Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

CENVAT - If any goods are transported through pipeline or by other means, if they are not solid, there is every chance of loss of quantity by way of evaporation - CENVAT credit cannot, therefore, be denied on quantity involved in transit loss: CESTAT

THE appellant is a manufacturer of petroleum products. They were receiving Lube Base Oil through pipeline. During the course of transportation of the goods, they have received less quantity varying from 0.01% to 0.72% as per the invoices.

Revenue is of the view that as the appellant has received less quantity as shown in the invoices, therefore, they are not entitled to take CENVAT Credit on the differential quantity.

The authorities below were not impressed by the arguments advanced by the assessee and, therefore, made him fall in line - inasmuch as the demands were confirmed along with interest and penalty.

Income Tax

Whether registration to Trust u/s 12AA can be refused merely because it earned some income from housing projects but applied same towards charitable objectives - NO: HC

THE assessee applied for the registration u/s 12A. The assessee stated that they are in the process of obtaining permission from various government organisations to have a Heritage Park constructed. To raise funds for the said project, they have also initiated a residential apartment project for which permission from the concerned authorities has been obtained. After considering all the documentation provided by the assessee, the Director of Income Tax (Exemptions) observed that Clause 10 of the Trust Deed which is neither part of the objects nor incidental to the objects, vests power in the trustees authorizing them to carry on activities for profit.

The issue before the Bench is - issue before the Bench is - Whether a trust can be denied registration u/s 12AA when it has earned income from housing projects, but applied them towards charitable objectives. And the verdict goes against the Revenue.

Service Tax

So long as activity is service and even if it is not taxable, it has to be considered as an exempted service. It is not necessary that service should be taxable and an exemption notification exempting from levy of service should have been issued: CESTAT

WHEN the statute is clear and there is no ambiguity, no citizen has the liberty or luxury of assuming and acting on his assumptions without looking into the law and without any verification whatsoever. More so, in matters like service tax where the responsibility of assessment is on the assessee and not on the department. Such being the position, no one has the liberty to make assumptions about the liability. The law requires a person to read it, understand it and implement it. Failing to do so and assuming the provisions which are non-existing would lead to consequences which the assessee has no option but to take.

See our Columns Tomorrow for the judgements