Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Appellant, a country liquor manufacturer, enters into selling agency agreement with HUF allowing them to use brand name 'Pahili Dhar' - No Service Tax is payable under 'Intellectual Property Services' - Appeal allowed: CESTAT

THE applicant is a manufacturer of sugar and molasses. The applicant is also manufacturing country liquor under their brand name "Pahili Dhar" which is approved by the State Excise authority. The applicant had entered into selling agency agreement with M/s Talreja Trade (HUF) with intention to obtain higher returns on their investments in their country liquor plant by increasing the sale of country liquor of their brand "Pahili Dhar".

The contention of the Revenue is that the applicants have allowed M/s Talreja Trade (HUF) to use their brand name "Pahili Dhar" in selling the products and hence they are liable to pay Service Tax under the category "Intellectual Property Services".

Income Tax

Whether when MAT liability of assessee is found out only because of alertness of AO, levy of penalty u/s 271(1)(c) is legitimately warranted - YES: HC

THE assessee company runs a hotel business. It filed its return disclosing "nil" income. It had admitted income from business at Rs.1,51,92,970/- and the same was set off with carried forward loss of the earlier years. In the course of the scrutiny proceedings, it was seen that the assessee was liable to tax u/s 115JB. The AO was of the view that the assessee was liable to pay MAT u/s 115JB. The adjusted book profit for working out the MAT payable u/s 115JB was calculated by the AO. Thereafter proceedings for levy of penalty u/s 271(1)(c) was initiated for the failure of the assessee to compute the book profit and the MAT payable u/s 115JB.

THE issue before the Bench is - Whether when the MAT liability of the assessee is found out only because of the alertness of the AO, the levy of penalty u/s 271(1)(c) is legitimately warranted. And the HC's answer is YES.

Central Excise

Despite receipt of directions from department, appellant failed to discharge excise duty liability - they also did not submit details sought by department and continued to drag issue by prolonged correspondence - suppression of information on part of appellant is clearly established: CESTAT

THE appellant is a manufacturer of bakery products such as biscuits and cakes and also manufactures ice-creams. The appellant was availing the benefit of small scale exemption. However, on crossing the exemption limit, the appellant did not discharge excise duty liability. The appellant also did not take any registration nor did they file any statutory returns or maintain records.

See our Columns tomorrow for the judgements