Jurisprudentiol – Tuesday's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise
CENVAT Credit - Job-worker entitled to take credit on capital goods used in manufacture of exempted intermediary products: HC
SEIITL was a public limited company and was engaged in the manufacture of colour monitors and CTV chassis on job work. Central Excise Officers conducted a check and found that SEIITL was manufacturing CTV chassis for SEIL on job work basis. For this purpose SEIITL had obtained 10 numbers of Auto Insertion Machines from SEIL. SEIITL had taken credit of the duty on these machines. The statement of Manager Production of SEIITL was also recorded, who deposed that all the 10 numbers of Auto Insertion Machine received from SEIL were being used exclusively for the manufacture of CTV chassis for SEIL. According to the department, Cenvat Credit had wrongly been utilised by SEIITL and there was suppression of facts.
Commissioner Central Excise, Noida passed an order in original disallowing the Cenvat Credit amounting to Rs. 74,40,730.00 and also imposed penalty. CESTAT allowed the appeal holding that SEIL was eligible for availment of Cenvat Credit.
Aggrieved Department is before the High Court with the question of Law: Whether the CENVAT credit of capital goods taken by the respondents, which are exclusively used in the manufacture of exempted goods, is admissible
Income Tax
Whether if assessee has sums of carry-forward losses and unabsorbed depreciation which are relatable to block period, same is to be set off against undisclosed income determined in block assessment - YES: HC
THE assessee is a dealer in machinery relating to bore-well. A search was conducted and a block assessment was done. During the assessment, the AO imposed certain amount of tax, upon the undisclosed income. Aggrieved, the assessee approached the Settlement Commission under Section 245D. The undisclosed income for the block period was determined at Rs.1,36,52,701/- and a tax at 60% was imposed, aggregating to Rs.81,91,620.
The issue before the Bench is -Whether if an assessee has sums of carry-forward losses and unabsorbed depreciation which are relatable to the block period, the same is to be set off against undisclosed income determined in block assessment. And the answer is YES.
Service Tax
Transaction in lottery not taxable - Sale of Sikkim Lottery tickets - Sikkim High Court has jurisdiction: HC
THE issue is the taxability of the transaction in lottery tickets. The petitioners have challenged in the Sikkim High Court, letters issued by Mumbai Service Tax.
Union of India raised an objection that the three impugned letters were issued from the Mumbai Office, thus, the cause of action arose in the territorial jurisdiction of the Mumbai High Court, therefore, the Writ Petition would not be maintainable.
The High Court noted that in an earlier writ petition (reported in ) the same High Court had held that the transaction in the lottery tickets are not liable to service tax under the provisions of the Finance Act, 1994, as amended by the Finance Act, 2012 and the three communications issued in the said matter were quashed.
Until Tomorrow with more DDT
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