Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Sales tax on food and drinks supplied by a club to its members

Matter remanded to Tribunal to decide the exact relationship between the parties. Will it have any Service Tax implications? In this case there was no determination by the fact finding authorities regarding the relationship between the Club and its members in the matter of supply of food and drinks; that is to say, was the Club acting as an agent of the members or did the property in food and drinks pass from the Club to the members?

Income Tax

Exports by 100% EoUs - wordings used in Sec 10B are similar to those in Sec 80I - exports incentives and interest earned on deposits made for power and water connections not eligible for Sec 10B benefits

THE Income Tax Act allows deduction for exports benefits and profits from exports under various sections. EoUs are eligible for similar benefits u/s 10B . But, is it a blanket benefit which can be reaped by EoUs on all sorts of income? The latest decision of the Tribunal explicitly says no. Assessees cannot avail the fruits of Sec 10B on exports incentive and exports quota benefits earned by an EoU . Similarly, it can have the cake of earning interest income from deposits made for electricity and water connections but cannot eat the cake u/s 10B which has the wordings similar to Sec 80I - "any profits and gains derived from an industrial undertaking".

Central Excise

Duty paid 'Coconut Punch Chocolates' bought in bulk and repacked with manufactured 'Coffee Bite chocolates' and cleared on payment of duty under s.4A is entitled for CENVAT Credit: Tribunal

THE Bench noted that provisions of Section 2(f)( iii) were specifically introduced from 1.3.2003 and it included packing or repacking of the goods as manufacture. As such, the activity of packing of “Coconut Punch chocolate” along with “Coffee bite” is an activity amounting to manufacture , the Bench added and further observed that as there is an activity of manufacturing, the duty paid Coconut Punch chocolate produced by respondents has to be considered as an input for manufacturing final products ‘Coffee bite'.

See our columns Tomorrow for the judgements