Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Excise - Valuation - cost of transportation from the place of removal to the place of delivery cannot be included in the assessable value even though cost of transportation has been calculated on average basis and not on actual basis - CESTAT.

DEPARTMENT is in appeal against the order of Commissioner (Appeals) dropping the demand relating to the issue whether equalized freight separately charged to be included in the assessable value in case of sale on FOR destination basis for the period from July, 2000 to February, 2003. Revenue did not accept Commissioner (Appeals)'s order and have came in appeal before the tribunal.

Income Tax

Income tax - Whether when assessee decides not to charge any interest on loans given to third party and loan is recovered after a civil suit is filed, any notional disallowance for said interest is warranted u/s 36(1)(iii) - NO: HC

THE issues before the Bench are - Whether when assessee decides not to charge any interest on loans given to third party and loan is recovered after a civil suit is filed, any notional disallowance for said interest is warranted u/s 36(1)(iii); Whether provisions of Section 2(22) (e) can be invoked, in case there is a genuine business transaction between two entities and funds of the appellant director were infact lying with the company for most of the time and no profit is derived out of the said loan transaction and Whether in that case such a transaction would be considered as of business expediency. And the verdict goes against the Revenue

Service Tax

ST - Services of financial leasing provided to clients - Taxable event occurs when hire-purchase contract is entered - ST to be paid at rate prevailing at time of entering lease agreements & not at time of receipt of EMI - Appeal allowed: CESTAT

THE appellant is a lease finance company and provided services of financial leasing under the category of ‘Banking and Finance' services. The lower authorities have confirmed a demand of Service Tax of Rs.18.75 lakhs on the lease agreements entered by the applicant with their clients between 16.7.2001 & 13.5.2003 and 14.5.2003 to 10.9.2004 on the ground that the applicant had not discharged the correct service tax liability

See our Columns Monday for the judgements