Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Service Tax - Whether cost of 'deemed sale' goods to be excluded from value for computing Tax - Larger Bench declines to answer reference in view of High Court order - Matter remanded to Division Bench: CESTAT

IN a recent High Court Judgement dated 13.11.2013 reported by TIOL on 19.11.2013 (G.D. Builders & Others Vs. Union of India and Others dated 13.11.2013 - 2013-TIOL-908-HC-DEL-ST ), the Delhi High Court explained the scope of Section 67 of the Act as being limited to ascertaining value of only the service component, wherever complex transactions involving service and sale elements including deemed sale are presented for valuation of a transaction as a taxable service.

Income Tax

Whether when assessee purchases shares at a price lower than quoted market price, there is any provision in I-T Act to tax the deemed difference between the two - NO: Delhi High Court

THE assessees are HCL Employees and Investment Company Limited (HEICL) & Associated Techno Plastics Private Limited (ATPPL). ATPPL had purchased 77929 shares of HCL Limited, which were sold by HEICL. These shares were purportedly purchased at the price of Rs.6.02 per share though the market price on the date of sale, i.e., 16th December, 1988 was Rs.41/- per share, being the quoted price on the recognised stock exchange. The issue before the Bench is - Whether when the assessee purchases shares at a price lower than the quoted market price, there is any provision in the I-T Act to tax the deemed difference between the two. And the ruling partly goes against Revenue.

Central Excise

Rule 6 of CCR, 2004 - As per rule 2(d) exempted goods have to be excisable goods - By no stretch of imagination imported goods which are traded can be considered as exempted goods - If that be so, the question of invoking the provisions of Rule 6(2) and 6(3) for payment of a sum @10%/5% on the value of the traded goods would not arise at all - Demand of Rs.298 Crores unsustainable, both on merits as well as on limitation - Appeal allowed: CESTAT

ALMOST a year ago when we reported the Stay order passed by the CESTAT in this case we mentioned about the fetish for numbers that the Revenue officers have.

In this case, a demand of Rs.297,77,33,460/- (no mistake here) was confirmed by the CCE, Thane-I against the appellant along with equivalent penalty and interest on the premise that the applicants are not maintaining separate accounts for input services which have been used by them for their manufacturing and trading activities.

The appellants are a manufacturer of electronic goods such as colour TVs, LCDs, telephone parts, washing machines, split air-conditioners. The company also undertakes trading activity in goods such as mobile phones, air-conditioners, washing machines, which are imported from abroad.

See our Columns Tomorrow for the judgements