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By Vijay Kumar

CST

goods despatched to consignment agents for sale to customer involves inter-state sales - liable to CST - Supreme Court

The goods which were triggered from Rourkela and sold to the subsidiaries of the CIL through the appellant's consignment agents were essentially meant to be sold to the subsidiaries of the CIL and the goods primarily triggered from Rourkela and were sent to the subsidiaries of the CIL amounted to inter-State sale and the view taken by the Division Bench of the Orissa High Court is correct.

Income Tax

Exemption to charitable trusts cannot be denied if part of the income was used for religious purposes - ITAT

The AO was of the opinion that the activities have been carried out in such a way that it is for the benefit of particular religious community i.e. Christianity. The AO proposed to invoke the provisions of Section 13(1)(b) so as to deny exemption u/s 11 & 12 of the Act. The appellant submitted that the amount incurred on conference was spent on ordinary kind of food, stay and conveyance for the participants and it was donated by "Word Outreach". By this activity, there was no direct or indirect benefit to the participant. The benefit of this activity is for the public at large. The AO held that benefit of exemption u/s 11 & 12 would not be available to any trust which has created for the benefit of any religious community. The AO found that the society has incurred various expenditure on the teams which have been sent to different parts to serve the victims of flood for community service, to educate the masses etc. Such activities are charitable in nature. However, the society has also applied its income for the benefit of a particular religious community i.e. Christianity and hence, the benefit of exemption u/s 11 was denied.

Service Tax

Review vs appeal - AC imposes penalty, Commissioner (A) confirms, CESTAT sets aside, jurisdictional Commissioner enhances penalty, CESTAT sets aside, Revenue appeals to Bombay HC - appeal dismissed

THE provisions of review and appeal in Service Tax are playing havoc with litigation hungry revenue officers going full steam.

The Commissioner is empowered to review and revise orders passed by his subordinates, but he has to remember that the assessees also have appellate channels. So when an order is set aside by the Commissioner (Appeals) or Tribunal, there is no point in the jurisdictional Commissioner passing a review order.

The respondent Hutchison Max Telecom were under the impression that sale of sim cards and activation charge did not involve any service and they were paying sales tax on these sales. The Service Tax department thought otherwise and demanded Service Tax and imposed penalty.

They did not contest the tax liability but challenged the penalty. The Commissioner (Appeals) upheld the original adjudicating authority.

Central Excise

Incorrect Cenvat availment also attracts penalty under rule 25 & interest in terms of Rule 8(3) of the CER - A Double whammy by Tribunal

THE appellant took Cenvat credit amounting to Rs.2,83,340/- on 12.06.2003 on the basis of an invoice and by mistake took the same credit again on the basis of same invoices on 21st June 2003. Later on, upon detecting the mistake (on their own) they debited excess credit taken by them on 21.08.2003 & also paid the interest for the said period under section 11AB on 04.03.2004. That should have settled the issue amicably, but then the department had other plans!

See our columns tomorrow for the judgements