Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Appellants are owners of properties and have allowed M/s ABCTCL to run café, making and selling coffee and other eatables under brand name of ‘Café Coffee Day' - there is nothing on record to indicate that the appellants have performed any activity relating to promoting or marketing or sale of goods produced or provided by or belonging to client or for that matter any auxiliary service - Demand not sustainable under BAS - Appeals allowed: CESTAT

APPELLANTS have entered into separate agreements titled as "The Franchise Agreement……" with M/s. Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL). The property belonging to appellants were given to M/s. Amalgamated Bean Coffee Trading Company Ltd. to run café, making and selling coffee and other eatables under the brand name of ‘Cafe Coffee Day'.

SCNs were issued to the appellants demanding service tax under the category of Business Auxiliary Service. In four appeals,the demands are issued by classifying the service in the last clause of BAS as Auxiliary Service while in fifth appeal it is for promotion, marketing and sale of goods and services. The period involved in the appeals is varying and is from June 2003 to February 2006.

Income Tax

Whether when AO has himself given tax credit to individual members of AOP for tax paid on surrendered undisclosed income, any penalty u/s 271AA is warranted - NO: Delhi HC

THE issue before the Bench is - Whether when the AO has himself given tax credit to individual members of the AOP for the tax paid on surrendered undisclosed income, any penalty u/s 271AA is warranted. And the answer goes against the Revenue.

Central Excise

If by continuously using an item, said item becomes scrap, it cannot be said that so-called waste is manufactured product - Duty demand set aside & appeal allowed: CESTAT

THE appellant is a manufacturer of purified drinking water. The said product is supplied in polycarbonate bottles which are returnable and re-usable with a shelf life of around 50 cycles. The appellant avails CENVAT credit of the Excise duty paid on such bottles. After a few cycles, these bottles get damaged and cannot be used further for packing of the finished goods. Such bottles are cut into pieces and sold by the appellant to dealers in waste and scrap.

During February 2001, the appellant sold 8320MTs of such bottles as scrap valued at Rs.3,55,500/-. The department was of the view that the appellant has manufactured plastic scrap and, therefore, duty is demandable and accordingly quantified a duty demand of Rs.56,880/-.

See our Columns tomorrow for the judgements