Jurisprudentiol-Friday's cases

By Vijay Kumar

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

Application for waiver of pre-deposit filed on 06.08.2014 - in view of substituted provisions of s.35F of CEA, 1944 as enacted by Finance Act, 2014 requiring mandatory deposit of duty/penalty, and applicant having paid 7.5% of duty confirmed, Stay application is dismissed as infructuous - CESTAT.

CONSIDERING the fact that the Finance Act, 2014 has been introduced on 06.08.2014 and stay application is not required to be filed by the applicant, as they are required to make a mandatory pre-deposit of duty/penalty. In these circumstances, the application for waiver of pre-deposit of impugned demands has become infructuous. Accordingly, same is dismissed as infructuous.

Income Tax

Whether amount paid to RBI/IDBI under Industrial Development Bank of India Bill Rediscounting Scheme can be excluded from discounting amount earned by assessee bank on such bills from its borrowers - Whether there is direct nexus/correlation with payment made to RBI/IDBI and what was received from borrower - Whether amount paid to RBI/IDBI under rediscounting scheme can be considered as part of chargeable interest under Section 2(7) of Interest Act

THE assessee bank is a subsidiary of the State Bank of India and is in the banking industry for the last several years and is involved in the activity of advancing money and receiving money from various persons. The assessee discounted various bills of its constituents (borrowers) and the discount earned on such bills was credited to discount account. The contention of the bank was that some of these bills were passed on to the RBI/IDBI for re-discounting and on such passing of the bills, the bank had to pay discount to the RBI/IDBI thus the discount earned by the bank would be the discount minus re-discount charges paid to RBI/IDBI and thus amount paid was allowable as a deduction out of the total amount earned and only net was to be considered as chargeable under the Interest Tax Act.

Service Tax

Rejection of VCES declaration on ground that issue was detected from audit of third party unit conducted before cutoff date - As on date when application was filed by petitioner, there was no audit as against petitioner unit- Rejection order set aside: HC

IN this case, the assessee filed VCES declaration after receiving an intimation dated 07.03.2013 from the Range Superintendent about their liability. The declaration was rejected on the ground that the issue was detected in audit of another assessee (third party) which was initiated much before the cutoff date, i.e., 01.03.2013 and Show Cause Notice was issued to the assessee on 31.07.2013, based on the audit report and hence they are not eligible for VCES. The assessee filed an appeal with the Commissioner (Appeals), but the same was dismissed as not maintainable.

See our Columns Friday for the judgements