Some Highlights Related to Service Tax & Income Tax

Highlights

  1. Service Tax: Fraudulent availment of CENVAT Credit – Inference of fraudulent transactions in the matter of payment of commissions to sub-brokers – The facts remained unnoticed if the same would have not been detected by the department. – Demand with penalty upheld – Tri
  2. Service Tax: Denial of refund claim – Bar of limitation – The relevant date for refund in the case of rebate should be from the date of payment of service tax on the taxable services exported. – Tri
  3. Service Tax: Claim of interest – Delayed refund – Unjust enrichment – appellant is entitled for claim of interest on delayed refund – Tri
  4. Service Tax: Rent-a-Cab Service provided to SEZ unit – benefit of Notification 4/2004-ST dated 31/03/2004 – There is no dispute that the appellant herein rendered service of tour operator for transportation of employees of a unit situated in SEZ – exemption allowed. – Tri
  5. Service Tax: Demand of service tax – cum-tax benefit expended to the assessee – value received for the taxable purpose needs to be considered as cum-tax amount if the service tax is not charged. – Tri
  6. Central Excise: Refund – unjust enrichment – excess payment of duty due to valuation dispute – in terms of legally enforceable Agreement of the appellant with HLL, the loan amount, was to be returned to HLL as soon as the Appellant gets refund of the excise duty; the refund would not be hit by the bar of unjust enrichment – Tri
  7. Central Excise: MRP based Valuation u/s 4A – affixing of sticker showing revised MRP over the printed MRP on the packages is in accordance with Rule 6 of the Standards of Weight and Measures (Package) Rule, 1977 and it fulfils the requirement of the declaration in terms of Section 4A of Central Excise Act, 1944 – Tri
  8. Central Excise: Classification of goods – Classification under CSH 1701.31 or 1701.39 – Clearance of sugar as levy sugar – It is nobody s case that the said Act is not Central act. The tariff heading 1701.31 is applicable in the cases in hand. – Tri
  9. Central Excise: Automobile cess – whether the appellant being job worker i.e. manufacturer of body building is required to pay automobile cess or not as per Automobile Cess Rules, 1984 read with Industries (Development and Regulation) Act, 1951 or not – Held No – Tri
  10. Central Excise: CENVAT Credit – suo moto re-credit of Cenvat credit which was reversed at the instance of Audit Team on GTA service – appellant is entitle for Cenvat credit – demand set aside – Tri
  11. Central Excise: Reversal of cenvat credit on goods lost / written off – returned goods – on written off value, Cenvat credit is not admissible – Tri
  12. Customs: Benefit of duty drawback – Conversion of free shipping bills into drawback shipping bills – Circular No. 04/2004 dated 16.01.2004 – there was no reason for denying the benefit only on the ground that at the time when the appellant had sought the duty drawback, the goods could not be physically examined. – SC
  13. Customs: Undervaluation of goods – no documentary evidence was produced by the assessee to support the plea that the goods at Chennai port were inferior in quality than the goods imported and cleared at Mumbai port – Tribunal has not only misinterpreted the statements of two partners of the assessee, it has also sidetracked and ignored other relevant material. – SC
  14. Customs: Classification of goods – Bridges/Aerobridges – required to be used for the modernization of airport facilities – benefit of Notification No. 36/96-CUS dated 23.07.1996 and Notification No.11/97-CUS dated 01.03.1997 allowed – SC
  15. VAT and Sales Tax: Challenge to coercive recovery of alleged Value Added Tax – no provision is pointed out to us under which the department can recover disputed tax even before passing any order by competent authority – respondents are directed to return three cheques – HC
  16. VAT and Sales Tax: Claim of sales tax exemption on rice bran – It is not for the selling dealer to go after the purchasing dealer to find out as to in what manner he utilized the goods, which it has purchased on the strength of the Declaration Forms in order to be entitled to the deduction. Such a requirement would fasten an impossible burden on the selling dealer. – HC
  17. Companies Law: Reduction of paid up share capital seeked – the procedure stipulated in Section 101(2) and (3) of the Companies Act, 1956, for the settlement of list of creditors will not apply. The prayers sought for in this petition are granted and the petition is allowed. – HC
  18. Income Tax: Registration under Section 10 (23C)(vi) denied – expenditure on advertisement made does not necessarily means that the activity of the petitioner is commercial in nature or is being done with the intention to earn more profit. Such finding given by the authority is patently erroneous – HC
  19. Income Tax: Non deduction of TDS u/s 194A – Loan amount raised from the State Government and the interest payable to the Government – assessee was unable to show that the payment of interest was made to the Government except to repeat that the corpus fund was created by the Government from which the loan was advanced to the appellant – benefit of section 196 cannot be extended – HC
  20. Income Tax: Eligibility for deduction under section 80IA – whether the Bangalore International Airport Ltd. [BIAL] is a statutory body u/s 80IA(4)(i) of the Act? – Held Yes – Tri
  21. Income Tax: Trusts for the benefit of two minor children – provisions of section 64(1)(iii) invoked to include the income of trust into the income of assessee (Individual) – the deferment of the benefit is beyond the period of minority of the assessee’s three sons, since the assets are to be received by them when they attain majority, the provisions of section 64(1)(v) have no application. – SC
  22. Income Tax: Entitlement to exemption u/s 11(2) – The memorandum of association does not permit the profits to be distributed between the members. The profits are provided to be utilised for services of the public utility, would thus clearly fall and will qualify for exemption within the meaning of “charitable purpose”, as defined in section 2(15) – HC
  23. Income Tax: Determination of unaccounted turnover – There is no provision to simply incorporate the demand made in the show-cause notice issued under the central excise laws for the purpose of computation of tax under the Income-tax laws. – HC
  24. Income Tax: Interest earned on grants made by the State Government kept in fixed deposits pending utilization – interest on all these fixed deposits are considered to be capitalised and not revenue receipts to treat it as an income. – HC
  25. Income Tax: Income from ‘seconds’ – block assessment in the light of the provisions of section 158BA – No law permits maintenance of two sets of accounts, i.e., one unaccounted and the other accounted – HC
  26. Income Tax: Taxability of the amount waived by the mutual funds/financial institutions – the amount of principal waived by the financial institutions cannot be taxed under section 41(1) as the same had not been debited to the profit and loss account in the earlier years nor had been claimed as a deduction from taxable income – HC
  27. Income Tax: Disallowance of interest paid to the bank – the appellant/assesse had advanced an interest free loan to its sister concern – there would be a direct benefit on account of the advance made by the appellant to its sister company if the same improves the financial health of the sister company and makes it a viable enterprise. – deduction on interest allowed – HC