Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Conversion of steel plates into partially finished and fully finished boiler components - Prima facie case for waiver of demand of service tax under Business Auxiliary Service - CESTAT.

THE applicant is a job worker of M/s. Bharat Heavy Electricals Ltd. (BHEL). The nature of process involved is cutting, drilling, pressing, welding etc., as per the drawings of conversion of steel plates into partially finished and fully finished boiler components. According to the Revenue, the process undertaken by the applicant, would not amount to manufacture under Section 2(f) of the Central Excise Act, 1944 and, therefore, they are liable to pay service tax under “Business Auxiliary Service". Adjudicating authority confirmed the demand along with interest and penalty.

Income Tax

Whether if Tribunal has duly considered notings made in seized record and has given finding that remuneration received is in excess, it can be accepted that addition made on such basis has been sustained on estimate basis - NO: ITAT

THE assessee is an actress by profession. The Revenue conducted a search of her premises u/s 132. The assessee filed her block return declaring undisclosed income of Rs.26,17,283/-. The AO, however, determined the amount of undisclosed income at Rs.1,58,41,635/-. The assessee had shown the remuneration received for a film at Rs.27.00 lakhs. Based on the seized material, the AO held that the assessee had received Rs.48.00 lakhs as remuneration for the above said film and accordingly added the difference to the undisclosed income of the assessee. The same was confirmed by the CIT(A). The Tribunal, however, gave a finding that the remuneration for the film was Rs.36.00 lakhs and accordingly restricted the addition to Rs.9.00 lakhs. Against this addition, the AO levied penalty u/s 158BFA(2).

The issue before the Bench is - Whether if the Tribunal has duly considered the notings made in seized record, surrounding circumstances and finally has given a finding that the remuneration received is in excess, it can be accepted that addition made on such basis has been sustained on estimate basis. And NO is the answer of the Tribunal.

Central Excise

Asceptic packaging paper is correctly classifiable under CETH 4811 90 92 and not CETH 7607 2090 - assessee is entitled to benefit of exemption notification 4/2006-CE - Revenue appeal dismissed: CESTAT

THE CCE, Pune-I classified “asceptic packaging paper" manufactured by the respondent under CETH 4811 90 92 and allowed exemption under Notification 4/2006-CE dated 01/03/2006 as amended. The adjudicating authority relied upon the test report of the product given by M/s. ARAI wherein it was confirmed that the paper content was 80.12%, plastic content 15.40% and aluminium content 4.48%.

It is the contention of the Revenue that the adjudicating authority has overlooked Note 2(n) to Ch. 48 which specifically provides that the said Chapter does not cover “metal foil backed with paper or paperboard" and the correct classification should be under CETH 7607 2090 as aluminium and articles thereof.

See our Columns Tomorrow for the judgements