Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Objectionable maps in book to be taken out and destroyed in presence of Customs authorities - On being satisfied that in left-out part there is no objectionable material or map, Customs authorities may release 'UNESCO World Heritage Atlas' to appellant - no redemption fine but penalty upheld: CESTAT

IN December, 2012, the appellant imported 500 numbers of "UNESCO" World Heritage Atlas" and filed bill of entry for the same.

During examination of the goods, it was noticed that the external boundaries of India was found wrongly depicted/not represented in the maps. The Ministry of Finance Notification No. 19-Cus. dated 6.3.1976 prohibits import of any books, periodicals, pamphlets, leaflets or other documents containing any words, signs or visibility representations which directly or indirectly questions the frontiers of India as declared by the Government or the territorial integrity of the county. Further, standing order No. 53/2004 dated 31.12.2004 of JNCH directs that import of such material shall be confiscated absolutely.

Income Tax

Whether when assessee suo motu makes certain disallowance as per Rule 8D, further disallowance as per Sec 14A is warranted - NO: ITAT

THE assessee, a company is engaged in full bouquet of travel services. It has grown to be one of the largest Complete Travel Management companies in India, with each of its products and services bearing the distinct ISO 9001 quality benchmarking. The assessee had claimed depreciation @60% on computer, UPS and printers, etc. The assessee had dividend income on which it allowed himself expenses relating to the earning of the dividend. AO concluded that UPS, printers, etc., were not part of computer, but part of machinery, therefore reduced depreciation @ 15%. Whereas, in respect of the expenses incurred on dividend income the AO asked the assessee to further furnish clarification. The assessee submitted no expenses had been incurred for earning the exempted income, therefore such allowance should be allowed. The AO rejected the submission of the assessee, invoked the provisions of Rule 8D and made a disallowance in regard to the expenses incurred.

The issues before the Bench are - Whether disallowance u/s 14A is warranted, when the disallowance suo motu made by the assessee is itself more than the disallowance envisaged under Rule 8D and Whether it can be presumed that the assessee must have had incurred some administrative expenditure for earning the exempted income, although the AO has failed to return any finding on expenditure incurred by the assessee. And the verdict goes against the Revenue.

Central Excise

CENVAT - Appellant, manufacturer of excisable goods taking credit of tax paid on services used in Trading activity - question of taking credit on input service and its utilization thereof cannot be permitted at all prior to 01.04.2011 - Pre-deposit ordered: CESTAT

THE appellant is a manufacturer of excisable goods and also undertakes trading of furniture, locks, air-conditioners, safes, etc. which are not manufactured by them.

The appellant availed CENVAT credit of the service tax paid on various services such as advertisement, air-travel agent, architect, ATM operations, business auxiliary services, Business exhibition and business support services, insurance services, storage and warehousing services, telecommunication services, and so on. These services were used both for the manufacture of the excisable goods and the trading of non-excisable goods (goods not manufactured but traded by them). However they did not maintain separate accounts for the credit availed by them in respect of taxable activities and non-taxable activities.

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