Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Commissioner (A) not addressing issues raised in appeal memorandum - In its absence, it would be inappropriate and difficult to record finding on the same at second appellate stage - matter remanded: CESTAT

A demand was issued for a total amount of Rs.51.26 lakhs which comprised of wrong availment of CENVAT Credit of Rs.32.37 lakh and short payment of Service Tax of Rs.18.88 lakh. Against the order of the adjudicating authority confirming the demand and imposition of penalty, the appellant filed an appeal before the Commissioner(A).

The lower appellate authority allowed the appeal in the matter of disallowance of CENVAT credit by the original authority but did not record any finding on the short payment of tax or in the matter of penalty. Inasmuch he reduced the demand to Rs.18.88 lakhs but retained the penalty of Rs.51.26 lakhs.

Income Tax

Whether when assessee involved in taking up cause of trade & industry has been granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available and even Revenue is not able to trace its file - NO: ITAT

THE assessee is an association undertaking various activities, seminars, medical relief, awareness programmes and also activities of general public utility without any profit motive. It had applied for registration u/s 12A and the same was claimed by the assessee to had been granted to the assessee in the year 1988-89. Thereafter, it had also applied for recognition u/s 80G and it was granted accordingly. However, the assessee's application for renewal of recognition u/s 80G was rejected holding that the assessee had resorted to agitational activities.

Whether when the assessee-association involved in taking up the cause of trade and industry has been granted registration u/s 12A, it loses eligibility for Sec 80G benefits merely because a copy of registration is not available with it and even Revenue is not able to trace its file. And the answer favours the Association.

Central Excise

Valuation - Paper in reels cleared on payment of duty to job worker who converted same into paper sheets and same were finally sold from job worker's premises to ultimate buyers - prima facie duty liability to be discharged on sale price of job-worked goods - Pre-deposit ordered of entire duty demanded: CESTAT

THE appellant is a manufacturer of paper and paper boards. The paper is cleared from the factory both in reel form as also in sheet form.

In respect of paper for which orders were received for supply in sheet form, the appellant cleared the paper in reel form to the job-worker for cutting of paper reels into paper sheets. They discharged excise duty liability on a lower value as applicable to reels. After undertaking the job work, the goods were sold form the job workers' premises to the ultimate buyers at a higher price as applicable for the sheets.

The department was of the view that in respect of such clearances of paper reels, the duty liability should have been discharged on the price at which sheets were sold to the ultimate buyers. And so the duty stands confirmed.

See our Columns Tomorrow for the judgements