Jurisprudentiol-Tuesday's cases

By Vijay Kumar

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

Law is very clear and there is no ambiguity in the matter - In terms of amended s. 129Ew.e.f 06/08/2014, Tribunal is barred from entertaining any appeal unless the pre-deposit as mentioned in s. 129E is complied with - as appellants have not complied with pre-deposit requirements, Misc. applications and appeal dismissed: CESTAT

THE CC(Preventive), Mumbai vide orders-in-original dated July, 2014 classified the coal imported by the appellant as “bituminous coal” and consequently confirmed a duty demand of Rs.1,86,91,478/- against M/s Asian Natural Resources and Rs.2,13,72,835/- against M/s Bhatia Global Trading, apart from interest thereon and imposing penalties.

The appellants are before the CESTAT with Miscellaneous applications and have urged that the case be heard without insisting on any pre-deposit and, therefore, the appeal be admitted.

Held: the appeal is not admissible before this Tribunal, inasmuch as the appellants have not complied with the pre-deposit requirements envisaged in section 129."

Income Tax

Whether 'amalgamation' as term can include transfer of one or more undertakings to another company without actually blending existing companies into amalgamated company - YES: High Court

THE assessee company is engaged in the business of manufacturing of textiles. Upon verification of its return, the assessee had claimed and was granted benefit of investment allowance or carried forward of investment allowance u/s 32A. Subsequently, it was noticed by the AO that under a scheme of arrangement u/s 391 and 394 of Companies Act, nine out of thirteen industrial units held by assessee were transferred to three newly formed companies. Accordingly, relying upon section 32A(5) and treating transfer of assets and liabilities, including plant and machinery as "sale or otherwise transfer", the AO passed an order u/s 32A(5) r/w/s 155(4A) and 154 withdrawing benefit of investment allowance or carried forward of investment allowance.

The issue before the Bench is - Whether "amalgamation" as a term can include transfer of one or more undertakings to another company without actually blending existing companies into the amalgamated company. And the answer is YES.

Service Tax

Since non-payment of ST was detected from books of accounts it indicates that appellant could not have acted mala fide - Adjudicating authority having found reasonable cause for waiving penalty u/s 76, there is no justification for imposing penalty u/s 77, 78 of the Act: CESTAT

THE appellant paid service tax under the category Goods Transport Agency on reverse charge basis. However, during the audit of their unit, the reconciliation of ledger accounts with the service returns revealed that they had not paid the due service tax during the periods 2007-2008 and April 2008 to December 2009.

Upon being pointed out, the entire amount of service tax was paid later but before the issue of show cause notice.

Nonetheless proceedings were initiated and apart from upholding the ST demand, penalties were imposed under Sections 77 & 78 of the Finance Act, 1994 along with interest.

See our Columns Tomorrow for the judgements