Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

CENVAT - Rule 2(l) of CCR, 2004 - Whether Outward transportation of finished goods from place of removal is covered by definition of "Input Service" before 01.04.2008 - Calcutta High Court refuses to accept Karnataka HC decision in ABB Ltd. allowing credit on GTA service - CESTAT order set aside - Appeal allowed

THE CESTAT Larger Bench in ABB Ltd & Ors - (2009-TIOL-830-CESTAT-BANG-LB) held that the definition of 'input service' has to be interpreted in the light of the requirements of business and it cannot be read restrictively so as to confine it only upto the factory or upto the depot of manufacturers, thereby allowing CENVAT Credit of service tax paid on ‘outward transportation from the place of removal'.

Such a decision did not go down well with the Revenue and, therefore, they filed an appeal before the Karnataka High Court.

Much to the relief of all the assessees, the Karnataka High Court delivered a historic judgment upholding the legality of the CESTAT Larger Bench judgment upto the period 31.03.2008.

Income Tax

Whether for purpose of valuation of renovation and cost of construction, when State PWD rates are not available, Revenue can rely on CPWD rates - NO: HC

THE Assessee had constructed a house in the year 1995-96. He claimed expenditure of Rs. 20 lakhs and odd for the A.Y 2006-07 towards extension and renovation. However, the Department estimated the cost of renovation and construction at Rs. 42,10,000 .The entire issue revolves round the valuation made by the Department after personal inspection of the building in question. Neither the AO nor the CIT(A) agreed with the claim of the appellant assessee. The Tribunal accepted the report of the DVO, and opined that assessee did not point out any flaw in the valuation report.

The issue before the Bench is - Whether Revenue is right in relying on the rate of Central PWD for the purpose of valuation of the renovation and cost of construction when rates declared by the State PWD were available. And its answer is NO.

Customs

Condonation of delay - Delay due to pursuing litigation before a wrong forum - Whether can be condoned - Matter goes to Third Member.

THE issue involved is recovery of drawback sanctioned to the appellant. The Adjudicating Authority (Commissioner) confirmed the demand vide Order-in-Original dated 06.04.2009. The appellant and two other co-applicants filed Revision Application before the Joint Secretary within the time limit. But, in this case, the appeal lies with the CESTAT. (Tribunal is barred from jurisdiction in matters relating to drawback in respect of orders passed by the Commissioner (Appeals) - Not Commissioners).

The Revisionary Authority vide order dated 07.04.2010 dismissed the Revision Applications on the ground of jurisdiction as the appeal was to be filed only before the CESTAT. This order was not delivered to the applicants and also was not received by the Customs. Based on a query by the Customs in 2012, a copy of the order was supplied to the department by the Revisionary Authority. Consequent to the recovery proceedings initiated by the department, the assessee filed this appeal before the CESTAT with condonation of delay of 1236 days.

See our Columns tomorrow for the judgements