Jurisprudentiol-Friday's cases

By Vijay Kumar

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

Show Cause Notice and orders sent by Speed Post is not valid service - COD applications allowed - Two SCNs were served personally to applicant - on same issue, as Tribunal has confirmed ST demand in case of Reliance Michigan JV, on merits, revenue has case - Pre-deposit ordered in r/o tax demand made under two Show Cause Notices: CESTAT

IN the matter of the COD application the applicant submitted that they never received the SCN or the impugned orders passed in the years 2011 & 2012 and they came to know about the same only on 12.08.2013 and, therefore, obtained the copy of the same on 25/29.10.2013 and appeals were filed on 02.12.2013. Inasmuch as it is pleaded that the delay be condoned. It is also submitted that they came to know from inspection of the records that the SCNs and orders were sent through Speed Post and which is not a valid service in terms of s.37C of the CEA, 1944 as held by the Bombay High Court in the case of Amidev Agro Care Pvt. Ltd. - 2012-TIOL-395-HC-MUM-CX. The applicant contended that the orders are required to be set aside.

Income Tax

Whether if assessee makes wrong claim of royalty which actually pertained to earlier AYs, it is fit case to attract penalty if assessee fails to give valid reasons for making such claims twice - YES: HC

THE assessee company was engaged in the business of leather chemical manufacture and trading. It had claimed deduction of royalty which was paid to M/s Bayer AG Germany under the agreement. As no TDS was paid during the year the same was added back at first instance and in the computation it was claimed as deduction on the basis of TDS payments. The same was done as per the provisions of section 40(a)(i). The assessee was asked to file full details of TDS payments made in respect of these royalty payments. After verifying these details it was noticed that some of the TDS certificates pertain to the earlier year and the part of the royalty payment attributable to these certificates had already been claimed and allowed as deduction to the assessee in the earlier years. When asked about this the assessee had admitted the error and stated that in AY 2002-03 a sum which had been already claimed in earlier year was again inadvertently claimed as deduction in the computation of income. Thus an addition was made and penalty for concealment was levied.

The issue before the Bench is - Whether if assessee makes wrong claim of royalty payment which actually pertained to earlier AYs and was also allowed by the Revenue, it is a fit case to attract penalty if the assessee fails to give valid reasons for committing such an error of making claims twice against same TDS certificates. YES is the answer of the High Court.

Central Excise

Sika Latex & Sika Latex Power are manufactured goods and chargeable to CE duty - addition of water to Inputs is not simple process otherwise even customers could have done same while using it - matter remanded for extending cum-duty benefit: CESTAT

IT is the claim of the appellant that for manufacturing the product Sika Latex and Sika Latex Power, they are only adding water to inputs namely "Styrofan D 623 AP" and "Apcotex TSN 100". The appellants' claim is that since the manufacturing process undertaken by them i s only of diluting the inputs and repacking the same, their activities do not amount to manufacture and hence, no excise duty is payable on their final product namely, Sika Latex and Sika Latex Power.

See our Columns Tomorrow for the judgements