SUMMARY FOR THE MONTH OF MARCH
(1st March to 15th March)
1st March
2016-VIL-113-CHG
ULTRATECH CEMENT LTD Vs STATE OF CHHATTISGARH
Chhattisgarh Entry Tax Act – assessee challenge the imposition of a higher rate of entry tax on limestone when it is clinkerised in the local area and stock transferred to their units outside the State to the extent it is used for manufacture of cement - power of State government to fix higher rate of entry tax in specified local areas on specified goods – HELD - The sub-classification sought to be done based on the end user outside the local area is unsustainable in the law as having no nexus with the object to be achieved by levy of higher rate of entry tax - the notification dated 31.3.2010 and the consequential notifications dated 1.7.2014 and 5.7.2014 are held to be not sustainable to the extent that they impose entry tax at 25% on limestone clinkerised and stock transferred outside the State for manufacture of cement outside such local area. The impugned notifications are set aside to that limited extent - Petitioners are entitled to refund additional entry tax paid – assessee writ petitions are allowed
2016-VIL-10-SC-CE
UNION OF INDIA Vs M/s HAMDARD (WAQF) LABORATORIES
Central Excise – classification – refund - Section 11BB – Interest on delayed refund – refund on account of favourable court decision – delay in rectifying deficiencies in refund application and its bearing on refund – Revenue challenge to High Court order allowing refund - HELD - rectification in the order has no bearing on the determination of interest - It is not a case where the assessee is claiming automatic refund. It is a case that pertains to grant of interest where the refund has been granted. The grievance pertains to delineation by the competent authority in a procrastinated manner - the principle laid down in Ranbaxy Laboratories Limited would apply to the case at hand. It is obligatory on the part of the Revenue to intimate the assessee to remove the deficiencies in the application within two days and, in any event, if there are still deficiencies, it can proceed with adjudication and reject the application for refund. The adjudicatory process by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months - Tested on the aforesaid premises, find no infirmity in the order passed by the High Court – revenue appeal, being sans substratum, stands dismissed
2016-VIL-112-DEL-CU
MICROMAX INFORMATICS LIMITED Vs UNION OF INDIA
Customs – Import of mobile phones – CVD Refund - Sections 27(1)(a) and 27(1)(b) of the Customs Act – refund on account of payment of excess CVD – Denial of refund on the ground refund of duty filed on bills of entry, which are already assessed – maintainability of refund claim - reviewed of assessment order under Section 28 – construal of decision of this Court in Aman Medical Products Limited - HELD – in this case there was indeed no assessment order as such passed by the customs authorities. Although under Section 2 (ii) of the Act, the word ‘assessment’ includes a self-assessment, the clearance of the goods upon filing of the B/E and payment of duty is not per se an 'assessment order' in the context of Section 27(1)(i) as it stood prior to 8th April 2011 - decision of Aman Medical Products Limited which was rendered in the context of Section 27 of the Act as it stood prior to 8th April 2011 - after 8th April 2011, as long as customs duty or interest has been paid or borne by a person, a claim for refund made by such person under Section 27 (1) of the Act as it now stands, will have to be entertained and an order passed thereon by the authority concerned even where an order of assessment may not have reviewed or modified in appeal - The impugned order of the Assistant Commissioner (Refund) rejecting the refund claim on the ground of maintainability was plainly erroneous – application for refund claim restored – assessee petition allowed
2016-VIL-168-CESTAT-DEL-ST
M/s SCHENCK ROTEC INDIA LTD Vs C.C.E., NOIDA
Service Tax – Business Auxiliary Service – payment of tax and interest for export of services – Section 11B of CEA, 1944 - claim of refund of tax and interest pursuant to CBEC Circular No.111/05/2009-ST – rejection of refund of interest on ground of limitation – HELD - in the present case, since the appellant for the first time had filed the application, claiming refund of interest vide its letter dated 15.09.2010, for paid during the period 18.12.2008 to 29.04.2009 - the same is barred by limitation of time, being filed beyond the period of one year from the relevant date. Further there is no document available on record to prove that the interest amount was paid by the appellant under protest - the refund application filed under Section 11B ibid is not maintainable on the ground of time bar aspect – assessee appeal dismissed
utrNoti181 & utrNoti18129
Uttarakhand Value Added Tax (Amendment) Rules, 2016 - Amendment to Rule 11, 26C, 29 & 30
Guest Article
Union Budget - Key changes in Service Tax
delCir39
Delhi: Extension in date for filing of reconciliation return in Form 9 for the year 2014-15
hpNoti425
Himachal Pradesh Value Added Tax (Amendment) Rules, 2016 - Amendment in Rule 77 & Form VAT-XXXVII
hpNoti524
Himachal Pradesh - Amendment of HPVAT Schedule A & B
2nd March
2016-VIL-114-KAR
M/s PRATHAM MOTORS PRIVATE LIMITED Vs STATE OF KARNATAKA
Karnataka Value Added Act, 2013 – Taxable turnover – Discount - Claim of deduction of discounts allowed by issuing credit notes as authorized by Rule 31 of KVAT Rules, 2005 r/w Section 30 of the Act - credit notes and debit notes – HELD - Section 30 or Rule 31 do not deal with the determination of turnover. If a credit note is given under Rule 31 reducing the tax amount, then it is for the dealer to declare the credit note in the return furnished to the tax authority and claim reduction in tax on such total turnover - the registered dealers issuing credit notes for discounts are authorized to claim deduction of the discounts from total turnover declared in the monthly returns filed - the disentitlement is only in regard to claiming the deduction in the computation of taxable turnovers in terms of sub-rule (2) of Rule 3 of the Rules - assessee petition allowed
2016-VIL-169-CESTAT-KOL-CE
M/s DABUR INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLKATA-VII
Central Excise – Classification of Chyawanprash (Awaleha Special & Awaleha with Ashtawarg) – classifiable as Ayurvedic medicaments under CETH 30.03, as claimed by the appellant, or under CETH 21.07/21.08 as decided by the Adjudicating authority - Ayurvedic medicaments or food supplements/health tonic – HELD – As the products impugned are manufactured from Ayurvedic, ingredients under a Drug Control Licence, same have to be considered as Ayurvedic medicaments falling under CETH 30.03 primarily having prophylactic or therapeutic use. Any additional health tonic capabilities in these products is only a secondary benefit - the argument of the Revenue, that for the period where no extension of the Drug Control licence is available the products should be classified as food supplements/tonic is beyond reasoning. If a product is considered as an ayurvedic drug then it remains an ayurvedic drug for all periods when the ingredients used are the same - the impugned products are classifiable as Ayurvedic Medicaments under CETH 30.03. The confirmation of demands, imposition of penalties and confiscation of goods was thus not justified – assessee appeal allowed
2016-VIL-170-CESTAT-CHE-CU
COMMISSIONER OF CUSTOMS (IMPORT) Vs M/s DO BEST INFOWAY
Customs – Rule 12 of the Customs Valuation Rules, 2007 - enhancement in declared value without issuance of show cause notice and without passing any speaking order – revenue appeal against Commissioner (Appeals) setting aside the assessment enhancing the declared value - HELD - manner of maintenance of public record shows that an empty formality was followed by the Commissioner (Appeals) for disposal of appeal. The appeal order was signed by Commissioner (Appeals) undated - the entire action of the Commissioner (Appeals) is contrary to law and there is no disposal of appeal as yet on his record - the remarks made by appellate Commissioner shall also have no legs to stand - adjudicating authority summarily disposed of the proceeding without a speaking order. Therefore, it is directed to issue appropriate notice to the importer clearly bringing out allegations if any - it is necessary to inform the Central Board of Excise & Customs (CBE&C) that appropriate guideline may be issued to the quasi Judicial Authorities in administrative justice system to discharge their duties publicly
2016-VIL-115-KAR-ST
COMMISSIONER OF SERVICE TAX Vs TAVANT TECHNOLOGIES INDIA PVT LTD
Service Tax – Whether the provisions under Rule 3 and 4 of the Service Tax Rules 1994 are mandatory or procedural in nature - benefit of availment of cenvat credit and refund of unutilised cenvat credit without registration – Revenue appeal tribunal order allowing refund – HELD - revenue has not been able to show that there was any liability on the part of the respondent-assessee to pay service tax which was required to be paid and which was required to be adjusted against cenvat credit or that the assessee was not entitled to the refund – there is no provision even under Rule 5 of Cenvat Credit Rules, which provides for condition precedent for registration of the service provider – revenue appeal dismissed
mahaNotiCR39A
Maharashtra: Notifies Municipal Corporation of Nagpur under clause (a) of Entry 5 of Schedule D (High Speed Diesel Oil) for period 01.03.2016 to 29.02.2017
mahaNotiCR39B
Maharashtra: Notifies Municipal Corporation of Nagpur under clause (a) of Entry 5 of Schedule D (Any other kind of Motor Spirit) for period 01.03.2016 to 29.02.2017
delNoti1585
Delhi: Filing of returns through digital signatures
delNoti1572
Delhi: Extension of the last date for filing return in form CR-II
delNoti1559
Delhi: Extension of the last date for filing of DP-1
Budget Articles
Single Registration facility under Central Excise – Condition amended
Excise Duty Studded on Jewellery by Budget, 2016
Clarification
Govt Clarification about changes made in the Tax Treatment for Recognised Provident Fund & National Pension System (NPS)
Ministry Response: Reaction of various Ministries on Union Budget
3rd March
2016-VIL-116-DEL
CAPRI BATHAID PRIVATE LIMITED Vs COMMISSIONER OF TRADE & TAXES
Delhi Value Added Tax Act - powers of Assistant Value Added Tax Officer - powers AVATO Enf-I to undertake survey, search and seizure operation and pass default assessment orders of tax, interest and penalty – power of AVATO Enf-I to reverse the Input Tax Credit claimed during an earlier period and whether such reversal take place in the order of default assessment for a different period – HELD - The survey operation was without authority of law inasmuch as the Officer who undertook such operation acted without jurisdiction and contrary to the order issued by the Commissioner VAT - The order issued by the Special Commissioner did not permit the enforcement officer to carry out any assessment and therefore, orders of default assessment passed by the AVATO Enf-I under Sections 32 and 33 of the Act were without the authority of law - The Joint Commissioner who issued the deployment orders authorising the AVATO Enf-I to undertake the search and seizure was not specifically authorized to do so, therefore, vitiates the entire survey, search and seizure operation undertaken by the teams of the DT&T so deployed - It was not open to the AVATO Enf-I who was not authorized to make any assessment, to adjust the ITC reversal pertaining to an earlier period ending on 31st March 2014 in the returns filed for the different quarters of 2014-15 - The penalty orders under Section 86 (10) read with Section 33 of the DVAT Act were bad in law - Section 87(6) of the DVAT Act does not enable the officers who undertake the search and seizure operation under Section 60 of DVAT Act to collect tax dues on the spot from the dealer whose premises is searched - the Court has been constrained in the recent past to interfere with the illegal exercise of powers and jurisdiction by the VAT Authorities, it has become imperative for the Commissioner to issue clear directions to the VAT Officers to follow regarding the scope of their powers and jurisdiction - The Commissioner should issue clear instructions that no VAT Authority will collect in cash or by cheque any alleged tax demand on the spot/field while undertaking a survey, or a search or seizure operation – assessee petitions are allowed
2016-VIL-117-KER
SHRI K.V. RAMACHANDRAN Vs STATE OF KERALA
Kerala Value Added Tax Act – Section 8 - petitioner is a civil works contractor paying tax at compounded rate – assessment of purchase turnover invoking Section 25 of the Act - escaped turn over – HELD - the issue in hand is as to whether there is any foundation or material whatsoever to initiate action under Sub-section 1 of Section 25 - The impugned notice is not based on any material unearthed or otherwise available to the CTO to even prima facie assume that there was any escaped purchase turn over or the purchase tax component leviable on such purchase turn over - revenue had concluded the assessment merely by adding on the proposal on the assumption that there would be a 30% purchase turn over in relation to the nature of transactions of the assessee - this is wholly misplaced in terms of the jurisprudential realm and the fiscal powers available to the Revenue under Section 25 of the Act. The entire proceeding is without any jurisdictional fact and material being available as the foundation for such proceedings - the impugned orders set aside - assessee appeal is allowed
2016-VIL-175-CESTAT-BLR-CU
LOGIC INDIA TRADING CO Vs COMMISSIONER OF CUSTOMS, KERALA
Customs - Classification of Multimedia Speakers - appellant claimed classification under Customs Tariff Heading 8518 22 00, attracting 10% Basic Customs Duty and 12% Countervailing Duty (CVD) - Revenue contends impugned items is classifiable under Chapter Heading 8519 81 00 and 8527 99 19 depending upon whether the same are having features of FM Radio, etc. - Though the Basic Customs Duty in both entries is same but difference of CVD resulting in excess duty liability – main and principal and essential function of the product - HELD - the opinion expressed by the Board in Circular dated 1.8.2013 in respect of “multifunctional speaker system” is diagonally opposite to the opinion expressed in the earlier two circulars being Circular No.17/2007-Cus. dated 19.4.2007 and Circular No.20/2013-Cus. dated 14.5.2013 - We really fail to understand as to how subsequent Circular stands issued wherein a different view stands expressed without assailing the fact that a speaker remains a speaker but with some additional facilities and features - the main role of the item in question remains amplifying the sound - As such, going by the Interpretative Rules and Section note 3 to Section XVI, the criteria for classifying the product is the principal and the main function it performs, which in the present case remains to be that of a speaker – accordingly, the goods in question are properly classifiable under Chapter Heading 8518 22 00 - the impugned order is set aside and assessee appeals are allowed
2016-VIL-07-ARA
M/s SAMSUNG INDIA ELECTRONICS PVT LTD, GURGAON Vs COMMISSIONER OF CUSTOMS, IMPORT, NEW DELHI
Customs – Advance Ruling - Classification of Samsung Galaxy K Zoom – Phone or Camera - classifiable under telephone under Custom Tariff Heading 8517 or as a Camera under CTH 8525 – trade parlance and consumer perception test - HELD - we have to see whether Galaxy K Zoom is sold at phone shop/market or at camera shop/market. The answer is clear that such a product is sold at phone shop. Therefore, as per trade parlance and consumer perception test also, the product is mobile phone, classifiable under CTH 8517 12 - the product i.e. Galaxy K Zoom is classifiable as telephone under Customs Tariff Heading 8517
2016-VIL-171-CESTAT-DEL-CE
M/s PLASOPAN ENGINEERS (INDIA) PVT LTD Vs CCE, DELHI-I
Central Excise – Classification of unassembled PVC Doors and Windows – assessee claims classification under Tariff sub-Heading 3925.20; whereas the Department contended the classification under Tariff sub-Heading 3925.99 – assessee claim for exemption under Notification No. 15/94-CE - Rule 2 (a) of Rules for the interpretation of the schedule of Central Excise Tariff – HELD – the appellants are clearing various channels and profiles of specific dimensions in unassembled condition - The process involved before fixing the windows or doors is a simple assembly at site - applying the Rule 2 (a) of the interpretation Rules, it is clear that the unassembled windows and doors, even incomplete or unfinished are to be classified with reference to goods which are complete or finished. The scope of this interpretation rule further explained by the Explanatory notes of HSN makes it clear the classification of the impugned goods shall be under 3925.20 - no merit in the impugned orders and accordingly set aside the same - Assessee appeals are allowed
2016-VIL-172-CESTAT-AHM-CE
M/s SUNLAND METAL RECYCLING INDUSTRIES Vs COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX-VAPI
Central Excise - Cenvat credit on the imported material diverted and sold in mid-way during transportation – SCN proposing demand of duty, interest and penalty - allegation of diversion of the inputs on the basis of the statements and documents of third party – HELD - The investigating officers had not verified the records of the assessee and merely proceeded on the basis of statement of third party. The inference of non-receipt of inputs and denial of Cenvat Credit on the basis of the statements of third party, who had failed to disclose the details of supply of inputs in mid-way, cannot lead any conclusion - the receipt of the inputs and used in the manufacture of final product and duly recorded in the statutory records, which cannot be discarded by mere assumption and presumption - the demand of Cenvat Credit, interest and penalty cannot be sustained - assessee appeals are allowed
2016-VIL-173-CESTAT-AHM-ST
ADANI POWER LTD Vs CST AHMEDABAD
Service Tax – SEZ operation - Authorised Operation in SEZ for supply of power – supply of surplus power in DTA - refund claim under Notification No.9 AND 15/2009-ST, 17/2011-ST, 40/2012-ST for Service Tax paid on various input services – rejection of refund claims on the ground that the services were not wholly consumed in SEZ - Revenue contention Assessee engaged in SEZ operations as well as DTA operations, therefore, services cannot be considered as wholly consumed within SEZ, hence, the conditions of notifications are not fulfilled – Notification No.17/2011-ST – power of Commissioner (Appeals) to remand the matter - HELD - the expression ‘wholly consumed’ referred to the in the Explanation to Notification No.17/2011-ST, would be applicable to sharing of business between authorized operation in SEZ Unit and DTA Unit – in the instant case Para 2(d) of notification cannot be invoked as there is no DTA unit of the Assessee - Assessee had not availed CENVAT Credit on the raw materials or consumables used in the transmission of power in DTA and it is not required to earn foreign exchange as it would not be possible for the Assessee to earn foreign exchange - Mere selling of surplus power in DTA and installing dedicated transmission lines into DTA would not mean that the Assessee owns or carries on any business other than the business in SEZ - The surplus electricity supplied in DTA as per Rule 47 of SEZ Rules, which cannot be treated as a ‘business’. There is no material available on record that the Assessee has a DTA Unit, it cannot be construed that the Assessee is carrying out business other than operations in SEZ – Commissioner (Appeals) has power to remand the matter to the Adjudicating authority for de-novo decision - the appeals filed by the Revenue on both the grounds are liable to be rejected - the Commissioner (Appeals) already remanded some portion of the refund for verification. So, it is appropriate that the Adjudicating authority should all issues on merit in de-novo Adjudication – Revenue appeal dismissed assessee appeal allowed by remand
2016-VIL-174-CESTAT-BLR-ST
M/s INFOSYS TECHNOLOGIES LTD Vs COMMISSIONER OF SERVICE TAX, BANGALORE
Service Tax - Section 11B of CEA, 1944 – Rule 5 of CCR, 2004 - Export of taxable and some non-taxable services – Refund of unutilized accumulated Cenvat credit – rejection of on ground of time-bar and nexus – relevant date - HELD - Issue is settled by decision in the case of GTN Engineering (I) Ltd. and Hyundai Motor India Engg. (P) Ltd - the relevant date for calculating time limit under Section 11B of the CEA, 1944 is the date on which consideration for the exported service is received – assessee contention to distinguish said decisions on the ground that it was ‘export of goods’ in those cases whereas the issue involved in present appeal is ‘export of service’ – there is no justification to accept the differentiation inasmuch as the same Rule 5, the same Notification No. 05/2006-C.E issued under Rule 5 and the same Section 11B of the CEA which was the subject matter of the Hon’ble High Court’s decision is involved - assessee has not shown any of the rule or provisions of the law, thus compelling to a different conclusion in respect of ‘export of service’ - no merits in the appellant’s contention on the point of limitation - appeal stands remanded for the purpose of examination of nexus, the quantum of refund falling for the period within the limitation, based upon the date of consideration received by the appellant – assessee appeal dismissed on the issue of limitation
Uttarakhand Notification [in Hindi]
utrNoti192: Levy of Cess on Petrol & Diesel
utrNoti193: Levy of Cess on Liquor, Kaini, Tobacco, Cigarettes & Gutka
utrNoti194: Levy of Cess on Fast food items, Sale by Pizza outlets and Fired Chicken outlets, pre-packed eatables, soft drinks, fruit drinks, flavoured drinks and beverages excluding pre-packed lassi, buttermilk and milk
Budget Article
Import of goods by vessel – Budget, 2016 made it expensive!!!
wbCir01
West Bengal: Regarding Reconciliation of sale-purchase mismatch for the financial year 2014-15
4th March
2016-VIL-176-CESTAT-DEL-ST-LB
M/s TOWER VISION INDIA PRIVATE LTD Vs CCE (ADJ.), DELHI
Service Tax - Business Auxiliary Services or Business Support Services - passive infrastructure - Admissibility of CENVAT Credit on Telecom Towers – credit on towers, pre-fabricated shelters parts thereon etc – HELD - the Hon’ble Bombay High Court judgments in Bharti Airtel Limited and Vodafone India Limited, which are directly on the issue of the character of towers and shelters and parts, and held to be immovable property, constitute the binding law, in so far as we are concerned. Since the provision of towers and shelters as infrastructure used in the rendition of an output service is common to both passive and active infrastructure providers, whether of “BAS” or “BSS” in one case and “telecom service” in the other, consequences of the application of the above Hon’ble High Court’s rulings, would not be different - the two issues on which difference of opinion had arisen and stand referred for resolution by this Larger Bench, are answered in favour of Revenue and against assessees
upNoti319
Uttar Pradesh: Amendment in UPVAT Schedule-I - Regarding L.E.D. Bulb
upNoti320
Uttar Pradesh: Exemption sugar manufactured during the Crushing Season 2015-16 by a Sugar Mill established in the State of Uttar Pradesh
utrNoti126
Uttarakhand: Changes in Section 43 of VAT - Regarding Lorry Challan
cuNoti36NT
Customs: Exchange rate notification
Budget Article
Import of Goods at Concessional Rate of Duty – Procedure simplified with a demerit
February Summary
Summary for the second fortnight of February
5th March
2016-VIL-11-SC
STATE OF PUNJAB Vs M/s SHREYANS INDUS LTD
Punjab General Sales Tax Act, 1948 - Section 11(3), Section 11(10) - time-limit for completing the assessment - power of Commissioner to extend assessment beyond stipulated three years after the expiry of original period of limitation as prescribed under the Act – Revenue appeal - HELD - extension of time for assessment has the effect of enlarging the period of limitation and, therefore, once the period of limitation expires, the immunity against being subject to assessment sets in and the right to make assessment gets extinguished. Therefore, there would be no question of extending the time for assessment when the assessment has already become time barred. A valuable right has also accrued in favour of the assessee when the period of limitation expires - sub-section (11) of Section 10 has to be interpreted in the manner which is equitable to both the parties. Therefore, the only way to interpret the same is that by holding that power to extend the time is to be exercised before the normal period of assessment expires – ratio laid down in the case of Karnataka High Court in BHEL is followed - High Court order upheld and revenue appeal is dismissed
2016-VIL-177-CESTAT-DEL-CE
DHAR CEMENT LTD Vs C.C.E
Central Excise - manufacture of cement – conditional benefit of Notification No.24/1991-CE dated 25.07.1991 and 5/1993-CE dated 28.02.1993 – certification of installed capacity by an officer not below the rank of Director of Industries – denial of concessional rate of duty contending the installed capacity is higher than 1,98,000 T.P.A. making assessee ineligible for the concession - Hon’ble Supreme Court directing Tribunal to examine the various material relied on by the Revenue to contest appellant’s claim for exemption – HELD – assessee claim of higher installed capacity before various authorities can at best raise the suspicion of the correctness of the installed capacity - Department cannot reject the certificate issued by the competent authority and reiterated again by the same authority on the ground that the appellant themselves declared to other authorities a different installed capacity - When the competent authority reiterated the certificate after examining the contrary evidence produced by the Revenue it is not open to the Commissioner to sit on judgment on such certificate - the impugned order is set aside – assessee appeals are allowed
2016-VIL-179-CESTAT-MUM-CU
KIMBERLY CLARK LEVER LTD Vs COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI
Customs – Valuation - includibility of lump sum amount paid as technical know-how fees and royalty paid on the domestic sales - components and raw materials - provisions of Rule 9(1)(c) of the CVR, 1988 – HELD - Under Rule 9(1), the price for the imported goods had to be enhanced/loaded by adding certain costs, royalties and licence fees and values mentioned in sub-rule 9(1)(a) to 9(1)(d). It refers to “all other payments actually made or to be made as a condition of sale of the imported goods.” In the present case, the Department invoked Rule 9(1)(c) on the ground that royalty was related to the imported goods, having failed it cannot fall back upon Rule 9(1)(e) because essentially we are concerned with the addition of royalty etc. to the price of the imported goods - transaction value cannot be loaded as technical know-how - the impugned order is unsustainable and liable to be set aside – assessee appeal allowed
2016-VIL-178-CESTAT-MUM-ST
M/s KOTAK MAHINDRA CAPITAL CO. LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I
Service Tax – tax liability for the period prior 16.07.2001 under the category of Management consultancy Services for the Advisory Services & Consulting Services in relation to Merger & Acquisitions – demand for rendering Advisory Services in respect of Merger & Acquisitions - Revenue seeks classify same under Management consultancy Services prior period to 16.07.2001 – HELD – ratio of DSP Merrill Lynch Limited case applies - taxability of Merger & Acquisitions is covered under Banking and Financial Services, w.e.f. 16.07.2001 - Service Tax liability in the facts of this case is w.e.f. 16.07.2001 only and not prior to that date - the impugned order is unsustainable and liable to be set aside – assessee appeal allowed
Budget Article & Video
Implications of change in taxability on Services provided by the Government
Union Budget 2016: Changes in Indirect Tax - Service Tax & Excise
(You Tube video link https://www.youtube.com/watch?v=n8EZYleZbzU)
6th March
utrNoti191
Uttarakhand Cess Rules, 2016
Clarifications on Jewellery
Ministry of Finance issues Clarifications on levy imposed on Jewellery (alongwith revised letter of Joint Secretary (TRU-I) Letter)
7th March
2016-VIL-119-UTR
RECKITT BENCKISER (INDIA) PRIVATE LIMITED Vs STATE OF UTTARAKHAND
Uttarakhand Value Added Tax Act - Section 6 - Input Tax Credit - admissibility of input tax credit on packaging material, containers etc. purchased locally, used in the manufacture of goods in Uttarakhand and sent outside the State otherwise than by way of “sale” – effect of the use of word “or” in Section 6(3)(d) of the Act - HELD - the use of the word “or”, in the context of this case, is intended to convey the meaning that the sale may be within the State, an intra-State transaction in Uttarakhand, or the sale may be in the course of inter-State trade or commerce - when goods are sent by way of stock transfer in the course of inter-State trade, the case would not be covered by Section 6(3)(d) of the Uttarakhand VAT Act. The intention of the legislature was to provide limited relief of providing input tax credit, but confined to raw materials, which are used in the manufacture or processing of finished goods, which are sent by way of stock transfer as a case of stock transfer cannot be treated as a case of sale - the proviso would appear to be an independent provision and the concept of sale would apply to both an intra-State sale, as also, inter-State trade and commerce within the meaning of Section 6(3)(d) of the Act - the case of stock transfer would not fall within the ambit of Section 6(3)(d) of the UVAT Act. The case of stock transfer is squarely covered by the proviso. No input tax credit is vouchsafed in respect of packing materials used in connection with finished products, which are stock transferred outside the State in course of inter-State trade or commerce – Single judge order upheld - Assessee appeal dismissed
2016-VIL-118-KAR
M/s JONES LANG LASALLE PROPERTY CONSULTANT INDIA (P) LTD Vs THE STATE OF KARNATAKA
Karnataka Value Added Tax Act - Filing of revised return beyond six months – additional tax and adjustments thereof with input credit – order of re-assessment under Section 39[2] - levying of penalty and interest – Interpretation of Commissioner Circular – HELD - whenever the word is ‘any additional tax liability’ it would mean ‘additional net tax liability’ because the moment there is use of the word ‘additional’, it would mean that either the tax is already paid, but shortly paid or even after the credit of input tax, the further liability of the tax remains which is required to be paid by the return - whenever the matter pertains to payment of additional tax liability, it would always mean the credit or set off to be made of the tax already paid and the consequential amount of tax by way of additional tax liability. If the credit or adjustment is to be given to the amount of tax already paid, there is no reason why the credit of input tax should not be adjusted against the tax liability and thereafter to arrive at the additional tax liability - the interpretation put forward on behalf of the Revenue to the circular dated 7.7.2008 cannot be accepted - the impugned order passed by the Revisional Authority are quashed and set aside with a further direction that the proceedings of the revision shall stand restored – assessee appeal allowed
2016-VIL-120-BOM-CU
ANANDEYA ZINC OXIDES PVT LTD Vs THE UNION OF INDIA
Customs – Drawback – EOU unit - export of zinc oxide – claim of drawback towards the Customs allocation of duty as contained in the Notification dated 01.04.2003 – applicability of All Industry Rates of drawback to exporters of the Commodity or products manufactured in terms of sub-Rule (2) of Rule 19 of the CER 2002 - removal of the goods under bond without payment of duties – Notification no. 26/2003 - denial of drawback – HELD – There is no scope of bifurcating drawback towards customs and excise allocation – assessee manufactured their goods and exported them in terms of sub-Rule (2) of Rule 19 of the CER 2002, the question of admitting the claim of the Petitioners towards customs allocation drawback is not at all justified – The contention of petitioner to bifurcate the non-applicability of the said Notification into the claims towards customs allocation, cannot be accepted. This exercise would be totally in contravention of the very Notification no. 26/2003 - The Petitioners having availed of benefits under Rule 19(2) of the CER, 2002 and removed exported excisable goods without payment of duty from the factory and, as such, the question of availing of any drawback in terms of the said Scheme is not at all justified – assessee petition dismissed
2016-VIL-180-CESTAT-CHE-CE
CCE, CHENNAI - II Vs M/s LUCAS TVS LTD
Central Excise – Cenvat credit – Section 4(3) - Place of removal – claim of Cenvat credit of service tax paid on transportation for delivery of goods at the port of export for export - or whether such service tax is refundable under Rule 5 of the CCR, 2004 wherever the Cenvat credit is not adjustable – contract of sale between the parties prior to 01.04.2008 - provisions in Sale of Goods Act, 1930 – Contract for Sale – HELD - Circular No.97/8/2007-ST, dated 23.08.2007, para 3 of the Circular No.988/12/2004-Cx., dated 28.10.2014 and Circular No.999/6/2015, dated 28.02.2015 follow the concept that when ‘property’ in goods is transferred under the Sale of Goods Act, 1930 as is envisaged by Section 19 thereof, at that point only, removal of the goods from the control of the seller is said to have occurred - The codified provisions in Sale of Goods Act, 1930 has been adopted by Board’s Circular No.999/6/2015-CX. Therefore, there should not be any ambiguity by the Adjudicating Authority to understand the concept of sale where that takes place and the intention of the parties entitling the seller of the goods to the Cenvat credit of the service tax paid on transportation of the goods to the place of export or for delivery thereof at the place agreed between the parties - the service tax paid in terms of the reverse charge mechanism under Section 68 of the Finance Act, 1994 read with Section 19 of the Sale of Goods Act, 1930 and the circular aforesaid becomes input service to fulfill contractual obligation. That does not disentitle the tax payer to the Cenvat credit of the service tax paid in respect of transport service availed to make delivery of goods at the destination - the service tax paid availing transportation service shall be admissible to the Cenvat credit or refundable where that is not possible to be set off against future liability – assessees appeals allowed by remand
2016-VIL-181-CESTAT-MUM-ST
GENOM BIOTECH PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, NASHIK
Service Tax – Rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - Export Oriented Unit – demand of service tax as recipient of 'advertising agency service' from providers based abroad - provisions of section 66A of Finance Act, 1994 for discharge of tax liability on "reverse charge" – revenue contention that overseas entities were required to market and promote the sale and distribution of the products of the appellant and hence the payments effected for advertising and business promotion of the goods of the appellant were liable to tax under section (105) (e) of Finance Act, 1994 – HELD - The original authority has failed to take note of the destination of the goods manufactured by the appellant and has deemed the services rendered in Ukraine to have been imported into India for business and commerce - the 'business or commerce' in Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 is not intended tax services that are rendered in connection with business or commerce outside the territory of India - Services that are undeniably rendered by a foreign 'service provider' in relation to the goods sold abroad cannot be presumed to be covered by the legislative intent to tax - the tax demanded in the impugned order is not on the consideration for a service received in India but a tax on the funds transferred in a cross-border transaction. Such a tax is not contemplated in Finance Act, 1994. The demand of tax on the appellant is not in accordance with law – the impugned order is set aside – assessee appeal allowed
Budget Article
Union Budget 2016 - Rationalisation of Cenvat Credit (Part-I)
cuNoti37NT
Customs: India-ASEAN Trade in Goods Agreement (Safeguard Measures) Rules, 2016
8th March
2016-VIL-122-KAR
WEP PERIPHERALS LIMITED Vs THE STATE OF KARNATAKA
Central Sales Tax Act – Section 6A - Burden of proof, etc., in case of transfer of goods claimed otherwise than by way of sale - Warranty replacements of spares outside the State – failure to file the statutory Form F - levy under the CST Act – HELD - When the statute mandates, a dealer to file Form- F with supporting documents, he bound to submit the same in support of his claims. If the dealer fails to furnish such declarations the movement of such goods shall be deemed for all purposes of the Act as a result of sale – assessee contention that it is a case of transfer of stock and therefore, no declaration was required to be filed, cannot be accepted on the face of Section 6A of the CST Act more particularly when on facts there is a finding that, the appellant has failed to discharge the burden by placing valid material to show that the goods were not transferred to any other place of business or to his agent or his principal – Assessee appeal dismissed
2016-VIL-121-GUJ-CE
COMMISSIONER, CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, DAMAN Vs M/s SABERO ORGANICS GUJARAT LTD
Central Excise – entitlement to the Refund of the CENVAT credit when the entire Insurance claim inclusive of the CENVAT Credit amount reversed, has been sanctioned and paid by the Insurance-Company - refund claim of reversed CENVAT Credit over and above same amount received from the Insurance-Company, whereby incidence of duty was passed on to the Insurance Company - unjust Enrichment – HELD – the larger Bench judgement of the High Court in case of CCE&C, Ahmedabad-II Vs Intas Pharmaceuticals Ltd. has held that prior to introduction of sub-rule (5C), there was no provision, which provided for reversal of the credit by the excise authorities where it has been lawfully taken by a manufacturer. Therefore, the credit accrued at the moment the raw material or the input was used in manufacturing of a dutiable final product - Such being the provision, as it stood in the Cenvat Credit Rules prior to September 7, 2007, there is no scope of application of equitable doctrine against the assessee and in favour of the Revenue on the ground that it will amount to conferring of double benefit – Intas judgement applicable to present case – Revenue appeal dismissed
2016-VIL-185-CESTAT-CHE-CU
PENSHIBAO WANG PVT LTD Vs COMMISSIONER OF CUSTOMS (SEAPORT-IMPORT), CHENNAI
Customs – Import of "Plant Bio Fertilizer" – whether classifiable under Chapter Heading 31010099 claimed by the importers as "Plant Bio-Fertilizer" or under Chapter Heading 38089910 of CTH as claimed by the Revenue as "Pesticides" – HELD - the results of the test indicates various compounds, Nitrogen, Phosphorous, Silicon etc., and Oxymatrine (detd. as Alkaloid content) at 0.41% - the goods with declared content of 0.36% Oxymatrine to be treated as “pesticides” rather than “Fertilizer” - Based on the test reports, the adjudicating authority classified the goods under Chapter 38089910 of CTH - the appellants having not obtained registration from the Central Insecticide Board (CIB) for the import of Pesticides, the confiscation of the goods under Section 111 (d) of Customs Act is liable to be upheld
2016-VIL-182-CESTAT-MUM-ST
TATA TOYO RADIATORS LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-I
Cenvat Credit – assessee availed cenvat credit twice on the same set of documents and later reversed the same - inadvertent error while availing credit - levy of interest of under Section 11AB - Rule 14 of the Cenvat Credit Rules, 2004 – HELD – Rule provides that where the cenvat credit is taken or utilized or erroneously refunded, the same recoverable with interest and the provisions of Section 11A and 11AB shall apply mutatis mutandis for effecting such recoveries - The Hon’ble Supreme Court in the case of Ind-Swift Laboratories Ltd examined the question whether interest would be liable to be paid even when the cenvat credit has been taken wrongly but not utilized. The Hon’ble Supreme Court noted that since the Rule covers both the situations i.e. cenvat credit taken or utilized wrongly and the word “or” is disjunctive in nature, even if the credit has been availed wrongly, the liability pay interest would accrue - appellant is liable to discharge interest liability – assessee appeal dismissed
2016-VIL-184-CESTAT-BLR-ST
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, COCHIN Vs M/s SAJU ENGINEERING COMPANY
Service Tax - Commercial or Industrial Construction - liability of service tax for activity of ‘Industrial Construction’ services – non-payment on the premise that they being ‘proprietary concern’ were not covered by wordings ‘commercial concern’ – penalties under Sections 76, 77 & 78 of the Finance Act, 1994 - bona fides belief – HELD - there were sufficient reasons for the assessee in bonafidely believing that they were not liable to service tax during the relevant period especially when the amendments in the definition of ‘Industrial Construction’ service made on 28.4.2006 by the Finance Act, 1994 made effective with effect from 1.5.2006 and the CBEC letter No. 334/4/2006-TRU; thus invoking the provisions of Section 80 of the Finance Act and the provisions of Section 73(3) of the Finance Act, 1994, the assessee case on non-imposition of penalty is sustainable – revenue appeal rejected
Rajasthan Budget 2016-17
Rajasthan Budget Notifications
Rajasthan Budget Highlights
Finance Bill, 2016
Amendment in Rajasthan Investment Promotion Scheme-2014
Budget Article
1. Union Budget 2016 - Rationalisation of Cenvat Credit (Part-II) Rule 6 of CENVAT Credit
2. Things could not be made easy under customs laws in this budget
delNoti1610
Delhi: Regarding filing of Form GE-II
cuCir07
Customs: Issue of Indian Currency Note - Foreign going vessels
dgftPN63
DGFT: Amendment in Appendix 2C of Appendices and ANF of FTP 2015-20, list of agencies authorized to issue Generalized System of Preferences (GSP)
apCir35
Andhra Pradesh: Registrations-VAT/CST/TOT/ APPT/APET/APLT, Post Registrations - Regarding Advisory visits
stNoti20
Service Tax (Second Amendment) Rules, 2016 - Amendment of Form ST-3
cuNoti6AD
Customs: Levy of definitive anti-dumping duty on Phenol, originating in, or exported from the European Union, Singapore and Korea RP, for a period of five years
cuNoti7AD
Customs: Levy of definitive anti-dumping duty on Polypropylene, originating in, or exported from Singapore, for a period of five years
hpBudgetHighlight
Himachal Pradesh Budget 2016-17 - Budget Highlights
Rajasthan Budget 20016-17 - Budget Speech [in Hindi]
9th March
2016-VIL-125-DEL
UNITED TELELINKS (BANGALORE) LTD Vs COMMISSIONER OF TRADE AND TAXES
Delhi Value Added Tax Act - Detention of goods on account of inadequate documents - additional place of business – e-commerce / online sale – HELD - The question that arises is the manner of the detention of the goods and the proper authorization of the VATO (Enf.) to intercepted the goods - on the basis of the interception, the VATO (Enf-II) proceeded to issue an "Assessment/Penalty Order" under Section 32 and 33 r/w Section 86(19) of the DVAT Act, it is not understood how an Assessment/Penalty order in the above manner could be passed against the driver of the tempo - It is further not understood how assessment and penalty can be combined in one order as there are distinct proceedings envisaged under the DVAT Act as far as levy of penalty is concerned - The order passed by the VATO (Enf.) abounds in illegalities and, therefore, set aside - the entire matter has to be examined afresh with an opportunity being given to the Petitioner to produce all documents - if Petitioner pays the entire amount of the VAT the said goods shall be released forthwith – assessee petition allowed by remand
2016-VIL-123-P&H
M/s KAMAL TRADING COMPANY Vs THE STATE OF PUNJAB
Punjab Value Added Tax Act, 2005 - levy a penalty for production of goods carrying documents after 20 hours of detention - provisions of Section 51(7)(c) of the Act allow 72 hours prove the genuineness of the transaction - levy of penalty under section 51(7)(c) for non reporting at ICC – HELD - pulses are a taxable commodity in the State of Punjab therefore the appellant was obliged to carry the goods with the genuine documents relating to the goods. The contention of the appellant that the transaction was shown in Form VAT 15 for the period from 1.7.2008 to 30.9.2008 and the fact about its purchase was reflected in the relevant statement in Form VAT 19, therefore, there could be no evasion of tax is without any merit - The view taken by the Tribunal is a plausible view and no error therein – assessee appeal dismissed
2016-VIL-186-CESTAT-DEL-CU-LB
M/s HUAWEI TECHNOLOGIES CO LTD Vs DESIGNATED AUTHORITY
Customs – Larger Bench - Appeal against levy of Anti-Dumping Duty on Synchronous Digital Hierarchy System from China PR and Israel - accuracy and adequacy of the information furnished, for purposes of initiating investigations under Rule 5 of the Anti-Dumping Rules - eligible domestic industry in terms of Rules 2(b) of the Anti-Dumping Rules - Whether the Product under Consideration (PUC) is properly defined, having regard to the statute – HELD - the fact that CMAI does not maintain accurate or exact figures of production of each company does not negate the fact that it was well aware that Tejas has a very large share of production in India - Therefore, DA was justified in initiating the investigation - the word ‘producer’ has connotation wider than a mere manufacturer and includes even those engaged in any ‘connected’ activity. Therefore, with the substantial activities undertaken by Tejas, it is clearly covered within the scope of ‘producer’ - The above WTO Panel reports make it amply clear that it is not necessary that all types covered by PUC must be alike to each other or even necessarily constitute a homogenous group. In the present case, the various STMs, are all having SDH technology and are upgradations of the models having lower numerical value. They are different types of SDH Equipment, which is the product under consideration. Thus, the determination of product scope by Designated Authority is sustainable - it is permissible for the Authority to include within the purview of the PUC, parts and components, which if not included, would make the levy ineffective. The coverage of the product for levy of duty should be such that the purpose and intent of the levy is achieved - If the parts and components meant for SDH application are excluded, the importers could simply bring the items in different consignments, in unassembled form, and assemble the same in India and defeat the levy - According to the appellants, the notification is liable to be set aside on the ground of vagueness and they argued that the expression like ‘for SDH application only’ is too vague to be acceptable in a taxing statute or exemption notification. We are unable to agree with this contention because expression ‘for SDH application only’ is quite comprehensible and there is nothing too esoteric about it. In our view there is nothing so vague or incomprehensible about expressions like ‘for SDH application only’ as to make it impossible or impractical to implement the anti-dumping notification - infirmity in the final findings of the Designated Authority as to invite appellate intervention. The appeals are dismissed
2016-VIL-124-BOM-CE
LARSEN AND TOUBRO LIMITED Vs THE UNION OF INDIA
Central Excise – Section 11 - Apportion of part of the rebate against the demand which is stayed by the Tribunal – order of Tribunal for waiver of pre-deposit and stay of recovery during the pendency of the Appeal - Revenue sanctioned the rebate claim and appropriated part of sanctioned rebate – HELD – Tribunal order could have been assailed by the Revenue by appropriate legal proceedings. However, the Revenue could not have got over a binding stay order and by indirect or oblique process seek to recover the very sum and amount which it could not recover because of the prohibitory order of the Tribunal. Once no recovery of taxes pending Appeal was permissible and there was a stay to that extent, then, the Revenue could not have ignored this binding order of the Tribunal. This is a novel way of taking over the adjudication and recommencing it when the earlier exercise ended completely in an order favourable to the Revenue but subject matter of Appeal. This is a clear case where the principle of matter being sub-judice would apply - The impugned order is quashed and set aside – assessee petition succeeds
2016-VIL-183-CESTAT-CHE-CE
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, PONDICHERRY Vs RAVISHANKAR INDUSTRIES PVT LTD
Central Excise – Valuation - Job work – discharge of excise duty on behalf of the principal manufacturer – demand of differential duty and penalty on the ground that duty discharge is not per the value on the sale price of the principal manufacturer - jurisdiction of Assistant Commissioner - impugned order only on the grounds of jurisdiction – HELD - the Assistant Commissioner is competent to decide the valuation issue and demand the differential duty - the issue is on valuation and re-determination of duty and imposition of penalty, the impugned order setting aside the original order on the jurisdiction is not justified – impugned order is set aside and matter remanded to Commissioner (Appeals) to decide the issue on merits
2016-VIL-187-CESTAT-CHE-CE
CCE (ST) LTU, CHENNAI Vs M/s TUBE PRODUCTS OF INDIA
Central Excise – provisional assessment - demand of interest on differential duty - Rule 7 (4) of CER, 2002 – HELD - From the reading sub-rule 4 of Rule 7 of CER, 2002 it is seen that interest is payable only when any amount is payable consequent to the order for final assessment. When no amount is to be paid consequent to the order of final assessment, sub-rule 4 is not attracted at all - interest is not payable when differential duty is paid before passing final assessment – revenue appeal dismissed
2016-VIL-126-MAD-ST
M/s CLASSIC BUILDERS (MADRAS) PVT LTD Vs CESTAT, CHENNAI
Service Tax – Pre-deposit – Tribunal - functus officio – payment of pre-deposit in instalments - dismissal of application for restoration of appeal observing that the Tribunal had become functus officio after passing the order – HELD - to the facts of this case, it cannot be said that the Tribunal has become functus officio, once the Tribunal had passed an order, not on merits, not while finally determining the issue and not an order which has merged with the Appellate Court order - When the Act or the Rules in question do not specifically prohibit restoration of an appeal, dismissed on the ground of non-deposit of the amount, the Tribunal certainly has the power and jurisdiction to recall its earlier order, if the ends of justice require such a course of action - When Rule 20 provides for restoration of appeal in case when the appeal is dismissed for default, there is no reason as to why the power of restoration should not be exercised in case of non-compliance with the provision for pre-deposit - since right to appeal is a statutory right and pre-deposit requirement under Section 129E of the said Act are only in nature of procedural requirements, but for delay in meeting the pre-deposit requirement, the primary right of appeal cannot be extinguished - Tribunal cannot deprive the substantive right of the party to prefer the appeal on the mere ground that there is violation of procedure. Therefore, the order of the Tribunal, dismissing the restoration application and the order dismissing the appeal itself are liable to be set aside – assessee appeal allowed
2016-VIL-188-CESTAT-DEL-ST
M/s CARRIER AIRCONDITIONING & REFRIGERATION LTD Vs CCE, GURGAON
Service TAX – Cenvat Credit – Sub-contractor - Business Auxiliary Service - eligibility for Cenvat Credit of the service tax paid on the services received from sub-contractors – providing of repair and maintenance service under Annual Maintenance Contract through sub-contractor – denial of credit - HELD - There is no dispute that the appellant during the period of dispute were paying service tax on their output service on repair and maintenance under AMC Contract. The service received by the Appellant from these sub-contractors (Business Auxiliary Service) is to be treated as “input service” for the output service of repair and maintenance under AMC and the ground on which the Commissioner has denied the service tax in respect of these services is totally wrong - cenvat credit demand set aside
Budget Article
Amendment required to Notification 52/2003-Cus in view of Finance Bill, 2016
Rule 7B of Cenvat Credit Rules, 2004 – A new concept for Multi-Unit Companies
chhgNoti15 & chhgNoti16
Chhattisgarh: Extension of time limit for Form-18 FY 2013-14 & 2014-15
Chhattisgarh Budget 2016-17 - Budget Highlights
delCir40
Delhi: Regarding scrutiny of Returns
cuCir08
Customs: Dispensing of Customs Baggage Declaration Form for domestic passengers
10th March
2016-VIL-127-MAD
ULTRUST SOLUTION (INDIA) PVT LTD Vs THE COMMERCIAL TAX OFFICER, CHENNAI
Tamil Nadu Value Added Tax Act – Central Sales Tax Act – detailed order of High Court since in numerous cases the direction to assessing authority have only fallen on deaf ears and many writ petitions are being filed on similar grounds – direction to accept objections, opportunity of personal hearing, to apply mind independently and not to follow the report of the enforcement wing officials and that the enforcement wing officials have no power to collect cheques – non-speaking order – Submission of ‘C’ Form - HELD – when the petitioner has raised objections on each point, the respondent must give specific findings on each point. In the absence of the same, orders can only be termed as non-speaking - this reflects the non-application of mind and the lacklustre attitude of the respondent. In the absence of specific findings to the various objections of the petitioner, the impugned proceedings have no legs to survive - Unmindful of that and the instructions of the Commissioner in the Circular No 7/2014, the respondent has proceeded to pass the impugned proceedings without granting a personal hearing. The conduct of the respondent is highly inappropriate and the order is therefore clearly in violation of the principles of natural justice - As per Section 65 (3), the enforcement wing officials, even when they discover that there is an attempt to evade tax, they can only seize the records for the purpose of enquiry. However, the demand can be made only after assessment and that has to be in accordance with law by the assessing authority - the enforcement wing officials cannot usurp the powers of the assessing officers and collect cheques. Therefore, the petitioner is entitled to refund of the cheque amount - assessing authority has powers not only to extend the time to submit ‘C’ Forms but also has powers to re-open the assessment on receipt of the ‘C’ Forms. Therefore, the impugned proceedings cannot be sustained and are hereby set aside - the impugned orders in all the writ petitions are set aside. The matters are remanded back to the respondent for fresh consideration – assessee writ petition allowed
2016-VIL-129-CHG
M/s SARDA & SEMEC ELECTROMECH PVT LTD Vs STATE OF CHHATTISGARH
Chhattisgarh Value Added Tax Act, 2005 – Section 22 - valid reason for re-opening of an assessment – HELD - Section 22 of the Act undoubtedly provides for re-opening of an assessment. But the re-opening cannot be at ipse dixit of the authorities and must be strictly in accordance with and within the jurisdiction and power vested in the authorities under that provision - unless the Petitioner is first told and made known the reasons and materials on basis of which the authorities had reasons to believe with regard to what may have happened under the earlier assessment compelling them to re-open it, the Petitioner would be seriously handicapped in filing its reply - the show cause notice is not in accordance with Section 22 of the Act. The authorities therefore cannot proceed on basis of the same. The impugned show cause notice is set aside - Writ Petition allowed
2016-VIL-130-KER
THE SALES TAX OFFICER Vs M/s IDEAL TRADING COMPANY
Central Sales Tax – Refund – Interest - Exemption from tax under Section 5(3) of the Central Sales Tax Act in relation to penultimate purchase – HELD - Full Bench was called upon to decide the vires of S.R.O.No.1071/2011. That SRO was inapplicable to the case of the assessee who claimed exemption on a ground referable to Section 5(3) of the CST Act – Full bench judgment does not, in any way, take away the statutory liability of the State to refund the amount with effect from the date of order and when 90 days lapsed, the self-working statutory imposition of interest at the rate of 10% per annum grew as an eligibility in favour of the assessee - no error in the single Judge order – revenue writ appeal fails
2016-VIL-190-CESTAT-DEL-CU
CC, NEW DELHI Vs M/s AVAYA GLOBAL CONNECT LTD
Customs – Valuation – assessable value in terms of Rule 9(1)(c) Customs Valuation Rules - royalty paid to the foreign supplier - Transfer of Technology Agreement – HELD – royalty remained same when the appellant was importing components to manufacture cards and when the appellant started importing cards themselves - Royalty continued to be based upon the number of ports activated - As the Supply Agreement is consistent with the Technology Transfer Agreement, it follows that the supplier had the right to terminate the supplies in case of non-payment of royalties. This also makes it evident that payment of royalty was a condition of sale in the present case - amount of royalty paid to foreign supplier was includible in the assessable value – revenue appeal allowed
2016-VIL-128-ALH-CE
M/s
TRIVENI ENGINEERING & INDUSTRIES LTD Vs CCE, ALLAHABAD
Central Excise – Clandestine removal - increase in
the volume of molasses – allegation of clandestine manufacture and clearance of
sugar – duty demand and penalty – Tribunal upheld duty demand within the period
of limitation along with interest and penalty – assessee in appeal – HELD -
demand of duty is based on an assumption that declaration of excess quantity of
molasses by the appellant is indicative that the appellant must have purchased
and crushed the additional quantity of sugar cane and that corresponding
quantity of sugar was manufactured and cleared clandestinely. This assumption
for imposition of duty and penalty is based purely on surmises and conjectures
and is totally unwarranted - the mere fact that the volume of molasses has
increased after the closure of the factory, i.e., after the manufacturing of
sugar comes to an end cannot lead to a presumption of clandestine manufacture
of sugar and consequently, removal of sugar without payment of duty nor can it
lead to a presumption that a fraud - charge of clandestine removal of sugar is
required to be discharged by the Department by production of sufficient and
tangible evidence. In the absence of any evidence of extra consumption of
electricity purchase of extra raw material, absence of evidence of extra goods
being manufactured no case is made out for clandestine manufacture of sugar and
its removal – tribunal order quashed and assessee appeal allowed
2016-VIL-189-CESTAT-CHE-CE
SANTEL COMMUNICATIONS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV
Central Excise - Section 2(f) - Manufacture of Basic Wired Telephone Instruments bearing brand name – import of entire telephone instruments in CKD condition – affixation of MRP sticker – whether the assembling of imported and indigenous telephone parts amounts to manufacture - whether the act of replacing RSP sticker with MRP label on the imported Basic Wired Telephone Instruments and Fax Machines amounts to manufacture - non-registration with excise department – SSI exemption - HELD – the appellants have not imported the complete Telephone in CKD or SKD condition as contended by them - the appellants have imported or procured indigenously all the parts of telephone instruments for assembly of Basic Wired Telephone then carried out the operations of soldering, assembling, testing and packing, labelling etc. Therefore, by virtue of Section2 (f) (iii) Central Excise Act read with Section Note 6 of Chapter Heading XVI to Central Excise Tariff the process carried out by the appellant assembling various parts to make it complete telephone instrument amounts to ‘manufacture’ and chargeable to Central Excise duty - the Telephones cleared by the appellants bearing the name of “TATA INDICOM” to the telephone service provider does not amount to usage of other's Brand to attract para-4 of SSI notification - No infirmity in the impugned order to the extent of allowing SSI exemption benefit to the goods cleared bearing the name of “TATA INDICOM” - The revenue appeal is liable to be rejected
2016-VIL-191-CESTAT-DEL-ST
M/s USHA INTERNATIONAL LTD Vs CST, NEW DELHI
Service Tax - Refund of service tax paid on royalty paid by the transferee company to transferer company on merger – denial of refund on ground of date of amalgamation and unjust enrichment – HELD - pending the approval and sanction of the scheme by the Hon’ble High Court, transferor company carried on its business and activities for and on account of and in trust for transferee company. In these circumstances the only inescapable conclusion which emerges is that the amalgamation was effective from 1.4.2007 even if its approval by the Hon’ble High Court and the letter of Registrar of Companies approving change of name of JEW to Usha International were issued letter - service rendered during the impugned period became service to self and consequently service tax paid during the said period became eligible for refund - As the service was rendered to self and service tax was paid thereon, burden can only passed on to self and passing on the burden to self is not tantamount to passing it to any other person. In other words in the present case in the given circumstances the appellant is not hit by the doctrine of unjust enrichment – assessee appeal allowed
2016-VIL-192-CESTAT-MUM-ST
M/s SITEL INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI II
Service Tax – disallowance of Cenvat Credit in respect of Health Club and Fitness Center, Transport Goods by Road and Electricity Expenses on the ground that these services are not falling under the definition of input service and the same has no nexus with the export of service – HELD - to decide whether service is an input service or otherwise, it cannot be decided only by the nomenclature of the service. It is necessary to ascertain what is the output service and whether the service in question is required for providing the output service - In the BPO companies the health and fitness of the employees is very essential factor in order to run the function of a BPO company. Therefore, health and fitness services availed by the company for their employee is a necessity for providing the better quality of output service - business organization is not meant for an entertainment of the employees but ultimate objective is to achieve optimum performance by the employee. For that purpose health and fitness of the employees are very necessary - these services are input services even as per the inclusion clause of the definition of input services - The services like repair, maintenance, electricity are directly used by the BPO service provider in order to carry out their day-to-day business activity. Therefore, it is an input service and credit is admissible – assessee appeal allowed
Guest Article
'Special Valuation Branch' - Recent changes; is it beginning of a new era?
RAJASTHAN NOTIFICATION
rajNoti243: Amendment in Rajasthan Investment Promotion Scheme-2014
rajNoti244: Amendment in Rajasthan Investment Promotion Scheme-2014 - Regarding Service Sector (Attached)
rajNoti245: Amendment in Rajasthan Investment Promotion Scheme-2014 - Regarding Backward Area (Attached)
rajNoti246: Amendment in Rajasthan Investment Promotion Scheme-2014 - Regarding Most Backward Area (Attached)
rajNoti247: Amendment in Rajasthan Investment Promotion Scheme-2010
hpNoti2509
Himachal Pradesh Entry Tax Act, 2010 - Amendments in Schedule-II
MAHARASHTRA NOTIFICATION
mahaNoti1B423: Format for Return Form 423 (Attached)
mahaNoti1B424: Format for Return Form 424 (Attached)
mahaNoti1B231-235: Format for Return Forms 231, 232, 233, 234 and 235
Andhra Pradesh Budget 2016-17 - Budget Speech
11th March
2016-VIL-133-CAL
RITIKA STEEL INDUSTRIES PRIVATE LIMITED Vs SALES TAX OFFICER
West Bengal Value Added Taxx - Rule 59(4)(b) - refund adjustment order – interest on delay refund – Court imposes cost for delayed refund - HELD - Since the State is quick to impose penalty and interest on assessees for not paying up the tax due in time, the State should also be subjected to payment of interest at a higher rate than normal for the State not complying with its own rules. There can be no discipline in the department if the State itself fails to adhere to fiscal discipline and integrity – revenue is directed to grant refund adjustment order together with interest thereon at 24% per annum - The Commissioner of Sales Tax will take immediate steps to ascertain who was responsible for this delay and take appropriate action against the persons responsible for causing the additional payment out of the State exchequer - petitioner will also be entitled to costs of the present proceedings – Assessee petition allowed
2016-VIL-132-P&H
M/s S.H. ENTERPRISES Vs THE STATE OF PUNJAB
Punjab Value Added Tax Act – dismissal of appeal by appellate authority as well as by Tribunal want of pre-deposit of 25% of the said additional – HELD - provisions of Section 62(5) of the PVAT Act are directory in nature meaning thereby that the first appellate authority is empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances - when a strong prima facie case is made out will the first appellate authority consider whether to grant interim protection / injunction or not – appeal stands disposed of in the same terms as in Punjab State Power Corporation Limited case
2016-VIL-193-CESTAT-CHE-CU
COMMISSIONER OF CUSTOMS, BANGALORE Vs 3M INDIA LTD
Customs – Valuation - 'Tripartite' IPR Agreement – Royalty payment - related party transactions - whether the original authority & LAA are correct in accepting the declared price and holding the Royalty payment not includible in the value of imported goods and whether the transactions are at arms length – Simultaneous DRI investigation on pan India basis against assessee’s transactions - HELD - All these facts establishes that the entire related party transactions are not at arm’s length or on principal to principal basis. This clearly shows that the principal company is compensated indirectly or directly in some other means either by way of pricing of the goods or other method of payments or the principal company absorbs the royalty payments by adjustment which can be brought out only in detailed investigation - neither the original authority nor the lower appellate authority has considered the intricacies of the agreements and the subsequent amendment agreements, billing and pricing patterns – lower authorities have not examined in detail, viz. agreements, amendment agreements but merely endorses the respondent’s view without any discussion. Therefore, there is enough justification on the Revenue’s contention and the O-in-O and the impugned order are liable to be set aside and to be remanded to the original authority - The original authority is also directed to take into consideration the outcome of the investigation proceedings initiated by DRI while deciding the issue - Revenue appeal is allowed by way of remand
2016-VIL-194-CESTAT-CHE-CE
RAN INDIA STEELS PVT LTD Vs COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, SALEM
Central Excise – valuation – Cenvat Credit – clearance to own unit for captive consumption – payment of duty by adopting market value - CAS-4 certificate for determining the value of goods cleared to own inter-unit – adjudicating authority rejected the value adopted by appellant - penalty under Rule 26 – revenue quantified value as per CAS-4 certificate and levied penalty for passing excess credit to own unit – recovery of the credit by invoking the proviso to Section 11A - HELD - whether the value is higher or lower will be known only after the receipt of the certificate from Cost Accountant - It is normally not possible for anybody to pay duty with mathematical precision at 110% of the cost. In all cases there may be shortage or excess payment. That will be known in the next financial year after getting a Cost Accountant certificate. Merely because there is variation, that too in favour of the Revenue, there cannot be a ground for imposing penalty under Rule 26 - Since the correct value has not been determined, it cannot be presumed that the appellant has passed on excess credit to their own unit, as there was no necessity to pass on excess credit as both units are one and the same entity. The excess amount can be transferred as cash also. Hence the entire basis on which the Department proceeded is incorrect - lower authorities have wrongly applied Rule 26 for imposing penalty. Similarly, imposition of penalty under Rule 27 is also not correct
2016-VIL-195-CESTAT-MUM-CE
PENNZOIL QUAKER STATE INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, BELAPUR
Central Excise - manufacture of lubricating oil – duty demand on account of shortage of raw material as well as finished goods in the factory and the depot - and on account of reversal of credit on duty paid finished goods at the depot – HELD - the shortages found are very minor in nature, i.e. 0.6% which is well accepted in petroleum products also, there is no allegation that there is clandestine removal of goods by the appellant - it cannot be said that the appellant has suppressed material fact with intent to evade payment of duty and there is no evidence with regard to clandestine removal of goods - the impugned order is set aside on merits as well as on limitation – assessee appeal allowed
2016-VIL-134-MAD-ST
M/s SHAPOORJI PALLONJI INFRASTRUCTUR CAPITAL COMPANY PVT LTD Vs COMMISSIONER OF SERVICE TAX, CHENNAI
Service Tax – issuance of second show cause notice contrary to the directions given by the High Court – HELD - When the respondent is bound by the directions given by this Court and when this Court had directed the petitioner to submit their objections by treating the impugned proceedings as show cause notice and when this Court directed the respondent to consider the same and pass orders in accordance with law, the issuance of the 2nd show cause notice, contrary to the direction of this Court is liable to be set aside - respondent cannot violate the orders of this court on the guise of filing an application for modification - since the issuance of the 2nd show cause notice is contrary to the order passed by this Court, the same is set aside and the writ petition is allowed
2016-VIL-196-CESTAT-MUM-ST
M/s ARPANNA AUTOMOTIVE PVT LTD Vs COMMISSIONER OF CUSTOMS & CENTRAL EXCISE
Service Tax - Business Auxiliary Service - tax liability on the commission received from the financial institutions for giving table space in the appellant’s premises and on the differential amount kept back on the fees charged for RTO registration – HELD - Service Tax liability on the amount received as commission from financial institution and other institutions is covered by the Larger Bench decision in the case of Pagariya Auto Centre in favour of Revenue - helping the purchaser with registration with the RTO, cannot be any considered by Business Auxiliary Service, the Service Tax demand of the amount retained by the appellant in respect of RTO registration fees is not sustainable – assessee appeal partly allowed
Guest Article
Krishi Kalyan Cess on all taxable services w.e.f. June 1, 2016 – Impact on “Make in India” and “Start-up India” drive
telNotiGO31
Telangan: Ease of Doing Business – Amendment to Rule 10 of the Telangana Value Added Tax Rules, 2005
telNotiGO34
Telangana: Central Sales Tax (Andhra Pradesh) Rules, 1957 (Telangana Adaptation) Order, 2016
utrNoti100
Uttarakhand: Regarding demand of security for Marble & Tiles
ceCir1020
Central Excise: Valuation of imported Set top boxes under Section 4 of the Central Excise Act, 1944
cuCir09
Customs: Clarification with regard to classification of Wireless microphone sets / systems consisting of one or more wireless microphones and a wireless receiver
12th March
2016-VIL-135-ALH
M/s FLIPKART INDIA PVT LTD Vs STATE OF U.P.
Uttar Pradesh Value Added Tax Act, 2008 – section 17, Sec 75 – registration – Rule 32, 33 - sub-rule (8) of Rule 6 - application for change of place of business – serving of notice and summon - ex-parte provisional assessment orders – attaching of dealer bank account without proper authority – Rejection of application of change of place of business on the ground of belated filing - HELD – In the instant case the change of declaration required under sub-rule (8) of Rule 6 of the Rules, which requires written permission of the Commissioner was not required to be done by the petitioner. Rule 6 (8) has no application in the instant case and could not be relied upon by the revenue - The ground for rejecting the application for change of place of business on the ground that the application was filed belatedly is patently erroneous - the word "shall" as provided under Section 75 of the Vat Act is not mandatory and is directory in view of section 17 (14) (a) of the Vat Act - the order rejecting the petitioner's application for change of place of business was wholly illegal and therefore, cannot be sustained - there was no valid service of summons and consequently, ex-parte proceedings were taken based on which ex-parte assessment orders were passed which can not be sustained and are liable to be quashed - Entire exercise was done deliberately so that the respondents could withdraw the amount through garnishee notices by exerting pressure upon the bank authorities. The Court gets an uncanny feeling that a deliberate attempt was made by the respondents to withdraw the money from the petitioner's bank account through dubious mean by passing ex-parte assessment orders and not allowing it to be served validly upon the petitioner. If in this cavalier fashion the Department functions and withdraws huge sums of money without valid service, it would be difficult for big business houses to carry on their business. Such business houses would be forced to shift their business outside the State of Uttar Pradesh
2016-VIL-136-PAT-ST
M/s RISHI BUILDERS INDIA PVT LTD Vs THE STATE OF BIHAR
Service Tax - construction and maintenance of the roads - Execution of works under contracts entered with Road Construction Department, Govt of Bihar - General Exemption Notification No.12/2012-ST - deduction service tax by Road Construction Department – permissibility to deduct service tax irrespective of the fact it was included in BOQs in tender - Estimated Cost Value – HELD - It is well settled that under Article 265 of the Constitution of India no tax shall be levied or collected except by authority of law. In view of the exemption it is evident that the respondents have no authority to collect service tax which is not at all leviable under the law - respondents are directed to refund the entire amount of service tax deducted from the bills of the petitioners after the issuance of the Notification dated 17.3.2012. They are further restrained from collecting any such tax from the bills of the petitioners or any other contractors in future so long as the said exemption remains in operation – assessee petition allowed
2016-VIL-197-CESTAT-DEL-CE
CCE, RAIPUR Vs M/s CHAKRA ROLLING MILLS PVT LTD
Central Excise – Clandestine removal – bogus invoice – HELD- the original allegation and the present appeal which was based on such allegation present propositions which are peculiar and contradictory. The case of the Revenue is that based on detailed investigation it is established that the main respondent did not physically clear the impugned quantities of finished goods and the inputs as such and only issued documents on the duty paid particulars. Hence, the conclusion is that these goods were not actually manufactured and cleared. However, it was further alleged that equivalent quantity of goods have been clandestinely manufactured and cleared and, hence, duty on such quantity is sought to be demanded under Section 11A of CEA, 1944. On the face of it the whole allegation appears misconceived and absurd - The duty which is sought to be demanded and confirmed by the Original Authority has already been remitted by the respondent. Now again such demand was justified on the ground that equivalent amount of impugned goods were manufactured and cleared clandestinely. For this, no attempt even has been made to adduce evidence – Revenue appeal dismissed
2016-VIL-137-BOM-CU
TATA MOTORS LIMITED Vs THE COMMISSIONER OF CUSTOMS (IMPORT)
Customs – Classification – mis-declaration – Extended period – HELD - there appears to be confusion in the mind of the Tribunal as to whether what the assessee declared was a correct description of the goods or whether it was a mis-declaration and suppression as alleged. The facts, according to the Tribunal, establish mis-declaration, but save and except the statements of the four officials - the Tribunal has not adverted to any other material based on which the assessee declared the goods and as claimed throughout (CR coils) under the Tariff Head 72.09 of the Customs Tariff - the Tribunal having not examined the issue of time-bar or extended period of limitation completely - the impugned order of the Tribunal is set aside only to this limited extent - The appeal of the assessee before the Tribunal shall stand revived only for this limited purpose to examine as to whether the recovery of duties are levied or not levied or erroneous and on account of the acts attributable to the assessee and within the meaning of sub-section (4) of section 28 of the Customs Act, 1962 – Appeal allowed by remand
cuNoti08AD
Anti Dumping: Amendment in notification No. 27/2014- Customs (ADD) dated 13.06.2014 - Levy of anti-dumping duty on imports of homopolymer of vinyl chloride monomer
dndNoti17
Daman & Diu: Designate Corporation Bank, Daman branch as authorised bank for payments of taxes
14th March
2016-VIL-138-KAR
M/s HINDUSTAN UNILEVER LTD Vs THE STATE OF KARNATAKA
Karnataka Value Added Tax Act, 2003 – section 2 (19) - Rule 131(3) - input tax credit – computation of input tax credit on the basis of its books of account and in accordance with Section 11, 14 and 17 of the Act instead of formula appended to Rules 131(3) of KVAT Rules, 2005 – application of Circular dated 26.06.2006 - apportionment of non-deductible input tax - non-taxable transactions – exempted goods – failure of the Assessee to get the specified formula approved by the Commissioner - HELD - for claiming input tax credit, the burden would be upon the Assessee to satisfy the Authority that he is entitled to input tax credit of a particular goods, used as raw material. If the books of accounts are prepared wherein the product for input tax credit is not identifiable and resultantly, the Assessing Officer has disallowed the credit, it cannot be said that there is any error of law – assessee appeal dismissed - Eligibility of input tax credit on purchase of furniture, chemicals, engineering goods scientific goods used in research centre - incidental activity in furtherance to the trade or commerce or manufacture – Business - HELD - if a Manufacturer- Assessee sets up a Research Centre for undertaking the research of a product or may be a new product in which he is dealing, such, can be said as having direct nexus to the principal activity of manufacture - the view taken by the lower Authority and Tribunal for giving restricted meaning to the word ‘business’ cannot be maintained - petitioner would be entitled to input tax credit on the purchases made for research unit - input tax credit is also allowed in respect of installation of Uninterrupted Power Supply system - assessee appeal partly allowed
2016-VIL-131-GAU
M/s ASSAM SILICATE, GLASS & CHEMICAL WORKS Vs THE STATE OF ASSAM
Assam Value Added Tax Act, 2003 – Section 105(2) – DDQ - Classification of Sodium Silicate – assessee claims it as industrial input to be subjected to tax @4% – Revenue treat it as a residuary item liable to be taxed @12.5% - determination of taxability of the item at the instance of a new manufacturer, who is exempted from tax - HELD - The items that are listed as industrial inputs under VAT Act do not stand independently but refers to the corresponding entries in the Central Excise Tariff Act. Therefore the determination of any question under Section 105(2) of the VAT Act can’t be made without due application of mind, to the implication of the entries of the C.E. Tariff Act - deciding the higher rate of tax at the instance of a new manufacturer, who is exempted from tax to make the Ruling applicable to those who are not exempted from tax was not a correct approach - Commissioner of Taxes to re-determine the classification and the rate of tax for Sodium Silicate after taking into account the classification of the product under the C.E. Tariff Act, the chemical composition of the item and its use as an industrial input – assessee petition allowed by remand
2016-VIL-199-CESTAT-BLR-CE
M/s FERTILISERS & CHEMICALS TRAVANCORE LTD Vs COMMISSIONER OF CUSTOMS & CENTRAL EXCISE (APPEALS), COCHIN
Central Excise - Section 11A(1) - manufacture of fertilizers - demand of duty on notional shortage exclusively based on credit notes issued by supplier – duty demand on account of notional weighment difference - willful misstatement or suppression of facts – penalty – extended period - HELD – the ingredients or elements holding the appellants liable for willful default in payment of duty “with the intention to evade” have not been found to be existing on record - the Revenue has failed to prove the malafides of the appellants to state that they had willfully suppressed the facts with intent to evade payment of duty – the appellants are a PSU whose employees normally would not deliberately and willfully like to contravene the laws with the intention to evade the payment of good revenue as there cannot be any personal profit motive for them unless otherwise proved on record by the Revenue authorities, which they have failed to do. Rather the employees of PSU very well know that if there has been any contravention of laws/rules, knowingly or unknowingly, they would be liable to vigilance/penal action - the facts and investigations have not clearly and convincingly indicated any such mala fide involvement of the appellants and their employees - the demand of duty beyond the period of one year cannot survive. Revenue, to recalculate the duty liability in respect of only one year period for which the demand has been found lawful – assessee appeal partly allowed
2016-VIL-198-CESTAT-CHE-CU
TRANSVIEW ENTERPRISES INDIA PVT LTD Vs COMMISSIONER OF CUSTOMS (SEAPORT-IMPORT), CHENNAI
Customs – classification of “Imitation Jewellery” - mineral based pendant made from high temperature nano-engineered glass - under Chapter Heading 71179090 as claimed by the appellant or under Chapter Heading 70189090 as “Articles of Glass” as assessed - rejection of transaction value – HELD – An imitation jewellery/artificial jewellery as per Note means it should be ornamental and it is to be normally worn as a personal adornment for enhancing beauty. Whereas it is evident that it is not made for regular use as jewellery. Merely the glass is fitted with a metal frame cannot qualify as an imitation jewellery to be classifiable under Chapter 71. Further, we find that the primary function of the imported goods is not as artificial jewellery but sold to only through multi-level marketing on one-to-one basis - the impugned item is not artificial jewellery - the imported goods cannot be classified under Chapter 71 as “Imitation Jewellery/Articles of Jewellery” - the goods are rightly classifiable under 70189090 of CTH - the adjudicating authority classifying the goods viz. “Amezcua Chi Pendant” under Chapter Heading 70189090 is upheld - Valuation - it is not the case of inclusion of royalty and knowhow but the enhancement of value under Rule 9 of CVR and the LA has loaded the price by adopting the Product Launch Proposal Form cost sheets of Quranos watches and La Retrograde watches - the LA order rejecting declared value and enhancing the value by taking the price of "Quranos" and Retrograde Watches is without any basis - The order of enhancement of the value under Rule 9 of CVR and consequent demand of differential duty is liable to be set aside - Assessee appeal partly allowed
2016-VIL-08-ARA
M/s GODADDY INDIA WEB SERVICES PVT Vs COMMISSIONER OF SERVICE TAX, DELHI-IV
Service Tax - Rule 9 of Place of Provision of Services Rules, 2012 – RULE 6A - Export of services - intermediary services - bundle of support services in relation to marketing, branding, offline marketing, oversight of quality of third party customer care center and payment processing on a principal to principal basis – HELD - Applicant proposes to provide support services in relation to marketing, branding, offline marketing, oversight of quality of third party customer care centre and payment processing, on principal to principal basis. These services are proposed to be provided with the sole intention of promoting the brand GoDaddy US in India and thus augmenting its business in India. Therefore, these services proposed to be provided by the applicant, would support the business interests of GoDaddy US in India - the various support services proposed to be provided by the Applicant to GoDaddy US are a "bundle of Services" being naturally bundled in the ordinary course of business and accordingly is a single service - The definition of "intermediary" as envisaged under Rule 2 (f) of POPS does not include a person who provides the main service on his own account. In the present case, applicant is providing main service i.e. "business support services" to WWD US and on his own account. Therefore, applicant is not an "intermediary" and the service provided by him is not intermediary service - In the facts and circumstances of the case, the place of provision of business support service provided by the applicant, is outside India in terms of Rule 3 of the Place of Provision of Service Rules, 2012 - the services to be provided by the applicant to GoDaddy US would fall to be classified under Rule 3 of the Place of Provision of Services Rules, 2012 qualify as export of taxable services in terms of Rule 6A of the Service Tax Rules, 1994 and therefore remain non-taxable for purpose of payment of service tax under the Finance Act - by providing the payment processing services to GoDaddy US, the applicant is not providing any service to the customers of GoDaddy US in India – Ruled in favoured of assessee
Guest Article
Limitation for issuing SCN under Section 73 enhanced - Pros and Cons of amended Section 73
Eligibility of CENVAT Credit on “Sales Commission” - Welcome step vide Notification No. 02/2016-CX (N.T.), dated 3rd February, 2016
Telangana Budget 2016-17 - Budget Speech
Uttarakhand Budget 2016-17: Budget Highlights
Uttarakhand Budget 2016-17: Budget Speech
15th March
cuNoti02SG
Customs: Safeguard Notification - Regarding safegurard duty on import of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more”
cuNoti01SG
Customs: Safeguard Notification - Regarding safegurard duty on import of Saturated Fatty Alcohols with carbon chain length of C8,C10,C12,C14,C16 and C18 including single, blends and unblended (not including branched isomers) which includes blends of a combination of carbon chain lengths, C12-C14, C12-C16, C12-C18, C16-18 and C14-C16 (commonly categorized as C12-C14)
2016-VIL-139-MAD
ENNORE FOUNDRIES LIMITED Vs THE STATE OF TAMIL NADU
Tamil Nadu General Sales Tax Act, 1959 - There was suppression of turnover – furnishing of three different figures, on three different dates during inspection of the factory - reassessment - presumption of suppression of turnover – revision petition on two grounds viz. violation of principles of natural justice and perversity of findings - HELD - The Tribunal was not supposed to get into the document and confront the petitioner with the discrepancies between the figures found in the balance sheet and what was furnished to the Team of Enforcement Wing. Once a party before a quasi judicial Tribunal, voluntarily invites the attention of the Tribunal to a document, the Tribunal is entitled to come to its own conclusion from what was produced. It is not part of the principles of natural justice to expect the Tribunal to confront the person producing the document with what is found by the Tribunal - the question of perversity cannot be examined at this stage when the petitions for rectification are pending from 2014 - petitions disposed of directing the Tribunal to dispose of the rectification petitions on merits
2016-VIL-141-GUJ
M/s VIKSUN STEEL CO. Vs STATE OF GUJARAT
Gujarat Value Added Tax Act, 2003 - section 45 – attachment and debiting of petitioner-assessee bank accounts during pendency of the stay application – HELD - when the petitioner has preferred an appeal together with a stay application within the prescribed period of limitation, the respondents were required to act in a reasonable manner in connection with the notice issued under rule 27 of the rules - in the absence of any exceptional circumstances, there is no warrant for the respondent-authority to proceed to initiate coercive recovery in exercise of powers under section 44 of the Act - the attachment on the bank accounts shall be forthwith withdrawn - respondent is hereby restrained from making any further coercive recovery from the petitioner till the stay application filed by the petitioner is heard and decided – assessee petition allowed
2016-VIL-201-CESTAT-CHE-CU
M/s KARNATAKA POWER CORPORATION LTD Vs COMMISSIONER OF CUSTOMS, CHENNAI
Customs – import of parts of Hydro Electric Generator i.e. Epoxy insulated single turn half coils with accessories and Epoxy insulated single turn half coils wave stator windings etc. - classifiable under 8503 as parts of generators as claimed by assessee or under 8544 as insulated wire/cables as claimed by the Revenue – Section Note 2 of Section XVI - HELD – Note 2 (b) is the relevant note suitable for the present case as the goods are not general parts or insulating materials as per the invoices and the catalogues it is established that these stators are particularly meant for generators only - rotors and stators used in monoblock pump which are suitable for electric motors are classifiable under 8503 - the goods imported under the Bills of Entries are epoxy stator coils solely designed for power generators for Hydro Power Project and rightly classifiable under 8503 and not under 8544 - the impugned order is set aside and assessee appeal is allowed
2016-VIL-12-SC-CE
COMMISSIONER OF CENTRAL EXCISE & CUSTOMS Vs M/s MAHINDRA & MAHINDRA LTD
Central Excise – valuation - value addition to base vehicle - whether the value addition by way of bullet proofing of base vehicle, has to be added while arriving at transaction value for the purpose of excise duty – HELD – the vehicles were cleared from the factory of the assessee without any bullet proofing, it is only after clearance that the vehicles were sent to get the processing of bullet proofing carried out by job workers outside the factory premises - in such circumstances, the cost of bullet proofing could not be added to arrive at the transaction value. The order of the Tribunal does not warrant any interference – revenue appeal dismissed
2016-VIL-200-CESTAT-KOL-CE
M/s INDIAN RARE EARTHS LTD Vs CCE & ST, BBSR-I
Central Excise – Manufacture – making of concentrates of ores – separation of minerals viz. Ileminite, Sillimenite, Rutile, Zircon and Garnet from beach sand – demand pursuant to insertion of Chapter Note 4 to Chapter 26 of CETA, 1985 – HELD - since the processes undertaken by the appellant like washing, magnetic separation, gravity separation to remove unwanted matters on sand ores, and the resultant satisfies the meaning of ‘concentrate’ as explained in the HSN, hence, it should be considered as “manufacture” as per Section 2(f)(ii) of CEA,1944 - The contention of the appellant that unless the content of Ores improves, the resultant cannot be called as a ‘concentrates’ and accordingly the physical/mechanical processes carried out by them would not fall under the definition of manufacture, is the result of misunderstanding and incorrect interpretation of the relevant tariff entry, the chapter note 4 and clause (ii) of Sec.2(f) of CEA,1944 - If on application of processes on Ores sand its purity/content increases and its use, commercial identity and character is different from the ore, then the resultant would be considered as “manufactured” and accordingly dutiable - in absence of an increase in the purity content by any method, if there cannot be a manufacturing process, the chapter note 4 inserted with effect from 01.3. 2011 defeat the very purposes and becomes otiose. Such a situation, cannot be the intention of the legislature - application of various processes to ore sand, converts it into concentrates and accordingly in view of the chapter note 4 of chapter 26 becomes manufacture and leviable to Excise duty
2016-VIL-140-PAT-ST
SHAPOORJI PALOONJI & COMPANY PVT LTD Vs COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA
Service Tax - works contract - construction of academic complex of Indian Institute of Technology – service tax liability while undertaking construction activity of educational institutions – exemption Notification No. 25/2012 - Indian Institutes of Technology Act, 1961 - service provided to Government or Local Authority or Governmental Authority – Refund of service tax paid – unjust enrichment – HELD - with effect from 1st July, 2012, the services provided to the Government, local authority, or governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration were exempted from payment of service tax - As per the definition of Governmental Authority as amended on 30th January 2014, an authority or board or any other body set up by an Act of Parliament or State Legislature is a Governmental Authority - Notification dated 20th June, 2012, exempts the activity of construction undertaken by the petitioner from payment of service tax - The Authority set up by an Act of Parliament or State Legislature is not and cannot be made subject to the condition of 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution - petitioner is entitled for the reimbursement of the amount of service tax in terms of the letter of award of contract. Such payment of service tax by the petitioner is not indirect collection of taxes but the direct payment by the petitioner. Therefore, it is not a case of undue enrichment – assessee petition allowed
2016-VIL-13-SC-ST
COMMR.OF C.E.CUSTOMS & SER TAX Vs M/s FEDERAL BANK LIMITED
Service Tax - whether the services provided by the respondent-Bank such as collection of telephone bills, collection of insurance premium on behalf of the client companies are liable to service tax under the category Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994 – HELD - sub-clause (vii) of Clause (19) refers to only a service which is incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), but those activities in turn do not specifically relate to banking and other financial services. - Clause (12) of Section 65 covers all charging services rendered by the Banks - when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service – High Court order upheld – revenue appeal dismissed
apCir421
Andhra Pradesh: List of Sensitive Commodities
cuCir10
Customs: Implementing Integrated Declaration under the Indian Customs Single Window