Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Stock Transfers made by EOU to its other units do not attract Sales Tax/VAT - it cannot be said that Sales Tax/VAT is “exempted” so as to deny benefit of exemption from SAD: CESTAT

THE Central Government by Notification No. 23/2003-CE dated 31.03.2003, has exempted the goods manufactured and produced in an EOU and cleared to DTA from levy of SAD subject to the condition that the said goods cleared to DTA are not exempted by the State Government from payment of Sales tax/VAT.

Revenue issued show-cause notices to the appellant under the belief that non-payment of Sales Tax/VAT on stock transfer made by the appellant EOU to its other unit's amounts to exemption of Sales Tax/VAT.

Income Tax

Whether Section 54F benefits can be denied on ground that house purchased by assessee was not fit for residence as it had no doors nor windows - NO: HC

THE Tribunal was of the view that the material on record showed that the assessee purchased a house with a site, subsequently, he had demolished it. He was in the process of putting up a construction. Before the High Court, the Revenue's counsel contended that the photographs produced by the assessee himself did not show that the construction put up therein was not fit for residence which had no facilities like electricity, water and toilet. It had no windows, no doors and therefore, the Tribunal committed a serious error in interfering with the concurrent finding of fact.

The issues before the High Court are - Whether Section 54F benefits can be denied on the ground that the house purchased by the assessee was not fit for residence as it had no doors nor windows and Whether the report of an Inspector is the sole criteria of allowing exemption u/s 54F - Whether in case it is proved that prior to sale, the vendor lived in the house and the same was sold along with the residential construction, exemption u/s 54F can't be denied. And the verdict goes against the Revenue.

Service Tax

When abatement is claimed, it should be from value inclusive of all materials used for providing the service: CESTAT

THE applicant is engaged in construction of commercial and residential complexes. While executing such projects, applicant was receiving steel and cement from their customers. The applicant was receiving only the value of services undertaken by them. They claimed abatement under notification 15/04-ST and 1/06-ST and paid service tax on 33% of consideration received. Revenue was of the view that such abatement is available only if value of the entire materials used is included in the gross amount.

See our Columns Tomorrow (in the New Year) for the judgements