on account of demurrage and dead freight, turnover for purpose of Sec 80HHC would be considered net of loss amount - NO: HC

ASSESSEE is a trading concern exporting Molasses, granites, diamond and leather. It exported molasses worth Rs.6,14,87,164/- from M/s. United Molasses, London. A per the terms, demurrage and dead freight incurred by virtue of loading molasses at Kochin Port had to be borne by M/s. United Molasses, London and the same was to be paid to the Chartered Ship owners. M/s. United Molasses, London in turn, collected the demurrage and dead freight charges from the assessee on the ground that the delay in loading was attributable to the assessee. The issue before the Bench is - Whether in case assessee has to bear loss on account of demurrage and dead freight, turnover for the purpose of section 80HHC would be considered net of the loss amount. And the ruling goes in favour of the assessee.

Service Tax

Appellant conducting market research on behalf of customers situated abroad - services have to be considered as export of service and would not be liable to Service Tax -Appeal allowed: CESTAT

THE appellants are engaged in providing market research. They are conducting the market research on behalf of certain customers situated abroad. After conducting the market research, the results of the same are communicated to their clients abroad and consideration for the said service has been received in convertible foreign exchange. The fact that the results of such market survey were being sent abroad and the amount was being received under the convertible foreign exchange is not disputed. It is the case of the Revenue that the whole of the service has been provided in India and just because the results of the service have been communicated abroad, it is not implied that the service has been provided abroad; inasmuch as the taxing event is not the consumption of service but the provision of service and since the service has been provided in India, they are liable to pay service tax.

See our Columns Tomorrow for the judgements