Jurisprudentiol - Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.CENTRAL EXCISE

CENVAT - MD being paid royalty by appellant for developing certain formulae and processes useful for the manufacture of fragrances- Audit party directing MD to pay ST for the services rendered of IPR - MD registering himself with ST department and paying ST and raising invoices on company - Appellant taking credit of ST so paid -when payment of ST has been accepted by department without dispute, Revenue cannot now take a stand that no Input services were received by the appellant -appeal allowed: CESTAT

THE appellants are manufacturers of fragrances and aroma chemicals (Ch. 29 & 33). The appellant availed service tax credit on Intellectual Property Right (IPR) services provided to them by their Managing Director during September 2007 to July 2008.

Income Tax

Whether when assessee gives prizes, wholly in kind, as part of its sales promotion scheme, any TDS obligation arises u/s 194B - NO: HC

THE assessee is a Company engaged in the business of manufacture and sale of various consumer goods/products. During the previous years, it had conducted certain sales promotion Schemes. The assessee advertised the Schemes wherein coupons were inserted in packs/containers of their products. Some of those coupons indicated that on purchase of the packs/containers, they would get prizes. The prizes that were offered were Santro Car, Maruthi Car, Gold chains, Gold Coins, Gold Tablas, Silver Coins & Emblems. The total amount of prizes distributed valued Rs. 6,51,238/- for the assessment year 2001-02 and Rs. 54,73,643/- for the Assessment Year 2002- 03.

The issues before the Bench are - Whether when the assessee gives prizes wholly in kind as part of its sales promotion schemes, any TDS obligation arises u/s 194B and Whether any responsibility is cast u/s 194B on the assessee before it releases the prizes to winners. And the answers go against the Revenue.

Service Tax

Import of service - Reverse Charge - The bar of utilising CENVAT Credit does not apply to credit on Capital Goods - Pre-deposit waived: CESTAT

RULE 5 of Taxation of Service (provided from outside India and received in India) Rules, 2006, reads as under:-

"the taxable service provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT Credit Rules, 2004."

From the above rule, it is quite clear that the restriction applies for availing credit of duty only in respect of excise duty paid on input or service tax paid on any input services and not capital goods.

See our Columns Tomorrow for the judgements