Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Since supply of material is under separate agreement and on which VAT/Sales Tax has been paid, applicant has prima facie strong case in their favour - Stay granted: CESTAT

THERE are two separate agreements. One is for supply of material and other is for erection, commissioning and installation service. Applicant had paid the appropriate service tax on erection commissioning service. Revenue wants to add the value of material supplied for the purpose of service tax. The supply of material is under a separate agreement and applicant paid Vat/Sales tax. Therefore prima facie the applicant has a strong case in their favour on this issue.

Income Tax

Whether when Revenue finds incriminating materials during Survey Operation and also Search & Seizure, Survey materials have to be dealt with independently - YES: HC

THE assessee is a partnership firm. The Revenue conducted a search & seizure in the premises of one of the partners Mr.P. Mohammed Sherief. So far as the assessment pertaining to Mr. Mohammed Sherief, the matter was remanded back to the file of the Assessing Officer as substantive additions were made. When the assessment of the present assessee came up on protective basis, according to the counsel for the appellant, similar exercise was adopted which was uncalled for in the light of Section 133A having no presumptive value.

The issue before the Bench is - Whether when the Revenue finds incriminating materials during Survey Operation and also a Search & Seizure, the Survey materials have to be dealt with independently. And the answer goes against the assessee.

Central Excise

Duty liability outstanding as on 31/03/2007 was paid by appellant on 01/04/2007 but by utilizing CENVAT credit earned on capital goods on 01/04/2007 - mistake rectified by appellant on own on 30/04/2008 by making payment through PLA along with interest - Duty demand not sustainable - CESTAT

IN the impugned case, the appellant has reversed the credit and made good the wrongly availed credit along with interest thereon. Therefore, the provisions of Rule 8 of the CER, 2002 are not at all attracted. Therefore, the confirmation of duty demand under Rule 8 is not sustainable in law.

Inasmuch as the assessee has made good the wrongly availed CENVAT Credit along with interest, imposition of penalty of Rs.50 lakhs is totally unwarranted.

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