Jurisprudentiol - Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Commercial Training or Coaching Services - in view of the fact that the appellant is set up by the Government of India and had a genuine understanding/belief that no service tax is payable by them on the basis of the decisions rendered by the Tribunal prior to the retrospective amendment, same would prima facie establish that the demand is substantially time barred. - CESTAT

A total Service Tax demand of Rs. 5,34,65,199/- along with interest and penalty was confirmed by the CCE, Pune-III against the Insurance Academy on the ground that they were providing 'Commercial Training or Coaching' service. The demand also includes a few lakhs of ST demanded under the head BAS.

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.

Income Tax

Whether when assessee enters into agreement for transporting employees of Research Institute and hires vehicles on rent to fulfil obligations, any TDS liability u/s 194C arises on payments made in this regard - NO: High Court

THE assessee concern had undertaken a contract of transporting the employees of Institute of Plasma Research by supplying vehicles for the purpose. In the course of executing the contract, the assessee hired certain vehicles from a private agency and made payment of Rs. 42.84 lakhs. During assessment, AO contended that u/s 194C, assessee was required to deduct tax at source, while making such payment. The assessee admittedly not having done so, such payment would be hit by the provisions of Section 40(a)(ia) and the expenditure should be disallowed. The assessee contended that the assessee had only rented the vehicles and the said agency had not provided any service of carriage of passengers.

The issue before the Bench is - Whether when the assessee enters into agreement for transporting employees and guests of a Research Institute and hires certain vehicles on rent to fulfil its obligations, any TDS liability u/s 194C arises on payments made in this regard. And the answer goes against the Revenue.

Central Excise

Comments by the third Member are not appropriate and proper inasmuch as the third Member is not deciding the matter in an appellate capacity and as such, is not in a position to comment upon the orders recorded by his co-brothers: CESTAT

THIRD Member observed, "While both the members have recorded factual aspects, none has recorded the consideration on which interim order should base."

The referral Bench was not too pleased with this remark and observed, "such type of comments by the third Member are not appropriate and proper inasmuch as the third Member is not deciding the matter in an appellate capacity and as such, is not in a position to comment upon the orders recorded by his co-brothers."

See our Columns Tomorrow for the judgements