Jurisprudentiol – Monday's cases

By Vijay Kumar

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

CE - Supplier delaying payment of duty on capital goods - interest u/s 11AB of CEA, 1944 for period from date of availment of credit to date of payment of duty is on supplier manufacturer and not on respondent: CESTAT

IN the month of June, 2000, the respondent received capital goods (dies and gauges) from M/s Fiat India Ltd., Kurla under two invoices, both dated 1.6.2000, involving the total duty of Rs.45,76,685/-. As per the CCR, the respondent took CENVAT Credit of 50% of the duty i.e. Rs.22,88,343/- on 3.6.2000 and took the balance credit of 50% on 1.4.2001 i.e. next financial year. Later, it came to the notice of the Revenue that the supplier M/s Fiat India Ltd. had deposited only 50% of the duty on 15.6.2000 i.e. on the due date, and had deposited the balance 50% of the duty after a considerable delay on 24.1.2002.

Proceedings were initiated against the respondent and when the adjudicating authority concluded that they were liable to pay the interest on the amount of CENVAT Credit availed during the period 1.4.2001 to 24.1.2002.

Income Tax

Whether if assessee faces financial hardships and gets no support from its CA and has no staff, it constitutes reasonable cause for purpose of penalty u/s 272A(2) - YES: ITAT

THE assessee company is a producer of feature films. The TDS section of the department conducted a survey operation u/s 133A of the Act at the business premises of the assessee. At the time of survey, it was noticed that the assessee company did not file its return of income. The TDS officials did not find any audited books of account also. Further, it was noticed that the assessee did not pay the tax deducted by it at source. The TDS officials intimated these details to the assessing officer and accordingly the assessing officer re-opened the assessments relating to the assessment years 2003-04, 2004-05 and 2005-06. During the course of assessment proceedings, the AO recorded a statement of the director of the assessee company, wherein he disclosed certain details about the income and expenditure. He also admitted that the assessee company did not file Form No.52A as required under Rule 9(a) of the I.T Rules. Thereafter, a person appeared before the assessing officer and filed copies of Balance Sheet and Profit and Loss account.

THE issue before the Bench is - Whether if assessee faces financial hardships and gets no support from its CA and has no staff, it constitutes reasonable cause for purpose of penalty u/s 272A(2). YES is the Tribunal's answer.

Service Tax

CENVAT Credit on inputs with respect to services used in construction of immovable property which is subject to service tax under renting of immovable property eligible: CESTAT

THE issue involved in these proceedings is whether CENVAT credit of capital goods, input and input services used for making of immovable property, which is further put to renting of immovable property service, will be admissible or not. Adjudicating authority under different Orders-in-Original held that such credit will be admissible as the inputs, capital goods and input services are availed in or in relation to creation of a property which is used for providing of output services i.e. renting of immovable properties.

Held: so far as admissibility of CENVAT credit on inputs and input services used for creation of immovable property, which is subsequently subject to service tax under renting of immovable property, is concerned, the issue is no more res-integra as held by the bench in the case of Navratna S.G. Highway Prop. Pvt Limited.

See our Columns Monday for the judgements