Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Penalty - s.11AC of CEA, 1944 - If material produced is not pointing towards any fraud or collusion or any willful misstatement or suppression of facts or contravention of provisions of Act or Rules with intent to evade payment of duty, then, imposition of penalty is not called for: HC

DURING the visit of the Preventive Officers it was pointed out that the assessee had cleared Galvanized Transmission Towers and parts thereof by wrongly claiming exemption under notification 6/2002-CE as amended by notification 48/2004-CE dated 10.09.2004. The officers were of the view that the exemption is available for the supply of the goods against International Competitive bidding only & to the goods which are exempt from the duties of Customs and the additional duty leviable under the Customs Tariff Act when imported into India, as per condition No.64 of the Notification and since the condition of the said Notification was not fulfilled, the appellant was not eligible for exemption.

The assessee immediately paid the duty due along with interest. In adjudication proceedings, a penalty was imposed on the assessee.

Income Tax

Whether assessee providing HR Services like recruitment of manpower for foreign clients is entitled to Sec 10A benefits - YES: HC

THE assessee M/s ML Outsourcing Service P Ltd filed NIL return. During assessment the AO disallowed the claim under Section 10A and held that the net profit of Rs.88,49,972/- should be brought to tax by denying exemption under Section 10A of the Act. One of the reasons given by the Assessing Officer to disallow the claim was that the assessee was rendering services as an employment agent, like any other employment agency, and merely forwarded list of shortlisted candidate to their overseas clients. There was a minimum use of computers or information technology enabled tools. The assessee was, therefore, not involved in the development of computer software or information technology enabled services as the use of technology was not quintessential for the nature of services rendered and the core activity was that of an employment agent.

The issue before the Bench is - Whether assessee providing HR Services like recruitment of manpower for foreign clients is entitled to Sec 10A benefits. And the answer is YES.

Service Tax

ST - Storage and Warehousing of goods is separate activity in itself and does not form part of Cargo Handling services -Tax demand upheld for normal period with penalty and interest: CESTAT

MIPL

is operating a Container Freight Station (CFS) and have entered into a contract with MLOG for providing various services in the premises of their CFS viz. rental space for keeping, storing, stuffing or consolidation of export cargo into containers. M/s MLOG have accordingly paid a fixed monthly amount to MIPL as "Space Reservation Charges".

See our Columns Monday for the judgements