Jurisprudentiol-Thursday's cases

By Vijay Kumar

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

Import of Coal - "Steam Coal" or "Bituminous Coal" - Appeal against pre-deposit - No substantial question of Law: HC

COMMISSIONER of Customs held that the coal imported by the appellant was "bituminous coal" classifiable under SHN 2701 1200 of the Customs Tariff Act, 1975 and not "Steam Coal" as claimed by them and consequently attracted duty. He rejected the classificat ion of the coal and determined the differential customs duty payable by the appellant at Rs.2,09,40,075/- and also ordered recovery of interest at the applicable rate on such amount and imposed penalty of Rs.31,00,000/- under section 112(a) of the Customs Act, 1962. By the impugned order, the stay application has been partly allowed by the Tribunal directing the appellant to deposit a sum of Rs.20,00,000/- as a condition for hearing and disposing of the appeal on merits and granting waiver of pre-deposit of the balance amount involved and staying the recovery thereof.

Against the order of pre-deposit, the importer is before the High Court.

Income Tax

Whether date of allotment letter issued by builder of flats is relevant date for acquisition of property for purpose of Sec 2(42A) - NO: HC

ASSESSEE had purchased the undivided share of land of 2150 sq.ft. out of a large extent of 4 grounds and 400 sq.ft. situated in S.Nos.2766 and 67, RS No.1570/4 at No.1, Binny Road, Chennai. Prior to the purchase of this undivided share in land, assessee had entered into an agreement with M/s. Vishranthi Homes Pvt. Ltd.(VHPL) for constructing the built-up area of 3465 sq.ft. including common area in the above-said undivided share of land. The agreement was for purchase of land as well as for construction of home by a project promoted by VHPL. The agreement was determined for a consideration at Rs.81,68,811/- to be paid by the assessee to the builder VHPL towards construction of the residential unit. Thereafter, the assessee sold the entire unit by a sale deed dated 10.4.2008 well after 36 months from the date of agreement dated 22.2.2005 and claimed the difference between the cost of acquisition and sale consideration as long term capital gains. The AO held that the undivided share of land was registered on 4.8.2005 and since the property was purchased in the month of August, 2005 and sold in April, 2008, the capital gains arising from sale will be assessed as short terms capital gains only and accordingly, AO denied benefit of Section 2(29A) and made addition. On appeal, CIT(A) had allowed the appeal filed by the assessee.

The issue before the Bench is - Whether date of allotment letter issued by builder of flats is the relevant date for acquisition of property for purpose of Sec 2(42A). NO is the answer.

Service Tax

Question of levying to service tax transportation by barges from mother vessel to jetty onshore would not arise at all since said activity is part of import transaction leviable to import duty - Appeals allowed: CESTAT

IT is a settled position in law that when a new entry is brought under service tax levy, the same activity cannot be subjected to levy under an existing entry unless the new entry is carved out of the existing entry as held in Indian National Shipowner's Association - 2008-TIOL-633-HC-MUM-ST. Therefore, there cannot be any demand for service tax on coastal transportation of goods prior to July, 2009. Further the goods transported by the appellant is also covered by Notification 30/2009-ST. The demand of service tax under the category of cargo handling service has to be set aside especially when the activity is squarely covered under the entry of coastal transportation of goods.

See our Columns Tomorrow for the judgements