Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Mobilisation Advance received is adjusted against running bills on which service tax is paid - delay in payment of service tax - pre-deposit ordered of Rs.30 lakhs towards interest: CESTAT

A demand of Rs.4,14,14,117/- is confirmed on the ground that the applicant had received mobilization advance in relation to various construction contracts and had not paid the service tax on this amount. The contention of the applicants is that the applicant had received the advance which has to be paid as per the contracts along with interest and the advance amount is to be adjusted against the running bills. The contention is that as the applicant had paid service tax on the gross amount of the construction activity which also includes the mobilization advance, therefore the demand is not sustainable.

Income Tax

Whether failure on part of assessee to submit valuation certificate is a good enough reason for Revenue to levy capital gain tax - NO: HC

THE assessee, an individual, had purchased land and building consisting of two shops and two houses. For the purpose of computation of capital gain, the assessee took the value of the property as on 1.4.1981 at Rs.2,75,000/-. The AO required the assessee to file the valuation report of the property as on 1.4.1981.

The issues before the Bench is - Whether the failure to submit valuation certificate can be a basis to levy capital gain tax and Whether in such a case, for determining the fair market value, reliance on either the guideline value for the purpose of stamp duty and registration charges, or the value adopted under the Wealth Tax Act is justified. And the verdict goes against the Revenue.

Central Excise

As per Note 10 of Chapter 28, two requirements were needed to be satisfied to term activity as manufacture - One, there should labelling or re-labelling of container and second is repacking from bulk packs to retail packs - Activity does not amount to manufacture - Revenue appeal dismissed: CESTAT

AS per Note 10 of Chapter 28 as it stood at the relevant time, two requirements were needed to be satisfied. One, there should labelling or re-labelling of the container and second repacking from bulk packs to retail packs. When both these conditions are satisfied, the activity would amount to ‘manufacture'. In the present case, on perusal of the show-cause notice and the order passed by the lower appellate authority, nowhere it is coming out that the appellant has done labelling and re-labelling on the gas cylinder. It is also seen that in many cases, the gas has been supplied by the appellant in the buyer's cylinders. If that be so, the question for re-packing from bulk pack to retail pack would not arise.

See our Columns Tomorrow for the judgements