Jurisprudentiol – Friday's cases

By Vijay Kumar

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

In the absence of any documentary evidence, there cannot be any presumption in favour of the appellant that the consideration received was for other than the Consulting Engineers Service - Order of adjudicating authority is impeccable - appeal dismissed: CESTAT

ON the basis of intelligence that the appellant had evaded Service Tax, an investigation was carried out by the Anti-Evasion Wing of Service Tax Commissionerate, Mumbai and records were summoned and statements recorded. Based on investigation conducted, it appeared that the appellant had received a consideration of Rs.51,49,56,282/- by way of Engineering Consultancy during the period from 1.4.2001 to 31.12.2005 and they had not discharged Service Tax liability on the consideration received.

Alleging that the Engineering Consultancy undertaken by the appellant would come under the category of Consulting Engineer's Service, a SCN was issued demanding Service Tax of Rs.4,12,93,802/-.

The appellant led evidence before the adjudicating authority by way of invoices showing that the consideration received during the year 2002-03 and upto 31.12.2005 were not on account of any Engineering Consultancy Services rendered but on account of other reasons such as Export earnings, Erection and Installation Services, Works Contract Services, supply of material and so on and, therefore, they were not liable to pay any Service Tax on this consideration received under the category of Consulting Engineers Service. This was accepted by the adjudicating authority, who dropped the Service Tax demand amounting to Rs.3,80,40,960/- for the period 2002-03 to 31.12.2005. However, since the appellant could not produce similar documentary evidence for the year 2001-02, the adjudicating authority confirmed the demand on the consideration received during the period 2001-02 classifying the service rendered under the category of Consulting Engineers' Service. Penal and interest provisions were also put into good effect.

Income Tax

Whether, after 18 years of the Search conducted, documents obtained under RTI Act can be relied upon for establishing that no notice u/s 143(2) was issued - YES: High Court

THE assessee was assessed to income tax for the block period from 1.4.1985 to 15.9.1995 u/s 143(3) read with Section 158BC, pursuant to a search u/s 132. The assessee filed Nil return of income and subsequently, the AO passed an order u/s 143(3) read with Section 158 BC determining the total undisclosed income at Rs. 9,55,380/- and demanding income tax of Rs. 5,73,228/-. On appeal, it was contended before the Tribunal that since no notice u/s 143(2) was issued, the entire assessment should have been set aside. The Tribunal observed that the assessee was subjected to search in 1995 and the appeal was being heard afresh in 2013, therefore, the possibility of misplacing the 143(2) notice cannot be ruled out in this span of almost 18 years. It was also observed that the assessee did not urge this legal issue at the time of filing appeal before the Tribunal, but urged for the first time before us after a lapse of considerable years. The Tribunal reduced the addition only to a limited extent. Aggrieved, this appeal has been filed in which the assessee has produced a document based on the Right to Information Act, which suggests that no such notice was issued.

The issue before the Bench is - Whether document obtained under Right to Information Act for establishing the non issuance of notice u/s 143(2) can be accepted as an evidence, although there has been a lapse of 18 years since the search was first conducted. And the answer favours the assessee.

Customs

Whilst the Court has the power to answer substantial questions of law, at the same time, a mere error in the findings of one or the other lower authorities would be insufficient to invoke the restricted nature of jurisdiction conferred under Section 130 of the Act - questions which were agitated before the CESTAT were duly considered - What the appellant/assessee is urging this Court to do is convert itself into a third court of appellate review - no substantial question of law arises - Appeal dismissed: High Court

IN this case that the proprietor of the assessee had made a statement under Section 108 admitting that the items imported were covered under Schedule 3 of the items of Central Excise Tariff Act, 1985 and, therefore, required MRP disclosure. Furthermore, the show cause notice and the Order-in-Original are entirely premised upon the goods having been seized because they were found to be without MRP stickers at the time of the search on 16.5.2008. The Order in Original as well as the Order in Appeal are categorical that such valuation attracted Sections 111(d) and 111(m) and thus, properly resulted in penalty and confiscation. After considering these aspects, the redemption fine and penalty were reduced having regard to the entire conspectus of circumstances. These questions were agitated before the CESTAT, which duly considered them. What the appellant/assessee is urging this Court to do is convert itself into a third court of appellate review. Whilst the Court has the power to answer substantial questions of law, at the same time, a mere error in the findings of one or the other lower authorities would be insufficient to invoke the restricted nature of jurisdiction conferred under Section 130 of the Act."

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