Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Computers are capital goods and hence for recovery of credit, provisions of rule 57U would come into play and not rule 57I of CER'44 – No cause for imposition of penalty u/r 57U (6) and interest u/r 11AB : Tribunal

THE appellants had availed modvat credit on computers imported by them in August 1998 and after availing of credit as capital goods, the said computers were put to use for some time. After a couple of months, it was found that the computers had turned out to be faulty and accordingly the same were returned to the supplier but without preparing any duty paying documents.

Once an order is reviewed by the Commissioner, proper recourse should be to file appeal – but not issuing a show cause notice: CESTAT

THIS case highlights the sad state of affairs in one of the largest revenue earning departments next only to Income Tax. Where the words “table posting”, “filed posting”, “cooling off period” “ sensitive” “ non sensitive” are officially recognized, the sections like Tribunal / Appeal are given least preference and are not given the due importance it deserves, though they work in head quarters office right under the no( i )se of the Commissioner.

Now, looking back in the chain of events, it is strange that such a simple issue could not be realized by one Commissioner (Appeals) who just confirmed the order in original, one Additional Commissioner who just confirmed the Show cause notice issued, one Joint Commissioner who just issued the notice even (with?)/without realizing that the same would not be sustainable on plain reading of Section 35E , one Commissioner who reviewed the order of finalization, but could not see that the appeal is filed within sixty days from 21.2.2006. Should the department waste the valuable time of the Tribunal just to know such simple issues?

Income Tax

SBI's MICR centre providing managerial services to Banks – Payment to SBI liable for TDS : ITAT

State Bank of India was managing and clearing of the cheques through MICR Centre by rendering managerial services which falls within the definition of technical services. The definition of "fees for technical services" is very wide. It covers within its ambit any managerial, technical or consultancy services rendered by a person. Since other banks pay to the State Bank of India charges for the MICR facilities regarding identifying, reading and clearing cheques through its special kind of machines, the same is in the nature of fees for technical services and, therefore, will be liable for TDS .

See our columns Tomorrow for the judgements