SUMMARY FOR THE MONTH OF MAY
2nd May
2016-VIL-220-DEL
JAYCON INFRASTRUCTURE LTD Vs COMMISSIONER OF TRADE & TAXES, DELHI
Delhi Tax Compliance Achievement Scheme, 2013 – Jurisdiction and power of Additional Commissioners acting as ‘Designated Authority’ to reject applications received under the Amnesty Scheme when clause 8 of the Amnesty Scheme envisages only the Commissioner VAT passing such orders – HELD - The Respondents have not placed any order by which the Commissioner, VAT has delegated any of his powers under the Amnesty Scheme including, most importantly, the powers under Clause 8 thereof to any other subordinate officer or to even a Designated Authority - Clause 8 of the Amnesty Scheme does not envisage the power therein to be exercised by a Designated Authority but only by the Commissioner. Unless there is a specific order issued by the Commissioner under Section 68(1) of the DVAT Act delegating his powers under Clause 8 of the Amnesty Scheme to any other subordinate officer, it cannot be presumed that an Additional Commissioner, who has been declared as a Designated Authority, can ipso facto exercise the powers of the Commissioner under Clause 8 of the Scheme - the impugned orders are hereby quashed. All other actions taken or orders passed pursuant to the impugned orders are declared to be invalid – assessee petition allowed
2016-VIL-221-GUJ
SWISS DEZINER TILES Vs STATE OF GUJARAT
Gujarat Value Added Tax Act - seizure memo in exercise of powers under sections 68, 69 and 70(A) of the Act - checkposts and erection of barriers – detention of truck at a place other than the check-post or barrier – HELD - it is an admitted position that the truck had been detained at a place other than the check-post or barrier as contemplated under sub-section (1) of section 68 of the Act - the respondent who passed the order of seizure and detention was not an officer-in-charge of a check-post or barrier as contemplated under sub-section (4) of section 68 of the Act - the impugned action of the respondents in detaining and seizing the truck with the goods is without any authority of law, and therefore, cannot be sustained - The impugned seizure memo is quashed and assessee appeal allowed
CUSTOMS SECTION
2016-VIL-222-GUJ-CU
M/s PRINTWELL OFFSET Vs UNION OF INDIA
Customs - export obligation in terms of the EPCG scheme – seizure of machines – Condition of furnishing a bank guarantee for the full duty amount for release of goods - HELD - if the machines imported under EPCG scheme remain under seizure, the condition thereof is likely to deteriorate, which would not benefit either the petitioner nor the revenue. On the other hand, if the petitioner firm is permitted to use the machines, it may be in a position to fulfill the export obligation, which would be in the benefit of the scheme - the requirement to furnish a bank guarantee for the full duty amount is in the nature of penalty, and hence, at this stage, the question of furnishing a bank guarantee towards penalty would not arise - the order of provisional release of the seized goods is modified - petitioner is directed to furnish a bank guarantee to the extent of 30% of the duty amount – appeal partly allowed
2016-VIL-298-CESTAT-AHM-CU
HASMUKH GANATRA Vs COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX-SURAT-I
Customs Act – section 54 - Transhipment of goods without payment of duty - high-seas purchase and sale of goods in local market - trading of the duty free goods in local market - jurisdiction of DGCEI to issue show cause notice – HELD - On reading of Section 54 and 55 it is clear that after importation of the goods into a customs port, it could be allowed to tranship to the customs station without payment of duty. In the present case, it is seen from the Bills of Entry for warehousing, the goods were imported at Mumbai Port and it was transhipped to the said unit at Surat, which is a customs station. Thus, as the goods were imported at Mumbai port, the DGCEI officers of Mumbai has jurisdiction to issue show cause notice – appellant is the master mind of the entire episode and therefore the imposition of penalty is warranted - penalty imposed on the other appellants are reduced – assessee appeal dismissed
CENTRAL EXCISE SECTION
2016-VIL-295-CESTAT-KOL-CE
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, JAMSHEDPUR Vs M/s TATA PIGMENTS LTD
Central Excise – GTA service - Cenvat Credit - place of removal - Rule 2 (l) of CCR, 2004 - Admissibility of credit for the GTA service tax paid when goods are manufactured by the job worker and cleared from the premises of job worker - denying credit on freight paid under Rule 15(2) of the CCR, 2004 – Transport charges paid for sending the raw materials to the job workers factory and from job workers premises to Respondent’s depots for sale – Revenue contention that only job worker, being manufacturer, is eligible to take Cenvat Credit with respect to inputs/input services availed in respect to manufacturing activity done on job work basis - extended period of limitation for demanding duty and imposition of penalty under Rule 15 (2) of CCR, 2004 – HELD - factor for treating either ‘job-worker’ or the ‘principal manufacturer’ for the purpose of taking Cenvat Credit is the person who decides to pay Central Excise duty. In this case it is the job worker who has paid duty, therefore, the job worker has to be treated as the ‘manufacturer’ eligible to take Cenvat Credit. The ‘place of removal’ and admissibility of ‘Input Service’ credit under CCR will have to be construed accordingly - Respondent also being a category of manufacturer, who can opt to discharge duty liability on the goods manufactured by the job worker, is eligible to take Cenvat credit on the input services upto the place of removal. Here the premises of job worker is the ‘place of removal’ and not the depot of the principal manufacturer, therefore, Cenvat credit of service tax paid by the Respondent upto the place of removal will be admissible. At the same time, service tax paid by the Respondent for transportation of goods from the job workers premises (place of removal) to the Depots of the Respondent has to be treated as services availed beyond the place of removal as there cannot be two manufacturers and two ‘place of removals’ for the same goods - matter is of interpretation of the provisions of CCR - extended period cannot be invoked - demand restricted to the normal period of limitation – Revenue appeal partly allowed
2016-VIL-296-CESTAT-CHE-CE
M/s TOWER STEELS LTD Vs CCE, MADURAI
Central Excise – Rule 4(5)(b) of Cenvat Credit Rules – Cenvat Credit on CI Ingot Moulds - inputs sent to job-worker - failure to receive back the moulds within the specified period – denial of credit - HELD - Rule 4(5)(a)/4(5)(b) under CENVAT Credit Rules were introduced to enable manufacturers to send inputs as such or such partially processed inputs as such or capital goods to the premises of the job workers for further manufacture of final products. Whether the moulds are to be treated as ‘inputs’ or ‘capital goods’, denial of credit is not dependent on where they are used so long as they are used on behalf of the manufacturer. If such goods are allowed to be sent to a job worker’s premises, where further manufacturing process is carried on behalf of the principal, credit is not to be denied - Even assuming that the appellant had wrongly declared the goods as inputs instead of capital goods because of consumption in the course of manufacture, credit cannot be denied merely because only 50% of the credit is allowed to be used in the same financial year of purchase - The part of the impugned order rejecting the refund claim is set aside – assessee appeal is allowed
SERVICE TAX SECTION
2016-VIL-223-KAR-ST
THE PRINCIPAL COMMISSIONER OF SERVICE-TAX, BENGALURU Vs M/s SHELL TECHNOLOGY INDIA PVT LTD
Service Tax – 100% EOU - refund of unutilized CENVAT credit – services of event management service, real estate agent service, tour operator and travel agents service – disallowance of refund – Tribunal allowing refund by summary order - HELD - the Tribunal did not examine the question of nexus vis-à-vis the particular service for which the refund claim was disallowed, but gave a summary finding for the refund available on all the above input services - It is true that the Tribunal found that liberal interpretation was to be made with regard to input services when one has to examine the nexus with the output services. But such could not be said to be sufficient to conclusively allow the revision claimed, unless the nature of service is examined and the nexus is found with the output services. It was required for the Tribunal to examine each of the services for which the claim of refund was made and the Tribunal was to find out as to whether it has nexus with the output services, which was being rendered by the respondent or not – Tribunal order set aside and matter restored to the file of the Tribunal
2016-VIL-25-SC-ST
DY. COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX Vs M/s BARNALA BUILDERS AND PROPERTY CONSULTANTS
Service Tax - whether an appeal under Section 86 of the Finance Act, 1994 against the order of rejection of declaration under VCES, 2013 filed by the assessee is maintainable – HELD - Since the Civil Appeal No. 3135/2015 has been disposed on the basis of incorrect facts, the judgment dated 24.03.2015 is recalled
2016-VIL-297-CESTAT-DEL-ST
M/s SAMIT ENTERPRISES PVT LTD Vs CCE & ST (ADJ.), NEW DELHI
Service Tax – Rendering of to foreign companies for promoting their product in India - commission from the foreign companies in convertible foreign exchange - Export of Service Rules, 2005 - whether payment of 5% commission in Indian rupee would satisfy the condition of Export of Service Rules which require consideration for the services to be received in foreign exchange – HELD - the commission was paid to the appellant on behalf of the foreign supplier only and can be deemed to have been paid in foreign exchange – such set of arrangement would amount to receiving the consideration in Indian rupee would amount to receiving the consideration in convertible foreign exchange only – assessee appeal allowed
jnptPN65
Customs: JNPT - Procedure for grant of Factory/Warehouse Stuffing Permission to the Exporters
chhgNoti54
Chhattisgarh: Entry Tax Act - Exemption to Lac
kerCir05
Kerala: Extension in last date for filing option for payment of compounded tax
rajCir126
Rajasthan: Post Registration Verification Guidelines
mahaNotiCR62
Maharashtra: Transfer of property in goods involved in the sizing and warping of yarn - Exemption from payment of tax
cuNoti16ADD
Customs: Levy of definitive anti-dumping duty on imports of Measuring Tapes originating in, or exported from Chinese Taipei, Malaysia, Thailand and Vietnam for a period of five years
3rd May
2016-VIL-225-DEL
TIM DELHI AIRPORT ADVERTISING PVT LTD Vs SPECIAL COMMISSIONER-II, DEPARTMENT OF TRADE & TAXES
Delhi Value Added Tax Act, 2004 – Section 2(m) - Goods - Section 2(1)(zc) – sale - advertisement hoardings, panels, display boards and kiosks - Levy of VAT on the turnover from display of advertisement on account of deemed sale resulting from transfer of the right to use hoardings, panels, display boards, kiosks - transfer of any right to use advertising sites - “sale of space or time for advertisement” as defined under Section 65(105) (zzzm) of the Finance Act, 1994 – Payment of service tax - HELD - The question whether a transaction would fall within the parameters of a deemed sale or a service is essentially a question of fact and would have to be determined in appropriate proceedings. The fact that the Assessee has filed its returns for service tax and also paid service tax may not be determinative of the true nature of the transaction and certainly, the authorities under the DVAT cannot be precluded from independently examining the transactions in question - Clause (vi) of Section 2(1)(zc) of the DVAT Act is identically worded as clause (d) of Article 366 (29-A) of the Constitution of India – under the expanded scope of “tax on the sale or purchase of goods?, tax on transfer of the right to use goods has been included; this is not the same as a tax on the use of goods and the two expressions cannot be read synonymously. Therefore, for a transaction to fall within the meaning of Section 2(1)(zc)(vi) of the DVAT Act, it is necessary that there should be a transfer of the right to use - it is not disputed that the sites in question are located in a restricted area and none of the advertisers have an unmitigated access to those Sites; the Petitioner affirms that possession of the Sites is retained by DIAL. Hence, it would be difficult to accept the view that the transactions entered into by the Petitioner with the advertisers constituted transfer of the right to use the Sites in question - The Tribunal’s decision in Upasana Finance Ltd, to the extent that it holds that possession of the hoardings is not relevant, cannot be accepted in light of the unequivocal view expressed by the Supreme Court in Bharat Sanchar Nigam Ltd - the Special Commissioner to consider the objections filed by the Petitioner in light of the observations made herein without insisting on pre-deposit – appeal disposed
2016-VIL-226-PAT
M/s S & P INFRASTRUCTURE DEVELOPERS PVT LTD Vs THE STATE OF BIHAR
Bihar Value Added Tax Act, 2005 - Section 41 and Rule 29 of the Bihar Value Added Tax Rules, 2005 – execution of the works contract - deduction of tax – refund claim of excess amount deducted from running account bills – appellant seeks restraining authorities from making further deduction of sales tax from the gross amount – HELD - the authorities directed to strictly comply with the provisions of Section 41 of the Bihar VAT Act and Rule 29 of the Bihar VAT Rules in the matter of making deduction and wherever the details were provided to them by the petitioner-contractor or were available to them then they were obliged not to make deduction with regard to the heads mentioned therein and the TDS was to be deducted with respect to the remaining part of the bills - it is not open to any person deducting tax at source under the Bihar VAT Act to do so otherwise than directed and doing so would be a clear attempt to override the direction of this Court - no certificate is required for not making deductions with regard to such part of the transaction as does not involve any transfer of property and there is no question of deduction on account of payment of labour charge and the person making deduction is obliged not to make deduction with respect to the part of the amount which does not relate to transfer of property, service charge, etc. enumerated in detail in Rule 29 of the Rules – impugned letter of the Accountant General (Audit), Bihar is quashed - assessee writ application is allowed
CENTRAL EXCISE SECTION
2016-VIL-299-CESTAT-KOL-CE
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, RANCHI Vs M/s CENTRAL MINE PLANNING & DESIGN INSTITUTE LTD
Central Excise Act – Section 11B - refund claim not accompanied with the required documents - time barred - doctrine of unjust enrichment – HELD - The documents being asked for were additional documents sought by Revenue to satisfy themselves that service provider has paid 100% Service Tax - it cannot be said that required documents were not filed by the Respondent alongwith refund application - refund claim of the assessee was not time barred - on the issue of unjust enrichment the matter is required to be remanded back to the Adjudicating authority. Respondent should produce all the documentary evidences, including a C.A.’s certificate, before the Adjudicating authority to establish that refund sought for has not been recovered from any person – revenue appeal dismissed
2016-VIL-296-CESTAT-MUM-CE
M/s CENTRAL CAPACITORS Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR
Central Excise – Modvat credit – show cause notice seeking to confirm the recovery of duty or reversal of Modvat - commissioner order for enhancement of demand and penalty – scope of Commissioner order – HELD - the commissioner has not answered the specific questions that were referred to him and has travelled beyond the charges levied in the show-cause notice - the commissioner has enhanced the demand and penalty well beyond those confirmed in the first OIO which was not challenged by the revenue. Since the Revenue had not challenged this order, the Commissioner cannot go beyond the impugned order confirmed in this order - the impugned order is set aside and the matter is again remanded for fresh adjudication
2016-VIL-300-CESTAT-MUM-CE
M/s DIAMOND ROADWAYS Vs COMMISSIONER OF CENTRAL EXCISE, NASHIK
Central Excise - Wrong availment of credit – co-appellants claim that the main appellants having paid the duties and 25% of penalty therefore, in terms of provisions of sub-section (2A) of Section 11A, all proceedings against all person on whom notices served shall be deemed to be conclusive – imposition of penalty under Rule 26 of CER, 2002 - HELD - the invocation of penal provision of Rule 26 is dependent upon so many factors which are unconnected with the provisions of Section 11A – HELD - Rule 26 which provides for imposition of penalty in certain circumstances cannot be said to be a part of the proviso to sub-section (2) of Section 11A so as to conclude the proceedings in respect of all noticees on payment of duty, interest and part penalty by main manufacturer - payment of short paid and non-paid duty by the main manufacturer would not result in conclusion of proceedings against all other persons on whom penalty stands proposed to be imposed in terms of Rule 26 - the grounds raised by the appellant do not survive – in favour of Revenue
CUSTOMS SECTION
2016-VIL-303-CESTAT-DEL-CU
ORBIT JEWELLERS Vs C.C., AIR CARGO (EXPORTS), NEW DELHI
Customs - Legal interpretation of the provisions of Section 28 (1A) of the Customs Act - when the entire duty amount along with interest and penalties stand deposited by the assessee, whether the proceedings would stand concluded in respect of all the issues involved in respect of all the appellants or whether it is still open to the adjudicating authority to decide on other associated issues like confiscation etc - impugned order confirming demands, confiscating goods and imposing penalties on all the co-noticees – HELD - first proviso to Section 28(1A) provides deemed conclusion of the proceeding pending against noticee if the payment as regard the duty, interest and 25% of the penalty stands made by the noticee within a period 30 days of the receipt of the show cause notice. It is further seen that the said provision is applicable even in cases of demand having been arisen on account of collusion, willful misstatement or suppression, meaning thereby that the said law is applicable in respect of even illegal activity of assessee which stand accepted by him and the duty interest and part of penalty stand paid. Further, the said deposits should be within a period 30 days from the date of the receipt of the notice. In such a scenario, the proviso to the said Section 28(1A) provides for deeming status of conclusion of the proceeding except the proceeding in respect of Sections 135, 135A and 140 - the said section is a beneficial piece of legislation with intention to reduce the litigation proceedings - The original authority’s presumption that closure of proceedings under Customs Act may conclude all proceedings under other Acts also is fallacious - While may be vested with some powers under the provisions of allied Acts, his role comes from the Customs Act. Nothing prevents respective competent authority under other Act if there is any action warranted to be taken against any person for violation of provisions of specific law - no further proceedings were required to be continued in terms of the provisions of Section 28(1A), the first proviso to Section 28(1A), the impugned order has no leg to stand. The same is accordingly set aside – assessee appeals are allowed
2016-VIL-224-MAD-CU
M/s TRANSPORT LOGISTICS Vs CESTAT, CHENNAI
Custom House Agent - Cancellation of CHA licence and imposition penalty on the ground of violation of Custom House Agent licence Regulation, 2004 - signed blank custom documents handed over to transporter which were used for clearance of the prohibited item for export – HELD - Even though the appellant herein is guilty of handing over blank signed forms to third parties, that would not attract the punishment of cancellation of licence, since no other grave charges could be fastened on the appellant, as there was no role played by him either in the substitution of goods or tampering with custom seal, as it happened outside the custom yard after the sealing was made by the Custom Officials - Once the role of the CHA licence came to over, he cannot be responsible for subsequent events - Appeal is allowed
SERVICE TAX SECTION
2016-VIL-302-CESTAT-DEL-ST
M/s ORIENTAL INSURANCE COMPANY LIMITED Vs CCE & CST, NEW DELHI
Service Tax – Short payment of tax – Limitation - adjustment of short payment from the excess payment made subsequently –Interest and penalty - HELD - Although there is no legal basis to allow adjustment of duty short paid out of the duty paid in excess, the fact remains that this judgment has been passed in the appellant’s own case - We are not entirely in agreement with the CESTAT earlier observation but we also not relying upon the said judgment in this case. The very fact that such a pleading has been made and the amount has actually been paid in excess in 2004-05 shows the bonafies of the appellant. In these circumstances, we are unable to discern any evidence which would even suggest that there was any wilful mis-statement or suppression of facts on the part of the appellant with regard to the short payment of the said amount of duty – Further, malafide intention to evade duty cannot be attributed to public sector undertaking owned by Government of India - demand barred by limitation - the extended period of five years is not invocable – assessee appeal allowed
2016-VIL-301-CESTAT-BLR-ST
RAJAPUR MINERALS Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BELGAUM
Service Tax - Supply of tangible goods – collection of service tax from customers – failure to remit the same to the Govt Exchequer – Imposition of penalty - HELD - Arguments of the appellant that this levy on the service of “supply of tangible goods” was newly introduced with effect from 16.05.2008 does not hold sufficient force as based on the intelligence that the appellant assessee was evading payment of service tax - appellant did not add the new category of service namely “supply of tangible goods services” to their service tax registration - the Argument of the appellant assessee that they were innocent and they were under confusion whether this service shall be liable for service tax hardly has got any force when they themselves were collecting service tax from their customers on the said services, though under the name of ‘machinery hiring services’ - Sufficient CENVAT credit does not wash off sin of non-payment of service tax, when the same was due to the Govt - the impugned order-in-appeal is upheld except that the penalty imposed under Section 77 (1)(a) is found to be not sustainable – assessee appeal dismissed
Guest Article
Changes in CENVAT Credit Rules, 2004 by Union Budget 2016-17
E-Bulletin on Tax proposals in State Budgets 2016-17
Uttarakhand - New Return process user manual with FAQ
FCP0205
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
4th May
mahaCir10T
Maharashtra: Settlement of Arrears in Dispute under the various Acts administered by the Sales Tax Department
harOrder0405
Haryana: Extension in date for filing online quarterly returns for the quarter ending 31.03.2016
delNoti157
Delhi: The requirement to furnish return with digital signatures shall be for the tax period commencing from 1st April, 2016
chhgNoti55
Chhattisgarh: Extension of time limit for Form-18 FY 2013-14
chhgNoti56
Chhattisgarh: Extension of time limit for Form-18 FY 2013-14
dgftNoti06
DGFT: Amendment in Para 5.04 (h) of FTP 2015-2020
dgftPN05
DGFT: Amendment of ANF 3C – Application for on line filing of Grant of Status Certificate
2016-VIL-229-MAD
MANOJ METALS Vs THE ASSISTANT COMMISSIONER
Tamil Nadu Value Added Tax Act - Section 27(2) – reversal of claimed / availed / adjusted Input Tax Credit on the ground of Invoice Mismatch, Purchases effected from Registration Certificate cancelled Dealers, Cross Verification revealed huge evasion of tax, Purchase Omission and Bill trading, without payment of tax – maintainability of writ petition - HELD - it is the duty of the petitioner to substantiate their claim by producing their books of accounts and to prove that the dealers from whom purchases were made were in existence and the goods were moved from the place of purchase to the place of the petitioner. Since the petitioner has miserably failed to prove the same, the respondent has passed the impugned order - basis of the detailed it is crystal clear that the petitioner with an intention to evade payment of tax produced the bogus bills obtained from non-existent dealers and as there was no transaction of goods, the respondent has passed the impugned order in a detailed manner, after affording an opportunity of being heard to the petitioner - there is no violation of principles of natural justice. It is not the case of the petitioner that the order under challenge is wholly without jurisdiction or the vires of the statute, is under challenge and therefore, viewed from any angle, the present writ petitions cannot be maintained - since the petitioner has approached this Court by way of this writ petition without exhausting the alternative statutory remedy of appeal, while dismissing the writ petitions, liberty is granted to the petitioner to approach the appellate authority - writ petitions are dismissed
2016-VIL-228-GUJ
M/s TIGER STEEL ENGINEERING INDIA PVT LTD Vs STATE OF GUJARAT
Gujarat Sales tax - Sections 67 - composition order - revisional jurisdiction - whether the Tribunal was right in holding that the notice for revision was not time barred as the period of limitation would commence from the knowledge of the purported mischief of the Government record – HELD - the language employed in the section 67 of the Act, it is amply clear that the period of limitation of three years commences from the date any order has been passed by any officer appointed under section 27 to assist the Commissioner. In the present case, such order is the composition order dated 19.12.2000 – as per clause (a) of sub-section (1) of section 67 of the Act, the period of three years for exercising powers under section 67(1)(a) of the Act would commence from the date of such order, that is, from 19.12.2000. Therefore, such period would come to an end on 18.12.2003. In the present case, it is an undisputed position that the Commissioner had taken the order dated 19.12.2000 in revision by issuing notice dated 2.2.2005. Evidently therefore, the exercise of powers under section 67 of the Act by the Commissioner was beyond the period of limitation – the Tribunal order as well as the order passed by the Deputy Commissioner of Sales Tax, are hereby quashed and set aside and the composition order is hereby restored - Assessee appeal allowed
CUSTOMS SECTION
2016-VIL-227-DEL-CU
MANGALI IMPEX LTD Vs UNION OF INDIA
Customs – validate the show-cause notices issued prior to 6th July 2011 by not only officers of the Customs but also officers of the Commissionerates of Customs (Preventive), DRI, DGCEI and similar placed officers - validity of Section 28 (11) of the Customs Act, 1962, inserted by the Customs (Amendment and Validation) Act, 2011 w.e.f. 16th September 2011 - validity of the Show Cause Notices issued by the DRI / DGCEI officers for the period prior to 8th April 2011 on the ground that even after insertion of Section 28(11), they are not proper officers to issue Show Cause Notices under Section 28(11) of the Act – HELD - Department cannot seek to rely upon Section 28(11) of the Act as authorising the officers of the Customs, DRI, the DGCEI etc. to exercise powers in relation to non-levy, short-levy or erroneous refund for a period prior to 8th April 2011 if, in fact, there was no proper assigning of the functions of reassessment or assessment in favour of such officers who issued such SCNs since they were not 'proper officers' for the purposes of Section 2(34) of the Act and further because Explanation 2 to Section 28 as presently enacted makes it explicit that such non-levy, short-levy or erroneous refund prior to 8th April 2011 would continue to be governed only by Section 28 as it stood prior to that date and not the newly re-cast Section 28 of the Act - Section 28 (11) interpreted in the above terms would not suffer the vice of unconstitutionality. Else, it would grant wide powers of assessment and enforcement to a wide range of officers, not limited to customs officers, without any limits as to territorial and subject matter jurisdiction and in such event the provision would be vulnerable to being declared unconstitutional - If all officers of the Customs appointed as such prior to 6th July 2011 are deemed to be 'proper officers’, then the administrative chaos that is likely to result, as was pointed out in the Sayed Ali case, would persist. The powers conferred would be overboard since it would be without any territorial or pecuniary jurisdictional limit. This type of a validation, therefore, does not remove the defect pointed out in the Sayed Ali case - Appeal disposed in favour of Assesses
CENTRAL EXCISE SECTION
2016-VIL-304-CESTAT-MUM-CE
AUTO AIRCON (INDIA) LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III
Central Excise - exemption under Notification 10/97 dated 01.03.1997 – Air Conditioning system specially designed and modified for use in specialized mobile operation theatres for use by the Indian Army in the field – HELD - the basic design of the Auto Air-conditioning was that of the Australian foreign collaborator and it was modified to suit the requirement of Ministry of Defence. The appellant are entitled for the exemption under Notification 10/97 dated 01.03.1997 because the institution to whom the appellant has supplied the goods is a public sector institution and they have also furnished the requisite and they are not engaged in any commercial activity and the said goods are required for research purposes - the impugned order is is set aside by allowing the appeal of the appellant
2016-VIL-305-CESTAT-ALH-CE
M/s BAJAJ HINDUSTHAN LTD Vs CCE, MEERUT-I
Central Excise - generation of electricity from bagasse - tariff item as per Chapter 27 of the Central Excise Act – applicability of Rule 6 Cenvat Credit Rules, 2004 – HELD - electricity generated from bagasse is not an excisable goods and does not qualify as tariff item as per Chapter 27 of the CEA, 1944 - appellant is not required to pay 10% of the value of the electricity sold to M/s U.P. Power Corporation Ltd - as the appellant has already reversed the Cenvat Credit on input/input services attributable to generation of electricity sold to M/s U.P. Power Corporation Ltd. is sufficient in compliance to provisions of Rule 6 of the CCR, 2004, therefore, the appellant is not required to pay 10% of the value of electricity sold to M/s U.P. Power Corporation Ltd - the impugned order is set aside and assessee appeal allowed
SERVICE TAX SECTION
2016-VIL-306-CESTAT-ALH-ST
M/s THE OUDH SUGAR MILLS LTD Vs COMMISSIONER OF CENTRAL EXCISE, LUCKNOW
Service Tax - input service - manufacturer of cane sugar, molasses and denatured alcohol – service tax paid for procurement of molasses for distillery unit – eligibility to Cenvat Credit - contract for the liaisoning work for procurement of molasses – revenue contention consideration paid to service provider appears to be speed money in the garb of commission / fee for liaising work – HELD - as molasses are under the strict control of the State Excise Authority the appellant have rightly incurred expenses for procurement of the same for their distillery unit. There is no dispute that the assessee have not received the services and paid the service tax on the said services - expenses incurred for procurement of inputs, is eligible input service as defined in Rule 2 (l)(ii) of CCR, 2004 - the ld. Commissioner (Appeals) have erred in observing that the service provider have only obtained the permit to procure molasses but not the molasses which is the actual raw material - the impugned order set aside and assessee appeal allowed
2016-VIL-307-CESTAT-MUM-ST
M/s TRANSINDIA LOGISTICS PARK Vs COMMISSIONER OF SERVICE TAX, RAIGAD
Service Tax – availment of Cenvat Credit in respect of input service exclusively used for non taxable activity – Trading activity - auction sale of the abandoned goods and export cargo – Demand - penalty under Section 78 – Limitation - HELD - since the services are exclusively used for non taxable activity the appellant was not entitled for the Cenvat Credit at the first instance that is at the time receipt of the service - the argument of the assessee that auction sale being a trading was categorized as exempted service w.e.f. 1.4.2011, therefore prior to that date Cenvat Credit is admissible, has no legs to stand as even prior to 1.4.2011 since no service tax was payable on auction sale, credit was not admissible on the input service used in such output activity as per the definition of input service – in this case Cenvat Credit is not admissible to the appellant - there is a suppression of fact on the part of the appellant therefore extended period is rightly invoked - penalty under Section 78 is partly upheld – assessee appeals are partly allowed
mahaNotiCR64
Maharashtra Value Added Tax (Third Amendment) Rule, 2016 - Amendment in Rule 11, 40, 40A, 63 & 73; Insertion of New Form 402A, 404A, 424A, 703, 703A, 703B, 703C, 703D & 703E
mahaNoti1B
Maharashtra: Substitution of Form 101, Form 103 & Form 105
dgftPN04
DGFT: Notification of new Appendix 5D containing the list of services for which payment is received in Rupee terms which could be counted towards discharge of Export Obligation under the Export Promotion Capital Goods(EPCG) Scheme
April Summary: Summary for the 2nd fortnight of April [List of updates from 16th April to 30th April]
5th of May
dgftPN07
DGFT: Services Exports from India Scheme (SEIS) – Appendix 3E notified
dgftPN06
DGFT: Merchandise Exports from India Scheme (MEIS)—Amendments in Table 2 [containing ITC (HS) code wise list of products with reward rates] of Appendix 3B
cuCir15
Customs: Instructions on monitoring of pendency in disbursal of rewards to informers
2016-VIL-230-MAD
FLEXTRONICS TECHNOLOGIES (INDIA) PRIVATE LIMITED Vs THE STATE OF TAMIL NADU
Tamil Nadu Value Added Tax Act, 2006 – Sale price - Anti-Dumping Duty - SEZ unit - import of transmission equipments and sub-assemblies and components – exemption under Section 26 of the SEZ Act, 2005 - clearance of goods in Domestic Tariff Area - goods manufactured and sold by the petitioner cleared by the buyer by filing Bill of Entry - whether the Anti-Dumping Duty paid on the imported components, would form part of the sale price of the goods for the purpose of TNVAT Act – Penalty under Section 27(3) – Refund - HELD - chargeability to duty of customs, including anti dumping, countervailing and safeguard duties, arises upon removal from the Special Economic Zone to the Domestic Tariff Area - the primary liability for payment of anti dumping duty actually falls upon the appellant, the moment the goods are removed from the SEZ to the DTA. The Supply Agreement that the appellant had with their purchaser, in whatever clever manner they are worded, merely shifted the burden of payment of anti dumping duty to the buyer. The contract between the petitioner and their purchaser cannot alter the incidence of duty - the petitioner enjoyed exemption from payment of anti dumping duty only because of being located in a SEZ. This exemption was available so long as the goods were in the Special Economic Zone. The moment the goods got removed to Domestic Tariff Area, Section 15 of the Tamil Nadu Special Economic Zones Act and Section 30 of the Central enactment came into play. As a consequence, the anti dumping duty became payable - once anti dumping duty is levied, the same becomes part of the sale price, as otherwise the sale price of the product imported into India will be different from the sale price of the product domestically manufactured - there was no wilful non disclosure of assessable turnover. In fact the whole thing was brought to the notice of the Assessing Officer by the petitioner themselves by their letter dated 06.9.2010 seeking a clarification - the imposition of penalty at the rate of 150% under Section 27(3)(c) of the TNVAT Act, 2006 is set aside - petitioner is not entitled to refund of tax inadvertently paid on countervailing duty discharged on the finished goods cleared from the petitioner's SEZ unit – Majorly in favour of Revenue
2016-VIL-310-CESTAT-CHE-ST
SOFTGEL HEALTHCARE PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III
Service Tax - Cenvat credit – Outward Transportation of final products which are cleared for exports from the place of manufacture to the customer’s premises – denial and recovery of credit under Rule 14 of Cenvat Credit Rules 2004 – ‘place of removal' for the purpose of exports - Customs house agent service and wharfage charges - HELD - the Board has clearly clarified that in a situation where a manufacturer effects sale at the destination point (customer’s premises) in terms of the sale contract whereby the ownership of the goods remain with the seller / manufacturer of the goods till the delivery of goods in acceptable condition to the purchaser at his doorstep, the seller / manufacturer bears the risk of loss or damage to the goods during transit to the destination; that freight charges were an integral part of the price of the goods, the cenvat credit of the service tax paid on the transportation up to such place of sale would be admissible - Port is to be construed as the 'place of removal' for the purpose of exports - As regards customs house agent service and wharfage charges, same are eligible for cenvat credit in view of the nexus in existence between the goods manufactured and the services under dispute which are essential for export, the same is qualified for credit - since the place of removal is the Port, the appellants are eligible for cenvat credit on GTA, CHA and wharfage charges – assessee appeal allowed
2016-VIL-308-CESTAT-CHE-ST
M/s HYUNDAI MOTOR INDIA LTD Vs CCE, CHENNAI
Service Tax - Cenvat credit on service tax paid on cost of transportation of goods from the factory to the Port for the purposes of export – place of removal – admissibility of cenvat credit on CHA charges, Wharfage charges incurred beyond the factory for the purpose of export – HELD - the issue regarding determination of the place of removal in respect of exports is settled by the Ministry of Finance/ CBEC through the Circular No.999/6/2015-Cx dated 28.2.2015 which is binding on the department - Port is to be construed as the ‘place of removal’ for the purpose of exports - the service tax paid on DTA services, CHA services and their services up to the port would be service up to the place of removal and would be eligible to cenvat credit in terms of the definition itself - As regards customs house agent service and wharfage charges, the same are eligible for cenvat credit in view of the nexus in existence between the goods manufactured and the services under dispute which are essential for export, the same is qualified for credit – Assessee appeal allowed
2016-VIL-311-CESTAT-CHE-CE
AGNI STEELS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, SALEM
Central Excise – Cenvat Credit – input service - certification of Pollution Control Board - input service under Rule 2(l) of CCR 2004 - input service credit based on debit notes – HELD - Certification by Pollution Control Board is essential for the running of the factory, hence eligible for credit - availment of cenvat credit on the basis of debit notes is settled in favour of assessee by the decision of the Tribunal in the case of Shree Cement Ltd. Vs CCE Jaipur – assessee appeal allowed
2016-VIL-231-DEL-CU
PRINCIPAL COMMISSIONER OF CUSTOMS (IMPORT) ICD Vs M/s SANTOSH HANDLOOM
Customs – confiscation / seizure of goods - Extension in time limit for issuance of show cause notice under Section 110 (2) - service of order or decision or summons or notice on an agent or customs agent – HELD - none of the procedures as stipulated under Section 153 of the Act were followed by the appellant while serving a show cause notice before exercising power under proviso to sub-section 2 of Section 110 of the Act - confiscation/seizure of goods would not fall within the meaning of “import of goods” as used in Section 146 of the Act and Regulation 2(c) of the Customs Broker Licensing Regulations, 2013. Such confiscation being penal in nature cannot be termed to be a part of the duty of a custom agent. Service would have to be effected on the owner of the goods personally or through agent so specifically authorized to accept - the right of owner of goods cannot be defeated without prior notice on him. Hence, the contention of revenue that service of the show cause notice could also be effected on the Custom Agent in view of Sections 146, 146A & 147 of the Act is a contention without merits – Single judge order holding that seized goods would have to be returned and revenue would be free to continue their investigation by complying with the provisions of Section 124 of the Act, is upheld - no merit in revenue appeal and the same is dismissed
Guest Article
Distributing happiness to outsourced Manufacturing Process/Job Work
dgftTN04
DGFT: Clarification regarding benefit under Incremental Export Incentivisation Scheme (IEIS)
jharNoti10
Jharkhand: Amendment in JVAT Schedule-II Part-F - Regarding Sponge Iron, Pig Iron, Steel Scrap, Pellet & Ferro Alloys [Gazetted on 05.05.2016]
cuNoti64NT
Customs: Exchange rate notification
6th of May
Finance Bill 2016 - As introduced in the Lok Sabha (with list of amendments)
CENTRAL EXCISE NOTIFICATION
ceNoti20: Amends notification No.1/2011-Central Excise dated 1.03.2011 - Exemption from Central Excise duty to certain goods falling in the First schedule to the Central Excise Tariff Act, 1985
ceNoti21: Amends notification No.2/2011-Central Excise dated 1.03.2011 - Exemption from Central Excise duty to certain goods falling in the First schedule to the Central Excise Tariff Act, 1985
ceNoti22: Amends notification No.12/2012-Central Excise dated 17.03.2012
ceNoti25NT: Amends notification No.49/2008-Central Excise (N.T.) dated 24.12.2008
ceNoti26NT: Amends notification No. 42/2001-CE(NT) dated 26.6.2001, No. 43/2001-CE(NT) dated 26.6.2001, No. 19/2004-CE(NT) dated 6.9.2004 and No. 21/2004-CE(NT) dated 6.9.2004
CUSTOMS NOTIFICATION
cuNoti30: Amend notification No.12/2012-Customs dated 17.03.2012
cuNoti31: Amends notification No.21/2012-Customs dated 17.03.2012
cuNoti32: Amends notification No.24/2005-Customs dated 01.03.2005
Finance Bill 2016 - As passed by the Lok Sabha on 05.05.2016 [Full Text]
2016-VIL-09-TRB
M/s RELIABLE SOFTWARE SYSTEMS PVT LTD Vs THE STATE OF MAHARASHTRA
Maharashtra Value Added Tax Act – Section 2 – Goods - Software - Service – VAT & Service Tax - analysed stock market data information access and query service - appellant analysed and processed massive data streams collected from the stock exchanges - processed data made available online and can be used only through the mechanism called “client side software” provided by the appellant – separate invoices for software and payment on service tax – Revenue contention transaction is of sale of software for the purpose of levy of sales tax – HELD – merely because the software is used for a specific purpose or for specific reason, it does not cease to be a “software”. Even if it is assumed that it is useful for two minutes, five minutes or six minutes; this duration of use also cannot convert the software in something else - the product sold by the appellant is a software, because according to the appellant, “it has developed a software”, which is required to be installed on the computer of the customer, and only after installation of such software, customer is entitled to use the data available on the server of the appellant - even if same traders dealing in similar business are evading tax, by maintaining accounts in different modes, that fact by itself will not be a ground of exempting the appellant from payment of VAT - when element of price of sale of software can be separated, tax can be levied for sale of the software - the dominant intention of the appellant was to sale the software; if at all there is any element of service involved in it, it is incidental to the sale of software. Therefore, merely because the appellant is paying service tax, it cannot be exempted from paying tax under MVAT Act – assessee appeal dismissed
2016-VIL-232-KAR
M/s UNIVERCELL TELECOMMUNICATIONS (INDIA) PVT LTD Vs STATE OF KARNATAKA
Karnataka Value Added Tax Act – Section 39 - reopening of concluded assessment based on the subsequent decision of the Supreme Court – appeal against conditional stay by single Judge - pre-deposit of 30% of the demand amount and to furnish bank guarantee for the remaining amount – HELD - In normal circumstance, there would not be any stay against the recovery of tax, but in the peculiar circumstances of this case where there was a concluded assessment and the reopening of the assessment is based on the subsequent decision of the Supreme Court and the point as to jurisdiction under Section 39 is under consideration, it would be just and proper to modify the interim order passed by the learned single judge and since the matter is pending before the learned single judge, the parties should be relegated to agitate the contentions before the learned single judge who is seized of the matter - the interim order passed by the learned single judge shall stand modified to the effect that there shall be stay against recovery of the demanded amount on condition that the appellant furnishes bank guarantee equivalent to 30% of the demand – writ appeal disposed
2016-VIL-312-CESTAT-KOL-CU
M/s R.A. INTERNATIONAL Vs COMMISSIONER OF CUSTOMS (PREV.), W.B., KOLKATA
Customs - Appellant exported fabrics to Bangladesh to perform the job of Cutting, Making & Trimming to make finished garments - Eligibility to Drawback on fabrics exported to job-workers in Bangladesh and finally sent to third country as garments when sale proceeds are received by the Appellant from third country from the buyer of the garments - That value taken for the purpose of claiming drawback was the purchase price of fabrics in India - Adjudicating authority rejected their drawback claim on the ground that sending of fabrics to Bangladesh does not involve sale and no sale proceeds are received from job-worker and that as per jurisdictional Central Excise officers the supporting manufactures of fabrics do not exist – HELD – In an international trade it can never be a case that fabrics are supplied free to a job-worker and the third country buyer of garments will send amounts to the appellant without getting anything. Therefore, the sale proceeds received by the Appellant from the third country buyer, representing sale proceeds of garments, will also include the proportionate price of the fabric used in the manufacture of garments - the products meant to realize foreign exchange are the ‘garments’ which are manufactured through job-workers in Bangladesh. The pattern of sale has been made clear by the exporter at the time of exports. Under the existing factual matrix of the case it cannot be said that proceeds of the fabrics exported have not been realized and accordingly it is held that provisions of Rule 16A of the Drawback Rules are not attracted - If a manufacturing unit is exempted then it may not be registered with the jurisdictional Central Excise authorities. However, non-registration of units do not necessarily mean that such non-registered units are not existing – assessee appeal allowed
2016-VIL-313-CESTAT-KOL-CE
M/s HALDIA PETROCHEMICALS LTD Vs COMMISSIONER OF CENTRAL EXCISE, HALDIA
Central Excise – Sub-section 11A(2B) - Availing of inadmissible credit by mistake – appellant suo motu paid entire amount and intimation given to the Department - Show Cause Notice issued after a period of one year as contemplated under Section 11A of the CEA, 1944 – demand of interest – assessee contention that demand of interest raised after a period of one year is time barred – HELD - relevant date for calculating period of one year for demanding interest will have to be calculated when Appellant intimated the Department about the payment of duty. The Show Cause Notice was issued on date which is within a period one year from the date of intimation given by the Appellant. Accordingly it is held that demand issued to the Appellant is not time barred - the provisions of Section 11A(2B) of the CEA, 1944 were not deliberated by Hon’ble Gujarat High Court in the case of Neminath Fabrics Pvt. Ltd. and it was only decided that date of knowledge of the department is not the relevant date under Section 11A of the CEA, 1944. In the present case it is not the presumed knowledge of the department but written intimation given which has the stamp of ‘relevant date’ as per proviso to Section 11A(2B) of the Central Excise Act, 1944 – in favour of revenue
2016-VIL-315-CESTAT-ALH-CE
M/s SHAMLI STEELS LTD Vs COMMISSIONER OF CENTRAL EXCISE, MEERUT-I
Central Excise - Manufacturer of M.S.TMT Bars, M.S. Angles, M.S. Channel & M.S. Ingot - clandestine removal of goods found short in the course of stock taking during inspection – demand of duty and equal amount of penalty under Rule 25 of CER, 2002 r/w Section 11AC of the CEA, 1944 and penalty under Rule 27 of the CER, 2002 along with interest – HELD - the method of valuation adopted being in the nature of estimation / approximation, there is bound to be some variation - the appellant had raised the discrepancy in the method of stock taking and had also pointed out that the stock of ingots had escaped in computing weight of ingots - the balance difference in the weight of ingots is approximately 10%, which is normal variation and no adverse inference can be drawn. So far as the difference in the stock of MS TMT Bars is concerned, the difference is more than 10% and in absence of cogent explanation, the assessee is liable to duty on the same - in view of the difference of more than 10% in the stock of MS TMT Bars and for want of cogent explanation, the extended period of limitation is applicable and invokable - in absence of any confiscation of goods and in absence of any evidence of clandestine removal except a strong presumption, penalty under Rule 26 is set aside. Penalty under Rule 27 is confirmed – assessee appeal partly allowed
2016-VIL-314-CESTAT-CHE-ST
CCE&ST, LTU, CHENNAI Vs COGNIZANT TECHNOLOGY SOLUTIONS INDIA PVT LTD
Service Tax – Section 80 of the Finance Act, 1994 - Availment of excess Cenvat Credit – assessee reversed credit availed along with interest under protest before issuance of Show cause notice – SCN on ground of willful suppression in availing the CENVAT credit twice - levy penalty equal to the tax amount due – HELD - Respondent has erred in availing CENVAT Credit on 132 entries out of 9400 entries (approx.) - unintentional mis-happenings/mistakes do take place for which the assessee is not to be punished by imposing the penalties - there is no suppression in the present case as the assessee has paid the service tax and interest by showing their bonafides - the distinction between the Central Excise Act and Finance Act, 1994 is that there is a specific provision for waiver of penalty under the Finance Act, 1994 when reasonable cause exists whereas the same is not available under Central Excise law – assessee is a registered with LTU and is a regular tax payer and subject to various audits/scrutinies conducted by the Department - In the present case as there is no suppression of facts with an intention to evade payment of duty and accordingly a reasonable cause is present to invoke Section 80 of the Finance Act, 1994 – Revenue appeal dismissed
2016-VIL-309-CESTAT-ALH-ST
M/s KRONOS SOLUTIONS INDIA (P) LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, NOIDA
Service Tax – Cenvat Credit - Appellant is entitled to cenvat credit of the input services received prior to date of registration - outdoor catering, rent-a-cab, maintenance and repairing service & expenses - due to nature of output service, outdoor catering service provided to the Appellant, works in the late night (odd hours) as such, rent-a-cab service is required for conveyance at odd hour as the normal transport is not available. Similarly, when an employee is working at odd hours, they also need to eat and as such, outdoor catering is also eligible. Similarly, maintenance of equipment services is an essential input service - As regards the amount disallowed for non-availability of records of service provider on NSDL website, matter remanded back to the adjudicating authority to verify manually, existence and/or registration status of the service provider and allow the credit subject to such verification - the Appeal is allowed as indicated
Guest Article
Video Presentation: Reverse Charge - POT & Krishi Kalyan Cess
upCir1617006
Uttar Pradesh: Treasury Form-I & Form-III - Format of Challan for depositing money
FCP0505
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
7th of May
MAHARASHTRA CIRCULAR
mahaCir13T: Grant of Administrative Relief
mahaCir12T: Profession Tax Enrolment Amnesty Scheme 2016
mahaCir11T: Exemption of late fee u/s 6(3) of the Maharashtra Professions Tax Act, 1975 to the Government aided educational institutions
RAJASTHAN NOTIFICATION
rajNoti11: Amendment in notification number F.12(84)FD/Tax/2009-21 dated 08-07-2009 - List of goods for VAT-47
rajNoti10: Amendment notification number F.12(59)FD/Tax/2014-18 dated 14-07-2014 related to payment of lump sum amount in lieu of tax
rajNoti09: Amendment in RVAT Schedule VI - Rate of tax on semi stitched garments
rajNoti08: Amendment in RVAT Schedule IV - Rate of tax on ready garments
rajNoti07: Exemption of semi stitched garments from 08-03-2016 to 31-03-2016
punPN0605
Punjab: Extension in last date of e-filling of VAT-15 for the 4th Quarter of 2015-16
harMemo664
Haryana: Guidelines regarding computerized based risk identification at the time of grant of registration and amendments under the HVAT Act, 2003 / CST Act, 1956 and Rules framed thereunder
delNoti183
Delhi: The details of purchases where the total amount of an invoice does not exceed Rs. 1000/- shall not be mandatorily required to be furnished in Form GE-II
dgftPN08
DGFT: Amendment in ANF-5A, ANF 5B, ANF 5C and Appendix 5C
FinBill2016Exp
Finance Bill 2016: Explanation to Government Amendments to the Finance Bill, 2016
9th of May
mahaCir14T
Maharashtra: Amendments to various Acts, Rules and Notifications issued thereunder
mahaOrder
Maharashtra: Forms under The Maharashtra Settlement of Arrears in Disputes Act, 2016
gujNotiGHN27
Gujarat: Exemption of purchase tax on Sugarcane
2016-VIL-233-BOM
THE COMMISSIONER OF SALES TAX Vs M/s NEULIFE NUTRITION SYSTEM
Maharashtra Value Added Tax Act – Classification of Whey Protein Powder - Revenue appeal against tribunal order classifying impugned goods under Schedule Entry C-107 (11) (g) and liable for tax at the rate of 5% - revenue seeking classification under Residuary Schedule Entry E-1, which is exigible to tax @ 12.5% - Health drink - HELD – The Entry is implied with the non-technical word “beverages”, which has to be understood in its ordinary meaning - Merely because a drink has more nutritive value in the form of proteins and meant for a certain class of consumers, it would not cease to be a “beverage” - even if the potable drink made from the said powders are perceived as health drink, it does not fall out of the purview of the Entry - the Tribunal has rightly held that the said products are classifiable under Schedule Entry C-107 (11)(g) and liable for tax at the rate of 5% - Revenue appeal dismissed
2016-VIL-234-KAR
M/s JAMSHEDPUR UTILITIES & SERVICES COMPANY LTD (JUSCO) Vs THE STATE OF KARNATAKA
Karnataka Value Added Tax Act - reply to the show-cause notice – assessee request for extension of time due to multiple holidays – period of limitation - principles of natural justice and denial of a reasonable opportunity of hearing – HELD - grant of opportunity should not be a mere formality but should be such that can be reasonably availed. Requiring a person to do something in a short period within which time the same cannot be performed, would amount to denial of fair opportunity. Merely completing the formality of issuing notice and not considering the reasons given in the response / reply for grant of further reasonable time to furnish the documents, would not amount to giving adequate or fair opportunity to the party - The writ petitions are accordingly allowed and the impugned order is set aside with a liberty to the Assessing Authority to pass fresh order in accordance with law – in favour of assessee
CENTRAL EXCISE SECTION
2016-VIL-26-SC-CE
COMMISSIONER OF CENTRAL EXCISE, RAIGAD Vs M/s ISPAT METALLICS INDUSTRIES LTD
Central Excise - transfer of raw materials, jointly procured, under a joint procurement policy which was followed by two sister companies – raising of debit notes for recovering actual expenditure incurred by it in relation to the procuring of such raw material - Whether amounts recovered in the form of debit notes towards bank charges, interest, etc. were includible in the assessable value - The notice for reversal of credit equal to the amount paid to the supplier – HELD - The Tribunal has held that transfer of iron ore pellets by IIL to IMIL was not a sale of goods but was only a transfer of raw materials procured under the Tripartite Agreement between the two of them and the supplier of the said pellets. This is a pure finding of fact - A reading of circular dated 1.7.2001 makes it clear that a distinction is made between inputs on which credit has been taken which are removed on sale, and those which are removed on transfer. If removed on sale, “transaction value” on the application of Section 4(1)(a) of the valuation rules is to be looked at. However, where the goods are entirely transferred to a sister unit, it is reasonable to adopt the value shown in the invoice on the basis of which Cenvat Credit was taken by the assessee i.e. the invoice of the supplier of the pellets to the assessee - Tribunal was also correct in holding that post manufacturing expenses cannot be loaded on to the amount equal to the duty of excise leviable on such goods as this amount would, then, cease to be an amount equal to the duty of excise but would be something more – Tribunal order upheld and revenue appeal dismissed
2016-VIL-316-CESTAT-MUM-CE
MATTEL TOYS (INDIA) PVT LIMITED Vs COMMISSIONER, CENTRAL EXCISE & CUSTOMS, NAGPUR
Central Excise – Excisebility of paint manufactured and captively consumed for giving colours to the toys which is final product of the appellant - test of shelf life and marketability of product – assessee contention that the product has no shelf life the same is not capable of being bought and sold in the market and hence the same is not marketable – HELD - even though shelf life of product is short, but only due to this reason it cannot be said that product is other than paint particularly when its character and use is of paint only - since use of the product itself clearly shows that it is coloring matter this is more than sufficient reason to hold that the product is paint and nothing else - There is no parameter of duration of the shelf life to decide whether it is paint or otherwise. Ld. Commissioner has given proper findings for coming to the conclusion that the product in question is paint and is excisable - Issue of test of marketability arises only in respect of these product which are generally not available in market and produced and used captively only. That is not the case here as the paint is indeed marketed - the test report has categorically reported that product in question is paint. In the cross examination also both the authorities have maintained that irrespective of short shelf life or composition is without stabilizing agent, the product tested is paint. Therefore in view of the settled legal position the product is paint and excisable - demand of extended period is sustainable - Modvat credit must be extended to the appellant – Assessee appeal partly allowed
CUSTOMS SECTION
2016-VIL-235-DEL-CU
M/s S.K. METAL & CO Vs COMMISSIONER OF CUSTOMS & ORS
Customs – petition seeking waiver from levy demurrage / godown rent charges in respect of the period of investigation and adjudication - liability of an importer to pay demurrage / godown rent and container charges under circumstances in which the importer is ultimately able to show that the import of the goods detained was validly made – HELD - There is no provision in the Act that enables the customs authorities to direct a carrier of goods to waive demurrage charges or container charges even in terms of Section 45(2)(b) of the Act. That would be governed entirely by the contract between the importer and the carrier and the terms and conditions of the bill of lading, if any - Where the carrier is a corporation incorporated by a statute like for instance, the CWC, or the CCI or SCI then it would be bound by the provisions of the Act as far as its right to recover demurrage or container charges is concerned - Section 45(2)(b) of the Act, which enables the customs authorities to issue a detention certificate, cannot extend to directing the carrier or the owner of the container to waive the charges even where an order of confiscation or levy of penalty is ultimately held to be illegal by the courts - The only option is for the Central Government to make a request to the owner of the container or the space where the goods were stored to waive demurrage charges and if it is so conceded then to that extent the importer would be able to get some relief - The Court, therefore, is unable to issue any direction to the customs authorities to direct the CWC or carrier to waive the demurrage charges, detention and/or container charges – assessee writ dismissed
SERVICE TAX SECTION
2016-VIL-317-CESTAT-ALH-ST
M/s DRISHTEE DEVELOPMENT & COMMUNICATION LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, NOIDA
Service Tax – Cenvat credit - Name in name of assessee – availment of credit on the strength of invoice in earlier name – Change in the name and premises of assessee – Denial of credit - demand and penalty – HELD - so far controversy of two different asseessee, is concerned, some in no longer existing in view of the remarks on amended registration certificate, wherein in the old registration is also mentioned, having a different PAN Number - so far as controversy of two different premises are concerned, matter remanded to the adjudicating authority with a direction to verify the details and the fact of deposit of service tax by the service provider - the substantial benefit of Cenvat credit cannot be denied for clerical error, which is evident on the face of record – Assessee appeal allowed by remand
2016-VIL-236-KAR-ST
COMMISSIONER OF SERVICE TAX Vs KYOCERA WIRELESS (INDIA) (P) LTD
Service Tax - denial of refund on the ground of non-registration and the other, is denial of refund for not producing sufficient proof before the authority for input service and output service for which the refund claim was made – HELD – on the eligibility of refund on account of non-registration the issue is no more res integra and is covered by a decision of this Court in the case of mPortal India Wireless Solutions (P.) Ltd. in favour of assessee - the conclusion recorded by the original authority, the first appellate authority and by the Tribunal on the point of verification of the record of input services and output services and the relation thereto, there is no appropriate consideration. Hence, it would be just and proper to direct the original authority to verify the records and if ultimately, it is found that the input services for which CENVAT Credit is claimed by way of refund is relatable to the output services, the refund should be allowed and if not proved, the further consequential order may be passed – appeal remanded in favour of assessee
MAHARASHTRA CIRCULAR
mahaCir15T: Documents requirement as proof of permanent place of residence for the purpose of Registration
mahaCir16T: Unique id in the form of TIN under MVAT Act, CST Act, Luxury Tax Act and Entry Tax Act
mahaCir17T: Designation of Wednesday as Taxpayers' Day
cuCir16
Customs: Audit Report No.15/2011-2012, Section 2 - Duty Drawback Scheme: Re-export under section 74 of Customs Act 1962
10th of May
2016-VIL-237-PAT
DELL INDIA PVT LTD Vs THE STATE OF BIHAR
Bihar Value Added Tax Act, 2005 – inter-State supply of spares used for fulfilling the warranty obligations – VAT return - penalty under Section 31 for not making full and complete disclosure in the return – HELD - levy of penalty is a serious matter, that too in a case where the petitioner has paid entry tax on the entire value of the goods which have been brought in by the petitioner and, in any case, if the said import of goods was ultimately treated as a sale then the set off would have had to be granted, but the same was not claimed by the petitioner simply because it was not sale and the petitioner as per its case merely supplied the goods free of cost under the warranty scheme and therefore had not made claim for the set off of the Entry Tax – impugned notice is quashed – appeal allowed by remand
2016-VIL-238-PAT-CE
COMMISSIONER OF CENTRAL EXCISE, PATNA Vs M/s BATA INDIA LTD
Central Excise Rules, 1944 - Rule 57H (7) – appeal against Tribunal order permitting assessee to utilize credit in the CENVAT account for payment of duty – revenue contends that assessee, having opted out of the Modvat Scheme, by operation of Rule 57H (7) the amounts would lapse and cannot be allowed to be utilized for payment of duty – HELD - non-utilization of the input credit were solely on account of the pending dispute between the parties which had arisen due to the failure of the Excise authorities to come up with a proper procedure in the matter of utilization of input credit coupled with the restraint order as a result of which the respondent could not utilize the said amount and the same continued to remain lying in it’s account - the Tribunal has taken a correct view in the matter and allowed the said credit - sub-rule (7) of Rule 57H has been brought into force on 1.3.1997 and thus the same was not at all in existence on 1.1.1997 when the respondents had opted out of the Modvat credit – Hence, it is not open for the revenue to place reliance upon the said rule for denying the benefit of the input credit lying in the Account of the respondent – revenue appeal dismissed
Guest Article
Intra-state transfer of goods within units having same PAN amounts to sale under Kerala VAT Act
delNoti141
Delhi: Amendment in the DVAT Fourth Schedule - Revision in rate of tax on Diesel (High Speed Diesel; Super Light Diesel Oil, Light Diesel Oil)
delNoti148
Delhi: Amendment in the DVAT Third & Fourth Schedule
ceCir1029
Central Excise: Clarification on segregation of impurities viz. iron, steel, rubber, plastic, dust etc. from honey grade brass scrap
dgftNoti07
DGFT: Amendment in import policy under Exim Code 85269200 of Chapter 85 of ITC (HS), 2012, Schedule
11th of May
2016-VIL-11-TRB
M/s BHUSHAN STEEL LTD Vs THE STATE OF MAHARASHTRA
Bombay Sales Tax Act, 1959 – levy of purchase tax under section 41(2) on purchase of furnace oil and LPG purchased against declarations in Form BC - fuel is used for the generation of electricity with the help of DG sets – HELD - Certificate granted to the appellant does not cover electricity which is manufactured by appellant with the help of fuel purchased on declaration in form BC. It is not established by the appellant that DG sets were kept off when plant was not in operation. It is also not established that the excess generated electricity is sold when the plant was in operation. In entitlement certificate holder cases, fuel is treated as a raw material by way of making deeming provision. It cannot be equated with machinery as contended by the appellant. Therefore, appellant’s contention as regard to the levy of purchase tax under section 41(2) is not acceptable - Eligibility set off under rule 42AC on purchases of building materials purchased from unregistered dealers as well as from registered dealers - Set off is to be allowed only in respect of sales tax and purchase tax. Turnover tax and surcharge paid or payable on purchases are not entitled for set off under 42AC. Similarly, it does not cover building material - appellant is not entitled to claim set off either under Rule 41D or under Rule 42AC of BST Rules, on the purchase of building material including cement either from registered dealers or from unregistered dealers used in construction of building or foundation of machinery - Assessee appeal dismissed
2016-VIL-241-GAU
M/s PATEL BROTHERS Vs THE STATE OF ASSAM
Assam Value Added Tax Act, 2003 - section 81(1) - statutory period for revision petition against an order passed by the appellate Tribunal - condonation of delay of 335 days - section 5 of the Limitations Act, 1963 – HELD - the statutory period for preferring appeal and/or revision under a special Act cannot be enlarged by taking recourse to section 29(2) of the Limitation Act when there is an express or implied exclusion of the applicability of the provision of section 5 of the Limitation Act, 1963 - the language employed in section 84 of the Assam VAT Act, 2003 clearly indicates that the provisions of the Limitation Act, save and except section 4 and 12, have been excluded from their applicability to any proceeding under that chapter and as such section 5 of the Limitation Act, 1963 would have no applicability in a proceeding filed under Section 81(1) of the AVAT Act - applications filed under section 5 of the Limitations Act, 1963 are not maintainable in law and as such the same are hereby dismissed
2016-VIL-10-TRB
M/s INGRAM MICRO INDIA (P) LTD Vs THE STATE OF MAHARASHTRA
Maharashtra Value Added Tax Act – classification of Multi Functional Printers (MFPs) – whether IT product taxable at 4% falling under Schedule Entry C-56 or at the residual rate of 12.5% - Additional tax demand - principal or dominant purpose of goods – HELD - From the Central Excise Tariff Heading 84433100 and 844332, it prima facie appears that MFPs are covered by Chapter Heading 84433100 and not by 8471 as claimed by the appellant. MFPs are, it prima facie appears, covered by chapter heading 84433100. Notification issued under entry C-56 also does not include multi functional printers though it covers other printers. It also prima facie appears that covers and carrying cases and like items are specifically excluded from Chapter Heading 847130 and 8473.30 - prima facie it appears that MFPs are not ordinary printers used with desktop in households - The onus was on the appellant to show and establish the principal or dominant purpose. Judgements delivered by High Courts other than that of Bombay, though they are precedents do not have binding effect - it left out to the lower authorities to decide the true nature of MFPs. The true nature of Multi functional printers is required to be decided by the First Appellate Authority – pre-deposit ordered – in favour of revenue
CUSTOMS SECTION
2016-VIL-242-GUJ-CU
RUCHI SOYA INDUSTRIES LTD Vs UNION OF INDIA
Customs Act, 1962 – Section 14 - Refund of amount pursuant to favourable Supreme Court order – assessee provided bank guarantees as directed as per the High Court interim order – Dismissal of petitions by High Court and encashment of bank guarantees by revenue towards duty liability which had arisen by virtue of the High Court judgment – Supreme Court ruling in favour assessee – whether such refund claim is hit by the principle of unjust enrichment – HELD - Since the Supreme Court allowed the appeal of the petitioner the amount of already recovered by the department became refundable - Principle of unjust enrichment would be applicable to every case of claim of refund of duty irrespective of the reason for claiming such refund - once the High Court dismissed the petitions and vacated the interim relief, the duty became payable as on that date. Encashment of the bank guarantees by the department was thus a step in furtherance of recovery of the duties. In the hands of the department, thus at that stage, it was in the nature of duty and not a security. When subsequently the Supreme Court reversed the judgment of the High Court, this duty became refundable. Any refund application would therefore, necessarily be governed by section 27 of the Act - We see no distinction between this hypothetic situation and the actual fact situation of these cases merely because the recovery in the instant cases came through the bank guarantees furnished by the petitioner pending the writ petitions - petitions are dismissed. Despite dismissal of the petitions, it would be open for the petitioner to produce necessary documents before the department as demanded in context of the question of unjust enrichment
2016-VIL-239-DEL-CU
M.F. RINGS & BEARING RACES LTD Vs COMMISSIONER OF CUSTOMS
Customs - denial of duty drawback on ‘Flanges’ manufactured the process of forging, and exported out of country – Denial of duty drawback on the ground that Flanges are manufactured by using low grade steel and are, therefore, not covered under SS No. 73.29 or SS No. 73.28 for the purposes of grant of duty drawback - All Industry Rates under SS 73.29 of the Drawback Schedule 2002-03 and/or SS 73.28 of the Drawback Schedule 2003-04 – HELD - Petitioners have exported Flanges which were manufactured from carbon steel using the process of forging and they have not availed CENVAT in relation to the inputs used for manufacturing the Flanges and, accordingly, have claimed duty drawback at the rates specified - It is clear on a plain reading of SS 73.29 of the Drawback Schedule 2002-03 and SS 73.28 of the Drawback Schedule 2003-04 that Flanges manufactured and exported by the Petitioners are covered under those entries - public notice dated 13th May, 2003 seeks to make substantial amendments to the express language of the Drawback Schedule 2003-04 with retrospective effect and that too is not permissible - The Petitioners claim to have made exports and priced their shipments on the basis of the Drawback Schedules notified by the Central Government. Thus, the benefit of duty drawback cannot be denied - Assessees petition allowed
CENTRAL EXCISE SECTION
2016-VIL-319-CESTAT-KOL-CE
M/s INDO EAST CORPORATION Vs COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II
Central Excise - Cenvat Credit on inputs directly sent to job worker - whether penalty under Rule 173Q (1) (bb) of the CER, 1944 is imposable for taking credit on inputs as soon as duty paying documents were received and before receipt of respective inter-mediate products manufactured by the job worker – HELD – in view of provisions under Rule 173Q (1) (bb) of the CER, 1944 taking inappropriate credit without taking a reasonable step has to be considered to be an offence for imposing penalty upon an assesse - credit with respect to inputs could be taken only on receipt of the intermediate products or finished goods from the job worker. However, all the consignments manufactured by the job worker were returned by the appellant for further processing within the prescribed time - penalty is imposable upon the appellant under Rule 173Q (1) (bb) of the CER, 1944 – assessee appeal is allowed by reducing the penalty from Rs.2.00 Lakhs to Rs.10,000/- under Rule 173Q (1) (bb) of the Central Excise Rules, 1944 – assessee appeal partly allowed
2016-VIL-321-CESTAT-BLR-CE
DYNAMATIC TECHNOLOGIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, BANGALORE-II
Central Excise - valuation – supply of pumps to defence establishment – consideration received for designing and development – exemption under Notification No. 10/97-CE - whether the appellant is required to reverse an amount which is equivalent to 8% or 10% of the value of the goods cleared by claiming exemption – cenvat credit on the sales returns - HELD - the appellants have taken cenvat credit on the common inputs used for dutiable as well as exempted goods, is required to reverse an amount which is equal to 8% of the value of the goods – amount reversed by the assessee is more than enough or sufficient compliance of the provisions of Rule 6 of CER, 2002 - Whether the cenvat credit availed in respect of sales returns on the basis of documents under Rule 16 of CER, 2002 is correct or otherwise – HELD - appellant had correlated all the incoming payments with the documents which were available with them and the set was produced. The issue has been held against the appellant only on the ground that he was not able to justify that the pumps which were cleared from the factory on payment of duty were only in fact received back - the findings by the lower authorities on this point are incorrect. The document revealed that the appellant had correctly availed the cenvat credit on the pumps which were received back from their purchasers - the appellant has correctly availed the cenvat credit on the sales returns of the pumps - The impugned order is set aside - assessee appeal allowed
2016-VIL-320-CESTAT-ALH-CE
M/s TIN MANUFACTURING CO. (INDIA) Vs COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD
Central Excise - time limit for availing Cenvat or modvat credit – denial of credit availed after six months – HELD – Assessee is entitled to Cenvat credit and the same cannot be denied on the ground that Cenvat credit have been availed after more than 6 months of the date of document, as the documents are dated prior to 26/06/95 when the period of 6 months was introduced – appeal allowed by remand
SERVICE TAX SECTION
2016-VIL-10-ARA
M/s HYUNDAI ROTEM COMPANY, NEW DELHI Vs COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, HYDERABAD-II
Service Tax – installation and commissioning of Rolling Stock - Whether the applicant is eligible for claiming exemption from payment of Service Tax in terms of Notification No. 25/2012 dated 20.06.2012 for the activities in relation to Testing & Commissioning, Integrated Testing & Commissioning and Trial runs of Trains – HELD - this whole process is nothing but commissioning i.e. bringing Rolling stocks into operation. Therefore, we agree with the applicant that the services provided i.e. in relation to testing & commissioning, integrated testing and commissioning, trial runs of trains, are by way of commissioning - Meaning of “original works” is assigned to it in Rule 2A of the Service Tax (Determination of Value) Rules 2006, wherein “original work” inter-alia means erection, commissioning or installation of plant, machinery or equipment or structures, whether fabricated or otherwise - since Rolling stock is at least plant and machinery and same would be commissioned by the applicant. Therefore, the applicant would satisfy this condition also i.e. providing services by way of commissioning of original work - Applicant is eligible for claiming exemption from payment of Service Tax in terms of Notification No. 25/2012-ST dated 20.06.2012 for the activities in relation to Testing & Commissioning, Integrated Testing & Commissioning and Trial runs of Trains to be undertaken under the contract – in favour of assessee
2016-VIL-240-MAD-ST
LANCO TANJORE POWER COMPANY LTD Vs COMMISSIONER OF SERVICE TAX-II, CHENNAI
Service Tax – Demand of service tax in respect of taxable services provided by a person who is located in a non-taxable territory and received by any person located in the taxable territory – demand from service receiver - maintainability of writ petition against show cause notice – HELD - The ratio laid down by the Hon'ble Supreme Court in the case of Vicco Laboratories shall not apply to the facts and circumstances of the present case for the reason that when the first respondent has stated that the petitioner is liable for service tax, it is for the petitioner to explain their contention by producing all the records stating that they are not liable for payment of service tax - the petitioner can be given a reasonable time for filing their explanation to the show cause notice raising all their objections and also all the documents to substantiate their contention - writ petition is dismissed
2016-VIL-318-CESTAT-AHM-ST
M/s NEEL TOURS & TRAVELS Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA
Service Tax - recovery of the Service Tax short paid in rendering the rent-a-cab operator service during the period 2002-03 to 2006-07 - gross taxable receipts incorrectly shown in their ST-3 returns – Penalty – HELD - leviability of service tax on rent-a-cab operator service when the charges recovered on per kilometer basis has been settled by the jurisdictional Gujarat High Court in Viay Travels Case - it is clearly established from the Balance Sheets the figures for Rent-a-Cab Scheme Operator Service had not been declared correctly and that the said income was higher than the income declared in the ST-3 Returns resulting into short payment of Service Tax – however Appellants are eligible to benefit to pay 25% of the penalty imposed on fulfillment of the condition prescribed under Section 78 of Finance Act, 1994 – Assessee appeal partly allowed
Guest Article
Goods imported/purchased inter-State used in Works Contract, would be exempt from VAT
delCir04
Delhi: Display of Certificate of Registration at principal place of business
rajCir05
Rajasthan: Regarding online template for Form VAT-72
FCP1105
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
12th of May
2016-VIL-244-MAD
M/s SCHWING STETTER (INDIA) PVT LTD Vs THE COMMISSIONER OF COMMERCIAL TAXES, CHENNAI
Tamil Nadu Value Added Tax Act, 2006 - writ petition seeking to declaration phrase "in the State" in Section 2(11) of the TNVAT as ultra vires - manufacture the goods of the description contained in Clauses (a) to (g), but goods are used not "in the State" but outside the State, as a consequence goods are not treated as falling within Section 2(11) – classification of goods as Capital Goods - Objections to the expression "in the State" appearing in Section 2(11) – fundamental requirements for challenging a legislation as ultra vires and violative of Article 14 – HELD - First ground of challenge to Section 2(11) is that the nature of the goods cannot change, merely on the basis of the location in which they are used – HELD - The law validly enacted by a State Legislature, cannot be challenged on the ground that it defies logic and common sense - the State Legislature is entitled to treat a particular item or good as a capital good, when used within the State. Similarly, a particular good which is treated as capital good in all other States, may be treated differently by one State - Therefore, the issue is not as to how the very same goods become capital goods when used in the State, but become different goods when used outside the State. The Sales Tax Law of the past and the Value Added Tax Law of the present seek to treat goods of a particular description differently, for the purpose of determining the incidence of tax. This is not prohibited by law and hence, the first ground of challenge has to fail - The second ground of challenge is that the treatment of dealers of one and the same goods differently, depending upon the place of use of the goods, offends Article 14 – HELD – the very scheme of sub-sections (1) and (2) of Section 8, treats the same goods of the same dealer differently, liable to be taxed at different rates, depending upon whether the sale is to a registered dealer or not. When such a discrimination is inherent in the scheme of Section 8 of the CST, 1956, the adoption of the same or similar principle to the definition of the expression "capital goods" under the State Act, cannot be assailed as discriminatory, offending Article 14 of the Constitution - The third ground of challenge is that the sale in the course of inter-state trade or commerce to a person other than a registered dealer, is covered by Section 8(2) of the CST, 1956 and that therefore, the prescription contained in Section 2(11) is an encroachment by a State law into a field occupied by a Central Legislation - The Central Sales Tax Act, 1956, itself is a law that deals with sale of goods in the course of inter-State trade or commerce. No law of a State is entitled to impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the State. Therefore, what is prohibited is the imposition of a tax on the sale or purchase that takes place outside the State - Section 2(11) does not impose a tax on the sale or purchase of goods that takes place outside the State. It merely qualifies the expression "capital goods" to mean certain goods that are used in the State - The fallacy of the argument of the petitioners lies in treating the definition clause as a charging provision. Therefore the third ground of challenge is fallacious and is rejected.
2016-VIL-243-MAD-ST
M/s DREAM CASTLE Vs UNION OF INDIA, MINISTRY OF FINANCE
Service Tax/Central Excise/Customs - Section 35F – Mandatory pre-deposit of 7.5% of tax demand – Writ petition seeking declaration the amendment introduced to Section 35F of the Act with effect from 6.8.2014, requiring the appellants in all appeals to make a uniform pre-deposit of 7.5% of the tax demanded, would not apply to proceedings initiated before the date of coming into force of the amendment - writ petitioner seeking declaration that the amendment would apply only to show cause proceedings initiated after 6.8.2014 and not to proceedings which were initiated, pending or disposed of at the Original stage, before the cut-off date namely 6.8.2014 – Date of effect of amendment in Act – right to appeal – HELD - the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory - if one condition that was already available in the statute for the exercise of a right of appeal, is merely replaced by another condition, the same cannot be said to be retrospective, unless it is definitely shown that the amended condition is more onerous than the unamended condition - When the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right. A mere chance of convincing the Appellate Authority to exercise the discretion for the grant of a total waiver is no vested right. The amendment, did not take away a right vested, but merely made a chance divested - Court differs with views of Andhra Pradesh & Kerala High Court in K. Rama Mohanarao and Muthoot Finance Limited case - writ petition seeking a declaration that the amended Section 35-F of the Central Excise Act 1944, is applicable only to show cause proceedings initiated on or after 6.8.2014 is dismissed
telAct09
Telangana Value Added Tax (Amendment) Act, 2016 - Increase in rate of tax on Petrol & Diesel
telAct10
Telangana Value Added Tax (Second Amendment) Act, 2016 -Amendment of Section 22
telAct11
Telangana Value Added Tax (Third Amendment) Act, 2016 - Amendment of Section 22, Schedule IV & Schedule VI
mahaNoti47
Maharashtra Settlement of Arrears in Disputes Act, 2016 - Delegation of powers
mahaNoti15
Maharashtra: Constitution of Advance Ruling Authority
gujNoti28
Reduction in rate of tax on vehicles, chassis
gujNoti29
Reduction in Entry tax on tractors, vehicles
13th of May
2016-VIL-246-P&H
M/s LUXMI TRADING COMPANY Vs STATE OF PUNJAB
Punjab - Entry Tax - Writ petition challenging the Punjab Development of Trade, Commerce and Industries (Validation) Ordinance, 2015 – Levy of Entry Tax on Sugar – HELD - the recovery of tax for the period, when Punjab Ordinance No.1 of 2015 remained in force shall remain stayed subject to the petitioners' furnishing details of sugar imported by it within the State during that period to the Assessing Authority
2016-VIL-248-GUJ
TIRUPATI ENTERPRISES Vs STATE OF GUJARAT
Gujarat Value Added Tax Act, 2003 - section 69 - transit pass - Form 405- detention of the goods carrying vehicle on the sole ground of driver or the person in-charge of the vehicle was not carrying a transit pass in Form 405- seizure of goods and detention of the truck under sub-section (4) of section 68 of the Act – HELD - action of the respondent of resorting to seizure of the goods and the truck is beyond the bounds of his authority inasmuch as for breach of the provisions of section 69 of the GVAT Act, the authorities under the said Act cannot resort to the provisions of section 68(4) of the Act - The power given to detain the vehicle is to facilitate the seizure of the goods and it cannot be termed as the detention for an indefinite period. The reasonable interpretation would mean the authority may seize the goods after detaining the vehicle and after the seizure of the goods, the goods may be kept by the authority at any place where it is permissible, but the vehicle is required to be released thereafter - The action of the authorities, therefore, is in breach of the provisions of sections 68 and 69 of the GVAT Act. The impugned seizure memo is quashed – assessee petition allowed
CENTRAL EXCISE SECTION
2016-VIL-323-CESTAT-KOL-CE
M/s THE TINPLATE CO. OF INDIA LTD. (TCIL) Vs COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR
Central Excise – Valuation of goods manufactured job-work basis – demand based on 115% of the cost of manufacture of FHCR Coils - Rule 8 of the Central Excise (Valuation) Rules, 2000 or Rule 11 in arriving at the valuation of the goods – imposition of penalty – HELD - job-worker M/s. TCIL is not a sister concern of M/s. TISCO and the goods manufactured by the job-worker are not used captively by him or on his behalf (job-worker’s behalf) in the production or manufacture of other articles. In view of the above observations and the settled proposition of law duty on manufacture by job-worker M/s. TCIL cannot be demanded @115% of the cost of manufacture for the period 01.07.2000 to 09.02.2001, under Rule 8 of the Central Excise Valuation Rules. Accordingly demand raised on the basis of 115% is required to be set aside
2016-VIL-322-CESTAT-ALH-CE
M/s UFLEX LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, NOIDA
Central Excise – Valuation – Demand of differential duty applying principles under Rule 11 of Valuation Rules, 2000 on captively consumed “hard copy shim” used in the manufacture of exempted final product hologram – assessee adopted of valuation in terms of Rules and CAS-4 standards – eligibility for exemption under Notification No.67/95-CE dated 16.03.1995 for captively consumed hard copy shim as capital goods - HELD - hard copy shim is an excisable product manufactured and fully put to captive use by the appellant. For arriving at the value for Central Excise purpose, the appellant followed provisions of Rule 8 and general principles of costings as per CAS-4 standards. This is also in terms of Board’s Circular dated 13.02.2003. Now, we find that the value adopted by the appellant was sought to be rejected by the Revenue without any valid legal grounds - Revenue adopted highly arbitrary and imaginative methodology to arrive at the value by adopting deductive method - the reasoning given by the original authority to deny the exemption as totally misconceived. Rule 6 (4) of CCR, 2004, has not application to decide the eligibility of said exemption – assessee appeal allowed
CUSTOMS SECTION
2016-VIL-27-SC-CU
SHELL EXPORTS (KANDLA) Vs UNION OF INDIA
Customs – interpretation of Notification No. 07/2002-2007 dated 05.06.2002 - benefit of DEPB in lieu of Drawback for supplies made to Special Economic Zone or unit in SEZ – eligibility benefit of DEPB in lieu of drawback for supplies from DTA to SEZ units made before 01.04.2003 – Denial of benefit on the ground that Customs Circular No. 25/2003 came into effect only from 01.04.2003 – HELD - the language of Notification dated 05.06.2002. It categorically uses the expression that the Central Government hereby amends / corrects the EXIM Policy 2002-2007 - thus, insofar as the amendment is concerned, that was made effective by the issuance of this notification - By an administrative circular, notification passed under Section 5 of the Act, could not be altered as that would amount to amendment of the notification and it was not within the powers of the Customs Authorities to alter the said date - the respondent-authorities could, insofar as this procedure is concerned, put conditions for claiming the benefit of DEPB for the period in question but could not say that the exporters would not be entitled to such a benefit from 05.06.2002 but would be entitled only from 01.04.2003 – High Court order set aside and assessee appeal allowed
2016-VIL-324-CESTAT-KOL-CU
B.E. OFFICE AUTOMATION PRODUCT P. LTD Vs COMMISSIONER OF CUSTOMS (PORT) KOLKATA
Customs – classification - Digital Multifunctional Copier Machines – confiscation of ‘old & used photocopiers’ – HELD - multifunctional photocopies are classifiable under CTH 8443 3100 - Appellant has claimed and classified their imported goods under CTH 84433930 in the bills of entry which is meant for ordinary photocopying machines - the issue of valuation & licensing restriction was not agitated by the appellant before the Adjudicating authority at all - we are not inclined to entertain these fresh grounds at this appellate stage when the same issues were not agitated before the lower Adjudicating authority - in this case redemption fine & penalty imposed are excessive & are respectively reduced to 10% & 5% of the value assessed by the department – assessee appeal partly allowed
SERVICE TAX SECTION
2016-VIL-11-ARA
M/s CHOICE ESTATES AND CONSTRUCTIONS LTD Vs COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, COCHIN
Service Tax – Revenue sharing agreement between Appellant-Company and Society - setting up and operation of an educational institution – formation of third entity “partnering person” – Construction of Civil Structure – Renting of Immovable Property - Construction of Civil Structure would entail Services of Architect, Engineer etc. – HELD – CBEC in Circular dated 13.12 2011 have clarified that when arrangement is under unincorporated partnership/ joint / collaboration basis, then service provided by each of the person is liable to Service Tax. Therefore, in the present case, applicant-a person under the meaning of Section 65 B(37)(iii)] if providing services to another person i.e. “partnering person”, who is a separate person in terms of Section 65 B(37) (VII) ibid, will be liable to Service Tax - In this case civil structure is not intended for sale and further, no amount shall be received by the applicant before issuance of completion certificate by the competent authority. Therefore, the construction of complex etc., in this case will not come under the ambit of declared service and not be liable to Service Tax - service of providing of renting of immoveable property by applicant to “partnering person” will not be “self service”. The consideration for renting said property would be received as per the “Revenue Share” clause in the said Agreement. Therefore, renting of immoveable property would be liable to Service Tax - Service Tax is applicable on the revenue share relating to the applicant to the extent it is relatable to rendering of taxable service - Service Tax is applicable on the revenue share relating to Choice Foundation to the extent it is relatable to rendering of taxable service - Service Tax is not leviable on the fees collected from the students to the extent it is covered under the Negative List in terms of Section 66D (l) of the Finance Act, 1994 - Service Tax is payable by a person providing taxable service in terms of Section 68(1) of the Finance Act, 1994. Therefore, in this case, Service Tax will not be payable by the students, as they are not providing any service – Partly in favour of assessee
2016-VIL-245-P&H-ST
M/s PREMIER MOTOR GARAGE Vs COMMISSIONER CENTRAL EXCISE, CHANDIGARH
Service Tax - Limitation - delay of 638 days - Whether a litigant can be made to suffer dire consequences on account of mistake of counsel and wether a litigant can be condemned unheard due to fault on part of its counsel - sufficient cause for condonation of delay in filing the appeal – HELD - The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases – appellant claims does not appear to be natural and cannot be said to be reasonable and logical as a litigant would always like to keep his record complete in case the lis had been decided either in his favour or against him by obtaining certified copy of the order from its counsel which had not been done here. The story put forth by the appellant is a camouflage to cover the inordinate and unexplained delay in filing the present appeal. Since no sufficient cause has been shown in the present case, no ground for condonation of delay is made out - application for condonation of delay is dismissed
Guest Article
Changes made in Rajasthan VAT in 2016-17 at a glance
14th of May
cuNoti65
Customs: Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Gold and Sliver
cuNoti17ADD
Customs: Anti-Dumping - Levy of definitive anti-dumping duty on imports of Digital Versatile Discs-Recordable (DVD-R) originating in, or exported from Vietnam and Thailand for a period of five years
15th of May
CUSTOMS NOTIFICATIONS & CIRCULARS
cuNoti72NT: Special Warehouse Licensing Regulations, 2016
cuNoti71NT: Private Warehouse Licensing Regulations, 2016
cuNoti70NT: Public Warehouse Licensing Regulations, 2016
cuNoti69NT: Special Warehouse (Custody and Handling of Goods) Regulations, 2016
cuNoti68NT: Warehouse (Custody and Handling of Goods) Regulations, 2016
cuNoti67NT: Warehoused Goods (Removal) Regulations, 2016
cuNoti66NT: specifies the following class of goods which shall be deposited in a special warehouse
cuCir18: Amendment to Ch IX of the Customs Act, 1962 – Bond required to be filed under section 59
cuCir17: Customs: Amendment to Ch IX of the Customs Act, 1962 – removal of goods from a customs station - instructions regarding affixation of one-time-lock
ceNoti27NT
Central Excise: CENVAT Credit (Sixth Amendment) Rules, 2016 - Amendment in Rule 3 - Seeks to replace the references to sub-clauses to clause 159 of the Finance Bill, 2016 with sub-sections to section 162 of the Finance Act, 2016
16th of May
miscNoti01-Clean Environment Cess
Seeks to replace the references to Clean Energy Cess with Clean Environment Cess.
miscNoti02-Infrastructure Cess
Seeks to replace the references to sub-clauses to clause 159 of the Finance Bill, 2016 with sub-sections to section 162 of the Finance Act, 2016 in the notification No. 1/2016 – Infrastructure Cess dated 1st March, 2016.
2016-VIL-249-MAD
NOKIA INDIA SALES PRIVATE LIMITED Vs THE ASSISTANT COMMISSIONER (CT), CHENNAI
Tamil Nadu Value Added Tax Act - SEZ unit – levy of purchase tax on inter-state stock transfer on the ground Section 15(a) of the TNSEZ Act, 2005, every removal of goods from the SEZ to DTA is chargeable to sales tax - appellant claim of exemption by virtue of Section 12(1)(a) of the Act - expression “authorized operations” – inter-play of Sections 12, 15 and 28 of the Tamil Nadu Special Economic Zones (Special Provisions) Act, 2005 vis-a-vis Section 12 of the TNVAT Act, 2006 – Assessee in appeal against Single Judge order - Levy of purchase tax – HELD - The appellant was obliged primarily to export the goods procured for trading and services. But, since the appellant was obliged to achieve positive net foreign exchange, only over a period of time, the Letter of Approval specifically permits the appellant to supply/sell goods or services in the DTA - an export obligation is imposed upon the appellant, not with the idea of making the appellant a 100% export oriented unit. The appellant is entitled to apportion their exports and domestic sales in such a manner that they achieve a positive net foreign exchange within the stipulated period - the operations indicated in the Letter of Approval as “authorised operations” very clearly satisfy the definition of the expression under Section 2(c) - the inter-state stock transfer made by the appellant to its own branches located outside the State, is authorised by Condition No.(v) of the LoA. Hence, the Department as well as the learned Judge were in error in thinking that an inter-state stock transfer would not come within the purview of the expression “authorised operations” - to say that the inter-state stock transfer effected by the appellant would not be an authorised operation, is nothing but to take up an extreme position. The same is not permissible in the light of the LoA granted by the Development Commissioner in terms of Section 15(9) of the Central Enactment r/w the definition of the expression “authorised operations” provided in Section 2(c) of the Central Enactment, r/w Section 2(f) the TNSEZ Act, 2005 - Common order of the learned Single Judge is set aside and assessee writ petitions are allowed
2016-VIL-28-SC
M/s RAVI PRAKASH REFINERIES (P) LTD Vs STATE OF KARNATAKA
Karnataka Sales Tax Act, 1957 – Section 12-A – Assessment of escaped turnover - re-opening of an assessment on the ground of assessment made at rate lower - rate of tax on oil cake and de-oiled cake – HELD - assessing authority had expressed the opinion with regard to the rate of tax on the de-oiled cake while scrutinizing ‘C’ Forms which is an expression of opinion on the available materials brought on record and, therefore, the first appellate authority as well as the tribunal was justified in concurring with the said order. The revenue had not challenged the order passed by the Joint Commissioner - Considering the cumulative effect of the facts and law there should not have been reopening of assessment and the same could not have been reopened - oil-cake and de-oiled cake being different products as per the notification dated 31st May, 2002 - competent authority while exercising power under sub-section (5) of Section 8 of the CST Act, has kept the reduction of tax qua de-oiled cake from the purview of Notification and has only provided oil cake to be taxed at the reduced rate of tax
2016-VIL-325-CESTAT-ALH-CE
M/s VARROC POLYMERS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, NOIDA
Central Excise - payment of duty on the goods cleared by the job worker - Notification 214/86-CE - responsibility of payment of Central Excise duty – HELD - It is a fact that for the goods, which were cleared on job work basis, the duty of Central Excise was not paid either by the job worker or by the Principal Manufacturer (s), whereas the Notification No.214/86-CE lays down that the Central Excise duty is liable to be paid on the final product to be cleared by the Principal Manufacturer; the final product would cover definitely the goods, which have been cleared by the job worker to the Principal Manufacturer (s) - there has been no any kind of concealment of the facts on the part of the appellant and all along Revenue was in full knowledge of the facts and even the Audit team of the Department visited the appellant’s premises and advised them to pay service tax instead of Central Excise duty and the appellant had paid the said service tax then. Consequently, there is no justification for imposition of any penalty – demand confirmed with interest – appeal partly allowed
2016-VIL-12-ARA
M/s AKQA MEDIA INDIA PRIVATE LTD Vs COMMISSIONER OF SERVICE TAX-VI, MUMBAI-II
Service Tax - incidental receipt of incentives/volume discounts from the Media Owners - media planning and placements of advertisements in various media – HELD - there is no agreement or contractual obligation between the applicant and the Media Owner to give volume discount to the applicant by the Media Owner. Volume discount is not fixed and is to be given at the discretion of Media Owner. Further, volume discount is gratuitous. Applicant / Advertising Agencies cannot claim it as a matter of right. Therefore, applicant is not providing declared services to the Media Owner - while the applicant shall be appointed by its clients i.e. the advertiser to provide services, incidental receipt of incentives/volume discounts from Media Owner shall not be considered to be providing a service, as defined under the Finance Act, 1994, to the Media Owner and shall not be liable to Service Tax - In proposed Business Model 2, while the applicant shall buy and sell the media inventory on its own account to the advertiser, incidental receipt of incentives/volume discounts from Media Owner shall not be considered to be providing a service, as defined under the Finance Act, 1994, to the Media Owner and shall not be liable to Service Tax – in favour of assessee
goaNoti7
Goa Tax on Infrastructure (Third Amendment) Act, 2016
wbOrder7
West Bengal: Authorisation to act as appropriate assessing authority and delegation of power to act as appropriate revisional authority
doLtr48
D.O. Letter: Synopsis of the budgetary changes proposed in the Finance Bill relating to warehousing
odiNoti14592
Odisha Sales Tax (Settlement of Arrears) Act, 2011 - Specifies period for application
17th of May
2016-VIL-29-SC
INDO BURMA PETROLEUM CORP. LTD Vs COMMISSIONER VAT DELHI & ORS
Delhi Value Added Tax Act, 2004 - proviso to Section 2(1)(zd) - Sale Price – increase and subsequent rollback of price of Petrol and Diesel - exemption in respect of enhanced ad valorem VAT payable on account of increase in petrol and diesel – HELD - The idea was to protect the interest of the consumers by giving exemption in respect of enhanced ad valorem VAT payable on account of increase in prices of diesel and petrol - On the element of increase no additional ad valorem VAT was payable and according to the proviso the increased component was not to be part of sale consideration. Consequently VAT was not to be charged in respect of such increased component, as per definition of the term “sale price” which came to be controlled by introduction of the proviso. When there was no increased component and therefore no liability to pay VAT in respect of such increased component, benefit under the proviso ceased to be applicable. The proviso cannot be given operation beyond the element of increase, so much so that even after complete roll back, the benefit in respect of that amount must operate. That certainly was not the intent. The idea was to grant benefit only in respect of that element of VAT respecting increase in rates and not beyond. If that component of increase ceased to be in existence, the benefit of proviso also ceased to be in operation – assessee appeal dismissed
2016-VIL-247-BOM
M/s SUN TAN TRADING CO. LIMITED Vs THE STATE OF MAHARASHTRA & OTHERS
Maharashtra Value Added Tax Act, 2002 – appeal against Tribunal’s interim order – HELD - We have been impressing upon the Tribunal that its order, even at the prima facie stage, must indicate beyond noting the rival contentions, that the Tribunal appreciated what is the controversy, has grappled with it in such a way that the issues are present to its mind and which have been dealt with or decided in Appeal, either by the First Appellate Authority or by it - We are at a loss and are left to guess as to which Section or provision of the MVAT, 2002 the Tribunal had in mind. Is it the definition of the term “Sale Price” some other which would support the prima facie view in law, has not been explained at all. Yet, crores of rupees are determined as deposit at an interim stage - It is in these circumstances and once the DRI's investigation has influenced the Tribunal's finding to a great extent, then we cannot sustain the same - the impugned order is quashed and set aside. The VAT Appeals shall stand restored to the Tribunal - writ petitions are allowed
CENTRAL EXCISE SECTION
2016-VIL-328-CESTAT-MUM-CE
RENFRO INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III
Central Excise – refund claim under Rule 5 of the Cenvat Credit Rules, 2004 – lack of evidence that the services were used in respect of exports during the given period – Rejection of refund - one co-relation pertains to co-relation - nexus between the inputs and services used for export goods – HELD - While there are many judgements which say “one to one co-relation is not necessary while availing credit”. However, the issue of nexus between the inputs and services used for export goods is a different issue altogether - so far as nexus is concerned, the question that needs to be answered is if input/services were used at all for the specific goods. In the instant case services were availed in the year 2004, 2005 & 2006 and the refund claim pertains to export made during January to March 2007 - services which were availed in the year 2004, 2005 & 2006 were not used for the manufacture of goods which were exported during January to March 2007. It is a fact that services are consumed immediately and cannot be stored. Thus, it cannot be said that the condition of the Notification No.05/2006-CE (NT) has been satisfied – In the instant case no claim had been made out by the appellants that during the period 2004, 2005 & 2006 there were no exports. Therefore, the said para 3.3 does not apply to the appellant - prior to 14/03/2006 the refund of credit of Cenvat in respect of “input services” was not permitted under Rule 5 of the CCR or the notification issued thereunder. Since most of the credit claimed pertains to the period prior to 1/03/2006, during which period credit of service tax paid on services used for manufacture of goods exported was not permissible at all – assessee appeal is not maintainable and is dismissed
2016-VIL-250-ORI-CE
M/s JINDAL STEEL & POWER LIMITED Vs UNION OF INDIA & ANOTHER
Central Excise Act, 1944 - manufacturing Iron and Steel items - mining and extraction of Iron Ores from captive mines – conversion of Ores to Concentrates - crushing of Iron Ore into smaller sizes and separation of different sizes – Duty demand on Concentrates – interest and penalty – maintainability of writ petition – HELD - since efficacious remedy by way of filing appeal before the CESTAT is available, we hereby direct the petitioner to challenge the impugned order before the appellate authority under Section 35-B of the Act and raise all such contentions raised before us - petitioner would make 5% of the demand of duty as pre-deposit under Section 35-F of the Act and rest of the demand of duty, interest and penalty will remain in abeyance till disposal of the appeal – appeal disposed
CUSTOMS SECTION
2016-VIL-251-DEL-CU
INDAIR CARRIER PVT LTD Vs COMMISSIONER OF CUSTOMS (GENERAL)
Customs – completion of proceedings concerning the revocation of the CHA licence within the time period stipulated in Regulation 22(5) of the Customs House Agents Licensing Regulations, 2004 – Validity of CESTAT order permitting further period of 60 days despite noting that the mandatory time limits – HELD - The time limits in the CHALR 2004 for issuance of the SCN to the CHA licence holder and completion of the inquiry within 90 days of issuance of such SCN are sacrosanct - This Court has consistently emphasised the mandatory nature of time limits - the SCN issued by the Respondents pursuant to the order of the CESTAT, the consequential inquiry report and the order passed by the Respondents revoking the Petitioner’s licence are held to be unsustainable in law and are hereby set aside - The CHA licence of the Petitioner that stood revoked will stand revived forthwith – assessee petition allowed
2016-VIL-30-SC-CU
JATIN C. JHAVERI Vs UNION OF INDIA
Customs – FERA - Confiscation of goods attempted to be improperly exported - confiscation of foreign currency - proceedings under Clauses (d), (e) and (i) of Section 113 of the Customs Act, 1962 proposing penalty and confiscation of the currency – HELD - The emphasis in the relevant clauses of Section 113 of the Customs Act is on an attempt to export goods contrary to any prohibition imposed by or under said Act or any other law in for the time being in force. On the other hand, what constitutes a violation under Section 8(1) of FERA is when a person, except with the previous special or general permission of the Reserve Bank, purchases or otherwise “acquires” any foreign exchange. The emphasis in proceedings under FERA is, therefore, on such acquisition of foreign exchange without the previous general or special permission of the Reserve Bank. Any failure in that behalf would lead to incidents including confiscation under Section 63 of the FERA - the question regarding ‘acquisition’ of currency must be independently established in the light of requirements under said Section 8(1). The assessment in that behalf by the Appellate Authority under FERA and the High Court is completely incorrect - order of confiscation is upheld – appeal disposed
SERVICE TAX SECTION
2016-VIL-326-CESTAT-CHE-ST
J-RAY MCDERMOTT ENGINEERING SERVICES PRIVATE LTD Vs COMMISSIONER OF SERVICE TAX, CHENNAI
Service Tax – export of services - Refund of unutilized input credit - rejected of refund on ground of (a) invoices on which credit has been availed and refund claim pertaining to unregistered premises (b) inputs invoice on which refund claimed does not pertain to the claim period and (c) ineligible input services – HELD - registration is not a criteria to allow refund when the output service is not liable to duty or tax - the time limit does not apply for the refund of accumulated cenvat credit - The judgement of the Karnataka High Court in mPortal is wide enough to cover both the situations and therefore, whatever is the factual situation, that would not in any way alter the eligibility for refund - services have been received in respect of Customs Clearing Services received for the goods imported relating to their business and therefore qualify as an eligible input service for the purpose of availment of credit as the said services are for inward transportation of inputs – assessee appeal allowed
2016-VIL-327-CESTAT-MUM-ST
M/s KUNDAN CARS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE
Service Tax – availment of Cenvat Credit for common services which are used for taxable services as well as for trading activity - denial of Cenvat credit attributed to the trading activity of cars – HELD - unless the vehicles are received and sold, there would not be any servicing of the same. Moreover, the definition of the input service is broad enough to cover the input service and also the output service rendered - no arithmetical correlation is required between the input and output services and accordingly the credit was allowed - appellant is not required to reverse the Cenvat Credit attributed to the trading activity of passenger cars - in the absence of ingredients such as fraud, collusion, suppression of fact penalty is not imposable under Section 78 – assessee appeal allowed
Guest Article
Reverse charge on “any service” received from Government: Alarm bell for all business entities from 1st April 2016
Finance Bill, 2016 enacted: Significant changes in Service Tax, effective from 14th May, 2016
dnhNoti1151
Dadra & Nagar Haveli: Notice for reconciliation of exemption claimed under Central Sales Act
delCir05
Filling of online return for fourth quarter of 2015-16 – extension of period thereof.
goaNoti242
Amendment in Schedule ‘C’ regarding Motor spirit
18th of May
stNoti25
Services provided by the specified organisations in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement
cuNoti33
Amends notification No.39/96-Customs dated 23.7.1996
cuNoti18ADD
Levy provisional anti-dumping duty on Seamless tubes, pipes & hollow profiles of iron, alloy or non-alloy steel (other than cast iron and stainless steel), whether hot finished or cold drawn or cold rolled of an external diameter not exceeding 355.6 mm or 14 OD, originating in or exported from China PR, for a period not exceeding six months
ceNoti23
Amends notification No. 12/2012-Central Excise - to exempt excise duty on RBD Palm Stearin, Methanol and Sodium Methoxide for the manufacture of bio-diesel (alkyl ester of long chain fatty acids obtained from vegetable oils, commonly known as biodiesels) on actual user basis for a period upto and inclusive of 31st March, 2017; to withdraw excise duty exemption on biodiesel with effect from 1st April, 2017; and to levy 6% excise duty on biodiesel and its inputs namely, RBD Palm Stearin, Methanol and Sodium Methoxide with effect from 1st April, 2017.
19th of May
2016-VIL-254-MAD
M/s M. AMURTHAM PETROLEUM AGENCY Vs THE ADDITIONAL DEPUTY COMMERCIAL TAX, PUDUCHERRY
Central Sales Tax Act - Puducherry Value Added Tax Act, 2007 – non payment of local sales tax dues – denial of Form 'C' - demand of a higher rate of tax by BPCL & IOCL under the CST Act, 1956 for default committed by their dealer – validity of refusal to issue declaration under a Central Enactment for default committed by a registered dealer under a State Enactment – legality of State Authorities to rely upon Section 43 of the PVAT to withhold a 'C' Form under Section 8(4) of the CST Act, 1956 for the recovery of the dues under the State Enactment - locus standi of IOCL/BPCL as unregistered dealer to question the refusal of the Puducherry Authorities to issue 'C' Form Declarations - Locus standi of IOCL/BPCL - if a right arises under the Act, such a right is not confined only as against the Central Government, but also as against the concerned State Government - the preliminary objections of the Respondents are overruled - If the statute fixes the rate of tax, the payment of the same is a statutory obligation. Every obligation shall correspond only to a right and not to a concession - an officer of the State Government performs a dual role, one under the Local Sales Tax Law of the State and another under the CST Act, 1956. Therefore, it is not possible for him to compartmentalise his mindset and ignore the default committed under one Enactment, while dealing with the question of issuance of "C" declaration forms under another Enactment. Hence it is futile to contend that for a default committed under a State Enactment, the Prescribed Authority cannot refuse to issue a declaration under the Central Enactment - the contention that the mandate of a parliamentary enactment is now defeated by a State enactment cannot hold good in the light of the interplay between Section 13(1)(d) and 13(4)(e) of the CST Act, 1956. It is not just an empowerment to prescribe the procedural provisions for the collection of tax, but also a power conferred upon the State to prescribe the conditions, subject to which 'C' Form declarations can be given - The entitlement of a person to a C-Declaration Form cannot be determined solely on the basis of the provisions of Sub-Sections (1) and (4) of Section 8. The entire scheme of the Act, including the provisions of Section 9(2) and Section 13(4)(e) have to be looked into. Therefore, we are unable to accept the reasoning given by the Madhya Pradesh High Court for taking the view that it did in Dawar Brothers - There is also no impediment in law for the simultaneous adoption of more than one method of recovery - The provision may appear to be one empowering the State to indulge in arm twisting tactics. But, so long as there is power and so long as the vires of Section 43 is not under challenge, the petitioners cannot dictate to the State that they could adopt any other mode of recovery - Assessee writ appeals and writ petitions are dismissed
2016-VIL-252-BOM
M/s PERMASTEELISA (INDIA) PVT LTD Vs STATE OF MAHARASHTRA
Maharashtra Works Contract Act - section 6A (1) - contract for construction of glass curtain walls - Whether the contract for construction of glass curtain walls would constitute contracts for construction of building or the contracts incidental or ancillary to the contracts mentioned in Notification dated 8 March 2000 – eligibility to benefit under the Notification dated 8 March 2000 – applicability of composition scheme rate – HELD - Notification dated 8 March 2000 clearly mentions the contract for ‘construction of buildings’ - the term “construction of buildings” would not involve the fixing of glass walls. Since the Applicant is seeking a lesser rate of tax, the burden is on the Applicant and the provisions of the Notification dated 8 March 2000 have to be construed strictly - The word “construction” and the word “building” are not defined in the Act and are to be read in the context of their ordinary meaning. The work of fixing glass to a building can in no manner said to be an activity which is covered under Notification dated 8 March 2000 – assessee reference dismissed
CUSTOMS SECTION
2016-VIL-334-CESTAT-MUM-CU
COMMISSIONER OF CUSTOMS (EXPORT PROMOTION), MUMBAI Vs M/s KAMANI OIL INDUSTRIES
Customs - DFRC Scheme - whether the Crude Palm Kernel oil is vegetable fat and whether benefit of Notification No. 46/2002-Cus can be extended or otherwise – exemption from customs duty and CVD if the imported item is for replenishment by a licence as an intermediate - revenue contention Crude Palm Kernel oil is not used as raw material, but it is an intermediate for manufacturing biscuits, hence not covered by DFRC licence – HELD – the question of co-relating the input and output would arise only in the case of sensitive items and crude palm oil is not listed as a sensitive item – under General Exemption Notification No. 90/2004-Cus, the benefit can be availed by an importer for the materials imported under DFRC licence, even if it is an intermediate. In the case in hand, there is factual findings that crude palm oil (edible grade) requires refining before it can be put to use for the manufacturing of biscuits, it would get covered under the category of materials as an ‘intermediate’. If that be so, the benefit of Notification No. 90/2004 cannot be denied to the assessee - nexus is not required to be established by the transferee of the licence. It is undisputed that the appellants had purchased DFRC licences from M/s. Parle Products Pvt. Ltd, there is no need for them to establish the nexus of the goods imported and the consumption thereof in the export of the goods as mentioned in the DFRC – impugned order is upheld and revenue appeal dismissed
2016-VIL-331-CESTAT-CHE-CU
M/s BLUE STAR LTD Vs C.C., CHENNAI
Customs – Import of water dispensers - classification under CTH 84186990 - assessment on RSP value – assessee claims that the impugned items do not attract RSP assessment in terms of Notification 13/02 NT-CE – Admissibility of refund without change in the assessment – HELD - The adjudicating authority in his order had clearly stated that the appellant had paid excess duty and the entry 8418 covered only refrigerators and not water dispensers is an unassailable finding. The Adjudicating Authority had passed a reasoned and speaking order and directed the Adjudicating Authority to consider the issue in terms of Section 27 of the Customs Act, which was also upheld by the Tribunal - the Assistant Commissioner had no other option except to decide the refund application. The impugned order cannot be sustained for the reason that the Ld. Commissioner (Appeals) has merely stated that the appellant has not challenged the assessment. In absence of any ground on merit, that the classification arrived at by the Adjudicating Authority is erroneous, which has not been done in the instant case, the impugned order is liable to be set aside and the order passed by the Original Authority granting refund is restored – revenue appeal dismissed
CENTRAL EXCISE SECTION
2016-VIL-253-GUJ-CE
PREMIER HEAVY ENGINEERING CORPORATION Vs COMMISSIONER OF CENTRAL EXCISE
Central Excise – service of show cause notice to the appellant – proceedings without issue of notice – Demand of duty, interest and penalty – mere supply of copy of the show cause notice instead of SCN to dummy unit – HELD - Merely because the notice was issued on the so called parent company, requirement of hearing the appellant company would not be done away with - The conclusion that the order of recovery of tax, interest and penalty could not have been passed without hearing the appellant - there was neither any proposal against the appellant nor a copy was served to the appellant - by supplying a mere copy of SCN the Department cannot initiate proceedings against the appellant; such requirement would not be fulfilled by mere supply of a copy of notice in case of another entity - Whether the appellant was dummy or not is a central question and cannot be decided without full participation of the alleged dummy – assessee appeal allowed
2016-VIL-330-CESTAT-DEL-CE
C.C.E. MEERUT-II Vs M /s HONDA SEIL POWER PRODUCTS LTD
Central Excise – Classification of pump set - suppression/ willful misstatement – SCN for subsequent period invoking extended period - Held - The Board clarified as to how the classification of pump set would be dealt with and how they would be eligible for the benefit of the then Notification No. 56/1995 dated 16.03.1995 - the suppression of facts/ willful misstatement is a combined question of facts and law, and therefore, precedential value of various judgments on this issue has to be determined in the context of the facts of each case - mere inaction or failure on the assessee’s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period, the allegation of willful misstatement/ suppression of facts is not sustainable against the respondent - SCN raising demand for subsequent period cannot sustainably invoke extended period if a SCN had been issued earlier on the same issue for an earlier period - Commissioner was justified in dropping the impugned demand as time barred - Revenue appeal is dismissed
SERVICE TAX SECTION
2016-VIL-13-ARA
M/s UNIVERSAL SERVICES INDIA PVT LTD Vs THE COMMISSIONER OF SERVICE TAX, GURGAON
Service Tax - Payment processing services – applicant submits that the place of provision of service should be the location of recipient of service i.e. U.S.A. as per Rule 3 of POPS, whereas Revenue contention that the place of provision of service as location of service provider i.e. India under Rule 9(c) of said Rules – HELD - it cannot be inferred that the applicant would be providing payment processing service to the Indian Customer, for the service rendered by WWD US to them. If that was the case, applicant would not receive any fees from WWD US in respect of payments by the Indian Customer remitted directly through Credit Card to their service provider. But that is not the case. Further, 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 - applicant is not an “intermediary” and the service provided by him is not intermediary service - the place of provision of payment processing service by the applicant, is outside India in terms of Rule 3 of Place of Provision of Services Rules, 2012 - Export of taxable services in terms of Rule 6A of the Service Tax Rules, 1994 - the services to be provided by the applicant to WWD US that 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 - Ruled in favour of applicant
2016-VIL-332-CESTAT-MUM-ST
M/s DIEBOLD SYSTEMS PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax - Installation, operation and maintenance of ATMs – Demand under Maintenance & Repair Services and Business Auxiliary Services – HELD - on merits the issue is settled in favour of the appellant, and the impugned order holding the services rendered by the appellant in respect of Automated Teller Machines are taxable under any other category prior to 01.05.2006 is erroneous. Accordingly, that portion of the impugned order which confirms the Service Tax liability along with interest on this point is liable to be set aside - Goods Transport Agency - movement of ATMs to various locations – HELD – on reading of clauses of agreement leads to inevitable conclusion that the said agreement is for movement of ATM’s to various locations, and appellant is paid for such movement of ATM - services rendered by appellant would fall under category of GTA - service tax liability under head Goods Transport Agency along with interest is upheld - appellant could have entertained a view that the movement of ATM’s is not covered under GTA Services - penalties set aside - Revenue’s appeal seeking to the enhance penalty under Section 76 fails – Assessee appeal partly allowed
Guest Article
Effective Rate of Service Tax under Abatement, Reverse Charge and Valuation Rules after introduction of KKC
ceCir1030
Central Excise: Imposition of Central Excise duty on jewellery – Constitution of sub-committee of the High Level Committee
stCir193
Service Tax: Clarification regarding leviability of service tax in respect of services provided by arbitral tribunal and members of such tribunal
dgftPN09
DGFT: Marking of Y in the EDI generated Shipping Bills by Exporters would be treated as declaration of intent to claim MEIS benefit
dgftPN10
DGFT: Amendment in Appendix – 2X under Foreign Trade Policy, 2015-20
dgftNoti08
DGFT: Amendment in export policy of edible oils
delCir06
Delhi: Regaarding Grant of Registration under DVAT & CST
apCir26197
Andhra Pradesh: Inter-State sales of Pulses and Dalls and Rice - Tax levied @ 5% in the absence of mandatory 'C' Forms
gujNotiGHN31
Gujarat: Amendment to notification regarding sales of PDS kerosene
gujOrderGHN32
Gujarat: Amendment to government order regarding sales of kerosene through the public distribution system
jharOrder56
Jharkhand: Kar Samadhan Scheme-2015 Extension
apCir329
Andhra Pradesh: Goods vehicles movements within the state and inter-state movement
20th of May
ceInst278A
Central Excise: Need for timely forwarding proposal for fresh appointment/extension of tenure of SPPs handling CBEC cases before the Subordinate Courts/Courts of Session and High Court
CUSTOMS NOTIFICATIONS & CIRCULARS
cuNoti34: Amend notification No. 96/2008-Customs dated 13.08.2008, so as to carry out the following changes: to omit 'Samoa' and 'Maldives' from the list of countries eligible for preferential tariff under the said notification; to amend the name of 'Republic of East Timor' as 'Democratic Republic of Timor-Leste'.
cuNoti77NT: Rate of exchange of conversion of the foreign currency with effect from 20th May, 2016
cuCir19: Regarding allotment of Warehouse Code for Customs Bonded Warehouses
cuCir20: Clarification regarding transitional provisions relating to Duty Free Shops, Ship Stores, Airline Stores & Diplomatic Stores
cuNoti19ADD: Amend notification No. 40/2012 -Customs (ADD) dated 30th August, 2012, so as to amend, for the purposes of levy of Anti-Dumping Duty on imports of 'Metronidazole' originating in, or exported from China PR, the name of the Exporter from 'M/s Hubei Hongyuan Pharmaceutical Co., Ltd' to 'M/s Hubei Hongyuan Pharmaceutical Technology Co., Ltd'.
delNoti238
New Delhi: Extension of the date for filing CR-II upto 16/05/2016
delNoti251
New Delhi: Filing of Form DS-I for providing information by regd. dealers in r/o movement of petroleum products, Tobacco and Gutka
21st of May
stNoti26
Service Tax: Amendment in Notification No.25/2012-Service Tax, dated the 20th June, 2012, regarding renting of immovable property
23rd of May
2016-VIL-31-SC
STATE OF PUNJAB Vs BHARAT PETROLEUM CORP. LTD
Punjab General Sales Tax Act, 1948 - Section 11(3) – Time-limit for completion of assessment – extension in period of limitation for assessment from three years to five years vide Punjab General Sales Tax (Amendment and Validation) Act, 2005 – retrospective amendment – validity of assessment – Revenue Appeal - HELD - The amendment Act provides that the amendment shall come into force w.e.f 19th July, 2000 and be deemed to have remained in force as such up to the 11th day of September, 2002. Thus, this amendment was retrospective in nature and covered the period in question. In the instant case, assessment order was made within the limitation as was provided by amended Section 11-CC - the judgment of the High Court holding that the assessment was validly made within the period of limitation is unsustainable - since the assessment is saved by the subsequent amendment and that too by making it retrospective, the assessee shall pay only principal amount of sales tax and no interest or penalty shall be paid - Revenue appeal allowed
2016-VIL-256-CHG
BUDHWARI BAZAR VYAPARI SANGH Vs THE STATE OF CHHATTISGARH
Chhattisgarh Entry Tax Act - whether the Entry Tax under the provisions of the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 can be levied upon the goods brought in the area which falls within the limits of railway - Article 285 of the Constitution of India – HELD – Contention that the petitioners are not liable for payment of entry tax is liable to be rejected as Article 285 of the Constitution of India only applies if the property is of the Union of India and the tax is directly imposed. Here, entry tax has been imposed under the Act of 1976 on the entry of goods into the local area for consumption, use or sale by the petitioners who are said to be dealers under the Act of 1976 - there is a difference between direct tax on property and on income as against indirect tax on manufacture of goods or entry of goods into the local area or sales tax. This dichotomy needs to be kept in mind of Constitutional Scheme and Article 285 and 289 of the Constitution - it cannot be held that the petitioners are exempted from payment of entry tax by virtue of the provisions contained in sub-section (1) of Section 184 of the Railways Act, 1989 - assessee petition dismissed
CUSTOMS SECTION
2016-VIL-257-MAD-CU
THE COMMISSIONER OF CUSTOMS (EXPORTS) Vs M/s PRASHRAY OVERSEAS PRIVATE LIMITED
Customs – CVD - challenge to Tribunal order holding that imported goods were not liable for payment of CVD in view of no duty was payable even on indigenous goods during the material period - Whether the imported goods are eligible for claiming benefits under the exemption Notification No.30/2004-CE when there was no compliance of the conditions as contemplated under the said Notification and whether the said exemption Notification is applicable only for the indigenously manufactured goods or even for the imported goods – Interpretation of Exemption Notification - HELD - In cases where the exemption Notifications are absolute and they do not make the benefit available only upon the fulfillment of any condition, even the importer would be entitled to the benefit of exemption (ii) In cases where the Notifications for exemption stipulate only one condition namely that the inputs used in the manufacture of the exempted goods should have suffered a duty, then the benefit of the Notification will not be available to any of the importers, since he could have never paid any duty of excise on the inputs used in their manufacture by the foreign manufacturer - Notifications of this nature, are not merely conditional, but also restrictive in nature (iii) In cases where the exemption Notification stipulates only one condition namely that no CENVAT credit ought to have been availed on the inputs, the benefit of the Notification will be available only to those, who satisfy two conditions namely that the inputs used by them suffered a duty and that they did not seek CENVAT credit. Since an importer can never satisfy the first condition, the second condition becomes inapplicable to him and he cannot be heard to contend that the inapplicability of the condition by itself would make him eligible for the grant of the benefit. (iv) In cases where the exemption Notification stipulates two conditions, namely that the inputs should have suffered duty and that no CENVAT credit should have been availed, then the benefit of the Notification will be available only if both conditions are satisfied. An importer will never be able to satisfy both these conditions and hence, he cannot claim the benefit - As a consequence, the appeals of the Revenue are allowed
2016-VIL-333-CESTAT-MUM-CU
COMMISSIONER OF CUSTOMS (IM-PORT), MUMBAI Vs M/s EXXON MOBIL COMPANY INDIA PVT LTD
Customs – Valuation – imported from Associate Companies - loading of commission – Revenue appeal – HELD - The lower authority has not established that the relationship in any way has influenced the transaction value as declared by the appellant or that the price declared was not at arms length. It has not been established overseas company is directly or indirectly controlling the affairs of the appellant. No mutuality of interest has been established. On the question of relationship, mutuality between the seller and the buyer is an essential aspect which has to be established whenever revenue wants to ignore the transaction value - commission paid by the foreign supplier to the dealers in India in respect of sales to third party cannot be treated as additional consideration or flow back to the dealer and therefore cannot be loaded on to the invoice price to the dealer – revenue appeal dismissed
CENTRAL EXCISE SECTION
2016-VIL-335-CESTAT-MUM-CE
M/s MERIND LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III
Central Excise – valuation - manufacture of P&P medicines – claim of 15% discount on MRP to arrive at the assessable value – failure to comply with condition related to Drug (Price Control) Order, 1987 of Notification No. 245/83 – willful misstatement and suppression of fact - Denial of discount and imposition of penalty invoking extended period – HELD – Difference of opinion – as per Member (Judicial) demand is not sustainable being time barred. The impugned order is set aside and the appeal is allowed – as per Member (Technical) there is a clear evidence of mis-declaration and fraud with intent to wrongly avail the benefit of notification. The extended period of limitation has been rightly invoked – Matter referred to Third Member
2016-VIL-329-CESTAT-ALH-CE
M/s BAJAJ HINDUSTAN LTD Vs COMMISSIONER OF CENTRAL EXCISE, LUCKNOW
Central Excise - Cenvat credit on the items utilized in fabrication of Bio-Gas Plant - Pollution Control Equipment – Rule 2 (l) of Cenvat Credit Rules - HELD - bio-gas plant is a pollution control equipment defined in rule 2 (a)(A)(ii) of CCR, 2004; appellant have rightly taken credit, being entitled to the same – manufacture cannot take place without repair and maintenance of capital equipment, the appellant is entitled the cenvat credit on the same - The impugned orders are set aside, assessee appeals are allowed
SERVICE TAX SECTION
2016-VIL-337-CESTAT-CHE-ST
COMMISSIONER OF CENTRAL EXCISE, COIMBATORE Vs ECLOUDS
Service Tax - Repair and customisation of imported software to make it usable for customers in India and supply of same to local customers - classification under Management, Maintenance and Repair service or Information Technology Software Services – demand under the reverse charge mechanism as per Section 66A of the Finance Act, 1994 – discharge of service tax under "Management, Maintenance or Repair Service" – Demand under “Information Technology Software Service” – levy of interest and penalty – HELD – The objection by Revenue is that Commissioner ought not to have adjusted the service tax payable on the import with that paid on the output service. It is quite obvious that the service provided by the appellant-assessee to their domestic client is based principally on the software which has been imported and on which further repair and customization has been carried out in India by them. Consequently, any service tax paid on such import under reverse charge mechanism would be rightly available to the appellant-assessee by way of cenvat credit - no serious infirmity in the view taken by the Commissioner that adjustment of service tax payable in the import of services as well as paid on the output service can be permitted as long as the liability is adjusted within the same service payment cycle. However, the computation needs to be factually checked to arrive at the correct value of import of software services and the total service tax liability on such import. The liability of payment of interest under Section 75 also needs to be re-checked in the light of the Revenue’s appeal – Matter remanded to consider the issue of classification of the imported software and quantification of duty
2016-VIL-338-CESTAT-CHE-ST
M/s SOURCE HOV INDIA P. LTD Vs COMMISSIONER OF SERVICE TAX, CHENNAI - I
Service Tax - Business Support Service – Eligibility of Cenvat Credit on twenty two different input services - Eighteen different appeals of appellant allowed, partly allowed or remanded
Guest Article
Open Issues on Changes in Service Tax, Excise, Custom Duty vide Union Budget 2016
rajNoti15
Rajasthan Value Added Tax (Third Amendment) Rules, 2016 - Insertion of rule 16A, 28, Form VAT-20AA & Amendment of Form VAT-26
24th of May
2016-VIL-258-MP
DESHLAHARA COKE INDUSTRIES (P) LTD Vs COMMISSIONER OF COMMERCIAL TAX
Madhya Pradesh Commercial Tax Act, 1994 - Section 2 (o) – Manufacture – leviability of tax as per entry 22 of Part V of Schedule II on smokeless coke obtained from processing of coal purchased from registered dealer after paying full tax @ 4% - HELD - The process involved in obtaining smokeless soft fuel i.e. smokeless coke is a process of manufacture as defined under Section 2 (o) of the Act and such process has not been excluded from the manufacture under any Entry of Notification No.(18) dated 01.04.1995, by which the State Government has declared certain manufacturing processes, which shall not be treated as 'manufacture' - There was no need to list the coal and coke in other forms separately, because Entry No.22 of Part V of Schedule-II of the Act is wide enough to cover all varieties of coal and by-products of coal - Provision of Section 9-B of the Act is clear on this point and the Department has levied tax on difference of sale price and purchase price in accordance with the provision - conversion of steam coal into a smokeless soft fuel i.e. smokeless coke by mechanical process is different commodity, therefore, is liable to tax under the Act - manufactured smokeless soft fuel i.e. smokeless coke out of coal is distinct commodity and also understood in common parlance different from coal, therefore, commodity manufactured is liable to tax under Section 9 of the Act – Assessee appeal dismissed
2016-VIL-255-MAD
M/s ARUN SMELTERS LIMITED Vs THE ASSISTANT COMMISSIONER (CT)
Central Sales Tax Act, 1956 – Assessment - show cause notice - variance of the contents between the pre-assessment notice and the final assessment order – validity of final order of assessment – HELD - A pre-assessment notice or a show cause notice cannot be reduced to an empty formality. It has a purpose and aim to be achieved, which is to provide an opportunity to the person to whom it is directed to know on what lines the assessing authority is likely to conclude the issue finally - Only when an effective opportunity is provided, the assessee can come up with a satisfactory explanation. But if the pre-assessment notice is very laconic then the assessee will be left with no meaningful opportunity to furnish any reply - the impugned order is set aside and the respondents are at perfect liberty to provide an opportunity afresh by drawing a detailed show cause notice to the petitioner – writ petition disposed
CUSTOMS SECTION
2016-VIL-259-DEL-CU
FNS AGRO FOODS LTD Vs COMMISSIONER OF CUSTOMS (PREVENTIVE) DELHI
Customs – show cause notice for alleged violation of the FTDR Act, the FTR Rules, the Customs Act and the schemes of Government of India including the DEPB and VKGUY – HELD - if the licence issuing authority, which in this case is the DGFT, has not questioned the veracity of the transactions undertaken under the licence, the Customs authorities cannot refuse exemption on an allegation that there was any misrepresentation - if there was any misrepresentation it was the licensing authority which had to take steps to cancel the licence - The impugned SCNs do not refer to alleged violations of the Act that are not consequential upon the alleged violations of the FTDR Act or FTR Rules – This aspect has already been examined thoroughly by the Dy DGFT while passing the order - the Dy DGFT during the course of those proceedings consulted the Customs authorities and sought their clarifications on various aspects - the impugned SCNs issued to the Petitioners, more than one and half years after the Dy DGFT exonerated them of the very same allegations, is nothing but a harassment of the Petitioners and an abuse of the process of law - SCN issued by the Commissioner, Central Excise, Noida and Commissioner of Customs (Export), Navi Mumbai are quashed – assessee petition allowed
2016-VIL-339-CESTAT-CHE-CU
K2 MACHINE TOOLS PVT LTD Vs COMMISSIONER OF CUSTOMS (IMPORTS), CHENNAI
Customs – Levy of Anti Dumping Duty on import of parts of injection moulding machine in multiple consignments – Rejection of classification under 84779000 reclassification under 84771000 as ‘injection moulding machines’ – revenue contends that importer has split the 'plastic moulding machine' into more than one consignment to circumvent the payment of Anti Dumping Duty – HELD - Anti Dumping Duty is imposed only on the plastic processing or injection moulding machines when they are imported from the specified country and subject to other conditions - the Chartered Engineer has categorically concluded that the parts imported will not form complete individual machines. The missing parts such as Control Unit, Electrical Parts and Drive Unit are critical parts without which the injection moulding machine cannot be complete and operated. Once it is concluded that what has been imported are nothing but parts of injection moulding machine, the case of the Revenue for imposition of Anti Dumping Duty fails - This is not a case in which circumvention of Anti Dumping Duty has been investigated and ordered under the Anti Dumping law. Consequently, assessee appeal succeeds and the appeals of Revenue fail
CENTRAL EXCISE SECTION
2016-VIL-260-MAD-CE
THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III Vs M/s BRAKES INDIA LIMITED
Central Excise – Cenvat Credit – Job work – whether Tribunal is correct in holding that the impugned goods became fully manufactured goods in the premises of the appellants when the appellant had admittedly done only testing and packing of the goods – whether the input procured solely for the purpose of export is entitled to CENVAT Credit when the goods were subjected only to testing and packing – HELD – the question of law raised by the Department proceeds to a wrong presumption that the assessee had done nothing except testing and packing - This is not a case where the assessee is attempting to claim CENVAT Credit twice over. Whatever credit was claimed by them before they sent for second job work was actually reversed. Therefore, the credit was still available for the assessee to take. The Tribunal was right in holding that testing and packing were part of a series of steps undertaken by the assessee for the manufacture of the goods – Moreover, out of a common order passed by the Tribunal in two appeals the Department has chosen to file one single appeal. But this is not possible for the reason that those two appeals arose out of different show cause notices and different orders in original – revenue appeal dismissed
2016-VIL-336-CESTAT-CHE-CE
M/s CATERPILLAR INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LTU, CHENNAI
Central Excise – availment of Cenvat credit on export of imported input under bond – removal of goods as such - demand equivalent to credit – HELD - manufacturer is entitled to clear the inputs/capital goods on which credit has been taken for export without payment of duty - the goods which are exported do not suffer the duty incidence – it is not appropriate to make a distinction between goods which are exported under ARE-1 procedure on payment of duty under claim for rebate, and those which are exported under bond without payment of duty / reversing the credit under Rule 3(5). Both sets of goods cannot suffer incidence of duty – appellant is not required to reverse cenvat credit taken on the inputs which were imported and subsequently re-exported – assessee appeal allowed
SERVICE TAX SECTION
2016-VIL-340-CESTAT-MUM-ST
M/s RED HAT INDIA PRIVATE LIMITED Vs PRINCIPAL COMMISSIONER, SERVICE TAX, PUNE
Service Tax – Export of services – refund claim under Rule 5 of CCR, 2004 – eligibility of Cenvat Credit and consequential refund in respect of Works Contract Service which is for maintenance of office equipment and building - interest on delayed sanctioned of refund claim – rejection of refund on the ground that Works Contract Service stand excluded from the definition of input service provided under Rule 2(l) of CCR, 2004 – HELD - Works Contract Services are excluded only when it is used for construction service, whereas in the present case input services were used for maintenance of office equipment and building therefore, this particular works contract service does not fall under the exclusion category in the definition of input service, therefore works contract service in the present case is input service and eligible of refund under Rule 5 - irrespective of any circumstances whatsoever, if there is delay beyond three months from the filing of refund, the department is duty bound to grant the interest for the delayed period in sanctioning the refund is as per the prescribed rate of interest under Section 11BB of the Central Excise Act – assessee appeal partly allowed
2016-VIL-341-CESTAT-MUM-ST
COMMISSIONER OF SERVICE TAX, PUNE Vs M/s SHREE GANESH ENTERPRISES
Service Tax – Penalty under Section 78 - whether the unamended provision of Section 78 according to which 100% penalty or amended provision of Section 78 according to which 50% penalty is applicable in the case when the offence was taken place during the period of unamended Section 78 - Revenue’s appeal for imposition of 100% penalty under the erstwhile Section 78 – HELD - neither there was any intention to save the tougher provisions of Section 78 of the Act after 8/4/2011, nor Section 38A of the CEA is legally capable of saving the provisions of erstwhile Section 78 of the Act, as Section 78 is not piece of the delegated legislation. Further, the erstwhile Section 78 of the Act does not exist after 8/4/2011 in view of its substitution by new Section 78 of the Act. Further, the Principle of Beneficial Construction also does not allow imposition of higher penalty under the provisions of erstwhile Section 78 of the Act - in the absence of savings clause in respect of erstwhile Section 78, the new Section 78 shall apply and accordingly the penalty of 50% is imposable - assessee have collected the service tax and not deposited to the Government exchequer and also not filed return - it is a clear case of suppression of fact with intent to evade payment service tax, therefore no reasonable cause has been shown by the assessee in order to invoke the Section 80. The penalty was rightly imposed under Section 78 by the lower authority which is upheld – revenue appeal dismissed – assessee appeal partly allowed
Guest Article
Krishi Kalyan Cess (KKC) applicable w.e.f. 01.06.2016
delCir07
Delhi: Extension in date for filing of online return for fourth quarter of 2015-16
harMemo781
Haryana: Criteria regarding selection of cases for scrutiny assessment under the HVAT Act, 2003 and the CST Act, 1956 for the assessment year 2014-15
dgftTN06
DGFT: Modification in IEC Trade Notice No.6 - Issue/Modification in Importer Exporter Code
CBEC Draft Circular
Draft Circular - CBEC invites suggestions on Single Registration and Return for Importer & Trader
25th of May
2016-VIL-261-CAL
INDIAN OIL CORPORATION LIMITED Vs SENIOR JOINT COMMISSIONER, COMMERCIAL TAXES
West Bengal Valued Added Tax Act, 2003 - whether bitumen emulsion should be regarded as bitumen and covered by Entry 14 of the list of goods taxable at five per cent in Part-I of Schedule C to the Act or would attract tax at the rate of 13.5 per cent under Section 16(2)(b)(a) of the Act - classification of goods based on the relatability of the product to the named entry – whether the nature of the product bitumen has been so changed in its conversion to bitumen emulsion that the resultant product would not be relatable to the entry covered by bitumen – Assessment at higher rate - HELD - The principle, while matching goods against the entries in schedules under the sales tax and VAT laws, ought to be the test of a product’s relatability to a particular entry based on its commercial identity, use and the common parlance test. If any commodity is capable of being covered by several specified entries the best fit would be on a combined assessment based on the commercial identity, common parlance and user tests. The positive co-relation between the concerned goods and the specified entry, based on such three broad tests, ought to provide the answer. But when the choice is between a particular specified entry and the non-descript residuary entry, the assessment should be founded on a negative test: whether the goods are more non-relatable than relatable to the entry on a reasonable application of the three criteria, before they are parked under the residuary entry. There can be no mathematical formula for such an exercise, but there must be a pronounced doubtful co-relation between the goods in question and the specified entry on all three counts before such goods can be banished to the residuary entry, irrespective of whether the residuary entry carries a higher or lower rate of tax - further consideration would be that since an indirect tax as sales tax is passed on to the consumers, whether a dealer should be penalised and made to pay the tax by upsetting an interpretation that has been accepted for a few years - If such are the tests, bitumen emulsion would pass muster to find itself in the company of bitumen in Entry 14 in Part-I of Schedule C to the Act of 2003 - bitumen emulsion is more relatable to the entry covered by bitumen rather than the residuary entry in Schedule CA to the Act – assessee petition allowed
2016-VIL-262-JHR
M/s NATIONAL ENGINEERING INDUSTRIES LIMITED Vs THE STATE OF JHARKHAND
Jharkhand Valued Added Tax Act – levy of penalty for collection and deposition of tax at higher rate of 12.5% instead of prescribed lower rate of 4% – penalty of twice of the amount of tax – bonafide error - HELD - it is admitted fact that instead of 4% of tax to be collected, the petitioner has collected tax at the rate of 12.5% and the same has been deposited with the State Government - no loss has been caused to the State and no prejudice has been caused to any of the parties because of the bonafide error - Moreover, no notice has been issued by the respondent-State under Sections 47 & 48 of the Act and no proceeding has been initiated under those sections – The additional amount of tax recovered by this petitioner from Tata Motors for which input tax credit is also given by the State to the Tata Motors and especially when the petitioner is not claiming any refund for the aforesaid amount the order of penalty is liable to be quashed and set aside – assessee petition allowed
2016-VIL-342-CESTAT-BLR-CU
M/s MARKS LOGISTICS Vs THE COMMISSIONER OF CUSTOMS, COCHIN
Customs – Majority Order - Custom House Agent Regulations – Difference of opinion of forfeiture of security - subletting of license – violation of Regulation 10 of Customs Brokers License Regulations, 2013 – HELD - the revocation of license and forfeiture of security amount is set aside by majority order – assessee appeal allowed
2016-VIL-344-CESTAT-AHM-CE
M/s NAXPAR LAB PVT LIMITED Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, VAPI
Central Excise - appellant cleared ‘inputs’ on which CENVAT Credit was availed to their sister concerns and reversed the CENVAT credit availed at the time of its receipt at their premises - Revenue contention that the appellants were required to pay duty on the value of the said inputs as per Rule 3(4) of CCR, 2001/2002 - adjudicating authority dropped the proceeding on the basis of amended provision which came in to force w.e.f 01.03.2003 - period June 2001 to February 2003 – HELD - the adjudicating authority while deciding the show cause notice adopted the amended provision of Rule 3(4) of CCR, 2001/2002 which came into force from 01.03.2003 instead of Rule 3(4) as was in existence during the relevant period June 2001 to February 2003 - the learned Commissioner (Appeals) after applying the correct position of law confirmed the demand against the appellant - the impugned order passed by the Ld. Commissioner (Appeals) is upheld and assessee appeal is dismissed
2016-VIL-343-CESTAT-KOL-CE
M/s ITC LTD Vs COMMISSIONER OF CENTRAL EXCISE, PATNA
Central Excise – Valuation - Bank Charges, Interest in excess of CSD. Advertisement of Sales Promotion, Below the line Expenses (BTL) and interest on trading – Additions / deductions to arrive at the correct assessable value and quantification of duty - HELD - It is observed from the case records that issues of valuation dispute relating to Bank charges, Interest in Excess of CSD, Advertisement & Sales Promotion, Below the line expenses & interest on Trading have been decided by Jurisdictional Adjudicating authorities at Bangalore, Parel, Saharanpur & Kidderpore factories in the light of ratio laid down by Apex Court. It is submitted by the appellant that orders passed by the above adjudicating authorities have been accepted by the department on these deductions/additions and also the method of quantification. This fact can be verified by Adjudicating authority of Munger factory and if what is stated by the Learned Advocate of the appellant is found to be true then the same ratio laid by other jurisdictional adjudicating authorities has to be followed by AC/DC in-charge of Munger factory, including the method of quantification of differential duty – matter remanded
2016-VIL-346-CESTAT-ALH-ST
M/s RIVER BUILDERS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD
Service Tax - construction of residential complex service – late filing of ST-3 Return – disallowance of claim abatement for material component – conditions prescribed under Notification No.01/2006-ST dated 01.03.2006 – Limitation - HELD - the Agreement is for sale of completely constructed flat. It means that the party are engaged in construction of a complete flat and not completion and finishing activities. It is thus established that the first condition of the notification is fulfilled - When a constructed flat is sold, it is obvious that value of all materials and goods would be part of the price of that flat – as there is no clause relating to free supply of materials by the buyer or for separate sale of material used in the construction of flat. From the terms of the Agreement, there is no doubt that the value of goods and material was included in the price of the flat to be sold. Therefore, the second condition for availing the benefit granted under the said notification is also fulfilled - The tenor of the Agreement clearly indicates that there is no mention of sale of land separately. It is found that the Agreement is for sale of flat, not for construction only - The due service tax has been paid in cash. Thus, it is proved that the party have not taken Cenvat credit - There is no mention of Notification No.12/2003-ST dated 20.06.2003 in the ST-3 Returns which is indicative that the party have not taken benefit of No.12/2003-ST dated 20.06.2003 - all the conditions prescribed under Notification No.01/2006-ST dated 01.03.2006 are fulfilled by the assessee. Hence, no reason to deny the benefit of Notification No.01/2006-ST so far it relates to availment of abatement of 25% - penalty is reduced and assessee appeal allowed
2016-VIL-345-CESTAT-MUM-ST
CROWN WORLDWIDE MOVERS PRIVATE LIMITED Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax - providing of taxable service as well as non taxable activity i.e. Trading Activity – failure to comply with the provision of Rule 6 of CCR, 2004 – demand and penalty – HELD - prior to 31/3/2011 there was no clarity whether the Cenvat credit in respect of services used for trading activity is required to be reversed or otherwise. Trading activity is included in the exempted services w.e.f. 1/4/2011 since then appellant was reversing the credit attributed to the Trading Activity. However for the period before 31/3/2011 appellant paid entire amount alongwith interest. In view of lack of clarity on the inclusion of Trading Activity under exempted service w.e.f. 1/4/2011, the appellant has shown a reasonable cause for non-reversal of the Cenvat credit attributed to the trading activity - penalty imposed under Section 78 is waived by invoking Section 80 of the Finance Act, 1994 – assessee appeal allowed
Guest Article
Indirect Tax Dispute Resolution Scheme, 2016: Overview
mahaCir18T
Maharashtra: Go Live of SAP based new registration functionality
harNoti15
Haryana Value Added Tax (Second Amendment) Rules, 2016 - Amendment of Rule 11, 13 & 14
telNotiGO85
Telangana: Andhra Pradesh Value Added Tax Appellate Tribunal Regulations, 2005 (Telangana Adaptation) Order, 2016
telCir18
Telangana: Ease of Doing Business - VAT/CST/TOT Registration Procedures
dgftTN11
DGFT: Inclusion of Regional Office Joint DGFT, Rajkot in the jurisdiction of Committee on Quality Complaint & Trade Dispute (CQCTD)
dgftTN12
DGFT: Amendment in Appendix - 1A and 6J of Appendices and Aayat Niryat Forms of FTP 2015-20 - Jurisdiction of Special Economic Zones
FCP2505
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
gujNotiGHN34
Gujarat Value Added Tax (Second Amendment) Rules, 2016 - Amendment of Rule 37 - Grant of provisional refund upto rupees one lakh for a full amount
26th of May
2016-VIL-264-DEL
COMMISSIONER, COMMERCIAL TAX, GOVT OF MADHYA PRADESH Vs THE OFFICIAL LIQUIDATOR
Madhya Pradesh General Sales Tax Act, 1958 - Section 33-C - Section 53 of M.P. Commercial Tax Act, 1994 - Section 530 of Companies Act, 1956 – first charge in winding-up proceedings - Sales Tax dues - State’s claim as a secured creditor – HELD - The introduction of Section 529A in Companies Act is conclusive inasmuch as the Parliament intended that all secured creditors and workmen inasmuch as their dues are concerned are to be treated alike. The question of primacy of State’s dues can be validly distributed only if the State law specifically so provides and the State law is specifically reserved for President’s assent on this aspect - the State of M.P. has not been able to show that the assent received from the President either in 1958-59 or in 1995 or before the introduction of Section 33-C in 1976 had received such a particular assent. In other words, Presidential assent to this law which seeks to override or recreate first charge or charge which alone can rank the State’s dues along with those of secured creditors do not seem to have been established – matter remanded to single judge to examine whether the statute reserved for the assent of the President, specifically drew to the notice of the President (i.e. the Central Government) the issue of repugnancy between the provisions, i.e. Section 33-C of the 1958 Act and Section 53 of the 1994 Act on the one hand, and Section 529A and Section 530 of the 1956 Act on the other - The appeals are allowed by remand
2016-VIL-265-UTR
NIDHI SEEDS CORPORATION Vs TRIBUNAL, COMMERCIAL TAX
Uttarakhand Vat Act, 2005 – section 54 - Appellate Tribunal – non-functioning of Commercial Tax Appellate Tribunal in the absence of administrative member - coercive measures for recovering tax dues – HELD - direction is issued to the State Government as well as to the Commissioner of Commercial Tax to initiate the process of appointment of an administrative member of Appellate Tribunal, at the earliest possible but not later than four weeks of receipt of certified copy of this order - for a period of four weeks from today the effect and operation of the impugned recovery citations shall remain stayed – writ petition disposed
CUSTOMS SECTION
2016-VIL-266-DEL-CU
UNLIMITED NUTRITION PVT LTD Vs THE COMMISSIONER OF CUSTOMS
Customs - Import of proprietary foods – whether proprietary foods are outside the purview of the FSS Act, the FSS Regulations 2011 and the FSS Packaging Regulations 2011 - compliance with the labelling requirements - labelling of imported goods at the port of entry - Overriding nature of the FSS Act as regards imported food items – HELD - the stand taken by the FSSAI that the imported proprietary foods fall outside the ambit of the FSS Act, Rules and Regulations is not borne out on a correct and holistic reading of Section 22 of thereof together with the FSS Regulations 2011 - FSSAI should co-ordinate with the Customs authorities and work out the modalities of ensuring that the requirements of the FSS Act and the Regulations thereunder are complied with in respect of the import of food articles. It can adopt the device of issuing advisories provided they are placed before the Parliament. Additionally, it should be possible for the Customs to re-visit and strengthen the protocols that have been evolved at joint meetings with the FSSAI - It is, therefore, directed that the issues and concerns voiced by the FSSAI in the present matter should be discussed at the meeting of the Coordination Committee of the Customs and the FSSAI and a protocol be drawn up and notified by way of a Circular by the Customs authorities to ensure that, in a co-ordinated manner, the requirements of the FSS Act, and Rules and the Regulations thereunder in relation to the imported food articles are complied with - Commissioner of Customs will initiate an inquiry into the affixation of labels by the Petitioner on the master boxes while they were at the CWC warehouse, without the permission of either the Customs or the CWC - writ petition disposed
2016-VIL-347-CESTAT-BLR-CU
M/s LGC PROMOCHEM INDIA PVT LTD Vs COMMISSIONER OF CUSTOMS AND SERVICE TAX, BANGALORE
Customs – appellant imported chemicals declaring them as Pharmaceutical Reference Standards and classifying the same under Customs Tariff Heading No.38 22 - benefit of Notification No.21/2002-Cus dated 1.3.2002 and Notification No.12/2002-Cus dated 17.3.2012 – revenue contention that the goods imported are Certified Reference Materials (CRM) and seeking classification under respective Chapter Heading based upon the chemical composition - demand of differential duty, denial of benefit of Notifications and imposition of penalties – HELD - The imported products are nothing but Reference Standard samples of various bulk drugs which are used for testing the parameters of either the raw materials or the finished goods of the appellant’s clients - the appellant had shown that the imported products, which had label and certificate of analysis from United State Pharmacopoeia convention indicating that Pharmaceutical Reference Standards is as per the standard laid down by them - Pharmaceutical Reference Standards which are accompanied by the certificate issued by US Pharmacopoeia are distinctive product and gets classified under laboratory chemical or under Chapter Heading 3822 read with Chapter Notes of Chapter 38. The conclusion that can be reached is that Pharmaceutical Reference Standard cannot be classified as certified Reference Materials and consequently not extending the scope of applicability of notification to products other than covered under Chapter Heading 28 and Chapter 29 is also not applicable – the products imported are classifiable under Chapter Heading 3822 - Demand for the duty is set aside - Assessee appeal allowed on merits as well as on limitation
CENTRAL EXCISE SECTION
2016-VIL-263-DEL-CE
DCM SHRIRAM INDUSTRIES LTD Vs UNION OF INDIA
Central Excise – manufacture of Phenyl Acetic Acid - captive consumption of intermediate products viz., Benzyl Chloride (‘BeCL’) and Benzyl Cyanide (‘BeCN’) - Demand in respect of the BeCN used in the manufacture of PAA invoking extended period limitation under Section 11A(1) - deliberate suppression of information – HELD - the Department was indeed aware of the fact that the Petitioner was clearing PAA, made from captively consumed BeCN cleared by paying nil duty and further that PAA was also being cleared upon payment of nil duty. The fact that it asked the Petitioner to reverse the MODVAT credit on inputs purchased from outside and the Petitioner complied, contradicts the Department's case to the contrary – further, the two SCNs shows that the second SCN for the extended earlier period is a virtual repeat of the first SCN - the conditions for invoking the extended period of limitation in terms of the proviso to Section 11 A (1) of the CE Act were not fulfilled and the demand raised in respect of the BeCN used in the manufacture of PAA for the extended period of 1st March 1986 till 31st December 1989 is barred by limitation – demand set aside – assessee appeal allowed
2016-VIL-350-CESTAT-MUM-CE
VIDYUT METALLICS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III
Central Excise – payment of the differential duty on the basis of the CAS4 – demand under Section 11A – payment of duty – assessee contesting levy of penalty and interest – HELD - the assessable value of goods is to be determined under Rule 8 of the Central Excise Valuation Rules, 2000, according to which the valuation has to be done on the basis of 110% of the cost of production and the cost of production can be derived on the basis of CAS4. The CAS4 can be made only after completion of the financial year when the Balance Sheet is finalized. In such a situation, it cannot be expected from the assessee to deposit the correct duty at the time of clearance of the goods - Revenue’s appeal seeking for imposition of penalty is dismissed - As per Section 11AB when the duty is determined under Section 11A interest is required to be paid consequently under Section 11AB. Therefore in the present case also the assessee is liable to pay the interest - appeals filed by Revenue as well as assessee are dismissed
SERVICE TAX SECTION
2016-VIL-348-CESTAT-CHE-ST
M/s VOLTAS LIMITED Vs CCE & ST, COIMBATORE
Service Tax - Job of erection, installation, commissioning of Textile Machineries – erection, installation, commissioning service or Consulting Engineer Service - Period involved 01.04.1998 to 30.06.2003 – HELD - the score of taxation is examined from the activity described by investigation. Board Circular No.79/9/2004-ST dated 13.05.2004 is candid on the scope of the taxing entry - when a taxing entry was not in statue book, proposition for taxing erection, installation and commissioning service during the material period does not arise - the erection, installation and commissioning service came to the statute book for levy w.e.f. 01.07.2003. Therefore, the service provided prior to that date shall be beyond the scope of levy – assessee appeal allowed
2016-VIL-349-CESTAT-MUM-ST
DECOS SOFTWARE DEVELOPMENT PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, PUNE-III
Service Tax - Refund claim under Rule 5 of the CCR, 2004 – Cenvat Credit pertaining to prior period - whether the amount of Cenvat Credit considered by the lower authorities for arriving at the Net Cenvat Credit in the quarter July to September 2012 by reducing the amount of Cenvat Credit in the quarter July to September 2012 is correct or otherwise – calculation of net cenvat credit – HELD - even though the services used for export of service for the quarter July to September, 2012 if such services were received during the period prior to 1-7-2012 and Cenvat Credit taken prior to 1-7-2012, the same cannot be included in the Net Cenvat Credit for the quarter July to September, 2012 - the appellants are 100% exporting their services, therefore if the appellants would have availed Cenvat Credit in the quarter April to June 2012, nothing prevented them to claim the refund for the quarter April to June 2012 but it appears that since the appellants have availed the Cenvat Credit in the quarter July to September 2012, they can only make claim of refund of Cenvat Credit for the quarter July to September 2012. However, since the lower authorities have concluded the aspect of availment of Cenvat Credit in respect of the disputed amount only on the basis of S.T.3 return they have not verified whether the Cenvat Credit was in fact availed in the quarter July to September, 2012. Therefore the matter needs to be remanded to verify the fact on the basis of Cenvat Credit account produced by them as well as any other corroborative evidences if required - even though the receipt of input is in the different period and credit was availed in the subsequent period, the period when the credit was availed is the relevant period and not the period when input/input service was received – assessee appeals are allowed by way of remand
FCP2605
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
stCir194
Service Tax: Accounting code for payment of Krishi Kalyan Cess
cuNoti35
Customs: Amendment in Notification No.27/2011 - Export Duty - Omission of Chromium ores and concentrates
27th of May
ceNoti28NT
CENVAT Credit (Seventh Amendment) Rules, 2016 - Regarding CENVAT credit of the Krishi Kalyan Cess
SERVICE TAX NOTIFICATIONS
stNoti31: Service Tax (Third Amendment) Rules, 2016 - Amendment regarding Swachh Bharat Cess & Krishi Kalyan Cess
stNoti30: Refund to SEZ Unit orDeveloper
stNoti29: Amendment to Notification No. 39/2012-ST, dated the 20th June, 2012 - Levy of Krishi Kalyan Cess
stNoti28: Regaarding exemption fromlevy of Krishi Kalyan Cess
stNoti27: Notification No. 30/2012-ST shall be applicable mutatis mutandis for the purposes of Krishi Kalyan Cess
harNoti16
Haryana Amnesty Scheme, 2016 for the dealers affected during reservation agitation in the month of February, 2016
delNoti284
Delhi: Withdrawal of Form Delhi Sugam-1 (DS1)
gujNotiGHN35
Gujarat: Deletion of Entry 246 pertaining to Salt from the list of Industrial Input
cuNoti20ADD
Customs - Levy of Anti-Dumping Duty on ?Coumarin? of all types [Tariff Item 2932 20 10], originating in or exported from People?s Republic of China, for a period of five years
dgftPN13
DGFT: Single application for filing claim under MEIS for shipments from different EDI Ports
28th of May
karNotiFD50
Karnataka: Exemption from Purchase Tax and Cess on Sugarcane
chhgNoti57
Chhattisgarh: Draft amendment in Rule 62-A
Guest Article
Rate of interest on delayed payment of duty as applicable during the impugned period – Issues therein
30th of May
2016-VIL-12-TRB
M/s THYSSENKRUPP ELECTRICAL STEEL INDIA PVT LTD Vs THE STATE OF MAHARASHTRA
Central Sales Tax Act – Section 3 – Section 6 - inter-state sale - stock transfers - branch transfers - movement of goods covenant to the pre-existing purchase orders - whether the transfer made of goods from Maharashtra State to the branches in another State were by predetermined order or a branch transfer - transactions in the form of (a) where standard goods are sent to branch, (b) where goods are sent to branch on the basis of orders placed, (c) where goods are ordered by one party but delivered to another party being standard goods – HELD – For transactions where standard goods are sent to branch, assessing authority has already granted relief - So far as transaction where goods are sent to branch on the basis of pre-existing purchase orders, and where goods are ordered by one party, but delivered / sold to another party being standard goods. Sales record though shows that goods were moved to OMS branches against purchase order of one buyer, but sold / delivered to other buyer customer, on detail verification, it is realised that those customers had put purchase order prior to despatch of goods from Maharashtra State. Exchange of goods on the count of purchase order makes no difference because goods are standard goods of common requirement – Such transactions will have to be treated as inter-state sales as movement of goods have taken place due to pre-existing purchase order - Assessee appeals are partly allowed
2016-VIL-271-DEL
VAYAM TECHNOLOGIES LTD Vs COMMISSIONER OF TRADE & TAXES
Delhi Value Added Tax Act, 2004 – Section 59(2) – Validity of exercise of power under Section 59 (2) of the Act in the absence of any rules being framed thereunder – HELD - Apart from the fact that the Commissioner has to exercise the power for 'the proper administration' of the DVAT Act, he has to make sure that what is being asked to be produced, in the form of books of accounts and other documents, are "related to the activities" of either the person to whom such notice is issued or any other person as the Commissioner may deem necessary - even in the absence of any rules being framed under Section 102 (2) (z) r/w Section 59 (2) of the Act, the power of the Commissioner to call upon a person to produce the books of accounts and other documents can be exercised under Section 59 (2) of the Act - the Petitioner, along with other dealers, can make a representation to the DT&T that Rules in terms of Section 102 (2) (z) read with Section 59 (2) of the DVAT Act should be framed as such a rule will serve the salutary purpose of guiding the officers in the exercise of their powers and serve to also act as a check on the possible abuse of powers - writ petition disposed
2016-VIL-270-AP-CU
M/s NOBLE IMPORT PRIVATE LIMITED Vs UNION OF INDIA
Customs - Import of Gold jewellery under the Preferential Tariff Agreement at concessional rate - Provisional assessment of goods – demand of bond along with full financial guarantee to cover the differential duty – Failure to furnish documentary evidence to show that the goods satisfy the Origin criteria under Rule 5 - Certificate of Origin – HELD - It is only after a retroactive check is conducted, and the concerned authorities are satisfied that the Certificate of Origin cannot be accepted, are they entitled, thereafter, to pass an adjudication order under the Customs Act. Without conducting a retroactive check, in terms of clause 16(a) of Annexure III to the 2009 Regulations, it was not open to the respondent to pass an adjudicating order. The impugned orders passed even before conducting a retro-active check in terms of clause 16(a), are without jurisdiction - respondent shall exercise his discretion, under Regulation 4 of the 2011 Regulations, in a reasonable and rational manner. In case, he considers it necessary for surety or security to be furnished by the petitioners for release of the imported goods, in terms of Regulation 4, he shall assign reasons therefor - On a reading of para-7.1, of the Circular dated 06.10.2015 in its entirety, it is evident that the direction of the CBEC to the authority, to obtain 100% bank guarantee, was only in the context “of wholly obtained gold jewellery from Indonesia”, and not “not wholly obtained gold jewellery”. We are satisfied that Circular dated 06.10.2015 does not fetter the exercise of discretion by the proper officer under Regulation 4 of the 2011 Regulations - respondent to release the imported goods, after exercising his discretion in terms of Regulations 2 and 4 of the 2011 Regulations and assigning reasons therefor - Writ Petitions are disposed of
2016-VIL-354-CESTAT-KOL-CE
TATA STEEL LIMITED Vs COMMISSIONER OF CENTRAL EXCISE, JSR
Central Excise – valuation – Addition of Joint Plant Committee levies for the purposed of determining the assessable values of the specified iron and steel products – Quantum of levy - whether appellant has correctly calculated duty liability based on remittances made to JPC or the duty liability should be as calculated by the Adjudicating authority - appellant contention that duty liability can be confirmed only on the amounts remitted by the appellant to JPC and periodical returns cannot be made as the basis of calculating JPC levies – HELD – the procedure prescribed that all the member Steel Plants, including the appellant, were required to remit JPC levies to the Joint Plant Committee. Under this factual matrix department was not right in asking the appellant to provide certain information on production & clearances made or to calculate JPC levies from the figures available in the periodical RT-12 returns filed with the department. What is required to be added to the assessable value as per the judgement delivered by the Apex Court is the JPC levies remitted to the JPC. If there was any short payment of JPC levies then JPC could have asked the appellant to remit the same but department cannot calculate a figure to add to the assessable value on their own based on RT-12 returns - At the same time appellant should have produced either a certificate from JPC or produce a chartered / cost accountant certificate indicating the basis of calculating duty liability - Demand calculated by the department is not sustainable – Assessee appeal allowed by way of remand to the Adjudicating authority for deciding the issue of quantification of demand
2016-VIL-272-GUJ-CE
COMMISSIONER OF CENTRAL EXCISE & CUSTOMS Vs MARIGOLD COATINGS PVT LTD
Central Excise – Modvat Credit - Rule 57-G of the CER, 1944 - Whether assessee was entitled to take cenvat credit on the inputs on the basis of documents endorsed by the consignee – HELD - Rule 57-G was amended with effect from 1.4.1994 by which invoices issued by the manufacturers of goods and the dealers in the prescribed form are considered valid duty paying documents and thus endorsement of duty paying documents, were eliminated - major changes were made in the procedure prescribed in availing cenvat credit. By virtue of such changed procedure, only upon the invoices being issued under Rule 52-A, the cenvat credit, on the strength of such documents could be availed by the manufacturer - The decision of the Tribunal is reversed. Revenue Tax Appeal is allowed
2016-VIL-355-CESTAT-DEL-CE
NITIN SPINEERS LTD Vs CCE, JAIPUR
Central Excise - manufacture of cotton yarn and polyester yarn – Clandestine removal - duty demand on yarn found short during physical verification and not accounted as compared to log book maintained for packing materials – unaccounted clearance - HELD - Mere shortage detected cannot ipso facto lead to the allegation and findings of the clandestine removal - even the shortage originally found on stock taking was later adjusted in the de novo proceedings, which only shows that the original stock taking and demand notice based on such verification was not fully correct - the demand of duty on account of clandestine removal solely based on the alleged shortage of excisable goods cannot be sustained - Mismatch between the entries in the log book of the packing department and entries in the RG-I - there is absolutely no corroboration and the demand is made only on the basis of certain comparison between a non-statutory record maintained for packing materials and the entries in the statutory records, RG-I - no corroboration of any nature has been brought out by investigation to support the allegation of clandestine removal of unaccounted goods - the impugned order is not legally sustainable and accordingly, the same is set aside – Assessee appeals are allowed
2016-VIL-357-CESTAT-MUM-ST
VARAD FERTILISERS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, AURANGABAD
Service Tax - demand of Service Tax under GTA service on transportation subsidy from Government – HELD - in the case of service the subsidy of transportation given by the Government is not paid by the service provider. The gross amount of the service can only be taken the value which is paid on payable by the service recipient. In the present case also, the subsidy given by the government, since not a part of the amount paid by the service recipient to the service provider, the subsidy cannot be included in the gross value of service. Therefore, the ratio of the Hon’ble Supreme Court judgment in Mazagon Dock case is directly applicable to the present case - the subsidy amount will not attract service tax. The adjudicating authority is directed to re-quantify the service tax liability by reducing the amount of subsidy - Penalties under Section 76 & 78 are waived the late fee is upheld - assessee appeal is partly allowed
2016-VIL-356-CESTAT-CHE-ST
M/s VEDANTA LTD Vs COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI
Service Tax - Business Auxiliary Services – liability under reverse charge mechanism u/s. 66 (A) of the FA, 1994 - requirement of informing the department in form EXP-I before claiming the exemption – Payment of entire service tax along with interest before SCN – levy of penalty – revenue neutral - HELD - the entire amount of service tax, paid under the reverse charge mechanism in respect of commission agent service was immediately available to the appellant as Cenvat credit - the contention of the appellant that there was no intention to evade payment of duty has considerable force - The allegation of suppression with the intention to evade payment of tax not being sustainable, the Revenue was not justified in contending that the appellant was hit by the bar under Section 73(4) - To suggest that in every case where tax is being paid on being pointed out by the Department, the benefit of Section 73(3) would not be available would tantamount to rendering Section 73(3) redundant, which is clearly impermissible - benefit of Section 73(3) is allowed and penalty is set aside – appeal allowed
Article on KKC
Krishi Kalyan Cess – Applicability & Open Issues
hpAct10
Himachal Pradesh Value Added Tax (Amendment) Act, 2016 - Amendment of section 11, 16 & 50A and Insertion of Section 14-A, 27-A, 49-A
31st of May
Jammu & Kashmir Notification
jkNotiSRO161: Major amendment in JKVAT Schedules 'A', 'C' & 'D-I' and enhancement in rate of tax from 13.5% to 14.5%
jkNotiSRO162: Regarding remission of tax
jkNotiSRO163: In JKVAT Schedule 'A' entry 34 shall continue to be in the said schedule till 31-03-2017
Jammu & Kashmir Bugdet 2016-17
Budget Highlights & Budget Speech
2016-VIL-273-ALH
M/s MOHAN MEAKIN LIMITED Vs STATE OF U.P.
U.P. Excise Act, 1910 – Demand/dues – Principle of merger - words "becomes payable" under Section 38A of the Act – merger of order of the High Court with the order of the Supreme Court – Revenue contends that with the setting aside the judgment of the High Court by Supreme Court, the original demand revived and since the amount was not paid as per the original demand, interest became payable – imposition of penal interest at the rate of 18% - HELD - Once the High Court had quashed a demand, the excise authorities did not have any authority to realize excise revenue nor could the excise department could make a valid demand for payment of excise - the quashed demand order was no longer in existence and, therefore, there was no valid demand for payment of excise duty during the period when the order of the High Court prevailed. It is only when the Supreme Court reversed the decision of the High Court that the excise demand became payable upon a fresh notice of demand. Penal interest becomes payable when the fresh demand is not paid within the stipulated period. In the instant case, the excise demand was paid within the stipulated period and, therefore, the question of demand of penal interest does not arise - The contention that the principle of merger would apply and that the demand raised by the excise department would automatically revive pursuant to the quashing of the judgment of the High Court is wholly erroneous - the impugned demand of penal interest cannot be sustained and is quashed - writ petition allowed
2016-VIL-274-KAR
M/s NAV BHARAT STEEL Vs STATE OF KARNATAKA
Karnataka Value Added Tax Act – section 10 & Section 70 - input tax rebate on the basis of photostat tax invoices – burden of proof – HELD - the burden lies on the petitioner to establish that the dealers from whom the petitioner had purchased the goods have remitted the tax collected to the Government. Mere obtaining the registration number by the selling dealers would not suffice to claim input tax credit unless the petitioner has discharged the burden of proof in support of the input tax claimed. No input tax credit could be allowed on the basis of the photostat copies of tax invoices. Availing of input tax credit on photostat tax invoices / bogus invoices in the absence of selling dealer remitting the taxes to the Government and the investigations providing that they are non-existing dealers amounts to violation of the provisions of the Act and attracts levy of penalty under Section 72(2) of the Act - revision petitions are dismissed
2016-VIL-359-CESTAT-MUM-ST
KESARWANI ZARDA BHANDAR Vs COMMISSIONER OF CENTRAL EXCISE, THANE-I
Service Tax – input service - GTA service - transportation of goods from one unit to another – denial of Cenvat Credit – HELD - there is no dispute that the appellant have paid the service tax on GTA service, which was performed for transportation of goods from their Allahabad unit to Kalher depot. Therefore the service tax paid in respect of certain service even if service was undertaken other than the appellant’s factory, the credit can be availed at any one place. In the present case, the credit was admittedly taken by the appellant and the same was not taken by any other unit. Without prejudice to the above, even if it is accepted that on the part of the appellant no service exist, the payment of service tax made by the appellant is the service tax paid in excess, therefore the credit of such excess paid service tax is allowable - appellant is entitled for the Cenvat Credit. The impugned order is set aside and the appeal is allowed
2016-VIL-361-CESTAT-MUM-ST
COMMISSIONER OF CENTRAL EXCISE, GOA Vs M/s MACHADO & SONS AGENTS & STEVEDORS PVT LTD
Service Tax - Demand of Service Tax on amounts pertaining to Port services, Cargo Handling, Steamer Agents - amounts received by the assessee as reimbursement charges – HELD – from the nature of the payments made it can’t be said that such payments are in the nature of expenditure incurred by the assessee for providing the taxable services and hence can’t be included in the taxable value. Moreover, the assessee says that the recipients of such payments have charged the Service Tax to their principals but they have not taken any credit of such tax payment. If they are the recipient of the service then they would have taken the Service Tax paid as credit. It implies that they have acted as only agents to their principals who paid the amounts or reimbursed the expenses on such services. Such expenses can’t be linked to the services provided by the assessee - asking agent to include the cost of job in his agency income and pay the tax is not tenable - the activity of the respondent is covered as an activity of a pure agent - the impugned order is correct and legal – revenue appeal dismissed
2016-VIL-358-CESTAT-DEL-CE
MAHENDRA STRIPS PVT LTD Vs CCE & ST, RAIPUR
Central Excise - recovery of Cenvat credit on ground of inputs not used in the manufacture of final product as they were lost in fire - recovery of Cenvat credit only on the basis of payment of compensation by the insurance company – HELD - No evidence or verification has been discussed to support the case of denial of Cenvat credit by the Revenue. The compensation of insurance company is for damage to the quality of the raw material - Though the appellant did not produce any documentary evidence to substantiate such claim it is also a fact that Revenue did not produce any evidence of total loss of the said raw materials except referring to the claim and insurance payment - In the absence of categorical assertion of total loss with evidence, the statutory records maintained by the appellant are to be relied upon. As such, the impugned order is not sustainable and the same is set aside - assessee appeal is allowed
2016-VIL-360-CESTAT-AHM-CE
M/s HERANBA INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, DAMAN
Central Excise - conversion of DTA unit into 100% EOU - transfer of Cenvat credit balance lying in the books of account at the time of conversion – as per revenue the CENVAT Credit lying unutilized as on the date of conversion of DTA unit to 100% EOU would lapse and cannot be transferred and utilized by the 100% EOU – HELD - at the material time the CER or CCR did not contain any provision barring the 100% EOUs from availing cenvat credit or utilizing the same for payment of duty on excisable goods removed to the DTA or for payment of duty on goods exported under claim for rebate. Also there exists no bar for a DTA carrying over inputs and the cenvat credit balance in its accounts when it got converted into an EOU - Cenvat Credit Rules does not prohibit the domestic unit converted into an 100% EOU, availing and utilizing the Cenvat credit lying in balance - impugned order is set aside and assessee appeal allowed
2016-VIL-275-DEL-CU
HLPL GLOBAL LOGISTICS PVT LTD Vs THE COMMISSIONER OF CUSTOMS (GENERAL)
Customs - Customs Brokers Licensing Regulations 2013 - completion of proceedings concerning the revocation of the CHA licence within the time period – HELD - Petitioner not having been issued the SCN within ninety days of receipt of the offence report by the Customs, the SCN issued to it by the Commissioner of Customs (General) is clearly unsustainable in law. The order confirming the suspension of the Petitioner's CB licence cannot also be continued on account of the failure to issue the SCN and therefore complete the enquiry within the time limit specified in Regulation 20. Consequently the impugned order is hereby declared to be invalid and set aside on that basis – In favour of assessee
mahaNotiCR77
Maharashtra: Amendment in MVAT Schedule-D - Increase in rate of tax on Motor Spirit
Jammu & Kashmir Notification
jkNotiSRO165: Jammu and Kashmir Entry Tax on Goods Act, 2000 - Amendment in SRO 428, dated 19.12.2003 - Exemption to plant, machinery, equipment or any consumable goods
jkNotiSRO166: Notification SRO 24 dated 31st January, 2004 - Made effective upto 31st of March, 2017
jkNotiSRO167: Jammu and Kashmir General Sales Tax Act, 1962 - Amendment in Schedule-B
jkNotiSRO168: Jammu and Kashmir General Sales Tax Act, 1962 - Amendment in Schedule-A - Regarding Aviation Turbine fuel
jkNotiSRO169: Amendment in Schedule-A of notification SRO 91 dated 16.03.2006
jkNotiSRO172: Supercedes Notification SRO 169 - Amendment in Schedule-A of notification SRO 91 dated 16.03.2006
mpNoti32
Madhya Pradesh: Notifies two classes of registered dealers for the purpose of assessments
delCir08
Delhi: New Composition Scheme for Restaurants and Halwais
ceNoti29NT
Indirect Tax Dispute Resolution Scheme Rules, 2016
dgftPN14
DGFT: Amendment in Appendix-6H - Procedure to be followed for reimbursement of Central Sales Tax on supplies made to EOUs and units in EHTP & STP
cuNoti78NT
Customs: Tariff Notification in respect of fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Gold and Sliver
cuCir22
Customs: Procedure regarding filing of ex-bond bill of entry
cuCir21
Customs: Security under section 59 (3) of the Customs Act