Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Chit Funds not taxable under ‘Banking and other financial services' - Board Circular quashed: High Court

In the absence of a specific statutory definition of ‘cash management' or even ‘asset management', the question of its wider interpretation either by seeking to include or exclude any other transactions or business does not arise and is not permissible and any such act on the part of the executive would certainly be in the teeth of Article 265 of the Constitution of India. The entire action on the part of the respondents in trying to extend the levy of the tax for the first time by way of a circular is merely an executive fiat, which is not permissible under the law.

Income Tax

Income Tax and CENVAT Credit - CENVAT balance as such does not amount to payment. The balance becomes equivalent to, payment only at point of time assessee exercises his option to set off balance against excise liability and not before; Whatever adjustment is made in valuation of closing stock, same will be reflected in opening stock also irrespective of any consequences on computation of income for tax purposes.

In cases where there are statutory compulsion u/s 145A to give adjustment in closing stock, in such cases it has to presume that the assessee has exercised his option to set off against MODVAT Account. It is to be presumed that the assessee exercises his option to set off MODVAT a/c against excise liability, which amounts to payment of excise duty and accordingly the assessee is entitled to deduction u/s 43B . The above presumption is based on legal fiction created by section 145A of the Act. However, to avoid double deduction, the assessee should ensure that there will be no double adjustment of MODVAT account firstly at the time of giving effect to the section 145A and secondly at the time of final exercise option for adjustment of MODVAT account. In this regard burden is on the assessee.

Central Excise

Motor vehicle body built on chassis supplied by Tata Motors – Valuation under Rule 10A of the Valuation Rules, 2000 – Applicant offers to deposit Rs 25 lakhs as pre-deposit and Tribunal graciously accepts

It is the Revenue's contention that the valuation of these “motor vehicles” manufactured on job work on behalf of the principal manufacturer should be in terms of Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 from the day it was inserted viz. 01.04.2007.

So, the value of these “motor vehicles” at the job worker's end for discharge of Central Excise duty is now supposed to be the transaction value at which the principal manufacturer [ Tata Motors ] sells these goods to be unrelated buyer.

Customs/FEMA

Even a Court has no power to impound a passport, let alone DRI or Enforcement Directorate – Avinash Bhosale's passport ordered to be released: High Court

Even the Court cannot impound a passport. Though, no doubt, Section 104 CrPC states that the court may, if it things fit, impound any document or thing produced before it, in our opinion, this provision will only enable the court to impound any document or thing other than a passport. This is because impounding of a “passport” is provided for in section 10(3) of the Passports Act. The Passports Act is a special law while CrPC is a general law. It is well settled that the special law prevails over the general law.

See our columns Tomorrow for the judgements