Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Whether Sodexho Meal Vouchers promote sale of goods/services? - Yes - CESTAT

PURCHASE of vouchers by employer and purchaser of goods and services by employee from affiliates itself promotes the sale of goods and services of the affiliates and therefore meal vouchers of the assessee definitely helps in promoting sale of goods and services of assesses affiliates.

Income Tax

Whether penalty can be imposed merely because assessee claimed deduction of liquidated damages provided for in contract but never filed claim for same - NO: HC

THE assessee, a company, had filed its return of income, which was processed u/s 143(1)(a). Subsequently, a notice u/s 148 was issued on 19.08.2002, proposing to reassess the income for the said AY. The assessment u/s 143(3) read with Section 147 was completed on 29.11.2002, disallowing the claim for provision for liquidated damages in respect of delays in supply of materials, amounting to Rs.74,50,000/-. The AO thereafter issued a notice and initiated proceedings u/s 271(1)(c). Not satisfied with assessee's reply, AO imposed penalty of Rs.26,50,000/-. On appeal, CIT(A) had dismissed the appeal both regarding quantum and penalty. Aggrieved by both such orders, assessee preferred appeals to the Tribunal. By a common order, Tribunal had dismissed the quantum appeal and allowed the appeal filed against the order of penalty.

The issue before the Bench is - Whether penalty can be imposed merely because assessee claimed deduction of liquidated damages provided for in contract but never filed a claim for the same. And the answer goes against the Revenue.

Central Excise

Manipulation of Gate Register - Availment of CENVAT Credit without goods being brought into factory - entire conduct of assessee clearly shows guilty mind and intent to evade duty - Explanation to s. 11A(2B) of CEA, 1944 comes into play and, therefore, reversal of credit would not help - respondent liable to interest as well as penal consequences - Revenue appeal allowed: CESTAT

THE respondent took CENVAT Credit of CVD amounting to Rs.30,56,260/- in respect of goods purportedly imported vide Bill of Entry without receipt of the goods in their factory. However, in the Gate Register maintained at the factory, entries were made showing the receipt of the goods on 30.6.2001. The goods were imported on 20.7.2001 and the consignment left Mumbai on 21.7.2001 to their customer M/s. Dhanlaxmi SSK Niyamit, Belgaum as per the container transport consignment note dated 21.7.2001. However, the appellant took credit of CVD paid on the said imported goods on 31.10.2001.

See our Columns Tomorrow for the judgements