From our Legal Corner – tomorrow’s cases

By Vijay Kumar

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

Maersk India gets reprieve in Service Tax case - Tribunal grants Stay from recovery of 18 crores Service Tax demand and Rs.25 crores penalty

The appellants had claimed the benefit of the exemption notification no. 6/99-ST and notification no. 21/2003-ST on the ground that they had received payment for taxable services rendered by them in convertible foreign exchange.

However, in terms of proviso to the said notification, if the payment received in India in convertible foreign exchange for taxable services rendered is repatriated from India there would not be any entitlement for the benefit of notification.

Customs

Denial of drawback - demand notice issued on Dec 26 th and order passed on Dec 29 th without even waiting for reply - Order set aside - Opportunity to be given for reply and personal hearing : Madras HC

THEY are taught at the Academy that they cannot pass orders without giving opportunity to party to reply and personally explain his position. But these Revenue officers get more loyal than the king and break every accepted norm in the book. Why? Because they can always get away with it.

Here is a case where a demand notice is given on 26th December 2006 and in three days time the Revenue was frantic to adjudicate and passed an order. The poor victim had to go the High Court twice and the case is back at the Show Cause Notice stage. What did the Revenue gain by such super speed and that too illegal?

Income Tax

Debt Syndication Fees is not interest accrued on loans and advances. Debenture Trust Fees are also not interest income. - Not entitled for deduction under sec.10(23G) of the Act - Tribunal

One of the grounds of appeal recently before the ITAT was that the CIT(Appeals) had erred in directing the Assessing Officer(AO) to allocate 10% of the gross Interest received under sec.10(23G) towards earning of exempted income though admittedly there was a finding that borrowed funds were not used for investment in Tax Free Bonds.

See our columns tomorrow for the judgements