Jurisprudentiol - Tuesday's cases
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Table Space provided by Automobile Dealers for accommodating representatives of Financial Institutions -maybe renting - not BAS - CESTAT LB
THE following issue was referred to the Larger Bench by the Single Member Bench in the case of Pagariya Auto Center ():
"Whether the table space provided by the Automobile dealers to financial institutions fall under Business Auxiliary service or not?"
Income Tax
Whether in case of TDS default by assessee, criminal prosecution can be launched independent of recovery proceedings - YES: HC
THE assessee is a registered company engaged in the business of operating passenger air lines in India. Revenue had filed case before the Economic Offences Court against assessee for the FYs 2009-10, 2010-11 and 2011-12 for the offences punishable u/s 276-B read with Section 278-B. A survey on the premises of assessee u/s 133-A. During survey, it was noticed from the records available that assessee had deducted TDS and failed to remit the same to the Government account for the FYs 2009-10, 2010-11 and 2011-12 to the tune of Rs.400,56,08,659/-. During verification of records, at the time of survey and in the subsequent proceedings after the survey it was detected that assessee company had deducted TDS on various payments and failed to remit the same to the Government accounts. Assessee company, its principal officer and the authorized representatives admitted the liability of TDS and failed to pay the same.
The issues before the Bench are - Whether in case of TDS default by the assessee, the criminal prosecution can be launched independent of the recovery proceedings; Whether the pendency of recovery proceedings is a legal impediment to the launch of criminal prosecution in case of TDS default and Whether quantification of sum for the initiation of prosecution is necessary. And the verdict goes against the assessee.
Central Excise
Rule 8(3A) of CER, 2002 - Default in payment of CE duty - whether payment through CENVAT is permissible during period of default - whether penalty is imposable u/r 25 of CER r/w s.11AC of CEA, 1944 for fraud committed although not invoked - Difference of opinion - Matter referred to Third Member: CESTAT
THIS is a case of default in payment of Central Excise duty of Rs.88.80 lakhs. The demand stands confirmed against the appellant for violation of provisions of Rule 8(3A) of the CER, 2002. Out of this amount, Rs.16.70 lakhs was paid by debit in the CENVAT account and the balance by cash. Revenue does not agree with this mode of payment. Interest is directed to be paid and a penalty of Rs.5000/- has been imposed u/r 27 of the CER. The appellant is before the CESTAT.
The Member (Judicial) observed that since the appellant has late deposited the duty, they are liable to pay interest but since the same is not quantified, the Revenue was directed to quantify the same and the appellant was directed to pay the same within 8 weeks. In the matter of payment of Rs.16.70 lakhs through the CENVAT account, the Member(J) viewed that the stand of the department that the same should be deposited in cash does not find favour in view of the decisions in Solar Chemferts P. Ltd. - () and Baba Viswakarma Engg. Co. (P) Ltd.- () wherein it has been held that deposit through CENVAT credit during the period of default would only result in confirmation of interest to the Revenue as that is the only loss to the Revenue. In the matter of penalty imposed, the Member(J) upheld the same citing the Gujarat High Court decision in Saurashtra Cement Ltd .() and directed the appellant to deposit the same and report compliance.
The Member (Technical) concurred with the view taken by the M(J) in the matter of interest but had a differing view in the matter of payment made through CENVAT and penalty.
Until Tomorrow with more DDT
Have a nice day.
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