Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Drilling and blasting of Mithi River site - 'Dredging service' includes removal of material - As the drilling and blasting essentially result in removal of material, therefore, the applicants have prima facie not made out a case for total waiver of the dues - Pre-deposit ordered: CESTAT

A Service Tax demand of Rs.12,75,866/-, interest and penalty is confirmed against the applicant on the ground that they had undertaken activity of drilling and blasting which is classified under Dredging services under Sec. 65(36a) of the Finance Act.

Before the CESTAT the applicant submitted that they had only undertaken the activity of drilling and blasting as per the direction of the main contractor and this could not be construed as dredging activity. In their support they relied on a letter dated 25/03/2006 to submit that Reliance Michigan (JV) has awarded the work of drilling and blasting of the Mithi River Site.

Income Tax

Whether expressions 'renovation' or 'extension' are covered by term 'construction' for purpose of giving Sec 54F benefits - question of law left open but benefit allowed: High Court

ASSESSEE, an individual, had sold property in Ghaziabad for Rs.45lacs. During assessment, AO made two additions. Firstly, benefit u/s 54F was denied and capital gains of Rs.51,71,994/- was brought to tax. The issues before the Bench are - Whether in the context of property, the term "construction" and "maintenance" are identical and Whether renovation or extension are covered by the term "construction"for the purpose of giving benefit u/s 54F. And the verdict goes in favour of the assessee although the question of law left open.

Central Excise

Valuation - Section 4 - Liquidated damages not to form part of transaction value: CESTAT (LB)

THE question before the Larger Bench - "Whether any deduction claimed by the buyer of excisable goods as compensation for the delay in the supply of the goods by its manufacturer (assessee) under the contract between them, during any period after 01.07.2000, is liable to be included in the assessable value of the goods under Section 4 of the Central Excise Act?" And the answer is NO.

See our Columns Monday (as we enter the tenth year of DDT ) for the judgements