Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Demand of service tax on British Airway set aside - not liable to pay service tax under reverse charge on services of online database access and retrieval services provided by overseas computerized reservation system companies - CESTAT by majority.

THERE is a demand of service tax on British Airways under Section 66A in respect of services received from outside India from computerized reservation system companies (CRS). Due to difference of opinion between the Member (J) and the Member (T), the matter was referred to the Third Member. Please see 2013-TIOL-1161-CESTAT-DEL

M/s British Airways, India has to be treated as a separate person. If that be so, in view of the admitted position that the contract between CRS/GDS companies is not with M/s British Airways, India and is only that M/s British Airways, UK, the present appellant cannot be held to be recipient of the services so as to make him liable to pay service tax, on reverse charge basis, in terms of the provisions of Section 66A.

Income Tax

Whether Sec 80IA benefits cannot be denied merely because business is in nature of works contract - YES: HC

THE assessee, an engineering company, is a civil contractor for the government. For the AY 2005-06, the return of income was filed which was taken under scrutiny assessment u/s 143(1) and the same was framed u/s 143(3). One of the disallowances was a part of deduction u/s 80IA(4). On appeal, CIT(A) had partly allowed such appeal. Both the sides challenged the same before the Tribunal and the Tribunal had already adjudicated upon the issue in a recent past. By way of these petitions, the challenge was made to the notice issued u/s 148 read with section 147. On the basis of retrospective amendment, the explanation given under sub-section (13) of section 80IA was substituted by the Finance (No.2) Act, 2009. Assessee objected to reassessment proceedings contending that this was nothing but a change of opinion.

The issue before the Bench is - Whether deduction u/s 80IA would apply in relation to a business referred to in the nature of works contract. And the answer goes in favour of the assessee.

Central Excise

Classification of Toys/Games/Puzzles - Funskool India dispute resolved by Third Member of CESTAT.

THE difference of opinion order was reported earlier vide 2014-TIOL-253-CESTAT-MAD, wherein the issue of classification of certain items manufactured by Funskool was referred to Third Member due to difference of opinion between the two Members. The majority order has been delivered by the Tribunal recently.

The issue under dispute is regarding classification of the following items:

1 Chip N Dale
2 Duck Tale Disney
3 Fox and Geese
4 Rally

See our Columns Tomorrow for the judgements