Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

CENVAT - Dredging is undertaken in navigation channel which is not private property of appellant but belongs to Maharashtra Maritime Board - channel is used not only by appellant but by several others - it cannot be said that benefit of dredging accrues only to appellant and such dredging is entirely in relation to manufacturing activity: CESTAT

THE CCE, Raigad has confirmed a demand of Rs.1.21crores against the appellant on the ground that the appellant is not eligible for availing CENVAT Credit of service tax on "dredging services” as the same does not come within the purview of "input service” as defined in Rule 2(l) of the CCR, 2004.

The appellant is before the CESTAT and submits that they have an agreement with Maharashtra Maritime Board as per which they were permitted to construct a jetty on the water front near Salav Village, Revdanda Port, District Raigad. As per the said agreement, they had agreed to provide all services at or around jetty including dredging, navigational aid, water supply, etc. Through the jetty, they undertake inward transportation of raw materials and outward transportation of finished goods.

Income Tax

Whether when search conducted by Revenue leads to papers relating to sale & purchase of land outside books and same is admitted by Managing Director in his statement, any addition with respect to unexplained investments is legally sustainable - YES: ITAT

THE assessee-company is engaged in real estate and construction business. During the year, company purchased land and sold plots after undertaking development works. There were search and seizure operations under section 132. Assessee claimed deduction under section 80IB on the residential complex constructed and sold. Assessing Officer asked for details. Assessee did not furnish complete details. Therefore, A.O. called for sale deeds and noticed that all the flats sold were above 1500 sq.ft. and exceeded the limits prescribed under the Act. Therefore, he denied the deduction.

In appeal, CIT(A) held that out of 65 flats only 5 were above 1500 sq.ft. area, therefore, the Assessing Officer was not justified to deny the benefit of deduction u/s 80-IB for the entire project completed for the assessment year under consideration.

The issue before the Bench is - Whether when the Search conducted by the Revenue leads to papers relating to sale and purchase of land outside the books and the same is admitted by the Managing Director in his statement, any addition with respect to unexplained investments is legally sustainable. And the verdict goes against the assessee.

Customs

Cocoa Beans, upon inspection were found contaminated with fungal growth - since Cocoa Beans comes under 'food product', unless it is cleared by Food Safety and Standards Authority of India, goods cannot be released by Customs authorities - Petition dismissed: HC

THE petitioner imported 132 bags of fermented and dried Coco Beans and certain other items under Bill of Entry. The Food Safety and Standards Authority of India (FSSAI), on inspection, found that Coco beans were contaminated with fungal growth. As per the prescribed standards, the materials should be free from fungus. According to the petitioner, after necessary fumigation, the fungal growth would be wiped off and there is no reason for detaining the goods.

The goods were not permitted to be released to the petitioner by the Commissioner of Customs, Cochin and it was proposed to either confiscate or destroy the same or to grant necessary permission to re-export the materials, if it is permissible, as per the procedure prescribed.

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