SUMMARY FOR THE MONTH OF FEBRUARY

(16^th February to 29^th February)

 

16^th Feb

 

stNoti04

Service Tax and Central Excise (Furnishing of Annual Information Return) Rules, 2016

 

rajNoti178

Rajasthan: Amendment in Rajasthan Investment Promotion Scheme-2014 - Insertion of new clause 8.1A

 

rajNoti7548

Rajasthan: Clarification regarding information to be submitted by e-Commerce companies

 

apCir128

Andhra Pradesh: Registration under VAT/CST/TOT/APPT/APET/APLT - Action points on ease of Doing Business

 

2016-VIL-93-MEG

MEGHALAYA BITCHEM PRIVATE LIMITED Vs THE STATE OF MEGHALAYA

Meghalaya Value Added Tax Act - rejection of claims of entitlement of 99% remission of tax payable under the Meghalaya Industries (Tax Remission Scheme), 2006, on the ground that, under this Scheme there is no provision for extension of period of eligibility for new industrial units that have undergone expansion, modernization and diversification – admissibility of exemption and remission newly established industrial units of the petitioner – HELD - None of the provisions of the Meghalaya Industrial Policy, 1997; the Meghalaya Industries (Tax Exemption) Scheme 2001 or the Meghalaya Industries (Tax Remission) Scheme 2006 provides that a new industrial unit set up under the Meghalaya Industrial Policy 1997 having already enjoyed tax exemption and remission under the Meghalaya Industries (Tax Remission) Scheme 2006 for a period of seven years under the initial Eligibility Certificate, upon undertaking expansion or modernization, can legitimately claim fresh benefits of tax remission under the Meghalaya Industries (Tax Remission) Scheme 2006 on the strength of a fresh Eligibility Certificate beyond the validity period of the First Eligibility Certificate granted upon establishment as new industrial unit. The petitioner units are only entitled to get the benefits by way of alternative benefits in lieu of benefits being enjoyed under the existing Scheme in terms of part one of the definition of eligibility under the Meghalaya Industries (Tax Remission) Scheme 2006 and that too, for the remainder period of First Eligibility Certificate of seven years which they have already enjoyed - Besides, the Directorate of Industries and the Meghalaya Industrial Development Corporation have not been empowered under the Meghalaya Value Added Tax Act to levy and assess the tax liability of any dealer - No merits in the writ petitions, they are dismissed

 

2016-VIL-91-MAD

M/s PEPSICOLA INDIA MARKETING (P) LTD Vs THE COMMERCIAL TAX OFFICER, CHENNAI

Tamil Nadu General Sales Tax Rules, 1959 – belated payment of taxes and levy of penal interest – assessee plea of applicability of Apex Court judgement in E.I.D. Parry (India) Ltd. Vs. Assistant Commissioner of Commercial Taxes, Chennai – HELD - The judgment relied upon petitioner is not applicable to the facts of the present cases, as the issue involved herein is related to belated payment of taxes and levy of penal interest, which is different from that of the issue covered in the EID Parry judgment – petition disposed in view of alternative remedy

 

2016-VIL-137-CESTAT-CHE-CU

SATISH MOHAN AGARWAL (PROP. M/s CASINO ELECTRONICS) Vs CC (SEA-EXPORT) CHENNAI

Customs - Sell of fake, forged and fabricated DEPB scrips covered by different Telegraphic Release Advice (TRA) – fraud - penalty u/s 112(a) of the Customs Act, 1962 - plea of time bar – HELD - Enactments like Customs Act 1962, and Customs Tariff Act 1975, are not merely taxing statutes but are also potent instruments in the hands of the Government to safeguard interest of the economy. One of its measures is to prevent deceptive practices of undue claim of fiscal incentives - Exposing entire modus operandi through allegations made in the show cause notice on the basis of evidence gathered by Revenue against the appellant, was sufficient opportunity granted for rebuttal. Revenue discharged its onus of proof and burden of proof remained un-discharged by appellant - Revenue has very successfully proved its case and oblique motive of the appellant enriched him at the cost of Revenue. Therefore all the appeals are liable to be dismissed – Silence of the Officers caused jeopardy to the interest of the economy for which they are answerable - it is left to the CBE&C to deal the matter with the DG (Vigilance), CBEC and make the nation corruption free - all the appeals are dismissed

 

2016-VIL-90-GUJ-CE

KETAN POTTERY WORKS Vs UNION OF INDIA

Central Excise – SSI Exemption - Constitutional validity of the portion “and Nepal” appearing in Explanation Clause (G) to SSI Notification No.8/2003 - Continued reference of export to Nepal on the said notification – mischief of including exports to Nepal within the exemption limit of Rs.1.50 crore after changes in bilateral treaties - HELD - Quite apart from total oversight or inaction on the part of the Government of India in not making such corresponding changes,  the same is also discriminatory – after the exports to Nepal are now placed at par with exports to other countries, the reference to clearances for export to Nepal in Explanation clause (G) to SSI notification No.8/2003 has been rendered wholly redundant. If such reference continues even after 01.03.2012, the situation that would arise is that, for all purposes, export to Nepal would be treated on par with export to any other country. For the purpose of SSI exemption under said notification No.8/2003, however, it would continue to be treated as clearances for home consumption. This will be plainly discriminatory - w.e.f. 01.03.2012 the petitioners and other SSI units making exports to the countries other than Nepal form a homogeneous class – the distinction which was prevalent till 01.03.2012 lost its relevance on account of change of the Government of India policy. Continued reference of exports to Nepal in SSI exemption notification No. 8/2003 would render, to that extent, such notification discriminatory and, therefore, violative of Article 14 of the Constitution - the impugned orders in the petitions are rendered invalid - assessee Petitions are allowed

 

2016-VIL-135-CESTAT-MUM-CE

COMMISSIONER OF CENTRAL EXCISE, RAIGAD Vs M/s WARTSILA (I) PVT LTD

Central Excise - Exemption under notification No. 64/95-CE – clearance of the goods, which are meant for construction of Indian Navy warship, to M/s. Mazgaon Dock – denial of exemption as goods not supplied to Indian Navy – HELD - the goods supplied should be used in the construction of warship of Indian Navy and a certificate from the Indian Navy should be produced to the Central Excise officer. In the said condition, it is no where mentioned that the goods has to be supplied to Indian Navy – hence, there is no need that the goods should be supplied to Indian Navy only - assessee is entitled for exemption notification No. 64/95-CE (Sr. No. 21) on their goods supplied for construction of warship of Indian Navy; demand under Rule 6(3)(b) – assessee having reversed the cenvat credit in respect of inputs used in exempted goods at the time of clearance of such exempted goods which tentamount to non-availment of credit - impugned order upheld and Revenue appeal dismissed

 

2016-VIL-136-CESTAT-DEL-CE

M/s KUSUM FOUNDRY & METAL WORKS (P) LTD Vs CCE, INDORE

Central Excise – SSI exemption - Clearance of finished machined casting under brand name – denial of exemption under Notification No. 1/1993-CE (NT) dt 28/3/1993 – HELD - The ld. Commissioner examined all the evidences and came to the conclusion that the appellants have cleared goods with brand name which was not owned by them - the appellant is not able to bring in any point for consideration to interfere with the impugned order. Regarding the communication received from Trade Marks Registry, it is to be noted that the same is regarding the application of Section 9 of the Trade Marks Act, 1999 for the purpose of registration - for denial of exemption the brand name or trade name has a wider connotation, registration being not mandatory  - assessee appeal dismissed

 

2016-VIL-92-GAU-ST

M/s BORDUBI ENGINEERING WORKS Vs UNION OF INDIA

Service Tax - demand and recovery of Service Tax - suppression of fact - levy of penalty – invocation of extended period of limitation - Section 11-(A)(1) of the CEA, 1944 – HELD - the construction placed by the Apex Court on the provisions of Section 11-(A)(1) of the Central Excise Act in Sarabhai M. Chemical case will also apply while construing the provisions of Section 73(1) of the Finance Act, 1994. So construed, the Revenue, before invoking Section 73(1) of the Finance Act, 1994, shall have to prove that there was wilful suppression as this provision cannot be applied just for any omission unless it is a deliberate attempt to escape from payment of Tax - When the law requires an intention to evade payment of duty then it is not mere failure to pay duty. It must be something more. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The word ‘evade’ in the context means defeating the provision of law of paying duty. It is made more stringent by use of the word ‘intent’. In other words the assessee must deliberately avoid payment of duty which is payable in accordance with law - where there was scope for doubt whether case for duty was made out or not the proviso to Section 11A of the Act would not be attracted – assessee petition allowed by remand

 

2016-VIL-138-CESTAT-MUM-ST

SHRI CHANDRAKANT SHAMRAO PATIL Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI

Service Tax – demand under Manpower Recruitment or Supply Agency Services for planning, arranging, authorization and nomination of persons who would be engaged in cutting and transporting of sugarcane to the sugar factories – HELD - on perusal of the agreement entered by the representative of the individuals with the sugar factories, it is noticed that the individuals had authorized the appellants herein for entering into contract with the sugar factories and engaging themselves for cutting of sugarcane and transporting the same to the sugar factories - The issue is no more res integra as the Hon'ble High Court of Bombay in the case of Godavari Khore Cane Transport Co. (P) Ltd held that such an activity will not fall under the category of Manpower Recruitment or Supply Agency Services – assessee appeal allowed

 

utrNoti133

Uttarakhand: Change in rate of tax on Bricks

 

punNotiSO04

Punjab: Reduction in rate of Advance Taxx on Sarson and Binola oil cake

 

BIA Representation: Union Budget 2016 - Representation Of Builders Association Of India To Union Finance Minister

 

17^th Feb

 

2016-VIL-139-CESTAT-CHE-CE-LB

I.T.C. LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I

Central Excise – Larger Bench Order – Valuation – Rule 8 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - CAS-4 Standards – Captive consumption – inter-unit transfer of goods – Notional loading - Whether, in the case of inter-unit transfer of goods for captive consumption, the entire value OR the actual cost of production would be the cost of raw material of the another unit for the purpose of determining value under Rule 8 of Valuation Rules and CAS-4 - Whether the decision of Chennai Bench in the case of CCE Vs Eveready Industries Ltd. OR the decision of Mumbai Bench in the case of Tata Iron and Steel Co. Ltd. Vs CCE had enunciated the correct position of law on the above issue – HELD - Since Rule 8 mandates loading of specified percentage (15% or 10% as the case may be) on the cost of production of goods cleared to another unit for captive consumption in the later unit for computing excise duty payable by the first unit, the cost of production must only be considered in terms of CAS-4 as mandated by Board's circular dt. 13.2.2003 - Loading of a percentage of the cost of production (mandated by Rule 8 of the Valuation Rules) is clearly not a requirement of CAS-4. The cost of production must therefore be computed strictly and invariably only under CAS-4 - In case of Inter-unit transfer of goods for captive consumption, the actual cost of production (100%) of the raw material procured from the Bhadrachalam unit of the appellant [excluding the notional loading under Rule 8] is the cost of raw material in the hands of the Chennai unit, for determining the cost of production of packaging material manufactured by the Chennai unit. The percentage of loading on such cost of production, mandated by provisions of Rule 8 for remittance of excise duty by the Bhadrachalam unit cannot not however be considered as comprised in the cost of the raw material consumed for manufacture of packaging material and thus constituting the cost of production at the Chennai unit - the decision of the Chennai Division Bench of CESTAT in Eveready Industries represents the correct position in law, the decision of the Mumbai Division Bench in Tata Iron and Steel Co. Ltd. Vs CCE Thane-II does not represent correct view regarding application of Rule 8 of the Valuation Rules and the same is overruled – In favor of assessee

 

delOrder1061

Delhi: Creation of E-commerce Zone and Ward No. 300 for E-Commerce companies

 

punNotiGSR12

Punjab Value Added Tax (First Amendment) Rules, 2016 - Amendment to Rule 52 - Refund to 'Gau-shala'

 

punNotiSO7

Punjab: Amendment in Schedule 'G' - Inclusion of entry 'The Gaushala registered with the Punjab Gau-Sewa Commission'

 

cuNoti09

Customs: Customs duty on electricity imported or cleared from SEZ to DTA

 

Summary for the first fortnight of February

 

2016-VIL-94-BOM

JOHNSON MATTHEY CHEMICALS INDIA PVT LTD Vs THE STATE OF MAHARASHTRA

Central Sales Tax Act, 1956 - Section 6A – Form F - burden of proof in case of transfer of goods - inter-state movement of goods – applicability of section 6A to inter-state movement of final goods returned by a job workers to its customer, after job work – validity of trade circulars - Tax treatment of goods sent to other States – interpretation of judgment of Hon'ble Supreme Court of India in M/s. Ambica Steels Ltd case – HELD – furnishing and scrutiny / verification of the declaration is a requirement in law and if that is fulfilled, the burden on the dealer is taken to be discharged. If that declaration is not furnished, then, the consequences follow. The goods might have been despatched for job work and not as and by way of sale, but that is the plea or case of the dealer. If that is the case and the burden is on him to prove it, then, he has to obtain the declaration- Throughout the understanding is that the burden is on the dealer and he has to discharge it in the manner prescribed in law. If the burden has to be discharged in the manner set out, then, no other mode or manner is permissible. Therefore, all that the Hon'ble Supreme Court clarifies is that if some States are not issuing 'F' form, then, that approach of a particular State should be brought to the notice of the Assessing Officer in the dealer's State. That the Assessing Officer should be convinced that the dealer made all efforts, but for no fault of his, he could not obtain the 'F' form. Thereupon and pursuant to the liberty given by the Hon'ble Supreme Court of India and the dealer raising the plea, the Assessing Officer, while taking note of it, would consider the peculiar facts and circumstances and may pass requisite orders. Even that is not the rule but an exception. The requirement is not displaced necessarily and as urged – writ petition dismissed

 

2016-VIL-140-CESTAT-MUM-ST

NIRLON LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI

Service Tax – Cenvat Credit - credit of the service tax paid on the input services, goods and used the same for discharging service tax liability under the category of Renting of Immovable Property Services – HELD - it is not disputed that appellant had discharged appropriate service tax liability under the category of Renting of Immovable Property - service tax liability on renting of immovable property will not arise unless the immovable property comes into an existence, such immovable property will be in the nature of constructed building/warehouse - unless the commercial complex is constructed and completed in all respects, the same could not be rented out by the appellant is a common sense - the reliance placed in the judgement of the Tribunal in the case of Navaratna S.G. Highway  will be applicable as in that case – assessee appeal allowed

 

2016-VIL-95-BOM-ST

THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, KOLHAPUR Vs M/s HONAI CONSTRUCTIONS

Service Tax – waiver of penalty under Section 78 in the cases where the suppression of facts for evasion is proved – HELD - The Tribunal omitted the fact that there after the inspection of the premises the assessee was called upon to pay the tax which was not paid till then - show cause notice was avoided by payment of the tax and discharge of the liability. Whether such an act absolves an assessee from payment of penalty and specifically with the aid of Section 80 of the Finance Act, 1994 before its amendment by Finance Act, 2015, is the question which has not been examined by the Tribunal at all. There is rather no reference to Section 80 of the Finance Act, 1994 - the Tribunal's order is cryptic and the reasons are wholly unsatisfactory - impugned order of the Tribunal is quashed – assessee appeal allowed by remand

 

tnNotiGO35

Tamil Nadu - Amendment to the Central Sales Tax (Tamil Nadu) Rules, 1957 - Amendment of Rule 10 and substitution of new Return Form [Form-1]

 

stNoti05

Service Tax: Non levy of Swachh Bharat Cess on services exempted by a special order issued u/s 93(2) of Finance Act, 1994

 

cuNoti10

Customs: Prescribes effective rate of duty on import of goods specified

 

cuInst10

Customs: Regarding Minimum Import Price (MIP) on Iron and Steel - Amendment in Import Policy Conditions

 

dgftTN19

DGFT: Clarification on availability of benefit under Focus Product Scheme on the export of item 'OMEPRAZOLE AND LANSOPRAZOLE'

 

18^th Feb

 

2016-VIL-96-MAD

RAJYOG STEELS Vs THE COMMERCIAL TAX OFFICER, CHENNAI

Tamil Nadu Value Added Tax Act - Section 19 r/w Rule 10 - Input Tax Credit – pre-deposit - revenue proposing to reverse the Input Tax Credit, on the ground selling dealers registration certificate is cancelled retrospectively – denial of credit – petition against Court order directing deposit of 15% of the tax excluding penalty – HELD - once the impugned assessment order is set aside, there is no crystallized amount of tax to be payable and therefore, the order directing the assessee to pay 15% of the tax is non-est in law - opportunity of personal hearing cannot be subjected to this invalid condition of deposit of 15% of the tax - the assessee has an arguable case – Therefore, denial of opportunity of hearing to the assessee would amount to denial of justice to the assessee - This is not a case where quantum of tax payable is in dispute. The very liability to pay the tax is in dispute. Unless and until the quantum of tax is determined, there is no question of payment of any percentage of tax as a pre-condition – revenue contention that offer to deposit 15% of the tax was voluntary cannot be accepted. Even assuming that it is voluntary, when the order cannot be enforced there is no point in insisting upon the offer being complied with - Writ Appeal is allowed by remand

 

2016-VIL-97-MAD

M/s ARIHANT UNITECH REALITY PROJECTS LTD  Vs THE ASSISTANT COMMISSIONER (CT), CHENNAI

Tamil Nadu Value Added Tax Act - Section 2(21) – Goods – sale of land – revenue deemed land development and construction charges incurred by the petitioner as the sale consideration, for the construction of the flats – levy ox tax and penalty – HELD - the first respondent shall cause an inspection of the property in question, by way of a spot inspection, before passing appropriate proceedings, with regard to the amount of tax and penalty – matter remitted for passing fresh orders, after giving an opportunity of personal hearing and by considering the further objections to be filed by the petitioner - impugned proceedings set aside – assessee petition allowed by remand

 

2016-VIL-145-CESTAT-HYD-CU

M/s BHAGYANAGAR METALS LTD Vs CCE, HYDERABAD – II

Customs – Larger bench – Valuation - WLL Cellular telephones – software - claim for exemption of imported software - whether there are two distinct goods i.e. hardware part of fixed wireless phone and the software part of the said phone, for Customs duty assessment - is there an identifiable goods as software in a media falling under Heading 85.24 of the Customs Tariff, in the imports by the appellants for the purpose of Customs Valuation and assessment – HELD – Fixed Wireless phones as imported require to be classified and assessed as phones with no segregation of value assignable to the software separately, as claimed by the importers - the impugned orders in so far as they relate to valuation and assessment of imported Fixed Wireless Telephones (FWT) considering them as single goods for assessment without any segregation of value for software - the appellant/assessees are not liable to interest, redemption fine and penalties - Penalties on other appellants (individuals and the exporting companies) are also found unsustainable – decided in favour of assessee

 

2016-VIL-142-CESTAT-DEL-CE

M/s K.E.I. INDUSTRIES LTD Vs CCE, JAIPUR

Central Excise – clearance of cable by claiming exemption under notification no.3/2004-CE dated 8.1.2004 – exemption to machineries, appliances and components required for setting up of water supply plants – failure to produce certificate issued by the Dy. Commissioner of District – denial of exemption – HELD - Perusal of the invoice, purchase order and excise duty certificate issued by sub-contractor and other correspondence make it clear that the impugned goods have been cleared by the appellant to the specified units - The appellants supplied the items as sub-contractor for the project the denial of exemption is only on the ground that the appellant’s name is not figuring in the certificate issued by the District Authority - on perusal of the records, it is clear that the certificate issued in the name of M/s. ONDEO NALCO INDIA LTD also mentions the purchase order placed on M/s. VATECH WABAG Ltd., who placed the purchase order on the appellants. These facts were established by the documentary evidences. As such, no justification for denial of exemption – assessee appeal allowed

 

2016-VIL-143-CESTAT-MUM-CE

THERMAX LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE

Central Excise – exemption under notification 22/03 – Exemption to goods brought into 100% EOU / STP complex – assessee contention the notification exemption to all goods specified in Annexure-I, when brought in a EOU/STP/EHTP, in connection with the processing mentioned in the notification – failure of the consignee to provide certificate of re-warehousing within the period of 90 days - liability to pay the excise duty – HELD - It is a fact that with regard to the same consignee the Asst. Commissioner of Customs issued a letter demanding the duty and interest for violation of the conditions of notification 22/03 and the appellant’s customer has paid the entire duty of excise along with interest to the department and thereafter with regard to the same consignment the department cannot ask the appellant to pay the duty as the department cannot recover the duty twice for the same consignment and moreover as per the sub-clause (3) of Rule 20 it is the responsibility of the buyer to pay the duty and in the absence of non-payment, recovery proceedings can be initiated against the buyer. In this case the said duty was recovered. Therefore, the appellant is not liable to pay duty - the impugned order is not sustainable in law and the same is set aside by allowing the assessee appeal

 

2016-VIL-144-CESTAT-MUM-ST

DSP MERRILL LYNCH LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI

Service Tax – Mergers and Acquisitions (M&A) service - leviability of service tax prior to 16.7.2001 – relevant date for taxability of new service – HELD - the concept of Management Consultancy is clearly consultancy and technical assistance in the running of the affairs of an organization. The definition itself refers to various aspects of the working system of any organization. Whereas "Mergers and Acquisitions" is a highly technical and restrictive term. Mergers refer to the mergers of organizations. Similarly, the word "acquisition" refers to acquisition of another entity by a company. Mergers and acquisitions cannot be related to the running of the affairs of an organization - The new entry of Mergers and Acquisitions (M&A) extends the coverage of service tax and is not the result of carving out a new entry from Management Consultancy Service - service tax is not payable on M&A Services prior to 16.7.2001 under the category of 'Management Consultancy Service' - As the service tax is held not payable, the question of imposition of penalties does not arise - assessee appeal allowed

 

2016-VIL-141-CESTAT-AHM-ST

SHRI JIVANLAL JOITARAM PATEL Vs COMMISSIONER OF C.EX. & SERVICE TAX, AHMEDABAD-III

Service Tax - Appellant entered into an agreement with National Highway Authority of India (NHAI) for maintaining complete Toll Operation, supply of Man Power and maintenance of Toll Collection System including Plaza maintenance etc. - demand alongwith interest and penalty for the period 01.12.2004 to 30.06.2006 under Business Auxiliary Service – HELD - the toll collection is related to the National Highway Authority of India. The Tribunal consistently viewed that the National Highway Authority of India cannot be treated as the customers of the Appellant. It is also observed that the NHAI is not running any business. Hence, no force in the submissions of Revenue – assessee appeal allowed

 

apNoti37

Andhra Pradesh: Regarding deduction of amount payable in respect of sale of taxable goods and amount payable towards lease/hiring charges

 

mahaNotiCR22

Maharashtra: Notifies Private Sector Banks for the purpose of Bank Guarantee

 

punNotiSO9

Punjab: Exemption to Sugar Mills from payment of Purchase tax for FY 2015-16

 

dndCir5

Daman 7 Diu: Statutory Forms from other State-UT - Dealers can now uploaded on the department website

 

bihNotiSO37

Bihar: Composition Scheme for Brick

 

cuNoti29NT

Customs: Exchange rate notification

 

19^th Feb

 

2016-VIL-100-KAR

M/s KENNAMETAL INDIA LTD Vs THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, BENGALURU

Karnataka Value Added Tax Act - reassessment orders denying the deduction claimed on annual turnover discount – jurisdiction of Addl. Commissioner in exercising the powers under Section 64[1] of the Act – HELD - It is true that the point of jurisdiction goes to the root of the matter - In view of the specific challenge made now by the Assessee regarding jurisdiction of the respondent to exercise powers under Section 64(1) of the KVAT Act, based on the subsequent Judgment, we deem it proper to remand the matter back to the respondent to consider the issue regarding the jurisdiction of the respondent in exercising the powers under Section 64[1] of the Act based on the Judgment of Southern Motors’ case – Matter remanded

 

2016-VIL-99-BOM

M/s MANISH TECHNO WORKS Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act – whether Tribunal was justified in passing a non speaking order, fixing huge part payment as condition precedent for grant of stay – stay of recovery – ex-parte order – HELD - dealers in all these appeals shall be provided inspection of all the relevant records and documents from the files of the Assessing Officer - thereafter the Assessing Officer shall pass a reasoned order - Revenue would pass fresh assessment orders but the appellants to submit to the jurisdiction of the authority in that regard without raising any objection to his power to do so – appeal disposed

 

2016-VIL-101-GUJ

KRISHNA INDUSTRIES Vs STATE OF GUJARAT

Gujarat Value Added Tax – Denial of tax exemption – delay in granting eligibility certificate – HELD - all that the petitioner can do is to apply for such eligibility certificate to the Commission and hope to persuade the Commission to grant such certificate expeditiously. If for some reason, however, the Commission fails to act promptly, consumes time beyond the reasonable and thereby delays the process of issuing such a certificate, could it be stated that mere delay in issuance of such certificate by the Commission should be fatal to the petitioner's claim for exemption? The answer being obvious has to be in negative - When thus such a certificate was issued somewhat belatedly by the Commission but covering entire period, the Department committed a serious error in treating the petitioner ineligible to claim exemption as per the said Government notification dated 27th February, 2009 - the impugned orders are quashed – assessee petitions are allowed

 

2016-VIL-148-CESTAT-AHM-CU

M/s INDIAN OIL CORPORATION LTD Vs CCEC&ST, VADODARA-I

Customs - Section 18(2)(4) of the Customs Act, 1962 - Interest on refund arising out of finalization of a provisional assessment – refund sanctioned after 3 months – HELD - payment of interest is not depended on the claim by the party. It is automatic. In case, if refund is not paid within three months from the date of receipt of the application, the authority concerned is under obligation to pay the interest - the word  ‘there shall be paid to the applicant’ means that it is not discretionary and has to pay. The payment of interest is statutory and automatically – assessee Appeal allowed

 

2016-VIL-147-CESTAT-MUM-CE

COMMISSIONER OF CENTRAL EXCISE, NAGPUR Vs KEC INTERNATIONAL LTD

Central Excise – Cenvat Credit - manufacturing transmission line towers – eligibility of Cenvat Credit on barbed wire as an accessory to the transmission tower - accessory under definition of ‘input' as contained in Section 2(k) of the CCR, 2004 – HELD - barbed wire is essentially required for smooth operation of the transmission tower and secondly, as per the terms and conditions of the agreements, it is necessary for the company to supply barbed wire along with transmission tower and thirdly, the description list of the goods sold is attached with the invoice copy, which clearly shows that the value of the barbed wire has been included in the assessable value and the duty has been paid on the whole amount, the respondent is entitled to the credit of duty paid on barbed wire – Revenue appeal dismissed

 

2016-VIL-146-CESTAT-MUM-CE

M/s BAJAJ AUTO LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-I

Central Excise – Cenvat Credit – Capital goods – rejection of credit on the basis of Surya Roshni case – HELD - almost in all cases, the Commissioner has not given any reasons for arriving at the conclusion - A perusal of the list of the items on which the credit has been denied includes items which have been described as spares in the excise invoice. The items on which credit have been denied are consumables include industrial fans, centrifugal fans, tube assembly, coupling, auto parts etc. - the impugned order does not give any reasoned findings but is based on presumptions and assumptions. Accordingly, the impugned order is set aside – matter remitted to the Commissioner to give reasoned findings to arrive at decision – assessee appeal allowed by remand

 

2016-VIL-149-CESTAT-CHE-ST

M/s COGNIZANT TECHNOLOGY SOLUTIONS Vs CCE & ST (LTU), CHENNAI

Service Tax – Management Maintenance and or Repair service - software maintenance service - Refund of unutilized CENVAT credit on export of services under Rule 5 of CCR, 2004 – Total turnover - Export turnover - quantum of eligible refund in accordance with the formula prescribed under Notification 05/2006 - CE(NT) dated 14-03-2006 – HELD - appellants have paid service tax on MMRS and duly filed the ST-3 returns and availed the cenvat credit and claimed the refund under Rule 5 of CCR on that portion of the input services used in export of services during the relevant period. By respectfully following the Hon’ble High Court decision and the Tribunal decision referred above, we have no hesitation to hold that the appellants are eligible for refund under Rule 5 of CCR on the input services used in the export of service - computation of total turnover vis-à-vis export turnover for determining the refund amount as per the formula prescribed under Notification No. 05/2006-CE(NT) dated 14.03.2006 - it is clear from the figures mentioned in the Order-in-Original that the Appellant had exported their entire turnover and had not provided any services to Domestic Tariff Area in therelevant period. Therefore, the 'export turnover' would be equal to the 'total turnover', in terms of clause (E) of Rule 5(1) of the CCR - the order of the LA rejecting the refund claim by adopting the wrong method of computation is not justified and liable to be set aside to that extent of restriction of the refund claim - the value of export turnover should be equal to the total turnover and the value of SEZ exports should be included in the export turnover (numerator). Accordingly, the appellants are eligible for the full refund claim and the impugned orders are set aside to that extent – Assessee appeal allowed

 

2016-VIL-98-MAD-ST

COMMISSIONER OF SERVICE TAX, CHENNAI Vs M/s TTK HEALTH CARE LIMITED

Service Tax – recovery of refund - amendment under Sections 116 and 117 of the Finance Act, 2000 – HELD - Section 117 of the Finance Act, 2000 made it clear that any refund already made could be recovered only within the period of 30 days from the date on which Finance Act, 2000 received the assent of the President. Therefore, obviously the show cause notice dated 20.7.2000 was not in accordance with Section 117. Hence, the substantial questions of law need not be answered at all. The claim for recovery of the refund having not been made in accordance with Section 117 – Revenue appeal is liable to be dismissed

 

Guest Article

No bar on admissibility of Cenvat credit either as Inputs or Capital goods at any stage of proceedings

 

delCir38

Delhi: Regarding Framing of Central Assessments

 

stNoti06

Service Tax: Appoints 1st April, 2016 as the date with effect from which the provisions of Section 109(1) as contained in the Finance Act, 2015 shall come into effect

 

stNoti07

Service Tax: Amends Notification No. 25/2012 by inserting new entry for granting exemption from service tax for the services provided by Government or a local authority to a business entity

 

dgftTN20

DGFT: Online filing and processing of application for export of SCOMET items - uploading of documents

 

20^th Feb

 

Presentation at GST Ecosystem Development Workshop at Bengaluru on 29th January '16

Introduction of GST Ecosystem : Introduction of GST Ecosystem [By Navin Kumar (Chairman, GSTN)] [File Size: 207 Kb]

GST Business Requirements : GST Eco-System Development Workshop - GST Business Requirements [Prakash Kumar CEO, GSTN] [File Size: 954 Kb]

GST Architecture Ecosystem : GST Architecture and Solution API & Sandbox [File Size: 758 Kb]

 

News Report

Revenue Secretary Dr. Hasmukh Adhia: Forthcoming Union Budget 2016-17 would aim to promote growth, employment and provide a level playing field to Indian domestic manufacturers

 

22^nd Feb

 

2016-VIL-102-GUJ

STATE OF GUJARAT Vs OIL AND NATURAL GAS CORPORATION LIMITED

Gujarat Sales Tax Act, 1969 – sale - sale price – inter-State sale – interpretation of exemption notification - processing and transportation charges – whether processing and transportation charges not received by the assessee from GAIL cannot be included as part of the sale price of the gas sold by the assessee to GAIL - sale of Liquefied Petroleum Gas to Oil Marketing Companies – eligibility to exemption to sale of Kerosene and LPG to OMCs - Inclusion of processing and transportation charges in ‘sale price – HELD - the learned Tribunal has committed a grave error in holding that processing and transportation charges not received by the assessee from GAIL cannot be included as part of the sale price of the gas sold by the assessee to GAIL - Held in favour of the Revenue and against the assessee - the sale of kerosene by the ONGC to various OMCs is as such intended for use of public distribution system - when the kerosene is sold by the ONGC to various OMCs which is intended to be used for public distribution system, in respect of sale of kerosene by the ONGC to various OMCs, the ONGC shall be entitled to exemption from payment of sales tax under the Act of 1969 as per Entry No.33 of the Schedule to the exemption notification issued under section 49(2) of the Act - in respect of sale of kerosene by ONGC to various OMCs, the ONGC is not entitled to the exemption claimed as per Entry No.53 and the ONGC is liable to pay the value added tax under the VAT Act, 2003, as the kerosene sold by the ONGC to various OMCs cannot be said to be kerosene sold “through public distribution system” - to the extent to which the amount of sale tax exceeds 14 ps. in rupee, the ONGC shall be entitled to the exemption from payment of sales tax as per Entry No.70 read with Entry No.173 - question of law framed with respect to interpretation of Entry No.69 in respect of the sale of LPG and the exemption claimed by ONGC in respect of the sale by it of LPG in bulk to various OMCs as claimed as per Entry No.69 is held pre 02.10.2008 to be in favour of the assessee and against the Revenue and for post 03.10.2008 onwards in favour of the Revenue and against the ONGC - ONGC is not entitled to exemption from tax on the inter-State sales of LPG as the exemption is available on inter-State sales of LPG for domestic use by the consumers of the State only - Penalty confirmed under sub-section (6) of section 45 of the Act, 1969 and on the difference of the amount of tax liability in eventuality of mentioned sub-section (12) of section 34 of the GVAT Act – Revenue appeal partly allowed

 

2016-VIL-153-CESTAT-CHE-CU

M/s SCHWING STETTER (INDIA) PVT LTD Vs COMMISSIONER OF CUSTOMS (IMPORTS), CHENNAI

Customs – Valuation – related supplier - import of components and parts of mobile concrete pump - determination of value and loading on the goods imported from related supplier - loading of value on various heads by rejecting the transaction value which was hitherto accepted by the department – enhancement in value by revenue basis value of comparable goods – HELD – the comparable price of third party sale of pumps adopted by the LA’s confirms that what was imported and sold to third party on high sea sale basis is a complete pump with pump kit - the invoice price of Euro 1,62,350/- of pumps imported, sold to third parties on High Sea Sale Basis are not comparable goods with the goods imported by the appellants @ Euro 1,49,000. The rejection of declared price and loading EURO 1,62,350 ordered by the authority is not sustainable - the declared value of the pumps imported is the correct transaction value - order for re-determination of value of import of mobile concrete pump placer is set aside and assessee appeal is allowed - Loading of Technical Knowhow fees to the Transaction value of imported goods - Loading of service fees paid to overseas supplier towards rendering various service - Assessee appeal allowed

 

2016-VIL-152-CESTAT-AHM-CU

M/s RAMA CYLINDERS PVT LTD Vs COMMISSIONER OF CUSTOMS-KANDLA

Customs – excess payment of safeguard duty due to wrong data in Customs EDI system - refund claim – bar of bar of unjust enrichment – denial of refund – HELD - the appellants had shown the excess payment of safeguard duty as refund receivable in their books of accounts. It is also certified that the said excess duty element has not been taken into the costing of the final products. Therefore, it is transparent that the excess duty has not been passed on and the principle of unjust enrichment has not been violated. The appellants are clearly eligible for the refund of the excess payment of duty – assessee appeal allowed

 

2016-VIL-150-CESTAT-CHE-CE

M/s TITAN INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III

Central excise – brand name or trade name - Replacement of logo of brand/trade with indelibly embossed marking on jewellery – goods cleared as unbranded jewellery - whether the mark/letters embossed on the jewellery is a brand name or trade name and chargeable to duty of excise as "Branded jewellery" – Notification No.4/2005 and 5/2005 - Demand, interest and penalty – HELD – Board's circular No.354/38/2011-TRU dt. 2.3.2012 and Circular No. B-1/1/2005-TRU dt. 4.3.2005 has clarified that excise duty is leviable on articles of jewellery where brand name or trade name is indelibly affixed or embossed on the articles of jewellery and duty is not leviable on any jewellery which do not themselves bear any marking of trade name or brand name. The appellants, in the present case, embossed the mark or symbol or letter on the jewellery and it is in connection with sale of goods indicating the goods belonged to the appellant. The very fact that the goods bear the markings which were earlier cleared with logo clearly conforms to the definition of brand name stipulated in Note 12 to Chapter 71 and Explanation to the said Notification - the appellants relying Illustration II of Board's circular that they have only used marking only for the purpose of identification is not justified and not applicable to the appellant’s case – following Apex Court decision in the case of Grasim Industries and Australian Foods India Pvt Ltd it is held that jewellery manufactured and cleared by the appellants are branded jewellery covered under Chapter Note 12 of Chapter 71 of CET and the Explanation appended to the Notification No.4/2005 dt. and chargeable to excise duty - demand of differential duty is upheld along with interest – in favour of revenue

 

 

2016-VIL-151-CESTAT-DEL-CE

M/s SPENTEX INDUSTRIES LTD Vs CCE & ST, INDORE

Central Excise - eligibility of the appellant for exemption under Notification of 30/2004-CE when they have reversed 6% of the value of exempted goods in terms of Rule 6(3)(i) - applicability of sub Rule (3D) of Rule 6 CCR, 2004 – HELD - appellants claim on the applicability of sub Rule (3D) of Rule 6 is legally sustainable. The said sub-rule provides for a deeming provision to the effect that payment of amount under sub-rule (3) should be considered as credit not taken for the purpose of such exemption notification. The appellant’s case is covered by the said provision even before the introduction of the said sub-rule in 2011 - payment of amount under sub-rule (3)(i) of Rule 6 will make the assessee eligible for claiming such exemption - the Original Authority had fallen in error in not considering the said sub-rule (3D) and relying on explanation (3) of Rule 3, the said explanation has no relevance to the facts of the present case in view of the specific provision of sub-rule (3D) of Rule 6 - the impugned order is unsustainable – assessee appeal allowed

 

2016-VIL-154-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, PUNE-III Vs HSBC SOFTWARE DEVELOPMENT (INDIA) PVT LTD

Service tax – demand under ‘management maintenance and repair service – export of services – Revenue also seeks quashing of that portion of the demands dropped and setting aside ‘technical testing and analysis service' – relevant date - HELD - Mere assertion that ‘performance in India' is the meaning assigned to it by the reviewing Committee will not suffice to overrule the provisions of the law and precedent judgements examined in the impugned order. Indubitably, the incorporation of ‘information technology software' in section 65 (106) of Finance Act, 1994 defining ‘technical testing and analysis' can have no implication other than it being outside the tax net prior to 16th May 2008 - The reliance placed by the original authority on the amendment to the statutory provision with effect from 1st March 2008 viz. second proviso to Rule 3(1)(ii) of Export of Service Rules, 2005 deeming the use of internet and electronic network in relation to certain specified services performed on goods et al located outside to drop the demands for the period after the amendment can only be endorsed. When there is a specific deeming of exports in a particular circumstances that squarely fits the activities of the assessee reference to the meaning of a specific phrase in the general provision is irrelevant - ‘technical testing and analysis' or ‘management, maintenance or repair' that is performed on software of the clients of the assessee, it is accepted that expert employees sitting in India have to access the servers/computer networks abroad - The location of the client cannot be uncoupled from the performance of the service. And as at least some portion of the service is, thereby, rendered outside the country and hence the renders these services outside the ambit of taxation even before 1st March 2008 - the appeal of Revenue is rejected and that of assessee is allowed

 

2016-VIL-153-CESTAT-DEL-ST

CCE & ST, INDORE Vs M/s MIDEX GLOBAL PVT LTD

Service Tax – Refund - exemption under Notification No. 41/2007 – port service - export of goods – denial of refund on ground of classification - HELD - the issue of classification of service is an issue between the service provider and the concerned service tax authorities having jurisdiction over it (i.e. the service provider) and it is not open to the service recipient or to the service tax authorities having jurisdiction over the service recipient to question the classification of the services received by it (i.e. the service recipient) - the impugned service tax has been paid under port service and accepted as such by jurisdictional service tax authorities. Port service is clearly eligible for exemption as per Notification No. 41/2007-ST. Thus the Commissioner (Appeals) has come to a correct finding with regard to eligibility of the respondent for the impugned refund - Revenue appeal is dismissed

 

odiNoti4166

Odisha: Central Sales Tax (Odisha) Amendment Rules, 2016

 

Guest Article

Cenvat credit admissible on services of sales commission agent

 

23^rd Feb

 

cuNoti05ADD

Customs: Amendment in notification No. 12/2012-Customs, dated 17.03.2012 - levy definitive anti-dumping duty on imports of All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester (non-textured and non - POY), originating in or exported from the People s Republic of China and Thailand

 

cuNoti27NT

Customs: Amendment in principal Notification No. 12/97-Customs (N.T) dated 02.04.1997 - Inland Container Depots for loading and unloading of goods

cuNoti28NT

Customs: Notifying Sikta LCS, District West Champaran, Bihar

 

2016-VIL-103-DEL

BHARAT BIJLEE LIMITED Vs COMMISSIONER OF TRADE & TAXES

Delhi Value Added Tax Act, 2004 – Section 73(1) - Tribunal – challenge to Single Member as the Appellate Tribunal in terms of Section 73(1) of the Act – formation of an Appellate Tribunal – requirement of issue of notification for appointment of Appellant Tribunal - HELD – As long as the requirement of Section 73(1) of the DVAT Act stood satisfied, inasmuch as there was one or more members of the AT functioning as such, the absence of notification being issued by the GNCTD under Section 73(1) of the DVAT Act would not impinge on the valid constitution of such AT – the AT does not cease to function only because there is no notification specifically issued by the GNCTD constituting such an AT - In the absence of any prohibition in the AT functioning as such with the remaining members when a vacancy is caused, it cannot be presumed that an AT with a lesser number of members than those appointed initially cannot function as an AT - as long as there is only one remaining member of the AT by virtue of the others being either removed or the vacancies not being filled up, such member can, subject to being otherwise qualified, validly function as an AT – writ petition dismissed

 

2016-VIL-104-KER

M/s PANASONIC INDIA PVT LTD Vs THE STATE OF KERALA

Central Sales Tax Act, 1956 – Section 6A(1) - claim of stock transfer solely on the basis of F forms – rejection of exemption claim in the absence of evidence to prove transfer of goods through the border check post, such as transport copy of delivery notes/L.R etc. - evidence of despatch such goods – Burden of proof – HELD - The issue is not on the genuineness or misuse of F forms. The question is whether the burden of proof in terms of Section 6A of the Act was discharged in terms of sub-section 1 thereof by establishing the conjoint requirements, that is to say, the goods being covered by an F form and the assessee producing along with the F form, the evidence of despatch of such goods. The statutory compulsion under sub-section 1 of Section 6A of the Act on the assessing authority is that if such F form and evidence of despatch of goods are not furnished, the assessing authority will have no other go, but to deal the transit as a sale. That would be the result of the deeming provision of the last limb of sub-section 1 of Section 6A of the Act - on the basis of the materials and facts, the Appellate Tribunal had decided correctly – assessee revision petition dismissed

 

CUSTOMS SECTION

 

2016-VIL-160-CESTAT-AHM-CU

M/s ORJET INTERMEDIATES PVT LTD Vs COMMISSIONER OF CUSTOMS, AHMEDABAD

Customs – Valuation – High sea sale - transaction value under Rule 4 of CVR, 2004 – collection of amount by way of debit note – revenue contention that the assessable value should be the value declared by the importer plus the value of the debit note – demand of differential duty - extended period – redemption fine - HELD - M/s ACCIL sold the goods on High Seas Sales basis to appellants for the price including the debit note value - this sale constitutes sale in the course of international trade and the price at which the same is effected is the sole consideration for the sale. Hence, the assessable value will be the value at which M/s ACCIL sold the goods to the appellants, who were the actual importers and who filed the Bills of Entry and paid Customs duty and cleared the goods. Therefore, the differential duty demand is liable to be sustained - M/s ACCIL has entered into the sales agreement with the other appellants and had not furnished the details to Customs authorities, but raised the debit notes and recovered higher amounts from their buyers. Therefore, the extended period of limitation is rightly invoked in this case - since the goods have been cleared from Customs charge and not available for confiscation, therefore, redemption fine would not be imposable - penalty is reduced – held in favour of revenue

 

2016-VIL-158-CESTAT-DEL-CU

M/s MILLENIUM EXPRESS CARGO PVT LTD Vs CC, NEW DELHI

Customs – CHA Regulation 13 - Revoking of CHA license and forfeiture of security deposit - mis-declaration – non-existent importer – HELD - The documents filed by CHA are treated with a certain degree of trust by the Customs and such trust was completely violated in the present case. Filing of bill of entry filed in the name of a non-existent importer is a grave offence on the part of CHA and it becomes graver when it turns out that CHA did not make minimum efforts to verify the genuineness of the importer and its address. Such acts of omission and commission on the part of CHA can potentially have even more serious financial /security consequences and therefore such a CHA hardly deserves any leniency - the impugned order upheld - The appeal is dismissed

 

CENTRAL EXCISE SECTION

 

2016-VIL-159-CESTAT-DEL-CE

M/s UNIWORTH TEXTILES LTD Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR

Central Excise - Export Oriented Unit - return of damaged goods, meant for export, to factory - damaged fabrics were recovered and part of it was exported and other part was cleared on payment of applicable duty in DTA - demand of duty for said damaged fabrics basis that the assessee claim of recovery of damaged fabric was wrong – HELD - The argument of the Revenue that it is not possible to reprocess the goods in 2007 which were considered unfit for reprocessing in 2003, is not sustainable in view of the facts that the technology keeps improving and any claim made in 2003 is based on the appellant’s knowledge at the material time - The appellants have argued that in 2006, they come to know the chemicals which can reprocess the said materials and they reprocessed the material. We do not find that there is anything which cannot be taken at face value - The appellants have not only brought back the goods but also re-processed and clear the same for export/DTA clearance on payment of duty - Revenue has only raised the suspicion that the records produced by the appellant are not authenticated. The assertion of the appellant cannot be set aside merely on suspicion - the impugned order is set aside and the appeal is allowed

 

2016-VIL-156-CESTAT-MUM-CE

M/s RATHI TRANSPOWER PVT. LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III

Central Excise – Valuation - sharing of cost of advertisement on optional basis – revenue seeking to add the amount recovered from the dealers in respect of the advertisements cost to the assessable value - demand confirmed by the lower authorities on the ground that the transaction value as defined under Section 4(3)(d) of the CEA includes cost of advertisements or publicity – HELD - the terms of agreement are very clear that it is an option to the dealer to obtain advertising materials from the appellant at 50% of the cost. It is not disputed that only some of the dealers are availing these option. That being so, it can safely be concluded that it is not mandatory for the dealers to take the advertising materials from the appellants and to share the cost of such materials - advertisement expenditure incurred by a appellant’s customer can be added to the sale price for determining the assessable value, only if the manufacturer has an enforceable legal right against the customer to insist of the incurring of such advertisement expenses by the customer – assessee appeal allowed

 

SERVICE TAX SECTION

 

2016-VIL-155-CESTAT-AHM-ST

M/s ESSAR STEEL INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, SURAT-I

Service Tax – Cenvat credit – sales commission - agreement for rendering sales promotion service – admissibility credit of tax paid on commission to overseas agents for rendering sales promotion service – denial of credit – period from November 2005 to March 2008 - effect of Notification No.2/2016-CX(NT), dt. 03.02.2016 - Rule 2(l) of CCR, 2004 – HELD - All the agreements are under the name and style of ‘International Marketing Service Agreement’, which cannot be termed as Commission Agent agreement for sale of goods - On overall reading of the agreement, it is evident that the appellants engaged agents to help in exploring market feedback and developing clients for enhancing the market share. So, it would be construed as sales promotion agreement - It is between the parties to decide the consideration of the service by various modes and one of which is commission on the basis of export sale - merely the agent’s commission paid on the basis of export sales cannot changed the entire gamut of the agreement as commission agent for sale of goods - The Board also clarified that the remuneration for sales promotion is linked to actual sale would be read harmoniously - impugned order set aside and assessee appeal allowed

 

2016-VIL-157-CESTAT-MUM-ST

HINDUSTAN PETROLEUM CORPORATION LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II

Service Tax - denial of Cenvat Credit of service tax on the ground that Calico is not incorporated in the excise registration certificate of appellant and that the service tax registration no. is not mentioned in the invoice issued by the service provider – HELD – Assessee had applied for inclusion of Calico land in their RC vide their letter dated 20.12.2007 and the same was granted by the excise authorities with effect from 16.05.2008. In view of this mere non-inclusion of Calico land in the excise registration at the time when the services were availed is only a procedural lapse, input service credit cannot be denied on this mere procedural lapse to the appellant. Secondly, Cenvat Credit of service tax is sought to be denied only on the ground that the service tax registration no. is not mentioned in the invoice issued by them to the appellant – the service provider had the registration under the service tax but inadvertently registration no. is not mentioned in the invoice - services have been provided much after the registration. Both the authorities below failed to consider this fact and wrongly denied the Cenvat Credit – however, assessee liable to penalty of equal amount of the credit wrongly availed – assessee appeal partly allowed

 

Guest Article

Glance at burning legal issues to set off in this Budget!

 

Gujarat Budget was presented today in the State Assembly, please download Gujarat Budget 2016-17 - Budget Speech.

 

24^th Feb

 

2016-VIL-107-KER

M/s PARLE AGRO PVT LTD Vs COMMISSIONER, COMMERCIAL TAXES, TRIVANDRUM

Kerala Value Added Tax Act – Classification of ‘Appy Fizz’ – ‘aerated branded soft drink' or 'Fruit Juice Based Drink' – appellant contention that the product had been classified as a 'Fruit Juice Based Drink' with HSN Code No.2202.90.20 under the Excise Tariff Act – HELD - It is clear from the material produced by the assessee itself that the product is an aerated drink. That it is branded is also beyond dispute. The question whether the product would be a 'Fruit Juice Based Drink' under the Central Excise and Salt Act would be wholly irrelevant in view of the fact that it comes squarely within the specific entry, ‘aerated branded soft drink’ as contained in Section 6 (1)(a) which has been specifically made liable to tax at higher rate - The residual sub entry (5) of Entry 71 would be attracted only if the product cannot be included elsewhere. Aerated branded soft drink excluding soda having already found a place under Section 6(1) (a) of the Act, it cannot be included in the residuary entry  - the product answers to the description of aerated branded soft drink which would fall specifically within the confines of Section 6(1)(a) – assessee appeal dismissed

 

2016-VIL-108-P&H

M/s AMBUJA CEMENTS LIMITED Vs THE STATE OF PUNJAB

Punjab Value Added Tax Act, 2005 – validity of Section 65(3) – Revision - mandatory deposit of 25% tax, interest and penalty as a condition precedent for hearing of revision – HELD - the provisions of Section 65(3) of PVAT Act are held to be intra vires, however, the Tribunal shall decide the matter in accordance with law in terms of the judgment in Punjab Power Corporation Limited's case – petition disposed

 

2016-VIL-07-SC-CE

COMMISSIONER OF CENTRAL EXCISE, CHENNAI Vs M/s FORD INDIA PVT LTD

Central Excise – Valuation – Revenue appeal against Tribunal judgment that advertisement expenditure incurred by the dealers of the respondent-company does not form part of the transaction value for purposes of levy of excise under the CEA, 1944 - A reading of the order passed by the Tribunal, however, leaves much to be desired in as much as several issues and aspects that arose for consideration and that had been dealt with by the Commissioner in his order have not been even mentioned leave alone satisfactorily dealt with. The order is on that short ground alone liable to be set-aside - the order passed by the Tribunal is set-aside - matter remanded back to the Tribunal – Appeal allowed

 

2016-VIL-106-TRI-CE 

M/s DHARAMPAL PREMCHAND LIMITED Vs UNION OF INDIA

Central Excise – challenged the notification dated 01.03.2007 for premature withdrawal of the excise exemption - whether premature withdrawal of the benefits is hit by promissory estoppels – Amendment notification No. 21/2007-CE dated 25.04.2007 - incentives under NEIP 1997 – matter of public interest - HELD - The policy change would not absolve the government from its obligation under the doctrine of promissory estoppels - the reasons as provided by revenue in support of deletion and substitution of the first proviso by the notification No. 21/2007-CE dated 25.04.2007 cannot be brushed aside - even though the petitioners have not thrown the categorical challenge against the notification dated 25.04.2007, the said notification will not absolve the respondents from its obligation under the promissory estoppel so far the pan masala without tobacco content is concerned. In view of the saving clause as engrafted in NEIIPP 2007, as the petitioners’ units have commenced commercial production on or before 31.12.2007 will continue to get benefits/incentives under NEIP,1997 in terms of the notification No. 8/2004-CE dated 21.01.2004 subject to the notification dated 25.04.2007 - the respondents have failed to show that the petitioner has misused the incentives or taken undue advantage, the said notification No.11/2007-CE dated 01.03.2007 is hit by the promissory estoppels - Hence, absence of “proper investment” as alleged, cannot be termed as misuse or undue advantage. Moreover, the respondents did not assign any public interest for issuing the impugned notification dated 01.03.2007. The cumulative effect is that the notification dated 01.03.2007 cannot be sustained and same is set aside – Held in favour of assessee

 

2016-VIL-105-BOM-CE

THE PRINCIPAL COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, DAMAN Vs OMNITEX INDUSTRIEX (INDIA) LIMITED

Central Excise – Limitation - Dismissal of appeal by Gujarat High Court on ground of territorial jurisdiction – filing of appeal in jurisdictional High Court at Bombay - whether period from filing of the Appeal in the Gujarat High Court till its disposal is to be considered for computing period of Limitation – HELD - there is no doubt that the Appellants were pursuing their remedy in a “Court”. The only question was one of lack of territorial jurisdiction. There is also no dispute that the Appeal before the Gujarat High Court was in fact filed in time. The entire period, therefore, from the time of filing of the Appeal in the Gujarat High Court till its disposal as above by that Court must, in our view, be fairly excluded for the purposes of limitation. If that is not done, great injustice and unfairness will result - there is sufficient reason to condone the delay - The time spent in prosecuting the Appeal before the Gujarat High Court is to be excluded - The Notice of Motion is allowed

 

2016-VIL-06-SC-CU

M/s ALKALI MANUFACTURERS ASSN. OF INDIA Vs DESIGNATED AUTHORITY, D.A.D.A.S.

Customs - Anti Dumping Duty - Challenge to imposition of anti-dumping duty on import of caustic soda - appellant contention that tribunal was not justified in comparing the normal value of a foreign exporter with the NIP of Indian producers - concept of "Equal Economic Importance" – HELD - the tribunal should have dwelled upon the said facet before it recorded the finding whether it is a co-product or a by-product. It is because the "Equal Economic Importance" has to be considered on a rational and pragmatic basis. It is the duty of the tribunal to see whether the DA had considered the said aspects or proceeded on hypothetical basis. The tribunal has the jurisdiction to appreciate the evidence in entirety and arrive at a conclusion and that having not been done - the judgment and order passed by the tribunal are set aside and the tribunal is directed to decide the matter afresh keeping in view the observations made – Appeals allowed

 

2016-VIL-163-CESTAT-AHM-ST

M/s SADBHAV ENGINEERING LTD Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Service Tax – classification – ‘site formation and clearance, excavation and earth moving and demolition’ service or ‘mining’ service - period prior to 01.06.2007 – demand under ‘site formation and clearance, excavation and earth moving and demolition’ service – HELD - since the essential character of the services provided by the Appellant is mining of Lignite and removal of Over Burdens is an activity incidental to facilitate and effectuate mining of lignite and as the quantum of lignite mined is also, under the schedule of quantities of the agreement between the Appellant and GHCL is predominantly, the contract should be considered in essential character as a contract for mining of lignite - the service provided by the Appellant is clearly and undisputedly falls within the ambit of mining service and cannot be classified as “site formation etc” service - The impugned order is quashed – assessee appeal allowed

 

2016-VIL-162-CESTAT-MUM-ST

CHIEF ENGINEER MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD Vs CCEC&ST, AURANGABAD

Service Tax – Collection of supervision charges from the consumer of electricity in outride contribution scheme in relation to power supply – demand under Consulting Engineering Services – applicability of Notification No. 45/2010-ST dated 20/7/2010 – HELD - all the taxable services related to transmission and distribution of electricity are exempted - the so called consulting engineer Service is provided in relation to supply and distribution of electricity to the consumer, therefore, the service in question is also covered under the exemption notification No. 45/2010-ST – impugned order set aside and assessee appeal allowed

 

odiNoti2985

Odisha: Modification of return form in Form VAT-201, under the Odisha Value Added Tax Rule, 2005 due to change in rate of tax

 

dgftPN61

DGFT: Standard Input Output Norms (SION) in Food Product Group

 

25^th Feb

 

2016-VIL-06-ARA

M/s AMAZON WHOLESALE (INDIA) PVT, NEW DELHI Vs COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I

Central Excise - Manufacture – deemed manufacture - Activities prior to delivery of the goods – HELD – following activities undertaken by the applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the CEA, 1944, namely; Inspection and testing, Cleaning and lint brushing, Jewellery correction, Activities relating to spectacles and frames (placing in case, tightening screws on eyewear), Folding and hanging, Tagging, Inserting freebies, Placing the product in original box / pack, Inserting warranty cards, Inserting moisture absorbing tablets, Inserting bookmark, Debundling, Sorting, Wrapping, Sensitive material covering, Bagging, Bundling, set creation and rubber banding, Stickering, Boxing, Stuffing and adding dunnage to glassware,Taping, Consignee detailing and Cardboard foot printing - in favour of the assessee

 

2016-VIL-05-ARA

M/s AMAZON SELLER SERVICES PRIVATE LIMITED, BANGALORE Vs THE COMMISSIONER OF CENTRAL EXCISE, THANE-I

Central Excise - Manufacture – deemed manufacture - Activities prior to delivery of the goods – HELD - activities undertaken by the applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the CEA, 1944, namely; Inspection, testing and installing batteries, Cleaning, lint brushing and deodorizing, Touching up and re-stitching, Filing, debundling and jewellery correction, Activities related to spectacles and frames, Folding, hanging and ironing, Polishing, shinning and coating, Tagging, Freebies, Protective stickering, Placing the products in original box, Inserting warranty card, Inserting moisture absorbing tablets, Inserting books mark and Replacing shoe laces – In favour of assessee

 

2016-VIL-161-CESTAT-CHE-CE

M/s SREE RAMCIDES CHEMICALS PVT LTD Vs CCE & ST, TIRUCHIRAPALLI

Central Excise – Classification - manufacture of pesticides and plant growth materials and bio-fertilizers - CETSH 3101 0099 or CETSH 3824 9090 – Demand – HELD – AA reliance on Fertilizer Control Order (FCO) for deciding the classification under 3105 is not justified and not substantiated - these products qualified to be considered as other chemical fertilizers and contain either nitrogen, phosphorous or potassium, which is the essential constituents to be classified under other fertilizers. Accordingly, assessee products are rightly classifiable under 3105 9090 and not under 3824 9090 - the products Allwin Top, Allwin Wonder, Allwin gold are classifiable under chapter 3105 9090 and demand is set aside – on other items the demand and interest is upheld – appeals files by revenue and assessee are partly allowed

 

2016-VIL-164-CESTAT-MUM-ST

VODAFONE CELLULAR LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE

Service Tax – Taxability of SMS termination service under the Point of Taxation Rules, 2011 - service rendered to other telecom operators with whom neither a contract for service has been signed nor any consideration has been received – HELD - the service in the present case is a continuous supply of service of termination of SMS - since there was no contract requiring a service receiver to make any payment, point of taxation is to be determined in terms of clause (a) of Rule 6 of Point of Taxation Rules, 2011 – the demand letters issued by the appellant to various telecom operators give the name and address of the service provider as well as the service receivers. The description and value of service provided is also mentioned in the demand letter - once the value is known as well as the rate of tax, the actual amount of service tax payable becomes quite obvious. The demand letters complied with the substantive provisions of Rule 4A and therefore, may be considered as invoices. Formal invoices were not issued by the appellant because service receivers were not ready to enter into a contract with the appellant even though they were receiving service continuously from the appellant. Therefore, service tax is payable by the appellant on the basis of the demand letters - there was clear suppression of facts because the assessee is aware that service tax is payable on the service provided - extended time period has been rightly invoked - dispute regarding amount of charges payable is pending before TDSAT. Therefore, the appellant is at liberty to claim consequential refund – Appeal dismissed

 

mahaCir6T

Maharashtra: Correction of mistakes made by the dealers or miscellaneous refunds of excess payment of taxes

 

26^th Feb

 

2016-VIL-109-ALH

THE COMMISSIONER, TRADE TAX Vs GUJRAT COOPERATIVE MILK MARKETING FEDERATION LTD

Uttar Pradesh Trade Tax Act - taxability of flavoured milk – HELD – Department Circular confirming that flavoured milk covered by the Entry ‘milk’ - According to the circular flavoured milk reaches best quality of being milk and does not cease to be milk and is to be taxed as such – circulars issued by the department are binding on it - matter requires reconsideration by the Tribunal – assessee revision allowed by remand

 

2016-VIL-110-MAD

THE AUDIO PEOPLE Vs THE COMMERCIAL TAX OFFICER, CHENNAI

Central Sales Tax Act – Rule 12(7) of CST Rules – application for revised assessment on account of delayed submission of of C Form and I Form – HELD – instead of driving the assessee to go on appeal for reopening and considering the ‘C’ Forms filed at the time of hearing the appeal, the Assessing Officer themselves may reopen the cases admitting the new ‘C’ Forms and passing the revised assessment order - In view of the Full Bench Judgment in the case of State of Tamil Nadu v. Arulmurugan & Co. and department circular dated 01.02.2000, the Writ Petition is allowed by setting aside the impugned orders and directing the respondent to accept the Form ‘I’ for the sales made to ‘SEZ’ and pass orders afresh

 

2016-VIL-165-CESTAT-MUM-CE

PAM PHARMACEUTICALS & ALLIED MACHINERY CO. P. LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI V

Central Excise – Cenvat Credit on membership of the business club – HELD – Membership to club like the Entrepreneur organisations is indirectly related to the promotion of the business - the expenses incurred on membership of the club are forming part of the assessable value - the expenses incurred on the membership of the business club is an ‘input service’ and appellant can legally take Cenvat Credit of the expenses incurred on the membership – assessee appeal allowed

 

Guest Article

Woes of issuing Supplementary Invoice

 

mahaCir7T

Maharashtra: Changes in the automation processes and other changes in procedures

 

delNoti1496

Delhi: Extension in date for furnishing of returns in Form GE-II for the first three quarters of the current financial year

 

dgftPN62

DGFT: Amendment in Annexure-1 of Appendix 2A of Appendices and Aayat Niryat Forms (2015-2020)

 

Finance Minister Shri Arun Jaitley Presents Economic Survey 2015-16 in the parliament today, please find atached Highlights of Economic Survey 2015-16.

 

27^th Feb

 

2016-VIL-111-DEL

LOTUS IMPEX Vs THE COMMISSIONER, DEPARTMENT OF TRADE & TAXES, NEW DELHI

Delhi Value Added Tax Act – refund claim under Section 38(3)(a)(i) – Section 34 - extended period - disallowance of disallowed the input tax credit (ITC) - fresh proceedings under Section 59 – passing of pass two fresh default assessment orders under Section 32 by VATO – power of VATO - HELD - Apart from the obvious error committed by the VATO in purporting to review a non-existent order, even the requirements of Section 74 B of the DVAT Act were not satisfied and therefore the powers thereunder could not have been invoked - When the original assessment orders of the VATO had been already set aside by the OHA there was simply no question of the Commissioner, and much less the VATO exercising powers under Section 74B of the DVAT Act to rectify or review such orders - In order to invoke the extended period of limitation the Commissioner would, in terms of the proviso to Section 34 (1) of the DVAT Act, have to record reasons for the belief that tax was not paid "by reason of concealment, omission or failure to disclose fully material particulars" on the part of the Assessee. In the present case, there is no such reason to believe recorded by the Commissioner and therefore, the jurisdictional requirement for invoking the extended period of limitation is not satisfied - the proceedings sought to be initiated by notice under Section 59(2) were an abuse of process of law and the consequential orders of default assessment of tax and penalty are hereby quashed – refund ordered with applicable interest – assessee petition allowed

 

2016-VIL-112-CAL-CU

RUCHI SOYA INDUSTRIES LIMITED Vs THE UNION OF INDIA

Customs - Section 15 - import of crude degummed soyabean oil of edible grade – revision in rate of duty date by way of notification issued by the Ministry of Finance (Department of Revenue) – effective date of new rate of duty – date of the notification or date of publication in Official Gazette and offer for sale – petitioner contention that the effective date would be date of publication in Official Gazette and offer for sale - statutory requirement under Section 25(4)(a) of the Customs Act - HELD - notification under sub-section (1) of section 25 shall come into force on the date of its issue by the Central Government for publication in the Official Gazette - Section 25(4)(a) is lucid in it stipulating when a relevant notification would come into force. A relevant notification would come into force not upon its publication in the Official Gazette, but on the date of its issue for publication in the Official Gazette. That would imply that if such a notification is issued on a particular day and it is asked to be published in the Official Gazette, notwithstanding its later publication in the Official Gazette, it would come into force on the date of its issue for publication in the Official Gazette - if a notification is issued on a particular date and is required immediately thereupon to be published in the Official Gazette, upon the publication being made in the Official Gazette within a reasonable time the notification would be deemed to have come into force on the date of its issue for publication in the Official Gazette – Assessee petition dismissed

 

2016-VIL-167-CESTAT-AHM-CE

M/s SUN PHARMACEUTICALS INDUSTRIES LTD Vs CCE&C (ADJUDICATION) - DAMAN

Central Excise - Destruction of the goods and remission of Central Excise duty thereon – destruction of goods after date of expiry - Destruction of goods before the permission was granted for removing the goods from Bonded Store Room – denial of remission of duty – HELD - the Dept. had written to the appellant on 19.12.2005 to furnish certain particulars. The appellant had not replied to the same till 13.1.2006 when they requested the permission to remove goods from the Bonded Store Room for destruction. It is observed that the goods have already been destroyed by the appellant on 11.1.2006 i.e. before the said letter. It is also observed that assessee had not given any specific intimation to the Dept. the time and date of the proposed destruction. Removal of goods from Bonded Store Room without permission, and destruction of same in the absence of supervision/permission are clearly not in accordance with the provisions – no reason to interfere with the impugned order and hence the same is upheld – assessee appeal dismissed

 

2016-VIL-166-CESTAT-CHE-ST

CITIBANK N.A. Vs COMMISSIONER OF SERVICE TAX, CHENNAI

Service Tax - Banking and Financial Services - Credit Card Services - tax liability of income accrued to appellant as mark-up when card is used for foreign exchange payment – use on credit card to pay in foreign exchange outside India – HELD - The essence of taxability of service is that it should be taxed in the jurisdiction of its consumption. Here, the service, namely facility of use of card for payment, is rendered outside India and duly consumed by the recipient-card holder outside India - service tax liability on such service is not sustainable for want of jurisdiction - the mark-up is essentially a part of the exchange rate that is to be applied for arriving at the cost of goods or services purchased by the card holder and hence is a part of the cost of goods / services - the mark up charges accruing to the appellant when card holder uses card to pay in foreign exchange abroad is not liable to service tax under Credit Card Services - This conclusion is based both on merit of scope of 'Credit Card Services' and lack of territorial jurisdiction of charge - assessee appeal is allowed

 

The Kerala Finance Bill, 2016

 

goaITPolicy2015-20

Goa Information Technology Investment Policy 2015-20

 

kerCir02

Kerala: Price fixation of Imported Timber

 

FCP2602

FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet

 

Guest Article

7-7.75% growth in 2016-17 - Key Highlights of the Economic Survey 2016

 

cuInst450

Customs: Single Window Project-Problems in clearance of Ex-Bond Bills of Entry in online clearance facility

 

West Bengal Budget 2016-17 - Budget Speech

 

Bihar Budget 2016-17 - Budget Speech

 

Madhya Pradesh Budget 2016-17 - Budget Speech

 

Madhya Pradesh Budget 2016-17 - Budget Highlights [Attached]

 

utrNoti112

Uttarakhand: Extension in date for filing of periodical return for third quarter of 2015-16

 

chndOrder2602

Chandigarh: Discontinuation of the manual submission of the applications for grant of Registration under PVAT and CST Act

 

29^th Feb

 

2016-VIL-08-SC-LB-CE

RAMALA SAHKARI CHINI MILLS LTD, U.P. Vs COMMISSIONER CENTRAL EXCISE, MEERUT-1

Central Excise – Cenvat Credit – Input - whether the definition of the term “input” in Rule 2(g) of the Cenvat Credit Rules, 2002 is to be understood to include items beyond the six items mentioned specifically in Rule 2(g) – HELD - the word “include” in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction – Court disagreed with its earlier decision in Maruti Suzuki case and agreed with the reference order which doubted this decision by holding that the answer to the question referred to the Larger Bench is self-contained in the order of reference - Matter remanded to appropriate bench to decide on the factual parameters of the case(s) and the entitlement to CENVAT credit in the facts of each case – in favour of assessee

 

Budget Notifications

Union Budget 2016-17 - Budget Notifications [Customs, Central Excise & Service Tax] and other Documents

 

2016-VIL-09-SC

M/s ELECTRO OPTICS (P) LTD Vs STATE OF TAMIL NADU

Tamil Nadu General Sales Tax Act, 1959 – Classification - electronic goods - survey instruments – Penalty under Section 12 - HELD - electronic survey instruments are covered by Entry No. 14 in Part-F and not under Entry 50 of Part B of Schedule I of the Act - considering that the appellant had a good arguable case even in this Court, the return submitted by the appellant was on account of bona fide belief in correctness of appellant’s stand - Only after the outcome of the legal dispute by virtue of this judgment, the authorities can be justified in holding henceforth that the return was incorrect - In such a situation it would not be just and proper exercise of discretion to hold the appellant guilty of submitting incorrect return so as to attract penalty for the same. Hence, in the peculiar facts of the case and in the interest of justice, balance penalty is set aside – Assessee appeal partly allowed

 

Central Excise Circulars

ceCir1016: Registration of two or more premises as one registrant in Central Excise

ceCir1017: Certificate evidencing payment of Central Excise duty

ceCir1018: Withdrawal from prosecution in Central Excise cases older than 15 years involving duty less than rupees five lakhs

ceCir1019: Change in rate of interest on goods warehoused for export, when cleared to DTA

 

cuNoti34NT

Customs: Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver

 

chhgNoti12

Chhattisgarh: Amendment in CGVAT Rules 55 -Delegation of Commissioner's Power for Assessment/Reassessment

 

Andhra Pradesh Circular

apCir04: Reiteration of earlier instructions to Assessing Authorities / Revisional Authorities on the utilization of report of AG, etc., in the discharge of quasi-judicial functions

apCir10: Levy of penalties under Section 53 of AP VAT Act, 2005

apCir12827: Registrations-VAT/CST/TOT/ APPT/APET/APLT, DIPP, GOI Action points on ease of Doing Business

 

Budget Articles

Central Excise Tariff – Summary of Chapterwise Changes

Returns under Central Excise can now be Revised

GST – Union Budget fails to make any impact

 

BUDGET NOTIFICATIONS

 

Explanatory Memoranda to notification Nos. 11 to 23/2016-Customs, dated 01.03.2016

 

 

Explanatory Memorandum to notification No. 30 to 33/2016-Customs (NT), dated 01.03.2016

 

 

Explanatory Memoranda to notification Nos. 5 to 18/2016-Central Excise, dated 01.03.2016

 

 

Explanatory Memoranda to notification Nos. 5 to 21/2016-Central Excise (N.T.), dated 01.03.2016

 

 

Explanatory Memoranda to notification Nos. 1 and 2/2016-CEC and Notification No.1/2016-Infrastructure Cess all dated 01.03.2016

 

 

Explanatory Memoranda to notification Nos. 8 to 19/2016-Service Tax, dated 01.03.2016