Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Recovery of demand day before Tribunal was to hear extension of stay application - Overreaching process of law which cannot be approved: HC

THE adjudicating authority confirmed a Service Tax demand of over Rs.83 lakhs with equal penalty and attendant interest.The Tribunal on 20.09.2012 granted stay subject to pre-deposit of 15% of the tax demanded.

After expiry of six months a notice dt.3.10.2013 was served upon petitioner from the office of Commissioner that the interim protection was for a period of six months and appeal is still pending but the stay granted by the CESTAT automatically stands vacated and called upon the petitioner to deposit the balance towards service tax along with interest and penalty in terms of order of the adjudicating authority under intimation to his office failing which necessary action shall be initiated for recovery of outstanding dues.

Whether for period prior to 10.05.2008,penalty under section 76 & 78 of FA,1994 can be imposed simultaneously - Matter referred to Larger Bench of CESTAT

THE short issue involved in the matter is whether penalty under section 76 & 78 of the Finance Act,1994 for the period prior to 10.05.2008 can be imposed simultaneously on the assessee or not.

Whereas the appellants relied on the Karnataka HC decision in United Communication Udupi favourable to them,the Revenue representatives countered the same by citing the Kerala & Delhi High Court decisions in the cases of Krishna Poduval & Bajaj Travels respectively.

Income Tax

Whether definition of 'case' over which Settlement Commission has exclusive jurisdiction excludes proceedings for reassessment - NO: HC

THE assessee company is engaged in real estate business.Its premises were searched different dates.It filed its return declaring taxable income.The assessee had earlier been issued separate notice under Section 153-A of the Act.In response to the notice,the assessee stated that its returns filed for 2000-2006 be treated as reiterated under Section 153A.The assessee approached the Settlement Commission to settle pending assessments for AY 2000-2001 to 2006-2007 and declared additional income. Initially, after hearing parties,the Commission admitted the application for hearing and disposal.The Commission passed its order under Section 245D(4),finally determining the assessee's liability,for 2004-05 to 2006-07.

The issues before the Bench are - Whether the definition of "case" over which the Settlement Commission has exclusive jurisdiction excludes proceedings for reassessment,under Section 245A(i) and Whether reopening of proceedings is permissible in respect of proceedings completed by the Settlement Commission.And the answers favour the assessee.

Central Excise

Conversion of retail packs of paints into bigger/bulk packs does not amount to manufacture as no evidence has been adduced to indicate that the appellant has undertaken any reprocessing - Appeal allowed: CESTAT

THE appellant is a job worker of M/s Asian Paints (I) Ltd. On the direction of M/s Asian Paints,the appellant has,in the months of January and February,2002,received retail packs of paints for conversion into bigger packs.The applicant did the repacking from small packs to bigger packs and cleared the same without payment of any duty. Incidentally, no CENVAT credit was availed on any materials/inputs while conducting the said repacking activity.

The Revenue was of the view that the reprocessing activity amounts to "manufacture" of final products and hence demanded CE duty on these clearances.As the lower authorities confirmed the duty demand and imposed penalty/interest the appellant is before the CESTAT.

See our Columns Tomorrow for the judgements