Jurisprudentiol-Monday's cases

By Vijay Kumar

Customs

Tribunal should not pass drastic orders - Tribunal cannot defeat or frustrate right of Revenue or litigation itself - It should decide on case to case basis and Revenue should get opportunity to seek a stay of implementation of orders: HC

THIS is an appeal filed by the Commissioner of Customs (General) before the Bombay High Court against an order passed by the CESTAT allowing the Appeal of the Respondent. The Tribunal's order set aside the order-in-original, by which, the Customs House Agent Licence of the Respondent was revoked and security deposit made by it was forfeited.

As the Tribunal's order was not implemented the respondent had filed a Miscellaneous application and the CESTAT had passed an order on 8th September, 2014 directing restoration of the Customs House Agent Licence and also mentioning that if the same is not complied with, the Tribunal intends to initiate contempt of Court proceedings.

Income Tax

Whether when assessee is Board of State Govt it cannot claim exemption for its income under Article 289(1) of Constitution - YES: ITAT

ASSESSEE is a statutory authority created by the Govt. of Andhra Pradesh with effect from 24/01/1976 in exercise of power conferred by section 4(1) of water (prevention and control of pollution) Act, 1974. Till AY 2002-03, assessee claimed exemption u/s 10(20) of the Act as a local authority. However, after amendment to the definition of local authority u/s 10(20) with effect from 01/04/2003, by Finance Act, 2002, assessee became liable to pay income-tax. Since assessee failed to file any return of income, even after it became liable to pay tax, AO initiated action u/s 147 of the Act by issuing a notice u/s 148 on 31/10/08 calling upon assessee to submit return of income for AYs. 2004-05 to 2008-09.

THE issue before the Bench is - Whether when the assessee is a pollution control board it can also claim exemption for its income under Article 289(1) of the Constitution. NO is the answer.

Service Tax

ST was paid on amount of advances received by Respondent but ultimately no service could be provided as said works contract got terminated - if no service is rendered then no service tax is payable - amounts paid have to be considered as "deposit" - provisions of limitation u/s.11B of CEA, 1944 not applicable: CESTAT

THE facts are that the respondent entered into works contract with M/s. Pipavav Energy Pvt. Limited ('PEPL') and received mobilization advance of Rs.4.83 crores in July-August, 2010 upon execution of bank guarantee.

They paid service tax @ 4.12% of a total amount of Rs.19,11,331/-, on the said mobilization advance, under Works Contract Composition Scheme. The said work contract was terminated by M/s. PEPL on 24.11.2011 and mobilization advance was recovered by M/s. PEPL by encashing the bank guarantee on 16.5.2012, for the service not provided.

Resultantly, the respondent filed an application on 25.10.2012 for refund of service tax paid. The adjudicating authority rejected the refund claim on the grounds of limitation.

See our Columns Monday for the judgements