Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Import of hospital equipment under duty exemption - Diagnostic centre also eligible: SC

THE Central Government has issued Notification No. 63/88-CUS, dated 01.03.1988 granting exemption to hospital equipments imported by specified category of hospitals (charitable) subject to certification from the Directorate General of Health Services (for short, "the DGHS") to the Government of India. The explanation to the notification reads as under:

"Explanation - For the purposes of this notification, the expression "Hospital" includes any Institution, Centre, Trust, Society, Association, Laboratory, clinic and Maternity Home which renders medical, surgical or diagnostic treatment."

The question before the Larger Bench of the Supreme Court was whether a diagnostic centre would be eligible for the exemption.

Income Tax

Whether interest payment towards delay in paying sale consideration after slump sale is effected and plant is in operation, is to be treated as revenue in nature - YES: HC

THE assessee concern is a joint venture company formed by Sandvik AB Sweden and M/s. Chokshi Tubes Company Limited. The company was incorporated on 20th October 1996 with the share holding of 51% by Sandvik AB and 49% by M/s. Chokshi Tubes Company Limited. M/s. Chokshi Tubes Company Limited was previously having EMD undertaking at Rajpur of Mehsana doing extrusion of stainless steel pipes and tubes. The joint venture company acquired the EMD undertaking of M/s. Chokshi Tubes Company Limited, situated at Rajpur, Mehsana as a going concern on "as is where is basis" and an agreement was made on 4th December 1996 between Sanvik Chokshi Limited and M/s. Chokshi Tubes Company Limited for transfer of EMD undertaking as a going concern at a slump price of Rs.100 Crores. Such amount was paid for acquisition, which included fixed assets, current assets, raw materials, advances, cash and bank balance, liabilities, etc., without bifurcating specifically in the agreement, any asset, raw materials or advances and no separate value for different assets also were determined.

The issue before the Bench is - Whether interest payment towards delay in paying sale consideration after slump sale is affected and plant is in operation, is to be treated as revenue in nature. YES is the answer.

Service Tax

Debit note mentions different amounts in figures and words - Demand raised on difference - no steps taken to verify as to what amount has been paid by service recipient although both under same jurisdiction - Matter remanded for verification: CESTAT

THE brief facts are that the appellant provided certain services to Swan Telecom, Santacruz (E), Mumbai and raised a debit note to the tune of ‘Rs.200,098,500' shown in figures and 'Rupees Twenty four crore thirteen lakh eighty three thousand only' in words. The revenue is of the view that as there is a difference of amount shown in figures and in words of the service provided by the appellant, therefore, they are required to pay service tax on the figures shown in words.

See our Columns Tomorrow for the judgements