Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Chartering of tankers for transportation of LNG – Deemed sale – not taxable under ‘Supply of Tangible Goods' – No tax under reverse charge – Corrigendum to Adjudication order not valid: CESTAT

Service Tax – Section 65(105)(zzzzj) - ‘Supply of Tangible Goods' Chartering of tankers for transportation of LNG – Deemed sale – not taxable under ‘Supply of Tangible Goods':

the transactions in issue amount to transfer of the right/ to use tangible goods, with possession and effective control of such goods, in favour of the assessee by owners of the tankers. These transactions fall within the ambit of the exclusionary clause of Section 65(105) (zzzzj) of the Act and are therefore immune to the liability to service tax.

Corrigendum to Adjudication order not valid:

Since the corrigenda were issued without notice or opportunity to the petitioner held that these are unsustainable. In any event since it is already held that the transactions in issue do not fall within the taxable service, the corrigenda issued amending the adjudication order, with regard to interest or penalties components would also be invalid.

Income Tax

Whether when retiring partner takes only money towards value of share and there is no distribution of capital assets among partners, even then it can be said that there is transfer of capital assets and partnership firm is liable to capital gains u/s 45(4) - NO: HC Full Bench

THE sole issue before the Full Bench of the HC is - Whether when a retiring partner takes only money towards the value of his share and there is no distribution of capital assets among the partners, even then it can be said that there is transfer of capital assets and the partnership firm is liable to capital gains u/s 45(4). And the verdict goes against the Revenue.

Central Excise

Applicant importing Polymer by classifying under Ch. 39 and taking CENVAT - after repacking, same is cleared under Ch. 38 on payment of duty on Transaction value - Revenue alleging that no chapter note exists in Ch.39 deeming such activity as manufacture and applicant should have reversed credit in terms of rule 3(5) of CCR, 2004 - activity cannot be considered as manufacture as per provisions of s. 2(f) of CEA, 1944 – pre-deposit ordered: CESTAT

THE applicants are engaged in the manufacture of lubricants and chemical additives and the raw material for the same is polymer. The applicants are importing polymer on payment of appropriate duties. Certain quantities of duty paid imported polymer were cleared, after re-working and repacking,on payment of duty on the transaction value. Revenue says this is wrong inasmuch as since the applicants were clearing the duty paid imported polymer as such, the applicants are liable to reverse the credit availed in respect of such polymer as per the provisions of Rule 3(5) of the CENVAT Credit Rules, 2004. Consequently, a demand of Rs.1,16,95,872/- came to be confirmed by the CCE, Belapur along with interest and penalties.

See our Columns Tomorrow for the judgements