Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

SCN alleges that credit has been taken intentionally and wrongly - if credit is taken intentionally then it cannot be taken wrongly but if it is mentioned wrongly, then it cannot be intentional - SCN alleges two contrary terms and in this situation, benefit of doubt goes in favour of respondent - Penalty correctly set aside by Commr(A) - Revenue appeal dismissed: CESTAT

THE respondent procured capital goods in the year 2001-02. In the said year, they availed 50% of CENVAT Credit of duty paid capital goods. Remaining 50% credit was taken in the year 2002-03. The respondent again took 50% in 2003-04. Audit took place in the factory of the respondent and on pointing out by the audit party they reversed the CENVAT credit availed on the capital goods on 14.07.2003 on 31.10.2003 and interest was also paid on 03.11.2003.

A SCN was issued for imposition of penalty under Section 11AC of the CEA, 1944 r/w Rule 13 of the CCR, 2004.

Income Tax

Whether when assessee receives interest on additional compensation in lieu of his land acquired by State after Supreme Court decision, interest is to be charged retrospectively - NO: HC

THE assessee an individual is primarily an agriculturist. His land was acquired by the Government and he got compensation under Section 23 of the Land Acquisition Act, which comprised of three components - compensation, interest on additional compensation and solatium. The assessee had declared the amount of compensation and solatium under VDIS, 1997, but interest on additional compensation received under Section 23 (1A) was not declared by the assessee for the purpose of tax. The issue before the Bench is - Whether when the assessee receives interest on additional compensation in lieu of his land acquired by the State after the Supreme Court decision, interest is to be charged retrospectively. And the answer goes in favour of the assessee.

Service Tax

Commercial Training or Coaching - applicant conducting Management Courses - the MBA course programme is not recognized by any University whereas applicant was misrepresenting otherwise - clear case of suppression - Pre-deposit ordered of 50% of confirmed demand: CESTAT

A total Service Tax demand of Rs.5,34,65,199/- along with interest and penalty has been confirmed by the CCE, Pune-III against the applicant. The major demand is under the head ‘Commercial Training or Coaching'.

While seeking a Stay, the applicant submitted before the CESTAT that they had started MBA Course in 2003 with the approval from AICTE vide letter dt. 11.5.2004; the approval was renewed on year to year basis and hence the demand is not sustainable. It is further submitted that in view of the decision of Supreme Court in the case of Association of Management of Private Colleges Vs. All India Council for Technical Education & Others dt. 25.4.2013, to start management courses, approval from the AICTE is not required and, therefore, the demand on the ground that the conditions imposed by the All India Council for Technical Education to start courses are not fulfilled cannot survive.

See our Columns Tomorrow for the judgements