Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Every time when matter came on board, both sides were on rivalry argument on principles of natural justice - If such argument goes on, reference Bench cannot solve such a problem - Therefore, it would be preferable to hear appeal by agreeing with Member(T) who is of view that amount already deposited should be adequate to hear appeal - Tribunal by Majority

THIS is a case booked by the DGCEI and the allegation is that the appellant has cleared processed fabrics under the guise of processed embroidered fabrics which do not attract Central Excise duty. Statements of 24 buyers were recorded wherein many of them deposed that the grey material sent by them was not actually processed embroidered fabrics but was 'other processed fabrics' though they received the invoices from the appellants reflecting the processed embroidered fabrics.

Income Tax

Whether when pipeline is owned by third party, connectivity charges paid for transportation of gas are to be construed as carriage of goods and are thus covered by provisions of Sec 194C - YES: ITAT

THE issues before the bench are - Whether acquiring the right of displaying advertisement at hoarding site and making payment to hoarding site owners involve lease, sub-lease or tenancy arrangement; Whether deduction of TDS u/s 194-I is applicable in such case; Whether connectivity charges paid as per the agreement for using of pipeline connection for gas transportation, is in the nature of carriage of goods and covered u/s.194C; Whether it would be considered differently, in case the pipeline was owned by a third party and was opened for service to other clients also; Whether in case, an assessee uses the facility of hiring helicopters for transportation of its employees, deduction of TDS u/s 194I is tenable in law; Whether in case an asset is taken on hire basis and the control lies with the actual owner only, deduction of TDS on payment made can be u/s 194I; Whether in case the services provided by an event Manager were taken for managing a particular event only, deduction of Tax u/s 194J is tenable in law and Whether an assessee can claim expenses from a particular event as its business expense. And the verdict goes against the Revenue.

Service Tax

Renting of Immovable property service - vires of levy decided by Delhi HC in 2009 for first time - How could a decision rendered in year 2009 lead to confusion in year 2007 - such a plea is clearly an afterthought - in absence of prima facie case on merits and no financial hardship pleaded, appellant directed to make pre-deposit of balance of ST dues: CESTAT

DURING the period June 2007 to December 2011, the appellant rented out immovable property and received consideration by way of rent. However, the appellant did not discharge service tax liability on the activity of renting of immovable property. It is also on record that the appellant had obtained service tax registration on 18/07/2007 under the category of 'Renting of Immovable Property Service'. However, apart from getting registered, they did not follow the statutory procedures nor did they pay any service tax.

Accordingly, investigation was carried out and a show cause notice dated 03/09/2012 was issued demanding service tax of Rs.68,84,748/- along with interest thereon and also proposing to impose penalties.

See our Columns Monday for the judgements