Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Recovery - Appeal not disposed within a period of 365 days - Vacation of Stay - as the appellant has already paid the duty amount and stay granted was in respect of penalty/interest, department is restrained from proceeding with any coercive measures - Misc. application allowed: CESTAT

AGAINST the order passed by the CCE, Raigad, confirming the duty and imposing penalty/interest, the appellant had filed a Stay application & an appeal before the CESTAT in the year 2010.

Vide an order dated 20.06.2011, the CESTAT had granted a Stay in the matter from pre-deposit of interest and penalty as the duty demanded was already paid by the applicant. This Stay granted was extended, till the disposal of the appeal, by the Bench in November, 2013.

In spite of the above orders of the CESTAT, the jurisdictional Range Superintendent addressed a letter to the applicant directing him to make payment of interest and penalty citing the amended provisions of section 35C of the CEA, 1944 and in terms of which if the appeal is not disposed of within the total period of three hundred and sixty-five days of the stay order, the stay order shall, on the expiry of the said period, stand vacated.

Income Tax

Whether when power tariff incentive received by assessee from State Govt goes towards reducing electricity bill, the same is to be treated as revenue receipt - YES: High Court

THE assessee considered industrial power tariff concession granted by the Tamil Nadu Government as capital receipt. The AO treated the same to be a revenue receipt. As regards the deduction u/s 80HHC, in respect of scrap sales, the AO followed the earlier year's order and included the same in the total turnover of the assessee. The CIT(A) while considering the issue relating to power tariff concession, rejected the Assessee's claim and pointed out that the subsidy given by way of power tariff concession was not related to production. Regarding the deduction u/s 80HHC in respect of sale of scrap, the CIT(A) confirmed the order of the AO.

The Tribunal held that the power subsidy was of revenue in nature, especially when subsidy had gone to reduce the electricity bills and rejected the case of the assessee. With regard to the scrap sales, the Tribunal held that it had to be included in the total turnover in the denominator.

The issues before the Bench are - Whether when the power tariff incentive received by the assessee from the State Govt goes towards reducing the electricity bill, the same is to be treated as revenue receipt and Whether scrap sales should be included in the total turnover for the purpose of computing deduction u/s 80HHC. And the verdict partly goes in favour of Revenue.

Service Tax

Commercial Training or Coaching Service - Consideration received by sale of prospectus and admission forms prima facie cannot be considered as a part of the service provided - Order confirming demand set aside and matter remanded: CESTAT

THE applicant is registered Service Tax assessee under the category of "Commercial Training or Coaching Service" and paying appropriate service tax. The case of the Revenue is that during the period 2006-2012 the applicant had sold prospectus and admission forms for a consideration and had not paid service tax on such consideration.

The adjudicating authority confirmed the demand of Rs.5,17,707/- along with interest and penalty.

The Commissioner (Appeals) directed the appellant to deposit service tax along with interest but since the appellant failed to comply with the condition of the stay order, the appeal was dismissed by the Commissioner (Appeals) without going into merits.

See our Columns Monday for the judgements