Legal Reference Library

In N.K. Bhasin vs Union of India, the division bench of the Allahabad High Court upheld the constitutional validity of provisions of Finance Act, 1994 imposing Service Tax on rented immovable property. While dismissing a bunch of writ petitions, the Court also confirmed the vires of connected circulars passed by the Ministry of Finance. The petitioners in the instant case, approached High Court challenging the constitutionality of Sections 75(A)(6)(h) and 77 of Finance Act, 2010 and Sections 65(90)(a) and 65(105)(zzzz) read with Section 66 of Finance Act, 1994 as amended by Finance Act, 2007 and Finance Act, 2010. They urged that the provisions are illegal, arbitrary and lacking legislative competence infringing Articles 14, 246 and 265 of Constitution of India. They further impugned the validity of circulars dated 04.01.2008 and 22.05.2007. The bench noticed that a similar issue was raised before various High Courts wherein these Courts upheld the validity of the above provision...

Customs, Excise and Service Tax Appellate Tribunal Prism Cement Ltd. V.  C.C.E. & S.T., Bhopal MANU/CE/0218/2017 24.03.2017 Excise Immovability of goods is not a criteria for denying credit Appellant is engaged in manufacture of cement. For manufacturing of cement, Appellant requires electricity which is used at various stages of production for conversion of raw material into final products for which Appellant entered into an agreement with Madhya Pradesh Poorva Kshetra Vidyut Vitran Company (Vidyut Company) for supply of electricity to Appellant’s manufacturing plant. Appellant also engaged Contractor for undertaking entire work of erection of dedicated Transmission line from Sitpura Sub-station to Appellant’s manufacturing factory. Appellant availed Cenvat Credit of main components of transmission line like towers or pylons made up of MS duly galvanized, aluminum conductors, insulators and was other hardware like clamp, vibration dampers, cable connectors, etc. Re...

In Aakash Enterprises V. Commissioner of Customs, New Delhi, the  Customs, Excise and Service Tax Appellate Tribunal, Appellant imported various automobile parts under cover of Bill of Entry on declared value. Such goods were cleared from Customs after paying customs duty. Subsequently, Appellants premises were put to search along with his residential premises, two shops and godown and goods imported vide above Bill of Entry was put to seizure on doubt of under valuation. Some other goods lying in the premises were also seized. Thereafter, statements of partner of importer firm were recorded along with statement of other persons. During course of investigations, Appellant took categorical stand that, goods other than one imported vide Bill of Entry dated 29th August, 2013 are locally procured goods and as such cannot be put to seizure. Transaction value declared by importer stand rejected by Commissioner on sole ground that, NIDB data for contemporaneous imports reflects higher v...

The Calcutta High Court has quashed Show-cause cum demand notice demanding Service Tax from former Indian Cricket Team captain, Saurav Ganguly. Justice Arijit Banerjee said that that mere failure to disclose a transaction or activity and pay tax thereon or a mere misstatement is not sufficient for invocation of the extended period of limitation, which has been done in this case. The Court also held that the remuneration received by the former Skipper for writing articles and anchoring TV shows would not attract service tax. The court also observed that “brand endorsement” was not a taxable service during the period of time for which the tax demand was raised, and hence such demand cannot be sustained. The Court also said that Ganguly while he played for Indian Premier League (IPL) was not rendering any service which could be classified as business support service. NON-DISCLOSURE SIMPLICITOR CANNOT BE CALLED ‘SUPPRESSION OF FACTS’ An amount of Rs. 1, 51, 66,500, was demanded from the fo...

Delhi High Court in Suresh Kumar Bansal vs Union Of India, has held that no service tax under Section 66read with Section 65(105)(zzzh) of the Finance Act could be charged in respect of composite contracts entered into with builders, since neither the Act nor Rules provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. Division Bench comprising of Justices S. Muralidhar and Vibhu Bakhru set aside the explanation to Section 65(105)(zzzh) to the extent that it seeks to include composite contracts for purchase of units in a complex within the scope of taxable service. The Bench however rejected the challenge against levying service tax with respect to preferential location charges levied by a builder LEGISLATIVE COMPETENCE The High Court has dismissed the challenge against the Legislative Competence holding that “We do not find any merit in the contention that the imposition of service tax in relation to ...