Jurisprudentiol - Friday's cases

By Vijay Kumar

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

CX/ST - Disclosure of Unaccounted income of about Rs.42 crores before Income Tax authorities - Director admitting that this amount was realized on account of Sale and Marketing of Tobacco products - CE duty demand confirmed against manufacturer of Tobacco products in respect of "unaccounted sale" - Simultaneously, Service Tax demand under head 'Business Support Services' raised on said Marketing company is also upheld - transaction cannot amount to both Service and manufacture & sale at same time; it can be only one of two - On this very ground alone, impugned order confirming CE duty cannot be prima facie sustained - Unconditional waiver from pre-deposit & stay granted: CESTAT

TWO parallel proceedings have been initiated by the department on the consideration amount of Rs.5.8crore alleged to have been received by M/s FTPL. Vide show-cause notice dated 5.9.2011 issued to M/s SRPL, Service Tax of Rs.71,55,424/- is demanded on the consideration of Rs.5.8crore received by treating the entire transaction as a service transaction falling within the taxable service of 'Business Support Services'.

++ This SCN was adjudicated and vide order dated 4.12.2012 & the CCE, Nashik upheld the demand and imposed penalties and interest and the ST paid by SRPL was appropriated towards the said demand.

++ Again, on the very same amount of Rs.5.8crore, another SCN dated 25.5.2012 was issued to M/s FTPL alleging the transaction to be undervaluation in respect of the goods manufactured by FTPL and sold through the C&F agents namely M/s Vandana Enterprises, Adipranav Agency and Rajlaxmi Agency. Further, an amount of Rs. 7,57,569/- has been confirmed towards excise duty demand in respect of the sales made through Rajendra Trading Company, a dealer of M/s FTPL on the ground that the appellant received sum of Rs.50,92,000/- from the said dealer over and above the value declared in the invoices issued.

Income Tax

Income tax - Whether interest on refund u/s 244A, is to be granted on sum after adjustment of MAT credit first and then Advance Tax and TDS - Case remanded: HC

THE issues before the Bench are - Whether interest on refund u/s 244A, is to be granted on on the sum after adjustment of MAT credit first and then Advance Tax and TDS and Whether carry forward MAT credit available to the assessee is to be adjusted first, before charging interest under sections 234B and 234C. And the case is remanded to the AO to work out the interest first.

Service Tax

Appeal against order of Tribunal - Maintainability - Issue involved is whether activity is taxable under "Banking and Other Financial services" under clause (zm) of Section 65(105) of Act and whether such service is not liable to service tax or attracts Nil rate of duty - Issue being related to classification and taxability of service, appeal lies with Supreme Court under Sec 35L of Central Excise Act, 1944 as made applicable to service tax matters - Appeal dismissed on ground of maintainability: HC

THIS is an appeal against the order of Tribunal relating to demand of service tax. The appellant is a bank, engaged in the business of providing banking and financial services to its customers including issuance of credit cards. There is a demand of service tax under Banking and Other Financial services.

It was argued on behalf of the respondent department that the issue involved in the present case is relating to the taxability of the receipt as interchange fee received from acquiring bank for providing credit card facility. Whether such service falls within the purview of "banking and other financial services", is a question, which relates to the classification and rate of tax and, therefore, High Court has no jurisdiction to entertain such question, inasmuch as such question can only be entertained by the Apex Court in appeal filed before the Apex Court under Section 35L of the Central Excise Act, 1944.

See our Columns Tomorrow for the judgements