Jurisprudentiol –Wednesday's cases

By Vijay Kumar

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

Refund - if services have not been received and the payment made for said services had been adjusted between Indian and Amsterdam Company, said corresponding value of services would not be liable to Service Tax - matter remanded: CESTAT

THE appellant is registered with service tax Department for providing Convention Services, Computer Network Services, Business Auxiliary Services, Commercial Training or Coaching Service, Sponsorship Services and Management or Business Consultant services. They filed a refund claim of Service Tax for the period October 2009 to March 2010 on 18/03/2011.

The ground of refund claim is that the party has entered into an agreement with M/s. Wolters Kluwer NV, Amsterdam, Netherlands for providing service of Management or Business Consultant from abroad in respect of management of their on-going office in India and also to provide service related to Mergers and Acquisitions deals on behalf the party. The assessee, as mentioned, got registered in the category of Management or Business Consultant service since they were liable for service tax under reverse charge.

Income Tax

Whether in absence of satisfaction note recorded by AO of searched person, proceedings initiated u/s 153C is without justification - YES: HC

THE AO issued a notice u/s 153C and wrapped up the assessment. The CIT (A) deleted the additions observing that though in the assessment order, AO had specifically stated that satisfaction for issuing notice u/s 153C was recorded, however on examination of record no such satisfaction was recorded. It was thus held that AO could not have assumed jurisdiction u/s 153C. Thus, all the proceedings undertaken u/s 153C were to be declared as invalid, being annulled for want of jurisdiction. The ITAT also confirmed the order of CIT (A) stating that in the absence of such satisfaction having been recorded by the Assessing Officer of the searched person, the present proceedings initiated by the present Assessing Officer against the present assessee u/s 153C was without jurisdiction and the same had been rightly quashed by the CIT (A) by following the judgment of Apex Court rendered in the case of Manish Maheshwari.

The issues before the Bench are - Whether in the absence of the satisfaction note recorded by AO of the searched person, the proceedings initiated u/s 153C is without justification and thus, the entire proceedings are illegal and whether the provisions of Sec 153C are only procedural in nature. And the verdict goes against the Revenue.

Customs

DEPB scheme - FOB value on invoices shown as 400-500 percent of ARE-1 value - Normally, proforma invoice will indicate higher value and after negotiation final price would be less than proforma invoice - Appeals rejected: CESTAT

THE appellants are exporting Porcelain Mugs to M/s Ransat Services Ltd. UK after procuring these from various manufacturers in India mainly M/s. JCPL, Mudrika Ceramic, Oasis Ceramics.

The dispute in the case is relating to the valuation of Porcelain Mugs. Appellants were exporting the said mugs under DEPB scheme which entitles them to claim DEPB benefit at the specified rates which are related to the FOB value of the goods exported.

While processing the shipping bills, it was realized that there was huge difference between the ARE-1 value (i.e. ex-factory value) declared by the manufacturers of Porcelain Mugs and FOB value (i.e. export price) declared by the appellants. The FOB value was to 4 to 5 times the ARE-1 value. In view of such huge difference, investigations were taken up.

See our Columns Tomorrow for the judgements