Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Port Services – CENVAT Credit - Steel and cement used for construction of jetty, not entitled; Credit entitled for mobile phone, rent a cab, CHA & Surveyor charges. Air-conditioners are capital goods, entitled for credit – CESTAT

THE cement and steel have undoubtedly been used in the construction of jetty and port building by the contractor, which service is itself liable to service tax, though the same is exempted under the Notification. As such, it can be safely concluded that the cement and steel stand used for providing the output service of construction of building and not used in providing the port service, such an interpretation would lead to unwarranted results and the definition cannot be so stretched so as to include the use of cement and steel as used for providing the output service of port services. If such a wide meaning is given to the above expression then the cement and steel used for construction of any building which houses the office etc. would become eligible inputs for the purposes of providing output services.

Income Tax

Expenditure billed in the name of sister company; rent on garden; capitalised advertisement expenditure; - eligible for deduction: No personal expenditure in the hands of the company - ITAT

Expenditure billed in the name of sister company; the disallowance cannot be made only on the technical ground that the bill was raised in the name of its sister concern for certain business considerations.

Rent on garden: The assessing Officer has disallowed the rent of garden space simply on the ground that the nature of assessee's business did not necessitate any garden space.

Capitalised advertisement expenditure; the real question for determining the deductibility or otherwise of any expenditure is its nature and not the treatment given in the books of account.

No personal expenditure in the hands of the company; The assessee is a private limited company and in such a situation, there cannot be any question of a personal use of the facilities by the Directors of the company.

Central Excise

If credit cannot be denied and an amount equal to 10% is not required to be paid in respect of exempted goods exported under bond, equal credit cannot prima facie be denied and amount equal to 10% is not required to be paid under Rule 6(3)(b) of the CCR, 2004 in respect of exempted goods cleared for export under rebate – Tribunal

THIS is a Stay petition filed against the Order of the Commissioner who held that the process of packing different medicine in blister packs does not amount to manufacture and accordingly confirmed the demand of an amount of Rs.1,65,45,396/- in terms of rule 6(3)(b) of the Cenvat Credit Rules, 2004 along with interest and imposed equivalent penalty of Rs.1,65,45,396/-

See our columns Tomorrow for the judgements