Jurisprudentiol-Tuesday's cases

By Vijay Kumar

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

Donations not liable to Service Tax - Time bar u/s 11B of CEA, 1944 will apply only if demand has been made/paid as duty under the law - since no demand made and tax was not payable in law, refund not time barred: CESTAT

THE appellant is a Charitable Trust. It has two halls which are given on hire for various functions. They also received donations from caterers and decorators for permitting them to use their halls. They were asked to pay Service Tax by the Superintendent on the donations received by them. As regards hire charges for the halls, they were paying Service Tax under the category of Mandap keeper.

After a few rounds of litigation up to the High Court, it was held that donations received by appellant from caterers are not leviable to Service Tax.

Income Tax

Whether, for purpose of TDS u/s 194A, decision of Special Court would prevail over ITAT order - YES: High Court

THE assessee company entered into an agreement with Fairgrowth Financial Services Ltd. (FFSL), as per which loan of different amounts were sanctioned by the FFSL in favour of assessee and the same were accepted. The said loan was against the pledge of 3,28,000 shares of United Phosphorous Ltd. As per the terms of the agreement, assessees had to repay 20% within 60 days and balance 80% within 180 days. The assesees handed over 3,28,000 shares of UPL together with duly executed transfer form to FFSL since as per the agreement the assessees had to repay 20% amount within 60 days. In the meantime FFSL illegally sold 2,28,000 shares to Syndicate Bank and sub-pledged 1,00,000 shares to NHB. In the month of June, 1992, the Government promulgated Special Court ordinance, 1992. On 2nd July, 1992, custodian appointed for FFSL. On 10.08.1992, the Syndicate Bank purchased 2,28,000/- shares and presented before UPL for registering the transfer. On 13.08.1992 UPL received intimation of sub-pledge of 1,00,000 shares with NHB. On 14.08.1992, the assessee filed Misc. Petition No.10 of 1992 against the Custodian, FFSL, Syndicate Bank, NHB and UPL. On 18.08.1992, the Ordinance was replaced by the Special Court Act, 1992. In some of the matters, the Special Court held that provisions of TDS did not apply to "payments made pursuant to Orders and Directions of Court" and directed the party to recover on its own TDS paid from Income Tax department and not to deduct TDS.

The issue before the Bench is - Whether, for purpose of TDS u/s 194A, decision of Special Court would prevail over ITAT order. YES is the answer.

Central Excise

Brand name 'Ribbons & Balloons' belonged to M/s. Bharat Cafe Pvt. Ltd. - Fact that M/s. Bharat Cafe Pvt. Ltd were not manufacturer or trader or seller of the said goods at the relevant time is of no consequence - benefit of SSI exemption not available to appellant: CESTAT

THE appellant was manufacturing cakes/pastries/biscuits/cookies/chocolates and selling these products through their franchisees. All the products were being sold under the brand name "Ribbons & Balloons". Most of the products carried the brand name and in some of the products when the goods are dispatched to the franchisees, the same are in bulk pack, the franchisees are selling the same with the above mentioned brand name. Further, the franchisees have exclusive outlets and they indicate " Ribbons and Balloons" as their name.

See our Columns Tomorrow for the judgements