Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

Service Tax

Legal Corner Icon — the image was hosted by the publisher and was not captured.For a credit of Rs.19.62 lakhs, no assessee would forego benefit of 67% of the abatement– Prima facie case for grant of waiver of pre-deposit as credit already reversed: Tribunal

Finding that the applicant had already reversed the amount of CENVAT credit of the service tax availed on the inputs services, it was held that they had made out a prima facie case for the waiver of pre-deposit of the amount involved.

So, the application for waiver of pre-deposit of the amount involved was allowed and considering the high stake of revenue involved (Rs.9.74 Crores), an out of hearing on the 17th November 2008 is ordered by the Tribunal.

Income Tax

Job work charges reduced after end of year to reduce tax liability of sister concern – agreement colourable; It is duty of assessee to extend cooperation to AO and furnish details as required enabling him to make assessment; Tribunal cannot act as a mute spectator to defrauding of Revenue: ITAT by majority

It is not possible to accept that the parties to the agreement continued to raise bills not in accordance with the alleged agreement and payments were also accordingly made throughout the year after deduction of tax at source. The facts which are clear to the naked eye cannot be brushed aside. The Tribunal, being a final fact finding authority cannot act as a mute spectator to the glaringly unbelievables going on, which is nothing but an arrangement between two interconnected concerns aimed at defrauding the Revenue and reducing the incidence of tax on the whole. It is under such circumstances that the cloak of corporate veil needs to be pierced for unearthing the real intention of the parties.

Central Excise

Yarn received for texturising by job workers in cartons bearing Brand name – Texturised yarn cleared in same cartons – Benefit of SSI exemption available - Tribunal by Majority

The Third Member on reference has passed the following order:-

“5. I have considered the submissions and perused the records. Though I am in agreement with the view expressed by the Member (Technical) on the merits of the case, which in the case of texturised yarn in respect of M/s Aakash Filaments is also not being disputed by the ld. advocate of the appellants, the same, in my view, applies to texturised yarn manufactured on behalf of M/s. Modipon, as well as the brand name was being affixed on cheeses also. I do note that Member (Technical) has not expressed any divergent opinion so far as the time bar aspect is concerned and consequently it has to be held that the demand is hit by bar of limitation .”

Was reference really needed?

See our columns tomorrow for the judgements