I-T - Once trademark acquired is used for selling products, its eligibility for depreciation cannot be questioned, simply because trademark is not put to use for manufacturing activities: HC

ST - Tribunal has relied upon speech of Finance Minister for holding that assessee was not liable to pay tax without discussing relevant provisions of law/notifications - Matter remanded: HC

I-T - Exemption u/s 10(23C)(iv) can be claimed only to the extent of actual income and not for accumulated income: ITAT

Garuda Timber Traders Vs Assistant State Tax Officer

GST - the assessee, a dealer, sent a consignment of Timber to a customer in Karnataka - It prepared an invoice with forest pass & also uploaded the e-way bill onto the official portal - Owing to some technical glitches, it was unable to upload Part B of the e-way bill - Nonetheless, the assessee went ahead with the transportation - The vehicle was intercepted en route and the goods were detained on grounds that the accompanying e-way bill was incomplete - Despite multiple attempts, the assessee repeatedly failed to upload Part B of the e-way bill - When it finally succeeded in doing so, it sent a copy of the e-way bill and also filed reply to notice u/s 129(3) - Nonetheless, duty demand was raised with interest & imposition of equivalent penalty - Hence the present writ contesting such duty demand & also seeking release of the goods - The assessee also challenged the power to levy duty demands and penalty in light of the glitches faced in the GSTN portal.

Held - considering the decision of a division bench of this court in Renji Lal Damodaran v. State Tax Officer which involves identical facts, the goods in question are directed to be released provisionally & pending further adjudication u/s 129(1) - Such release is however subject to the assessee furnishing bank guarantee for the tax amount with penalty as well as a bond u/r 140(1) of the CGST Rules, equivalent to the value of the goods - Issue relating to legality of powers of detention and adjudication vesting in the same authority, is left untouched: HC (Para 3-6, 51, 52, 57, 58)

- Writ petition disposed of: KERALA HIGH COURT

2018-TIOL-101-HC-KERALA-GST

Earthline Services Pvt Ltd Vs State Of Kerala

GST - Petitioner is a dealer under Kerala Value Added Tax Act, 2003 and has been issued with a notice dated 02.06.2014 u/s 25(1) of KVAT Act – Petitioner seeking a writ of mandamus or any other appropriate writ, order or direction declaring section 174(1)(i)/174(2) of the Kerala State Goods and Services Tax Act, 2017 as being unconstitutional and for striking down the same. 

Held: Once a lis can be disposed of, and a grievance can be redressed, on the statutory adjudication, the other issues, especially involving constitutional validity, need not be addressed - canon of constitutional avoidance is well established - Writ petition allowed on the issue of limitation in view of this High Court decision in Court in M/s. Cholayil Pvt. Ltd v. The Assistant Commissioner (Assessment) Judgment dated 5th July 2018 = 2018-TIOL-1624-HC-KERALA-VAT – Petition allowed: High Court [para 3]

- Petition allowed: KERALA HIGH COURT

2018-TIOL-08-AAAR-GST

CMS Info Systems Ltd

GST - ITC - GST Council in its 28 th meeting has felt the need for widening scope of ITC in respect of motor vehicles used for transportation of money for or by a banking company or financial institution and recommended amendments - given the collective mind of the GST Council on the subject, argument stands clinched in favour of Respondent Revenue -as the law now stands, no credit available: AAAR

- Reference answered: AAAR

SERVICE TAX

ST - Assessee is a statutory body set up by Government of Tamil Nadu as per Tamil Nadu Water Supply & Drainage Board Act, 1970 (TWAD Act) created to carryout works related to water and drainage schemes in Tamil Nadu - TWAD awards contracts of laying pipelines or drainages on turnkey basis to independent contractors - Department was of the view that in doing such tests, assessee was rendering 'Technical Testing and Analysis' Services and is liable to pay service tax on charges collected for testing for period from 1/4/2004 to 30/6/2009 - Clause 7.9 in TWAD Act deals with testing of pipes - Such testing is done not at the behest of contractor - In fact, the contractor would be happy to use all materials procured without any testing - The TWAD in order to ensure standard of quality of the pipes for the works done by TWAD has made it obligatory on the part of contractor to get the pipes tested - In CBEC, the Board has clarified the necessity to look into the 'quid pro quo' in a transaction - It is explained therein that the concept of 'activity for consideration' involves an element of contractual relationship wherein the person doing an activity does so at the desire of the person for whom the activity is done in exchange of consideration - An activity done without such a relationship i.e., without the express or implied contractual reciprocity of a consideration would not be an 'activity for consideration' even though such an activity may lead to accrual of gains to the person carrying out the activity - Thus, consideration presupposes a certain level of reciprocity - In the instant case it is TWAD who wants to ensure the quality of pipes used in Water Supply and Drainage Schemes floated by them - Therefore, there is no 'service' rendered by TWAD to the contractor and fees collected is not a consideration that can be subject to levy of service tax under FA, 1994 - In the result, impugned order calls for no interference: CESTAT

- Appeal dismissed : CHENNAI CESTAT

ST - Assessee is engaged in rendering advertising agency service - They also indulge in activity of sale of advertisement space which is booked with various broadcasters for telecast of advertisements - Assessee normally gets a discount of about 15% from quoted price for sale of advertisement time slots from broadcasters - At the time of billing the customers for time slots, assessee marks up the rate by 2-4% of cost at which they get the time slots from broadcasters - There is no dispute that the assessee is already paying service tax on such marked up margins, considering the same as commissions - Revenue was of the view that assessee is required to pay service tax by including the quantum of discount extended by broadcaster in the value of advertisement of slot billed to the customers - Identical issue had already been considered by Tribunal in case of Mccann Erickson India Pvt. Ltd. 2008-TIOL-271-CESTAT-DEL in which it has been held that 15% discount extended by broadcasters cannot be included for purpose of charging service tax under category of advertising agency from the clients - By following the said decision, impugned order set aside: CESTAT

- Appeal allowed : DELHI CESTAT

CENTRAL EXCISE

CX- The assessee is a manufacturer of cotton and spurn yarn - During the period in dispute, for installation of a power plant in the factory, it entered into a contract with another contractor- The contractor was to supply one super heated steam, coal, fire boiler and one 20MW STG power with auxiliaries - It claimed Cenvat Credit on the components required for the captive power plant - However, the Revenue took a view that the components were procured by the contractor & as power plant is attached to grounds, is not goods as such - Thus, claim was denied - Duty demand was raised - The adjudicating authority confirmed the demand - Hence, the present appeal. Held - For some capital goods the contractor placed an order with the manufacturer who in turn raised invoice on the contractor - However, the goods were directly sent and received at the premises of the assessee - Later these goods were used by contractor for erection, commissioning and installation of the coal fired boiler or STG Power Plant by the contractor at the premises of the assessee - Until and unless the final product, as asked to be erected, is finally installed, and is handed over by the contractor to the assessee - The ownership remains with the contractor and not with assessee - Accordingly, manufacturer (here, contractor) of final product would be allowed to take Cenvat credit on the inputs and capital goods utilized for the manufcature of final products - Relying on the cases of Pepsi Foods Ltd. & Bannari Amman Sugars Ltd. vs. CCE, Mysore, even if the capital goods become immovable after installation it will not be the criteria for the purposes of Cenvat Credit - Besides, the benefits which cannot be availed directly, cannot be allowed to be availed indirectly - Hence, the order challenged is upheld : CESTAT (para 1, 4, 5, 6)

- Appeal Dismissed : DELHI CESTAT

CX - The issue involved pertains to inclusion of VAT subsidy amount in form of Vat-37 B, challans, which can be utilize for subsequent period to discharge VAT, for arriving at assessable value under Section 4 of CEA, 1944 - Accordingly, Revenue proceeded to include such subsidy amount in value of goods cleared by assessee and demanded the differential duty - Both of the parties agree that the issue is covered by Final Order dated 11/4/2018 of this Tribunal wherein it is held that there is no justification for inclusion in assessable value, the VAT amounts paid by the assessee using VAT 37B Challans - Following the same, impugned order set aside: CESTAT

- Appeal allowed : DELHI CESTAT

Kumaran Hardwares Vs State of Tamil Nadu

Whether the interference of the High Court under writ jurisdiction is warranted in a matter where the assessee has been non- compliant during the assessment proceedings and appeal remedy is also available - NO: HC

- Assessee's writ petition dismissed : MADRAS HIGH COURT