Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Manufacture of dutiable and exempted goods and providing dutiable and exempted services - non-maintenance of separate accounts - if they have opted to pay 5% of value of exempted goods as per rule 6(3)(i), they cannot take option separately for exempted services as per Rule 6(3A) - CESTAT

THE applicants are manufacturers of goods falling under Ch. 84 and also providing services such as consulting engineering services, erection, commissioning and installation service, management, maintenance and repair service etc. The applicants are not maintaining separate account for their manufacturing activity as well as service activities and also not maintaining separate account for taxable as well as exempted goods or exempted services. Revenue is of the view that the appellant are required to reverse 5%/6% of the goods/services(exempted during the impugned period) as per Rule 6(3)(i) of CCR, 2004.

Accordingly, a demand of 5% of the value of the exempted services and which came to Rs.11,56,09,971/-was confirmed.

Income Tax

Whether to be eligible for Sec 72A(4) benefits, undertaking being demerged ought to be 'going concern' at time of demerger - NO: ITAT

THE assessee company is engaged in the business of manufacturing of Indian Made Foreign Liquors [IMFL], sugar, cogeneration of power, wind energy and speed zone. The assessee had claimed deprecation on the premise that it had purchased 37 wind mills during the month of March, 2006 from M/s Indowind Energy Limited [IEL] and ‘put to use' during the period under consideration; and, hence, eligible for depreciation etc. However, the AO had disallowed the claim of depreciation.

The issue before the Bench is - Whether for the eligibility to the benefits u/s 72A (4) of the Act, the under-taking being demerged ought to be a going concern at the time of demerger. And the answer favours the assessee.

Service Tax

JNPT had given land on lease in the year 1993 to M/s Ganesh Benzoplast and lease agreement was renewed in year 2004 - ST demanded - Prior to 01.07.2010, renting of vacant land is not covered under scope of Service Tax - Pre-deposit waived and stay granted: CESTAT

AGAINST an o-in-a, the applicant has filed an application before the CESTAT for waiver of pre-deposit of service tax amount of Rs.11,89,402/- interest and penalty.

The demand is confirmed on the ground that applicant had provided 'Renting of Immovable Property Service'.

It is the submission of the applicant that they had given land on lease to M/s. Ganesh Benzoplast Ltd. in the year 1993 and the lease agreement was renewed in the year 2004. It is further submitted that it is only w.e.f. 1.7.2010 that even the vacant land given on lease or licence for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce had come under the scope of service tax. Inasmuch as prior to 1.7.2010, renting of vacant land is not covered the scope of service tax, the applicant submitted. The applicants also informed the Bench that they are paying appropriate service tax w.e.f. 1.7.2010.

See our Columns Monday for the judgements