Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Penalty - if SCN alleges that drawback has been wrongly availed, it cannot be said that assessee was having an intention to suppress facts - moreover, there is no demand of Customs duty, so penalty u/s 114A cannot be imposed - Appeal allowed: CESTAT

THE appellant is manufacturer of De-Oiled Cake and an exporter. To manufacture the said De-oiled Cake, they procure Hexane gas without payment of duty. After exportation of the goods, they claimed duty draw back available on the export goods. The claim was sanctioned. Later-on, it was revealed that the appellants have procured the Hexane gas without payment of duty and also availed draw back claim which was not admissible.

A SCN was issued alleging that the appellant manufacturer has wrongly and irregularly availed duty draw back and, therefore, they as well as the Director are liable to be penalized under Section 114A and 114(iii) of the Customs Act, 1962 respectively.

Income Tax

Whether when interpretation of document placed before Settlement Commission results in finding of fact, it does not call for interference by High Court under Article 226 of Constitution - YES: HC

REVENUE filed a Writ petition against the order of Settlement Commission u/s 245D of the Act and contended that assessee had not made a full and true disclosure and therefore the impugned orders were liable to be quashed and set aside. The first point was relating to transaction in respect of a property in respect of which assessee with his wife declared Rs. 7.60 crores as undisclosed investment.

The other issue was relating to five receipts of cash totalling to Rs.6.00crores which were found during the search operation. Assessee contended that although the said receipts representing Rs.6.00crores were receipts of loans received by him, the same had been disclosed as income before the Settlement Commission.

The issue before the Bench is - Whether when the interpretation of a document placed before the Settlement Commission results in a finding of fact, it does not call for interference by the High Court under Article 226 of the Constitution. And the verdict goes against the Revenue.

Service Tax

Web hosting service received by appellant from foreign service provider is used by appellant for marketing of his products - prima facie same has to be treated as Support Service of business or commerce and cannot be classified as Information Technology Service - Pre-deposit ordered: CESTAT

THE appellant have entered into agreements with various Telecom service Providers, such as, Bharti Airtel Ltd. etc. for supplying the content including user generated contents which enable the mobile phone subscribers receive advertisements, ring tones, general information like cricket scores etc. by the way of SMS. The Department was of the view that this service provided by the appellant to various telecom service providers during the period from 01/5/06 to 31/05/07 is "business support service". The demand raised is of Rs.53,02,577/-.

See our Columns Tomorrow for the judgements