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By Vijay Kumar

Service Tax

Service tax - Liability to pay interest on short or delayed payment of duty is mandatory – Interest under Section 75 is not penal - It is a civil liability which is inescapable: CESTAT

THE appellants, a public sector undertaking have short paid their service tax liability for which the department demanded interest. They paid the differential tax liability but did not discharge the interest liable to be paid by them on the ground that the short payment of service tax was only due to arithmetical error in calculation of service tax and not on account of any fraud or suppression with an intention to evade service tax. They also stated that they have paid some amount of service tax in excess and requested that the same may be adjusted against the interest liability to be paid by them. The Tribunal rejected the idea of appellant's request to square off their interest liability against the service tax payments made by them and dismissed their appeal.

Central Excise

Central Excise – suppression - Letter given to an officer not having jurisdiction cannot be treated as a letter to jurisdictional officer: High Court

THE issue before the High Court is: Whether wilfully non-furnishing of information and non-obtaining of Central Excise Licence will not constitute suppression of facts on the part of the party (respondent company) and consequently the demand w.e.f . 22.01.1991 should not be time barred? The Court took the view that the information given on 22.01.1991, to the Inspector of the Range with regard to which he had no jurisdiction in the matter, cannot be said to be information to the office of Assistant Collector, Central Excise. Therefore, the observation of CESTAT that no concealment was made by the assessee is erroneous in law.

Income Tax

Procurement of aircraft engines - when contract mentions that engines cannot be reproduced it tantamounts to contract for sale and not service – Payment made to non-resident is not fee for technical services under Indo-Russian DTAA - not liable for any TDS in India: ITAT

If the foreign company delivered any technical knowhow along with the three prototype engines of AL-551, it cannot be construed as rendering of technical services to the appellant and the payment made in this regard cannot be treated as ‘fee for technical services'. In conclusion it was held that the appellant is not required to deduct TDS for the payment made to the non resident entity.

See our columns Tomorrow for the judgements