Jurisprudentiol-Tuesday's cases
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Appellant promoting products of their foreign counterpart by way of advertising, marketing etc. and consequently procuring orders for foreign supplier who delivers goods in India - service qualifies as export - Refund admissible: CESTAT
THE appellant is in the business as commission agent of their foreign counterpart for which they are promoting their product in India by way of advertising, marketing etc. Consequently they procure orders for their foreign supplier who delivers goods in India.
Revenue is of the view that as the said activity is performed in India, therefore, the appellant is required to pay service tax under Business Auxiliary Service under reverse charge mechanism.
The appellant had filed a refund claim of the tax paid by them and the same was rejected by the lower authorities holding that the service of the appellant does not fall under the Export of Services Rules, 2005.
Income Tax
Whether when assessee has received certain services and also accepted claims for same, such expenditure is not allowable u/s 37(1) merely because provisions were made close to AY and bills were not received - NO: HC
THE assessee made provision for network repair and maintenance expenses. Assessing Officer made addition on account of provisions for network repair and maintenance and disallowance on account of credit verification cost, provision for consultancy charges and provision for car hiring charges. Commissioner of Income Tax (Appeals) upheld the disallowance made by Assessing Officer.
Tribunal held that no case was made out that the provision made by the assessee for network repair and maintenance expenses was only a contingent liability. It was held that the provision was made for the repairs in this regard as the relevant bills were not received and payment thereof was not made upto the close of the assessment year. Hence, in accordance with accrual system of accounting, the provision in this regard was created. Hence, the provision for network repair and maintenance expenses could not be said to be a provision made for contingent expenses. Hence, said disallowance has to be deleted.
The issue before the Bench is - Whether provisions for network repair and maintenance and credit verification cost and provision for consultancy charges and provision for car hiring charges are disallowable as a contingent liability where the services had actually been performed and liability was accepted by the assessee and the amounts represented ascertained liabilities and were shown as "provisions" as the services were rendered close to the assessment years and relevant bills were not received. And the answer favours the assessee.
Customs
Notf. 77/2008-Cus dated 13/06/2008 is effective from 00 hours of 13/06/2008 - Since 'Let Export Order' has been given on 13/06/2008, the rate of duty relevant for assessment would be the rate prevalent on 13/06/2008 - Benefit available: CESTAT
THE Commissioner (A) held that the assessee was eligible for the exemption under Notification No. 77/2008-Cus dated 13/06/2008 as the same is effective from the midnight of 13/06/2008 and the Let Export Order was given on 13/06/2008; refund is admissible
Revenue is aggrieved and, therefore, is before the CESTAT.
The ground urged is that the respondent had not challenged the assessment order and, therefore, in view of the apex Court's judgment in the case of Priya Blue Industries Ltd. , the refund claim was not maintainable.
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