Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Service Tax - Refunds - Interest payable on delayed refunds - CESTAT

BOARD has categorically directed the formation that the refund claim of the service tax paid on services rendered to SEZ units should be sanctioned within the maximum time of 30 days from the date of filing of refund claim and in any case beyond 45 days from the date of filing of the refund claim. The time limit which has been given out in place by the Board needs to have been followed failing which, the liability to pay interest arises. The circular dtd 20th May, 2009 has practically put the refund claims filed in terms of Notification of 9/2009 on a higher platform as compared to other types of refund claims filed under Section 11B for which 3 months period was prescribed for processing the claim from the date of filing of the refund claims.

Income Tax

Whether when assessee has option to claim exemption either u/s 10(23C) or Sec 11(1), AO cannot force assessee to go for deduction u/s 11 - YES: ITAT

THE assessee is a Trust registered u/s 12AA of the Act. The AO observed that the application of Rs.53,84,680/- which was claimed to have been made through statement of affairs was made on the purchase/addition to the fixed assets. Further, in response of accumulation claimed to have been made as per Explanation to sec 11(1) of the Act, it was also noticed that no application for exercise of option in writing was found on record. Accordingly, he asked the assessee as to why the expenditure made on addition/purchase of fixed assets may not be treated as application for charitable purpose in view of the ratio of decision in the case of Queens Educational Society v. CIT of the High Court of Uttarakhand and since no notice as per section 11(1) of the Act r.w.Exp.2 to this section, was given within the prescribed time limits, why exemption may not be withdrawn on such accumulation. The AO did not consider the purchase of fixed assets as application towards charitable purpose and accordingly withdrawn the exemption of Rs.53,84,680/- and added the same to the income of the assessee.

The issue before the Bench is - Whether when assessee has option to claim exemption either u/s 10(23C) or Sec 11(1), AO cannot force the assessee to go for deduction u/s 11. YES is the answer of the Tribunal.

Central Excise

CE - s.4A of CEA, 1944 - Goods cleared in bulk does not mean that they are meant for Industrial/Institutional consumers - It should be meant for Industrial/Institutional consumers under SWAM Rules to pay duty u/s 4 of the CEA, 1944 - Appeal allowed: CESTAT

THE appellant is a manufacturer of ceramic tiles and clearing the same to their depots. The appellant sells these tiles to dealers who in turn sell to ultimate consumers. The appellant also sells tiles to buyers such as Real Estate Developers, Construction Co., Cooperative Housing Societies, Commercial Complexes, Educational Institutions & Hostels, Hotels, Hospitals, Interior Designer etc.

The appellant is discharging duty liability on MRP basis as per Section 4A but the revenue is of the view that as these tiles have been cleared to real estate developers etc. viz. industrial or institutional consumers, they are not required to affix MRP inasmuch as they are exempted from this requirement as per Rule 2A of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and, therefore, the appellants are required to pay duty on transaction value i.e. as per Section 4 of CEA, 1944.

See our Columns Monday for the judgements