SUMMARY FOR THE MONTH OF JUNE

PART-I (1st June to 15th June)

 

 

 

1^st June

 

cuNoti22ADD

Customs: Imposition of definitive anti-dumping duty on "Methyl Acetoacetate", originating in or exported from USA or China PR, for a period of five years (unless revoked, superseded or amended earlier)

 

cuNoti21ADD

Customs: Imposition of anti-dumping duty on 'Dichloromethane (Methylene Chloride)' of all types [tariff item 2903 12 00], originating in or exported from People's Republic of China or Russia

 

dgftPN15

DGFT: Ten additional Pre-Shipment Inspection Agencies are notified as PSIAs in terms of Para 2.55(d) of HBP 2015-20 in Appendix 2G

 

stLetter310516

Service Tax: Enactment of Finance Bill, 2016

 

rajNoti122

Rajasthan: Amendment in Notification No. F.16(708)/Tax/CCT/2015/7307 dated 31.12.2015 - Regarding e-commerce Form EL-1, EL-2 and EL-3

 

gujNotiGHN36

Gujarat Value Added Tax (Third Amendment) Rules, 2016 - Amendment of Rule 5

 

gujPN310516

Gujarat: Guideline for Ecommerce Operator

 

2016-VIL-13-TRB

M/s MERK KGAA, GERMANY Vs THE STATE OF MAHARASHTRA

Maharashtra Sales Tax - Transfer of the Right to use any Goods for any purpose Act, 1985 – taxability of royalty income – Dealer - lease right to use goods trademark for consideration - situs of sale – irregular assessment – HELD - Assessment orders being mere irregular and not illegal cannot be set aside - agreement executed between the parties, it clearly goes to show that the licensor i.e. the appellant is registered owner of the trademark - the agreement itself makes substantially clear that the licensee has to pay royalty for use of the licence granted to him of use of trademark. Therefore contention that appellant is not receiving royalty for use of his Trade mark, cannot be accepted. Therefore, there has been transfer of right to use the trademark (goods) for consideration – Since appellant receives royalty that means some consideration has passed as commission or remuneration or otherwise. Hence, the appellant falls within definition of ‘dealer’ – the circumstances are sufficient enough to draw conclusion that so far as the right given to licensee is concerned, situs of sale in the instant case would be in Mumbai and therefore the Commissioner of Sales Tax, Mumbai has jurisdiction to levy tax under the Lease Act - the provisions of Lease Act would be applicable and the appellant is liable to pay tax under Lease Act – penalty set aside - assessee appeal partly allowed

 

2016-VIL-277-JHR

M/s JOSH MINING & INFRACON PVT LTD Vs THE STATE OF JHARKHAND

Jharkhand Value Added Tax Act, 2005 – levy of penalty by treating purchase of capital goods amount as a turnover amount - blocking of road permit – HELD - purchase of capital goods cannot be treated as turnover - whenever any new industry is established capital goods are bound to be purchased first and turnover takes sometime. This “sometime” may be of few months. These aspects of the matter have not been properly appreciated while issuing the show cause notice - Tax payers cannot be called upon overnight to give reply except emergency so requires like disposal of the properties by the assessee etc. - it appears that there is a need of having 'Orientation or Refresher Course' by the State for such type of officers so that this type of error should not be repeated otherwise, this further resulted into multifariousness of the courts proceeding – writ petition disposed in favour of assessee

 

2016-VIL-362-CESTAT-CHE-CU

M/s ANTOINE & BECOUEREL ORGANIC CHEMICAL CO. Vs COMMISSIONER OF CUSTOMS (AIRPORT & AIR CARGO), CHENNAI

Customs - import of Tranexamic Acid without Form-10 licence under Drugs and Cosmetics Act, 1940 - smuggling the prohibited goods - section 2(39) r/w section 2(33) of the Customs Act, 1962 – re-export of goods – redemption fee - Fraud – HELD - Beginning from the origin of the goods from China from the exporter till that reached India and MAWB presented to Customs, the appellant was real importer on record without having drug licence. Therefore, at this juncture, it would be necessary to state that at the interest of the nation, the DGRI may cause enquiry and ascertain whether M/s. DHL Logistics Pvt. Ltd., is engaged in the trading of drug i.e., Tranexamic Acid - When the collusion and fraudulent design of the exporter, importer-appellant and M/s. DHL Logistics Pvt. Ltd., surfaced, the impugned goods that came to India, became no man’s property and confiscation being an action in rem, the dubious claim of ownership of the goods at different point of time calls for absolute confiscation thereof without any leniency for redemption and re-export of the same. Accordingly, the order of the adjudicating authority requires to be set aside on such count and absolute confiscation of the impugned goods is hereby ordered - the impugned goods have already left India on payment of redemption fine. Therefore it is left to the Chairman of the CBE&C to deal this matter as the Board may consider appropriate in the fitness of the circumstances of the case to protect interest of Revenue since the action of redemption of the goods and re-export has caused detriment to interest of justice - Registry is directed to send a copy of this order to the Chairman, CBE&C as well as DGRI for the needful – appeals are dismissed

 

2016-VIL-276-P&H-CE

COMMISSIONER, CENTRAL EXCISE COMMISSIONERATE, PANCHKULA Vs M/s CURE QUICK REMEDIES P. LTD

Central Excise – SSI Exemption - benefit under Notification No.8/2003-CE, dated 01.03.2003 – whether the assessee is entitled to claim full exemption in terms of Notification No.8/2003-CE in respect of the goods manufactured under his own brand name even though Cenvat Credit was availed by it in respect of the duty paid on the inputs utilized in the manufacture of those goods which bear brand name of another person and are cleared on full payment of duty – aggregate value of clearances - HELD - Referring to Clauses 3(a) and 4 of the said notification the Tribunal has held that the specified goods bearing brand name or the trade name of another person, manufactured by the assessee and cleared on payment of entire duty would not be entitled to claim the benefit under the said notification. Simultaneously the specified goods manufactured in the brand name of the assessee were not excluded from availing the benefit of exemption under the said notification even though in case of the former goods, the assessee seeks to avail the Cenvat credit facility in respect of the duty paid on the inputs utilized in the manufacture of the branded specified goods on which the full duty was paid while clearing the same - The approach of the Tribunal finds support from the decision of the Apex Court in Commissioner of CCE, Chennai v. Nebulae Health Care Ltd - there is no error in the approach of the Tribunal – Revenue appeal dismissed

 

2016-VIL-363-CESTAT-CHE-CE

M/s SRINIVASA HAIR INDUSTRIES Vs CCE, CHENNAI - II

Central Excise – Cenvat Credit  - Refund of unutilized credit due to closure of unit – revenue contention unutilized CENVAT credit is not refundable in absence of any statutory provision in law – HELD - There is no rule at all to entertain refund of the unutilized CENVAT credit in respect of use of the input in the manufacture for domestic clearances. However, cases where assessees are not able to use the unutilized CENVAT credit due to closure of their business or any other circumstances beyond their control, law cannot be interpreted to cause absurdity or impossibility - there being no law to carry forward such credit for future or to transfer the same to others, in such circumstance, it may be considered that the duty element paid by the assessee to the treasury shall serve no useful purpose of the taxpayer in the event of closure of the unit or impossibility of adjustment. The State should not be enriched at the cost of the citizen in such circumstance – assessee appeal is allowed and refund is admissible

 

2016-VIL-364-CESTAT-MUM-ST

M/s QATAR AIRWAYS Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I

Service Tax – Liability of branch office to discharge Service Tax liability under Section 66A of the Finance Act, 1994 when the head office has made the payment for the services provided to CRS companies – Whether service tax liability arises on the appellants under reverse charge mechanism under the category of "online information and data base access or retrieval service" as per Section 65(75) r/w Section 65(105)(zh) of the Finance Act, 1994 – service provided by a foreign based company to a foreign based head office - HELD - The service having been provided by a foreign based company to a foreign based head office there cannot be any liability of the appellant to discharge its service tax, inasmuch as service tax being a destination and consumption based tax cannot be created against the non-consumer of the services – British Airways majority judgment followed - Indian branch office cannot be treated as recipient of the service provided by the CRS companies under Section 66A of the Finance Act, 1994 - impugned orders are set aside and appeals are allowed

 

telNotiGO115

Telangana: Rule 67 of the Telangana VAT Rules, 2005 - Pre-payment of deferred Tax – Specifying discount rate

 

kerCir06

Kerala: Extension in last date for filing of Annual Return for the year 2015-16

 

jhrNotiSO26

Jharkhand: Exemption to the Central Master Canteen of Central Reserve Police Force (CRPF), Group Centre, Sembo, Ranchi

 

mpNoti31

Madhya Pradesh: Establishment of Check post and barrier

 

telCir1825

Telangana: Ease of Doing Business Guidelines - Registration - Post Registration Inspection Visit/ Advisory Visit

 

2^nd of June

 

2016-VIL-14-TRB

M/s ARPANNA MOTORS PVT LTD Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act - Levy of tax on turnover of warranty claim - Sale – Sale and agreement to sell – sale under warranty - Free supply of spare parts for vehicle under warranty – Sale price – HELD - Since the dealer is not ordinary customer of the manufacturer and since he acts as agent, he is bound to sell that product at the cost price to the dealer. Merely because the appellant is receiving cost price of the product, and appellant is not earning profit thereon, the transaction does not cease to be a sale – assessee contention that according to the definition of words “seller” and “buyer”, present appellant is not a seller or the customer is not a buyer is a superficial distinction, because there is parallel express contract between the manufacturer and the appellant that cost of the spare part used by him for carrying out repairs during warranty period will be paid to him – Inclusion of amount charged for delivering the vehicle to the destination desired by the customers - Bare reading of the definition of “sale price” in Section 2(25) of MVAT Act clearly goes to show that since the service of delivering the vehicle to the destination desired by the customers, does not form the part of sale price - The service of delivering the vehicle to the destination desired by customers, does not form the part of sale price – Assessee appeal partly allowed

 

2016-VIL-278-GUJ

BHAGWATI TRADERS Vs STATE OF GUJARAT

Gujarat Value Added Tax Act, 2003 – validity of detention order – non-production of produce Form 405 - principles of natural justice – HELD - In the entire detention order, there is nothing whatsoever to indicate as to what is the nature of the documents which were not produced by the driver - the notice under section 70A of the GVAT Act came to be issued at 02:45 p.m. to the driver of the vehicle calling upon him to respond to the same at 03:40 p.m. Evidently therefore, no reasonable opportunity of hearing has been given to the petitioners prior to passing of the detention order - the impugned detention order stands vitiated on two counts: firstly on the ground of breach of the principles of natural justice; and secondly, on the ground of lack of application of mind on the part of the concerned officer who passed the impugned order and therefore, the same cannot be sustained - impugned detention order is quashed and set aside – assessee petition allowed

 

2016-VIL-366-CESTAT-CHE-CU

TAMIL NADU NEWS PRINT & PAPERS LTD Vs COMMISSIONER OF CENTRAL EXCISE, TRICHY

Customs – Refund claim – Limitation – dismissal of sanctioned refund claim as time-barred under Section 27 of the Customs Act, 1962 – dispute regarding the correct date for filing of the refund claim - HELD - the appellant had filed the refund claim 23.1.2013 and since the application for refund filed by appellant, according to Revenue, was incomplete they had returned the claim - claim for refund which is wanting certain documents and particulars cannot be a reason to hold that the claim was not filed within time. The conclusion arrived at by the Commissioner (Appeals) holding that the appellant had filed the refund claim beyond the stipulated period of one year from the date of issue of the OIO for final assessment is not correct - the finding that claim of refund is time barred is contrary to the judgement of the Hon’ble Madras High Court in the case of Sashun Pharmaceuticals Ltd and is therefore set aside. The matter is remanded to the original authority to examine the aspect of unjust enrichment - Appeal is allowed by way of remand

 

2016-VIL-367-CESTAT-DEL-CU

M/s R.S.G. STONES Vs CCE, JAIPUR

Customs – export under EPCG Licence Scheme - appellants have declared the goods as Marble Blocks, the Revenue considered the same as Silcified Limestone not covered by the export product of the shipping bills, the shipping bills had not been converted under the EPCG Scheme - HELD - There is no definition of Marble appearing in the Customs Act and as such we have to resort to the other attending circumstances - it is the metamorphosed limestone which turns into marble. As such, the report of the GSI, Jaipur laying down that the goods, in question, were Silcified Limestone, actually does not go strictly against the appellant - the GSI report reflects upon the goods to be limestone, which is nothing but marble. The said report is not available on record in as much as the same was not handed over to the assessee. We are not aware as to what were the questions put to Geological Survey of India at the time of sending all the samples. There being admittedly another report on record holding the goods to be marble and GSI’s report not clearly saying that the goods were not marble, the goods have to be held as marble – the impugned order is set aside and assessee appeal allowed

 

2016-VIL-365-CESTAT-MUM-CE

HI-REL COMPONENTS (I) LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III

Central Excise – Cenvat credit – Clearance of capital goods 'as such - whether the appellant is required to the reverse Cenvat Credit availed on the capital goods and removed subsequently after use - show cause notice invoking provisions of Rule 3(5) of CCR, 2004 – HELD – till the law was amended as on 13-11-2007 in respect of used capital goods, there was no liability to pay duty – New proviso was added by a Notification No. 39/2007 dated 13-11-2007 making the position clear which was not there in the earlier orders - therefore, prior to 13-11-2007 there was no duty payable in respect of capital goods which was used before it is removed – assessee appeal is allowed

 

2016-VIL-368-CESTAT-CHE-ST

AREVA RENEWABLE ENERGIES INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III

Service Tax - installation and erection of the plant – segregation of services for procurement of materials and availing the services – denial of cenvat credit claimed in respect of the service tax paid on the taxable service used for procurement of plant but not used for installation – limitation – HELD - services were so integrally connected with the plant and commissioning thereof erecting at the site, that cannot be ruled out. Services were utilised for erection and commissioning of the plant. The indispensable nature of the services is appreciable from the description provided in the SCN itself. That cannot be ruled out – assessee appeal is allowed on merit as well as on limitation

 

Guest Article

FAQs of Krishi Kalyan Cess

 

jkNotiSRO177

Jammu & Kashmir: List of notification kept in abeyance till further order

 

hpNoti0106

Himachal Pradesh: Draft amendment in HPVAT Schedule B -Regarding 'Sim Card'

 

puduPR310516

Puducherry: Regarding Registration of dealers

 

cuCir23

Customs: Manner of payment of interest on warehoused goods

 

ceInst1080

Excise: Instruction regarding Indirect Tax Dispute Resolution Scheme, 2016

 

cuNoti80NT

Customs: Exchange Rate notification

 

cuCir24

Customs: Requirement of Solvency Certificate for the purposes of Private Warehouse Licensing Regulations 2016

 

3^rd of June

 

UTTAR PRADESH NOTIFICATION

upNoti773: Levy of Entry Tax on H.D.P.E./P.P. Laminated and Unlaminated Bags and H.D.P.E./P.P. Laminated and Unlaminated Fabrics

upNoti774: Rate of Entry Tax on H.D.P.E./P.P. Laminated and Unlaminated Bags and H.D.P.E./P.P. Laminated and Unlaminated Fabrics

upNoti775: Tax Rebate to H.D.P.E./P.P. Laminated and Unlaminated Bags and H.D.P.E./P.P. Laminated and Unlaminated Fabrics

 

cuNoti36

Customs: New Ports for Export & Import under Export Promotion Scheme

 

2016-VIL-281-CAL

GNG EXPORTS Vs SALES TAX OFFICER, PARK STREET CHARGE & OTHERS

CST Act - Rejection of C-Form - co-relation of amounts covered in the two C-forms with the relevant bills - components did not add up to the exact amount indicated in the bill - Difference of one rupee – HELD - Once the State does not suspect that the petitioner was trying to pass off a sales tax C-form in respect of a transaction without justification and when the arithmetical error is to the extent of Re.1, the Board ought to have allowed the petitioner the latitude and accepted the co-relation of the invoices with the relevant C-forms. It is true that in matters of accounts, the figures should tally up to the last digit on either side and chartered accountants burn their midnight oil over such details, but when it comes to a matter of adjudication as to whether the relevant bill was relatable to the amounts claimed in the two C-forms, the Board ought to have shown a greater degree of flexibility and accepted the same - the assessing authority will give the petitioner the benefit of the amounts covered by the C-forms and will reduce or modify the demand accordingly – petition allowed

 

2016-VIL-280-MP

SRF LTD Vs STATE OF MADHYA PRADESH

Madhya Pradesh VAT Act – Section 21(1) - Reassessment - sales effected from SEZ to DTA – Reassessment on ground of such sales are not exempted under MPVAT Act & CST Act - interim relief order – liquid cash in place of Bank guarantee – HELD - In the matter of Dunlop India Ltd the Apex Court has held that no government business or for that matter no business of any kind can be run on mere Bank Guarantee. Liquid cash is necessary for the running of a Government - the petitioner to pay 10% of the total amount of 98.18 Crore within a period of four weeks and furnish Bank Guarantee for the remaining dues – Matter listed for further date

 

2016-VIL-279-DEL-CE

M/s ESTER INDUSTRIES LTD Vs UNION OF INDIA

Central Excise - MODVAT credit - Rule 57A of the CER, 1944 - Validity of Section 112 of the Finance Act, 2000 - denial of MODVAT credit in respect of the excise duty paid on High Speed Diesel Oil (HSD) consumed for generation of electricity used for the manufacture of excisable goods – Demand of Modvat credit wrongly taken for the period 16th March, 1995 to 12th May, 2000 – HELD - The Supreme Court in Sangam Spinners Limited had  held that Section 112 of the Act was clarificatory and the appellants were not entitled to credit for duties paid on HSD by virtue of the express exclusion in notifications dated 1st March, 1994 and 16th March, 1995. Thus, the very basis on which the Petitioner advanced its contentions stands eroded  - the contention that the provisions of Section 112 of the Act are expropriatory must be rejected, as squarely covered by the decision of the Supreme Court in Sangam Spinners Limited - Section 112 of the Act has been held to be clarificatory and it has been conclusively held that MODVAT credit on duties paid on HSD used as an input was not available. Consequently, assessees who had claimed the same were liable to refund the credit wrongly taken – assessee petition is dismissed

 

2016-VIL-369-CESTAT-CHE-CE

M/s BSNL Vs COMMISSIONER OF SERVICE TAX, CHENNAI

Central Excise - Cenvat Credit - denial of CENVAT credit on goods lying in the premises of the consumer and public places and did not come from a place where it was for the purpose of CENVAT Credit Rules - Rule 3(5) of the CENVAT Credit Rules – HELD - these goods have not gone elsewhere but all along lying in the premises of the consumer and in different public places for the purpose of verification. If the rule becomes stringent and hard, provisions of the services by the appellant-public sector shall be brought to standstill and the rule in other words shall be a tyrant instead of a servant to law. Therefore, that rule cannot be interpreted in a manner Revenue tries to interpret for the purpose of disruption of service and defeat the spirit of law - it does not stand to reason as to why denial of CENVAT credit shall be made if the goods cleared shall lie in the premises of the consumer and public places to ensure provision of the output service – appeal allowed

 

2016-VIL-370-CESTAT-BLR-CU

M/s ABB LTD, NASIK Vs THE COMMISSIONER OF CENTRAL EXCISE, BANGALORE

Customs – Section 142 - rebate claim on export of goods - appropriation of sanctioned rebate against Customs duty arrear – HELD - the appropriation of refund amount towards duty demand pending in other cases which has not attained finality is not legal and proper - the appropriation of refund claim against disputed pending custom appeals is not sustainable in law as the demands in those cases have not reached finality - the impugned order is set aside and assessee appeal allowed

 

2016-VIL-372-CESTAT-CHE-ST

M/s STAR DRUGS AND RESEARCH LABS LTD Vs CCE & ST, CHENNAI-III

Service Tax - Cenvat credit – input service - denial of credit on the ground that services were used outside the factory and hence same is not used in or in relation to manufacture of finished goods in the factory – credit on the strength of invoices in which the address of the Head Office - HELD – Definition of input service makes it very clear that there is no requirement in law that the credit can be taken only on the service tax paid on the services received in the factory premises - there is no dispute about the actual receipt of the goods in the factory and their utilization thereof. Therefore, the fact that the address recorded in the invoice was that of Head Office of the appellants, unit does not debar them from taking Modvat credit on the strength of this type of documents. Therefore, Modvat credit will be admissible to them in this respect - the impugned order is set aside and appeal allowed

 

2016-VIL-371-CESTAT-BLR-ST

MAHINDRA REVA ELECTRIC VEHICLES PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, BANGALORE - I

Service Tax – Export of goods – rejection of refund on the ground that invoice of Courier / CHA do not satisfy the conditions of Notification 41/2007 and for failure to produce any evidence to link the use of the said services in relation to export of goods – HELD - appellant produced a certificate issued by the CHA along with the details which clearly establish the linkages between the service tax paid and the export of goods - appellant has furnished sufficient details which if examined can establish the link proving to the fact of export of goods by the said CHA. This exercise has not been done by the lower authorities - the impugned orders are set aside and appeal allowed by remanded

 

utrNoti480

Uttarakhand: Extension in date of filing of fourth quaterly return of assessment year 2015-16 upto 30/06/2016

 

chhgPN030616

Chhattisgarh: Mobile Squad Information

 

6^th June

 

2016-VIL-283-ALH

M/s SONY INDIA PVT LTD Vs STATE OF U.P.

U.P. Value Added Tax Act, 2008 – re-assessment – rejection of assessee request for grant of sufficient time to furnish a reply, on ground of nearing of expiry of limitation – HELD - It was incumbent upon the Assessing Authority to have provided a reasonable opportunity to the petitioner, more particularly, when the First Appellate Authority had directed the Assessing Officer to grant proper and meaningful opportunity to the petitioner before passing the fresh assessment order - where the High Court sets aside the order of re-assessment for want of reasonable opportunity of being heard and directs the Assessing Authority to make a fresh order of assessment or re-assessment, the Assessing Authority may make an order of assessment or re-assessment, before expiry of the assessment year succeeding the assessment year in which such order or direction is received by the Assessing Authority by due process. In this view of the matter, it cannot be said that upon the re-assessment being set aside, the Assessing Authority will not be in a position to pass fresh assessment orders - the assessment order set aside - assessee writ petition allowed

 

2016-VIL-284-DEL-ST

SURESH KUMAR BANSAL Vs UNION OF INDIA

Service Tax - Section 65 (105)(zzzh) of the Finance Act, 1994 - clauses (zzzh) and (zzzzu) - leviability of service tax on consideration paid by flat buyers to a builder/promoter/developer for acquiring a flat in a complex, which under construction/development – service tax on preferential location charges – petitioner contention that the entries relating to taxation in List I and List II of the Seventh Schedule to the Constitution of India were mutually exclusive and the Parliament did not have the power to levy tax on immovable property; thus, the levy of service tax on agreements for purchase of flats was beyond the legislative competence of the Parliament – HELD - The use of a legal fiction is a well known legislative device to assume a state of facts (or a position in law) for the limited purpose for which the legal fiction enacted, that does not exist. The Parliament is fully competent to enact such legal fiction. In the present case the Parliament has done precisely that; it has enacted a legal fiction, where a set of activities carried on by a builder for himself are deemed to be that on behalf of the buyer - The clear object of imposing the levy of service tax in relation to a construction of a complex is essentially to tax the aspect of services involved in construction of a complex the benefit of which is available to a prospective buyer who enters into an arrangement - whether by way of an agreement of sale or otherwise - for acquiring a unit in a project prior to its completion / development – No merit in the assessee contention that the imposition of service tax in relation to a transaction between a developer of a complex and a prospective buyer impinges on the legislative field reserved for the States under Entry-49 of List-II of the Seventh Schedule to the Constitution of India - while the legislative competence of the Parliament to tax the element of service involved cannot be disputed but the levy itself would fail, if it does not provide for a mechanism to ascertain the value of the services component which is the subject of the levy. Clearly service tax cannot be levied on the value of undivided share of land acquired by a buyer of a dwelling unit or on the value of goods which are incorporated in the project by a developer - Levying a tax on the constituent goods or the land would clearly intrude into the legislative field reserved for the States under List II of the Seventh Schedule of the Constitution of India - Whilst Rule 2A of the Rules provides for mechanism to ascertain the value of services in a composite works contract involving services and goods, the said Rule does not cater to determination of value of services in case of a composite contract which also involves sale of land. The gross consideration charged by a builder/promoter of a project from a buyer would not only include an element of goods and services but also the value of undivided share of land which would be acquired by the buyer - neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract - Petition partly allowed

 

2016-VIL-282-DEL-ST

MEGA CABS PVT LTD Vs UNION OF INDIA

Service Tax – Validity of Rule 5A(2) of the Service Tax Rules, 1994 to the extent amended Rule 5A(2) empowers deputing departmental officers or officers from the CAG to 'demand' documents mentioned in Notification No. 23/2014-Service Tax dated 5th December 2014 – HELD - Under the garb of the rule making power, the Central Government cannot arrogate to itself powers which were not contemplated to be given it by the Parliament when it enacted the Finance Act. This is an instance of the Executive using the rule making power to give itself powers which are far in excess of what was delegated to it by the Parliament - Rule 5A(2) as amended in terms of Notification No. 23/2014-Service Tax to the extent that it authorises the officers of the Service Tax Department, the audit party deputed by a Commissioner or the CAG to seek production of the documents mentioned therein on demand is ultra vires the FA and, therefore, strikes it down to that extent – the expression ‘verify’ in Section 94 (2) (k) of the FA cannot be construed as audit of the accounts of an Assessee and, therefore, Rule 5A(2) cannot be sustained with reference to Section 94(2)(k) of the FA - Circular No. 181/7/2014-ST dated 10th December 2014 is ultra vires the FA and strikes it down as such - CBEC Circular No. 995/2/2015-CX on the subject “Central Excise and Service Tax Audit norms to be followed by the Audit Commissionerates” and the Central Excise and Service Tax Audit Manual 2015 issued by the Directorate General of Audit of the CBEC are ultra vires the FA, do not have any statutory backing and cannot be relied upon by the Respondents to legally justify the audit undertaken by officers of the Service Tax Department

 

2016-VIL-373-CESTAT-BLR-CE

COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX & CUSTOMS, BANGALORE-II Vs

NASH INDUSTRIES

Central Excise - Rule 5 of the Cenvat Credit Rules 2004 – input and input service – Business Auxiliary Service, Chartered Accountant service, C&F Service, Courier Service, GTA, Repair and Maintenance Service, Renting of immovable property service, Technical Testing and Analysis Service, Telephone service, Transport of Goods by Air, Online Information and Database access service, Manpower Recruitment and Supply Service, Rent a Cab service etc. – HELD - definition of ‘input service’ we will find that it has a very wide scope as held by the Hon’ble Bombay High Court in the case of Coca Cola Vs. CCE, Pune-III and further while allowing the cenvat credit with regard to input services involved in these appeals, the learned Commissioner has relied upon various decisions of the Courts and the Tribunals and has also mentioned about the nexus - in view of the well reasoned finding of the Commissioner (Appeals) the findings given are sustainable and there is no infirmity in it and the same is upheld - Eligibility for refund of unutilized cenvat credit in respect of clearances made to 100% EOU on inter unit transfer - deemed exports are equivalent to physical export and therefore clearances to an EOU is to be treated as export and refund of unutilized credit is allowed to the respondent-assessee – assessee appeal allowed

 

dgftPN16

DGFT: Enlistment under Appendix 2E – Agencies Authorized to issue Certificate of Origin - (Non-Preferential)

 

dgftNoti09

DGFT: Amendment in import policy condition No.2 under Exim Code 4801 of Chapter 48 of ITC (HS), 2012, Schedule – I (Import Policy)

 

2016-VIL-285-KAR

M/s REPROMEN OFFSET PRINTERS PVT LTD Vs THE STATE OF KARNATAKA

Karnataka Value Added Tax, 2003 – Printed materials – printing of hoardings and banners - rate of tax on material of poster, banners, pamphlets, leaflets etc. – Entry No.71 of Third Schedule or residual entry - HELD - If one has to consider the entry, the entry is always to be considered after reading it as a whole and it cannot be by segregating a few words of the entry. A reading of the entry shows that the printed material has to be on the stationery paper - If the contention of the appellant is to be accepted that all printing materials are included in the entry irrespective of the material on which the printing is made, the resultant effect would be that the other entries would be redundant - In interpretation of an entry in a taxing statute even if the meaning understood in commercial parlance is considered, then also, the items which are included in Entry No.71 cannot encompass the items of printed banners and hoardings – assessee appeal is meritless and is dismissed

 

2016-VIL-287-DEL-CU

INOVYN SVERIGE AB Vs THE DESIGNATED AUTHORITY

Customs – Anti-dumping - export PVC Suspension Resin – appellant application seeking change of name in the Final findings – validity of DA order to seek Mid-Term Review - HELD - the consequential change of the name of the Petitioner as recorded in the Final Findings should not ordinarily require an elaborate exercise of a mid-term Review - The question is not so much about the prejudice caused to the Petitioner by the mid-term Review but whether in fact it is called for at all. The Court suggests that the DA must issue a further set of instructions to account for the need to make routine clerical corrections in the Final Findings or for that matter in any other Findings rendered by the DA particularly where such corrections are occasioned by changes that take place after the issuance of the Findings or notification as the case may be. The contingency of change in name is one such - The failure to devise a procedure for dealing with such contingencies cannot constitute a valid reason to compel the initiation of a mid-term Review to effect changes that are of a routine nature and which do not affect the basis of the Findings – impugned communication is set aside - writ petition is allowed

 

2016-VIL-32-SC-CE

SARLA PERFORMANCE FIBERS LIMITED Vs COMMISSIONER OF CENTRAL EXCISE, SURAT-II

Supreme Court: Central Excise – Section 3 - manufacture of synthetic yarn – 100% EOU unit - Removal of goods by 100% EOUs to DTA – eligibility for exemption under Notification No. 125/84 dated 26.05.1984 – removal of finished goods without requisite permission from the Development Commissioner – leviability of duty under main Section 3(1) of the Act - Circular No. 618/9/2002-CX dated 13.02.2002 – HELD - tribunal was not right in holding that duty was to be leviable in terms of the proviso to Section 3(1) of the Act - The circular No. 618/9/2002-CX dated 13.02.2002 clearly lays down the expression “allowed to be sold” has been replaced with “brought to any other place” with effect from 11.05.2001 vide Section 120 of Finance Act, 2001 (14 of 2001). The circular being in consonance with the decision in SIV Industries Ltd and rightly so, it was absolute unnecessary on the part of the Larger Bench of the tribunal to say that this Court in SIV Industries Ltd did not deal with the case where clearance was made to DTA by 100% EOU in excess of the permission granted. The attempt to distinguish the circular, was not only unnecessary but also absolutely erroneous - The judgment and order passed by the tribunal and that of the adjudicating authority are set aside. The assessee shall be liable to pay the excise duty as per Section 3(1) of the Act - assessee appeals are allowed

 

2016-VIL-286-MAD-ST

M/s TIRUCHITRAMBALAM PROJECTS LTD Vs CESTAT, CHENNAI

Tribunal - Pre-deposit order – maintainability of writ petitions against orders passed by the Appellate Authorities or the Tribunal on applications for stay or applications for waiver of pre-deposit condition – difference of opinion with Division Bench order in Metal Weld Electrodes case - HELD - To the extent that the Division Bench of this Court interpreted in Metal Weld Electrodes, the expression 'any order' to mean all orders and held that therefore, appeals are maintainable against these orders, there is no quarrel. But, the opinion expressed by the Division Bench in the said judgement that writ petitions are not maintainable, cannot be accepted – as in exceptional circumstances carved out in the decision of the Supreme Court in Rajkumar Shivhare, the writ petitions are also maintainable - the Tribunal has passed a conditional order for a pre-deposit without considering any of the issues raised - the writ petition is allowed, the impugned order is set aside and the application for pre-deposit is directed to be heard by the Tribunal

 

Guest Column

Permission for factory stuffing of export cargo – whether required or this is another case of “dis-ease” of doing business?

 

jhrOrdi03

Jharkhand Value Added Tax (Amendment) Ordinance, 2016 - Amendment in Section-80A - Advance Ruling

 

jhrAct10of2016

Jharkhand Single Window Clearance Act, 2015

 

7^th of June

 

2016-VIL-288-DEL

BAJRANG FABRICS PVT LTD Vs COMMISSIONER OF VAT

Delhi Value Added Tax Act 2004 - service of the notices under Section 59 (2) DVAT Act - Section 100A – validity of summons/notices/orders issued in electronic form - Section 100A of the DVAT Act, inserted with effect from 16th November 2005, enables the Commissioner to issue summons/notices/orders in electronic form - While there may not be an express agreement between the originator and the notice, an order validly passed by the Commissioner in exercise of his powers under Rule 62 (1) (vi) of the DVAT Rules is binding on the registered dealers. Therefore, the system put in place by the Commissioner by the order dated 17th January 2014 cannot be said to be inconsistent with Sections 12 and 13 of the IT Act. It appears that the dealers registered under the DVAT Act are in fact adapting their functioning to the changed system of service of electronic notices, summons or orders by DT&T - The Petitioner being a registered dealer under the DVAT Act ought to have been aware of the Order dated 17th January 2014 issued by the Commissioner - The failure by the Petitioner to go to the website to view the impugned notices, notwithstanding the order dated 17th January 2014 of the Commissioner, disables it from contending that there is no proper service on it of the said notices under Section 59 (2) of the DVAT Act - The question of bringing inter-state sales within the ambit of the DVAT Act does not arise. There has been an obvious non-application of mind by the VATO. He (or the computer) has mechanically framed identical notices of default assessments without bothering to examine what has been written therein – there is sufficient ground to invalidate the impugned default notices of assessment of tax, interest and penalty – assessee petition partly allowed

 

Guest Article

No Service Tax Audit by the Service Tax Department or CAG

 

stNoti32

Service Tax: Amendment in Notification No. 25/2012-ST - Exemption to the legal services provided by senior advocates to a business entity with a turnover up to rupees ten lakh in the preceding financial year

 

stNoti33

Service Tax (Fourth Amendment) Rules, 2016 - Specify the business entity as the person liable to service tax in respect of services provided by senior advocates

 

stNoti34

Service Tax: Amendment in Notification No. 30/2012-ST - Prescribes extent of payment of service tax by a business entity as a recipient of services provided by senior advocates

 

cuNoti23ADD

Customs: Levy of definitive anti-dumping duty on ?Polytetrafluoroethylene (PTFE)? [Tariff Item 3904 61 00], originating in or exported from Russia

 

ceInst221

CBEC: Instructions on Information returns to be furnished under Notification No. 4/2016-ST dated 15.02.2016

 

goaNoti136

Goa: Amendment in Schedule ‘C’ - Reduction in rate of tax on Motor Spirit

 

mahaNotiCR522

Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016 - Date of effect of Amendment to the Maharashtra Motor Vehicles Tax Act and Amendment to the Maharashtra Purchase Tax on Sugarcane Act, 1962

 

2016-VIL-15-TRB

M/s SAROJ IRON INDUSTRIES Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Act - claim of set off on purchases effected by way of works contract resulting into immovable property – supply and installation of windmill - separate invoice for plant and machinery - denial of set-off – tax period 1/4/2005 to 31/3/2006 – HELD - Perusal of the tax invoices clearly show that all the purchases are by way of works contract which are resulting in immovable property as they are permanently embedded in earth or permanently attached to the things which are embedded in earth. Therefore we are of the considered view that the lower authorities have made no error in disallowing set off on the purchases effected by way of works contract. Whether the purchases effected by the appellants’ are of plant and machinery cannot be considered for the impugned period for the simple reason the word “other than plant and machinery” was subsequently added on 08/09/2006 and the said amendment is not retrospective with effect from 1/4/2005 but is prospective from 08/09/2006 - there is no application of rule 53(7B) in the present case of the appellant as set-off is not at all admissible to the appellant under rule 54(g) of the MVAT Rules and Rule 53(7B) is in respect of reduction of set-off – assessee appeal dismissed

 

2016-VIL-289-KAR

ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) Vs M/s ABIDHEEP INTERLOCK PAVERS PVT LTD

Karnataka Value Added Tax Act, 2003 – section 15 - payment of tax by way of composition - works contract - reassessment on the basis of Court order holding rate of tax on paving bricks/blocks would be 12.5% instead of 4% - validity of reassessment prior to the cancellation of the certificate - Entry-2 of Schedule-III –  principles of natural justice into Rule 145 – HELD - although the KVAT Act or Rules do not prescribe any provision for hearing a dealer prior to cancellation of the certificate issued by the authorities for payment of tax by way of composition under Section 15 of the Act, the principles of natural justice have to be read as part and parcel of Rule 145 of the Rules which deals with cancellation of certificate - notice was issued for reassessment directly without cancellation of the certificate - As the certificate issued under Rule 137 has not been cancelled, the respondent would be entitled to continue with the benefit under Section 15 of the Act on composition of tax – revenue appeal disposed

 

CUSTOMS SECTION

 

2016-VIL-376-CESTAT-MUM-CU

M/s ANTIFRICTION BEARING CORP. LTD Vs COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI-I

Customs – valuation - Collaboration agreement – inclusion of documentation fees paid for documents of technical know-how and royalty paid on quantum of sale – HELD – the agreement and the payment terms provided therein is related to the technical knowhow for the manufacture of final product at the appellant’s end. The agreement nowhere suggests that there is any link between quantum of import and the payment terms related thereto provided in the agreement. Since the agreement is, towards technical knowhow which is related to the manufacture of the final product and not related to the sale of imported goods, fees cannot be included in the assessable value - the adjudicating authority has correctly held that the documentation fees and the royalty are not related to the import of the goods, therefore, the same cannot be included in the value of the imported goods and the same is not covered by Rule 9(1)(b)(iv) and 9(1)(c) of the Customs Valuation Rules, 1988 - impugned order set aside and assessee appeal allowed

 

2016-VIL-375-CESTAT-MUM-CU

KIMBERLY CLARK LEVER LTD Vs COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI

Customs – valuation – import of components and raw materials - payment of lump sum amount as technical know-how fees and royalty payment on the domestic sales - Rule 9(1)(c) of the Customs Valuation Rules, 1988 – HELD - the Apex Court in an similar set of facts in the case of Ferodo India Pvt Ltd has considered the scope of the Rule 9(1)(c) and Rule 9(1)(e) of the Customs Valuation Rules, 1988 and took a view that the transaction value cannot be loaded as technical know-how and the said ratio will be applicable in the present case - Rule 9(1)(c) stipulates that payments made towards technical know-how must be a condition pre-requisite for the supply of imported goods by the foreign supplier and if such condition exists then such royalties and fees have to be included in the price of the imported goods. Under Rule 9(1)(c) the cost of technical know-how is included if the same is to be paid, directly or indirectly, as a condition of the sale of imported goods - there was no nexus between royalty / licence fees payable for the know-how and the goods imported for the manufacture of licensed products - the impugned order is set aside and assessee appeal allowed

 

CENTRAL EXCISE SECTION

 

2016-VIL-379-CESTAT-CHE-CE

M/s COVESTRO (INDIA) PVT LTD Vs CCE, PONDICHERRY

Central Excise – job work – inter-utilisation of inputs supplied to the job worker and those procured on their own account – SCN for alleged diversion of such inputs without following the procedure and without payment of duty or paying an amount equal to credit taken on such diverted inputs – inputs meant for manufacture on job work utilised for manufacture on own account and vice versa - HELD - There is no provision in the Act or Rules or in Cenvat Credit Rules treating such inter-utilization of inputs as prohibited. On the other hand, Modvat/Cenvat Credit Rules permits utilization of inputs for any final product of the manufacturer - under the rules there is no requirement of one to one correlation of inputs and output so long as inputs are not used for manufacture of exempted goods. Within the factory, for manufacture, the inputs can be utilised irrespective for whom the goods are manufactured. Removal within factory is not removal for home consumption from factory which alone invites reversal of credit or payment of duty - Duty demand and penalty set aside – assessee appeal allowed

 

2016-VIL-378-CESTAT-BLR-CE

M/s PRIME PROGRESSION EXPORT & SERVICE (P) LTD Vs COMMISSIONER OF CENTRAL EXCISE, BANGALORE - I

Central Excise – Refund claim - Assessee appeal against setting aside of the order of sanctioning authority granting refund in favour of the appellant - appellate authority allowed the departmental appeals by rejecting the refund granted by the adjudicating authority  - Rule 5 of CCR, 2004 – HELD - the Assistant Commissioner has sanctioned the refund claims after satisfying himself with regard to the conditions as contained in the Notification 5/2006 dated 14.03.2006 and there is no infirmity in the orders granting refund whereas the Commissioner (Appeals) has wrongly observed that the original authority has failed to bring on record in the impugned order whether the input/input services are used in relation to the manufacture of exported goods - There are no legally sustainable ground on which the validly sanctioned refund orders should be set aside and therefore the findings returned by the Commissioner (Appeals) on merit needs to be set aside. Secondly, the impugned order is beyond the grounds on which the permission was granted to prefer an appeal in the review order which is not permitted by law - the impugned orders are set aside and appeals are allowed

 

2016-VIL-290-DEL-CE

HH INTERIOR & AUTO COMPONENTS LIMITED Vs COMMISSIONER OF CENTRAL EXCISE

Central Excise – dismissal the settlement application by Central Excise Settlement Commission (CCESC) – HELD - CCESC erred in concluding that since the Department and the Assessee were not ad idem on certain factual details, the matter should be sent back for adjudication before the concerned Excise Officer. The CCESC failed to appreciate that the grounds on which the application can be rejected are restricted to those set out in Section 32-F (1) and Section 32-L of the CE Act - None of the provisions in Chapter 5 of the CE Act dealing with the ‘settlement of cases’ envisages the CCESC sending the matter for adjudication to the Central Excise Officer because of the differences between the applicant on the one hand and the Department on the other. In other words unless the applicant before it has not stated the true and full particulars or fails to cooperate with it, the CCESC cannot decline to examine the application on the ground that there is difference between the applicant and the Department on an issue arising from the application - the impugned order of the CCESC rejecting the application is set aside - writ petition is disposed

 

SERVICE TAX SECTION

 

2016-VIL-377-CESTAT-HYD-ST

M/s GE INDIA EXPORTS PVT LTD Vs CC,CE&ST, HYDERABAD-II

Service Tax - appellant is 100% EOU under STPI Scheme - refund claim of unutilized CENVAT credit - Rule 5 of CCR, 2004 r/w Notification No.5/2006-CE(NT) - rejecting the refund on the ground invoices were issued to the premises which was unregistered – credit for input services towards Telecommunication, Internet port charges, for liaisoning with Revenue authorities, Chartered Accountant Service, Commercial Training or Coaching Services, fitting and renovation in the office premises – HELD - As per Rule 4A of Service Tax Rules, 1994, there is no requirement that the premises of the service recipient has to be registered. Therefore, the denial of refund on this ground is unjustified - there cannot be two separate yardsticks for availing credit and refund of the same - All the services detailed above are included in the definition of input service. They have been used by the appellant for providing output service - appellant is eligible for refund – assessee appeal allowed

 

2016-VIL-374-CESTAT-CHE-ST

ACX COURIER (I) PVT LTD Vs COMMISSIONER OF SERVICE TAX, CHENNAI

Service Tax – non-payment of tax – penalty - HELD - Recession is no ground of non-payment of the tax and this is no ground for showing any leniency either – penalty imposed under Section 78 is upheld – assessee appeal dismissed

 

delCir09

Delhi: Regarding requirement of item-wise details in Forms Annexure-2A, Annexure-2B, DVAT-30 and DVAT-31

 

8^th of June

 

2016-VIL-291-DEL

JAIN MANUFACTURING (INDIA) PVT LTD Vs THE COMMISSIONER VALUE ADDED TAX

Central Sales Tax Act - Section 8(1) - Inter-state sale – C-Form – Retrospective cancellation of registration of purchasing dealer and consequent cancellation of validly issued C-Form - validity of already issued C-Form subsequent to retrospective cancellation of registration of purchasing dealer – proxy litigation - HELD - it is apparent that the Petitioner is pressing only for the relief of validation of the C-Form issued to it. Consequently, the Court rejects the plea of the DT&T that this is a proxy litigation by Petitioner on behalf of purchasing dealer - their being a valid registration of the purchasing dealer on the date of the transaction and the C-Form having been validly issued, there could not have been a retrospective cancellation of the C-Form - there is no statutory power that permits cancellation of a C-Form that has been validly issued, much less retrospectively - The only circumstance perhaps that could lead to the cancellation of a C Form is the failure by the issuing authority to notice the cancellation of the purchasing dealer's CST registration previous to the date of the sale - the order passed by the DT&T cancelling the C-Form issued to the Petitioner is set aside. The Petitioner will continue to treat the said C-Form issued to it as having been validly issued - assessee petition allowed

 

2016-VIL-293-RAJ

COMMERCIAL TAXES OFFICERS, ANTI EVASION, ALWAR Vs ESCORTS YAMAHA LTD

Rajasthan Sales Tax Act, 1994 – stock transfer of motorcycles – blank declaration form ST-18-A - penalty under Section 78(5) – HELD - prior to 30/03/2000 on the basis of the notification issued by the State of Rajasthan (supra), there was no necessity of carrying of declaration form ST-18-A in the case of stock transfer/branch transfer/depot transfer of goods or SOS transfer and even if the form was found to be blank or incomplete, no penalty could be levied. Once there was no necessity of carrying declaration form prior to 30/03/2000, question of penalty does not arise – revenue revision petition stands dismissed

 

CUSTOMS SECTION

 

2016-VIL-382-CESTAT-KOL-CU

PRADIP PORT TRUST Vs COMMISSIONER OF CENTRAL EXCISE CUSTOMS & S. TAX, BBSR-I

Customs – Section 45 – responsibilities and duties of the custodian of imported goods - pilferage after the order of clearance of the goods but before the physical clearance of the goods from the port area – duty demand on quantity of imported LAM coke not accounted for in the Customs area and in the custody of the appellant. The goods after unloading lying in the port trust area – HELD - There is no evidence brought on record by the appellant that any insurance survey was done or whether any remission of duty under Sec 23 of the Customs Act 1962 was claimed by the appellant. Imported goods lying in the Customs area in the custody of the appellant can only be cleared on payment of duty and cannot be handed over to an importer by taking shelter of Sec 42 & 43 of the MPT Act 1963 - there is no evidence on record that the goods, for which duty has been demanded are lost or destroyed. Accordingly the quantity not accounted for by the custodian has to be treated as pilfered under Sec 23 of the Customs Act 1962 and Custodian is responsible for paying duty on such unaccounted imported goods under Sec 45 (3) of the Act – duty demand upheld and assessee appeal dismissed

 

2016-VIL-294-MAD-CU

M/s A.S. ENTERPRISES Vs THE COMMISSIONER OF CUSTOMS, CHENNAI

Customs – Import of LED Spare Parts, Spare Parts and Capacitor – Seizure of goods – request for provisional release - invocation of provisions of Section 110(2) for releasing the goods unconditionally in the absence of issuance of any valid show cause notice – HELD - combined reading of Sections 110(2), 124 and 110-A spells out that any order of provisional release shall not take away the right of the assessee under Section 110(2) r/w Section 124 of the Act. When no action is initiated by way of issuance of show cause notice under Section 124(a) of the Act within six months or extended period stipulated under Section 110(2) of the Act, the person from whose possession the goods were seized, becomes entitled to their return - The remedy of provisional release is independent of remedy of claiming unconditional release in the absence of issuance of any valid show cause notice during the period of limitation or extended limitation - Therefore, merely because a request has been made for provisional release of goods under Section 110A of the Customs Act and the same has been acceded to by the respondent, the same would not take away the right of the petitioner for unconditional release of the goods under Section 110(2) of the Customs Act. The right under Section 110(2) of the Customs Act is absolute and cannot be curtailed or prevented by the Department - petitioner is entitled to get release of the goods unconditionally – writ petition allowed

 

CENTRAL EXCISE SECTION

 

2016-VIL-380-CESTAT-DEL-CE

M/s BAUSCH & LOMB EYECARE (INDIA) PVT LTD Vs C.C.E., JAIPUR

Central Excise – valuation – transaction value - clearance of sample packs at a price of Re 1/- to distributors as a means of marketing strategy - free sample for supply to customers – payment excise duty based transaction value – demand based on price of comparable goods - show cause notice for recovery of interest as also imposition of penalty on the appellants – payment of duty under protest – HELD - The transaction is between the assessee and their distributors at the price charged by the assessee from the distributors and what the distributors ultimately did with these goods is extraneous and cannot be the relevant consideration to determine the valuation of the excisable goods - Revenue has not doubted the fact that the consideration received from the distributor is not the consideration or something more has flown back, such consideration fulfills the requirement of Section 4 (1)(a) of Central Excise Act, 1944 - the impugned order is set aside and assessee appeal allowed

 

2016-VIL-384-CESTAT-CHE-CE

MURUGAPPA MORGAN THERMAL CERAMICS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III

Central Excise – Cenvat credit - disallowance of credit on the ground that the invoices addressed to appellant's head office - appellant not registered as Input Service Distributor – HELD - non-registration as ISD should not deprive the appellant of substantial benefit of credit. Moreover, the appellant has taken the ISD Registration later on and since this is only a procedural lapse in law, credit cannot be denied – appeal allowed by remand

 

2016-VIL-292-P&H-CE

M/s ACCUREX STEEL ROLLING MILLS Vs COMMISSIONER OF CENTRAL EXCISE, PANCHKULA

Central Excise – Deemed credit – benefit of the notification No.1/93-CE – admissibility of benefit of deemed credit order no. TS-36/94-TRU dated 1.3.1994 even after crossing the exemption limit slab of Rs. 75 lacs in terms of notification no. 1/93-CE dated 28.2.1993 - HELD - No doubt the benefits under this notification were limited to clearances of Rs.75 lacs but this does not mean that manufacturers whose clearances exceed Rs.75 lacs were not availing the exemption under the notification - the wording used in the notification identifies the category of manufacturers who are satisfying the criteria as set out in Notification No. 1/93-CE and are availing of the benefit of the said notification - The Tribunal while adjudicating the issue had solely relied upon the decision of the larger Bench of the Tribunal in Digamber Foundry v. CCE, Allahabad whereas the Himachal Pradesh High Court in Sood Steel Industrial (P) Ltd had held the judgment of the Larger Bench of the Tribunal in Digamber Foundry case to be incorrect - the order of the Tribunal set aside – assessee appeal allowed

 

SERVICE TAX SECTION

 

2016-VIL-383-CESTAT-DEL-ST

M/s RADICO KHAITAN LTD Vs C.S.T. DELHI

Service Tax - Business Auxiliary Services - manufacture of IMFL - service tax liability of the appellant with reference to transactions with the contract bottling units (CBUs) – HELD - the original authority grossly erred in appreciating the terms of the agreement and in not following the Board’s clarification dated 27.10.2008 - It is clear from the agreement that the contract bottlers will get the fixed amount per case for manufacture of liquor with the brand name of the appellant. It is apparent that the contract bottling units are actually manufacturing the branded liquor as job workers for the appellant for which they are getting fixed amount.  The CBU has no freedom of marketing the manufactured products. The sale and distribution of manufactured product is in control of the appellants - It is relevant to note that after the amendment carried out w.e.f. 01.10.2009 in the definition of Business Auxiliary Services the CBUs are paying service tax under the said category. This shows that it is the CBUs who are providing services to appellant not the other way around. It cannot be said that the appellants are promoting the business of bottlers - impugned order is set aside assessee appeal allowed

 

2016-VIL-381-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, PUNE -1 Vs M/s SHRIKRISHNA ASSOCIATES

Service Tax - 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 case the where transactions are recorded in the books of the assessee and when the offence was taken place during the period of unamended 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 - the Principle of Beneficial Construction also does not allow imposition of higher penalty under the provisions of erstwhile Section 78 of the Act - In such situation amended Section 78 shall clearly apply at the time of Adjudication of the show cause notice - impugned order is upheld. Revenue appeal dismissed

 

Guest Column

Power of Audit by Departmental Officers or CAG – Ghayal Once Again

 

punNotiSO46

Punjab: Regarding Advance Tax on shoddy yarn

 

dgftPN17

DGFT: Amendment in Para 4.47(a)(ii) of Hand Book of Procedures 2015-20 for allowing revalidation of Advance Authorizations along with Bond waiver

 

cuNoti25ADD

Customs: rescind notification No. 35/2012-Customs (ADD), dated the 10th July, 2012 - Provisional Anti Dumping Duty on all imports of Vitrified/Porcelain Tiles originating in or exported from China PR

 

jhrNotiSO27

Jharkhand: Amendment in JVAT Rule 3 - Regarding Registration in one day and SUGAMS

 

9^th of June

 

2016-VIL-295-KAR

M/s PHOTO EMPORIUM Vs DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT 12), BENGALURU

Karnataka Value Added Tax – Work contract – Input tax credit - determination of net taxable turnover and tax liability subsequent to Apex Court judgment in the case of State of Karnataka Vs Pro Lab – admissibility of input tax credit and deduction for labour charges from the composite value of works contract – revenue argument input tax credit cannot be availed as assessment orders were made in view of the interim order granted by the Hon’ble Supreme Court – HELD - the process of assessment for determining the correct tax liability cannot be left half way through only. The question of liability to pay tax has been determined by the Hon’ble Supreme Court only now on 30th Jan, 2015. If the claim for input tax credit and other deductions from the gross turnover on account of labour charges, etc., could not be made by the assessee during the assessment proceedings which took place while this litigation was pending, the they cannot be non-suited to make such claim now, if otherwise it is admissible in accordance with the provisions of law - while the levy of output tax is sustainable, the computation of net tax liability has to be done afresh by the Assessing Authority, allowing the petitioner to make such claims based on relevant evidence - writ petitions are allowed

 

2016-VIL-16-TRB

M/s SHREE BALAJI STEEL Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act – Jurisdiction of Enforcement officer-Mumbai to pass assessment order for Pune-based assessee in absence of order for transfer of proceedings to Mumbai – HELD - section 59 and Section 10(8) operate in different spheres. Even if there is no order of transfer of proceedings, if appellant is aggrieved and he feels that the assessing authority has no jurisdiction and has wrongly assumed jurisdiction, he has to submit his objection in the prescribed form in writing with a prayer to refer the same to the Commissioner for decision. In the present case, admittedly, no objection in the prescribed form was raised by the appellant. Similarly, there was no prayer for reference of question to the Commissioner for decision - copy of such written submissions is not placed on record and even if such objection was taken admittedly, no objection in prescribed form u/s. 701 was taken and therefore, the contention of the appellant that the assessment order is abinitio-void is not sustainable - there is no need to interfere with the order of part payment – assessee appeal dismissed

 

CUSTOMS SECTION

 

2016-VIL-296-KER-CU

M/s SADIQ BROTHERS MARINE WORKS Vs COMMISSIONER OF CUSTOMS, COCHIN

Customs Act – section 159A - Effect of amendments in notification - Breaking up of ocean going vessels, other than the vessels - show cause notice for confiscating the vessels under Section 111(o) – imposition of penalty and recovery of duty on account of non-compliance with provisions contained in notification No. 133/87, rescinded by notification No. 47/96 – HELD - the transfer of the vessel by the appellant for breaking up would not attract the liability under notification No. 133/87 for the reason that as on the date of acquisition of the vessel or its transfer for breaking up, notification No.133/87 was already rescinded by notification No. 47/96 - Clause (c) of Section 159 A is attracted only in a case where a right, privilege, obligation or the liability is acquired, accrued or incurred under any notification superseded or rescinded - as on 26.02.1998 or thereafter, in the absence of notification No. 133/1987 being inexistence, the liability thereunder could not have been acquired or incurred, to attract clause (c) of Section 159A. This means that Section 159A would not save the proceedings initiated against the appellant under notification No. 133/1987. If that be so, the whole proceedings initiated against the appellant are without jurisdiction – assessee appeal is accordingly allowed and the impugned order is set aside

 

2016-VIL-298-CAL-CU

GOPAL SAHA Vs THE UNION OF INDIA

Customs - penalty under Section 112 of the Customs Act for improper importation of goods - whether the expression “goods in respect of which any prohibition is in force” implies goods which have been specifically barred from being brought into the country and not the smuggling of any goods into the country which may otherwise have been brought into the country by the appropriate channel upon payment of due duty thereon – HELD - The expression “goods in respect of which any prohibition is in force" in the context of Section 112 of the Act would imply goods which are prohibited from being imported and not goods which have been smuggled into the country in contravention of the procedure established by law for the import thereof. Thus, while the corresponding provision in Section 111 of the Act permits the confiscation of the goods on a broader construction of the relevant expression with reference to the definition of “prohibited goods”; the similar provision in Section 112 of the Act has to be strictly construed and confined to goods which are expressly prohibited from being imported into the country - the impugned order in so far as it imposes a penalty based on the value of the goods, is set aside and the matter remanded for such limited purpose for the imposition of such other quantum of penalty that may be permissible – writ petition partly allowed

 

CENTRAL EXCISE TAX SECTION

 

2016-VIL-386-CESTAT-KOL-CE

M/s ALKEM LABORATORIES LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, SILIGURI

Central Excise – Cenvat credit – Rule 2(l) of CCR - Area based exemption - place of removal - sale of goods from godowns and depot – revenue denial of credit on the ground as per exemption Notification No.20/2007-CE, the place of removal will also be the factory gate – HELD – from the definition of place of removal for the purpose of valuation of goods could be a factory or a warehouse where goods are permitted to be deposited without payment of duty or a depot/premises from where the excisable goods are sold after their clearance from the factory. Duty is required to be paid at the time of clearance but place of removal need not always be the factory gate as per the definition given in Section 4(3)(c) of the CEA, 1944 - In the present case the goods are sold from the godowns/depots and no sales are effected at the factory gate. Reliance placed by the department on the wording of Notification No.20/2007-CE dated 25.04.2007 is mis-placed and is not the correct appreciation of law - In the light of definition of input service given in Rule 2(l) of CCR r/w the definition of place of removal, it is held that input service credit of the services availed upto the place of removal is admissible and in the present appeals the place of removal will be godown/depots from where goods are sold and not the factory gate – assessee appeal allowed

 

2016-VIL-384-CESTAT-CHE-CE

MURUGAPPA MORGAN THERMAL CERAMICS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III

Central Excise – Cenvat credit - disallowance of credit on the ground that the invoices addressed to appellant's head office - appellant not registered as Input Service Distributor – HELD - non-registration as ISD should not deprive the appellant of substantial benefit of credit. Moreover, the appellant has taken the ISD Registration later on and since this is only a procedural lapse in law, credit cannot be denied – assessee appeal allowed by remand

 

SERVICE TAX SECTION

 

2016-VIL-385-CESTAT-DEL-ST

CHHATTISGARH STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD Vs C.C.E. & S.T., RAIPUR

Service Tax – taxability of services provided in relation to maintenance or repair of immovable property under statutory duty/function on behalf of the State Govt. - leasing the Govt. land and collecting charges for maintenance of street light and repair and maintenance of roads, etc – demand under Repair and Maintenance service - HELD - even if these charges are statutorily prescribed, they remain a consideration for rendition of service. There is nothing in Section 66 of the Finance Act, 1994 which implies that if charges for rendition of taxable service are statutorily prescribed the same would not be liable to service tax. Similarly, there is nothing in Section 65 to imply that a service rendered as part of statutory duty/obligation will not be treated as taxable service even if it satisfied the definition of any of the taxable services - When the service rendered is taxable under Section 65 there is no inherent exemption from levy of service tax merely on the ground that the service provider is ‘Government’ or ‘Government Agency’, nor is there any exemption from the levy of service tax merely because service recipient is Govt. or Govt. Agency - the appellant is a corporate entity and is therefore can scarcely be called sovereign or public authority and also the charges collected by it were not deposited in the Govt. treasury. Therefore, even the CBEC Circular No.192/62/2016-ST, dated 13.04.2016 does not come to the appellant’s rescue – revenue demand sustained

 

2016-VIL-388-CESTAT-HYD-ST

M/s GE INDIA EXPORTS PVT LTD Vs CC,CE&ST, HYDERABAD-II

Service Tax – Refund of unutilized CENVAT credit – denial of refund based on input services nexus with the output services and input invoices are addressed to unregistered premises – Commissioner (Appeals) by relying upon the judgment in Maruti Suzuki Ltd upheld the rejection - HELD - the judgment rendered in Maruti Suzuki case deals with interpretation of inputs and not input service – further, the view laid in Maruti Suzuki has been doubted and referred to Larger Bench. The Larger Bench of Hon'ble Supreme Court in the case of Ramala Sahakari Chini Mills Ltd answered the reference stating that the word 'include' does not have a restrictive meaning - the authorities below have wrongly applied the judgment laid in Maruti Suzuki case - Rule 4A of the Service Tax Rules, 1994 does not mandate that the premises of service recipient has to be a registered premises. It is sufficient that the name and address of service recipient is shown in the invoice - the appellant is eligible for refund - the impugned order is set aside and held in favour of assessee

 

2016-VIL-387-CESTAT-MUM-ST

M/s PPD PHARMACEUTICAL DEVELOPMENT (I) PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI

Service Tax – Refund - Rule 5 of CCR, 2004 - services of inspection of the goods in India for the principal situated abroad – export of services – denial of refund on ground of limitation – revenue appeal against sanctioning of refund - HELD - limitation starts from first Foreign Inward Remittance Certificate (FIRCs) is received – part of refunds which are within limitation are allowed - the first appellate authority has come to a conclusion, inspection that undertaken by the appellant is export of services the issue is no more res integra in view of Hon'ble High Court of Bombay order in the case of SGS India Pvt Ltd – revenue appeal dismissed

 

Guest Article

No Service tax on sale of under-construction flats if contract price includes value of land

 

cuCir25

Customs: Maintenance of records in relation to warehoused goods in electronic form, filing of Returns and acknowledgement of receipt of goods

 

puduPR070616

Puducherry: Press Release on voluntary tax compliance through public participation

 

10^th of June

 

cuCir26

Customs: Form of application for a Licence under Public Warehousing Licensing Regulations, 2016 / Private Warehousing Regulations, 2016 / Special Warehousing Regulations, 2016

 

cuNoti83NT

Customs: Chandigarh notified as a Customs airport for 'Unloading of imported goods and the loading of export goods or any class of such goods'

 

dgftTN08

DGFT: Clarification regarding FPS benifits to "Other Cast Articles of Iron & Steel"-ITC(HS) code-7325 under SI. No. 279 of Appendix 37 D as revised vide Public Notice 52 dated 25.02.2014

 

2016-VIL-300-JHR

M/s EXPRESS INFRATECH PVT LIMITED Vs THE STATE OF JHARKHAND

Central Sales Tax Act – section 8(3) - denial of assessee application for amendment to certificate of registration with retrospective – inclusion of Capital goods purchased for mining activity – HELD - Section 7 of the CST, 1956 r/w Section 25 (4) of the JVAT Act, the authorities of the State of Jharkhand are authorizing the authorities for issuance of the certificate of registration. Moreover, the certificate of registration issued under Section 8(3) of the CST Act can also be amended as per Rule 7 of the Central Sales (Registration & Turnover) Rules, 1957, if an application is to be given to the notified authorities and the State authorities notified the authorities especially DC of Commercial Taxes - Section 25(4) of the JVAT Act r/w Rule 12 of the Central Sales (Registration & Turnover) Rules, 1957, retrospective amendment in the certificate is always permissible - once capital goods are purchased for mining purposes and there is a provision of amendment in the certificate of registration,  the respondents are directed to carry out that amendment and capital goods shall be included in the certificate of registration with retrospective effect - writ petition is allowed

 

2016-VIL-299-RAJ

ASSISTANT COMMERCIAL TAX OFFICER Vs FECCO ELECTRICALS COMPANY

Rajasthan Sales Tax Act, 1994 – Transport of goods directly from custom clearance for home consumption – non-production of declaration form ST-18A under Rule 53 – levy of penalty – HELD - there is a difference in between the goods coming in the state of Rajasthan from other States as against the goods being directly imported from foreign countries as in the instant case. No occasion would arise for carrying a declaration form in such a case as the foreign seller may not be aware of such eventualities of filing of declaration form ST-18A - it will be detrimental to even imports from foreign countries as the foreign seller may not be aware of Indian Tax Laws and filling such declaration form as and when goods are sold to Indian Traders and which came after custom clearance. Though Rule 53 prescribes that declaration form ST-18-A is required to be carried but, not at least in such an eventuality where the goods were directly imported from the foreign countries – revenue petition dismissed

 

2016-VIL-393-CESTAT-HYD-CU

M/s STUDIO 24 FRAMES Vs CC,CE&ST, HYDERABAD-II

Customs - import of second hand camera – Capital goods or otherwise - ‘all other second hand capital goods’ or ‘other second hand goods’ as in para 2.17 of the FTP 2009-14 - levy of redemption fine and penalty under Section 112(a) of CA, 1962 – HELD - The appellants have imported the goods without license and contends that the goods fall under category of second hand capital goods which are freely importable - As per para 9.52 FTP, ‘services’ include all tradable services covered under General Agreement on Trade and Services and earning foreign exchange. The appellants the equipment imported by them is their basic infrastructure and machinery for revenue generation. The authorities below have reached the conclusion that the activities proposed to be carried out by the appellant are not covered within the scope of the definition of services as mentioned in para 9.52 of FTP. That therefore they would not fall into the category of capital goods - the second para of the definition of capital goods say that it includes goods used for service sector. The authorities below have assumed without any basis that the activities proposed to be carried out using the imported goods cannot earn any foreign exchange. It is submitted that the appellant could sell the goods also and in that case would fall into the category of capital goods. Hence, the goods fall into the category of second hand capital goods - the argument of the Revenue that the subject goods do not fit into the definition of second hand capital goods is not acceptable and therefore the confiscation of the goods is not legal and proper - the impugned order is set aside and the appeal is allowed

 

2016-VIL-391-CESTAT-MUM-CU

M/s SPICER INDIA LIMITED Vs COMMISSIONER OF CUSTOMS, CHENNAI-III

Customs - provisional assessment - refund in respect of amount deposit for provisional assessment of imports in terms of Section 18 of the Customs Act, 1962 - refund credited into Consumer Welfare Fund applying the provisions of unjust enrichment – HELD - the bar of unjust enrichment was first time inserted under Section 18 by way of Sub-Section (5) w.e.f. 13.7.2006 - at the time of provisional assessment the bar of unjust enrichment in case of a refund arising on finalization of the assessment was not applicable. Therefore, the lower authority has wrongly credited the sanctioned refund in the Consumer Welfare Fund - the impugned order is not sustainable, hence, the same is set aside – assessee appeal is allowed

 

2016-VIL-390-CESTAT-DEL-CE

M/s SURYAVANSHI SPINNING MILLS LTD Vs C.C.E. BHOPAL

Central Excise – clearance of Polyster Synthetic Yarn in DTA on the basis of DTA clearance permission which was subject to the condition that the DTA sale will be of similar goods or goods belonging to same class as that of goods manufactured and exported - demand and levy of penalty on the ground that the permission was not valid for DTA clearance of Synthetic Yarn – HELD – If manufacture and export of Synthetic Yarn was required for DTA sale of Synthetic Yarn then the Development Commissioner would not have extended the approval for domestic sale of both Cotton Yarn and Synthetic Yarn as he was very much aware that there were no exports of Synthetic Yarn during that quarter. Therefore, the only harmonious interpretation of the scope of the said condition is that the clearances in the DTA for Cotton Yarn and Synthetic Yarn is subject to the condition that similar goods i.e. goods namely Cotton Yarn and Synthetic Yarn should have been manufactured and exported from the unit in the past - it is not disputed that the unit had exported both Cotton Yarn and Synthetic Yarn in the past - the DGFT’s Permission letter does not disallow domestic clearances of synthetic yarn granted by the Development Commissioner - the entitlement for domestic clearances is determined in totality and not with reference to specific items - the contention of the Ld. DR that Synthetic Yarn and Cotton Yarn do not belong to the same class of goods nor are they similar goods is not germane to the present case because the appellant had manufactured and exported both Cotton yarn and Synthetic Yarn from the same unit and therefore clearance of Synthetic Yarn for DTA sales was in conformity with its condition - impugned duty demand is unsustainable – assessee appeal allowed

 

2016-VIL-392-CESTAT-BLR-CE

M/s BEML LTD Vs THE COMMISSIONER OF CENTRAL EXCISE (APPEALS), MANGALORE

Central Excise - Section 11B - Claim for refund of duty – refund arising out of reduced rate of duty - refund of excise duty paid in excess – delay in clearance of goods from the factory – denial of refund on ground of limitation – HELD - the duty was paid in December 2006 and March 2007 but the goods were removed in March 2008 and the refund application was filed on 5.1.2010 which means that the refund application in the present case has been filed after more than three years which is beyond the period of limitation as per Section 11B - the provisions of time limit are mandatory and the authorities cannot grant refund which is filed beyond the due date – Further, the appellant has failed to establish that the said burden of duty has not been passed on to its buyer. Simply producing a copy of the ledger would not be sufficient to discharge the onus on the appellant - the appellant has not been able to prove that the disputed duty amount has not been passed on to its buyers – assessee appeal dismissed

 

2016-VIL-301-GUJ-CE

M/s LUBI INDUSTRIES LLP Vs UNION OF INDIA

Central Excise - includability of the pre-delivery inspection charges in the assessable value of the goods - identical issue decided by the CESTAT in favour of the petitioner, despite which the adjudicating authority had once again given a decision against the petitioner – HELD - Assistant Commissioner committed a serious error in ignoring the binding judgment of superior Court that too in case of the same assessee - Even if the decision of the Tribunal in the present case was not carried further in appeal on account of low tax effect, it was not open for the adjudicating authority to ignore the ratio of such decision. It only means that the Department does not consciously agree to the view point expressed by the Tribunal and in a given case, may even carry the matter further. However, as long as a judgment of the Tribunal stands, it would bind every Bench of the Tribunal of equal strength and the departmental authorities taking up such an issue – petition disposed in favour of assessee

 

2016-VIL-389-CESTAT-ALH-ST

M/s MANUPATRA INFORMATION SOLUTIONS PVT LTD Vs CCE,C&ST, NOIDA

Service Tax - Section 65 (75) of Finance Act, 1994 - online information and data base service – web-hosting services - common input services for manufacture and clearance of exempt goods - pursuant to issue of SCN and prior to passing of the order in appeal, assessee made payment for common services with interest - penalty under Rule 15 (3) of CCR, 2004 – HELD - Internet service, web-hosting service and content service is wholly attributable to the activity of rendering taxable output service. Thus, the demand attributable to these input services is set aside – matter remanded on issue of input rent with direction to ascertain the space occupied for providing exempt activity and thereafter, re-distribute the rent in the ratio of space and accordingly, the appellant will be liable for reversal of Cenvat credit attributable to the space occupied for exempted activity - the appellants have co-operated with the revenue by providing the information, requisitioned from time to time. The issue is of interpretation of the statutes. No case is made out of deliberate default or contumacious conduct - penalty reduced to under Rule 15 (3) of the CCR – appeal partly allowed

 

triNoti27

Tripura: Establishment of Check-post

 

odiNoti9336

Odisha: Regarding delegation of power

 

ceOrder278

CBEC: Approved panel of Sr/Jr Standing Counsel

 

11^th of June

2016-VIL-303-MAD

SRI RUKMANI ROLLING MILL PRIVATE LIMITED Vs THE ASSISTANT COMMISSIONER (CT)

Central Sales Tax Act, 1956 – Rejection of claim of exemption on consignment and Branch transfer - Form F – assessment order without grant of opportunity for personal appearance under Section 22(4) of the TNVAT, 2006 – HELD - following the Full Bench's Judgment in Arulmurugan's case and the Circular dated February 1, 2000 issued by the Commissioner the writ petition is allowed by setting aside the impugned order - the respondent is directed to accept form-F filed by the petitioner for the assessment year 2014-2015 and pass orders afresh in accordance with law – writ petition allowed

 

2016-VIL-302-BOM-CE

LARSEN & TOUBRO LIMITED Vs THE UNION OF INDIA

Central Excise - refund claim – revenue non-compliance of Division Bench Order granting refund in favour of assessee – HELD - No officer is acting independently and following judgments of this Court, but waiting for the superiors to give them a nod. Even the superiors are reluctant given the status of the assessee and the quantum of the demand or the refund claim. We are sure that some day we would be required to step in and order action against such officers who refuse to comply with the Court judgments and which are binding on them as they fear drastic consequences or unless their superiors have given them the green signal. If there is such reluctance, then, we do not find any enthusiasm much less encouragement for business entities to do business in India or with Indian business entitles. Such negative responses hurt eventually the National pride and image - Hereafter if such orders are not withdrawn despite binding Division Bench judgments of this Court that would visit the officials with individual penalties, including forfeiture of their salaries until they take a corrective action - copy of this order be sent to the Secretary in the MoF, Government of India and the Chairman, CBEC - Writ Petition disposed of

 

2016-VIL-394-CESTAT-MUM-ST

COMMISSIONER OF SERVICE TAX, MUMBAI-II Vs M/s WNS GLOBAL SERVICES

Service Tax - Cenvat credit - refund of the Service Tax paid on various input services – HELD – the first appellate authority has come to a correct conclusion that respondent-assessee is eligible to CENVAT credit and claim of the refund claim needs to be allowed. The claim of Revenue that input services do not have direct nexus to the business activity of assessee is a hollow claim - The appeals filed by the Revenue are rejected

 

cuCir27

Customs: Export Against Supply by Nominated Agencies - Procedure for import of Gold & Silver

 

mahaNotiCR83

Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016: Notifies the date of effect of amendment to sub-section (3) of Section 16 of MVAT Act, 2005

 

13^th of June

 

2016-VIL-17-TRB

M/s SUMER CORPORATION Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act – Sale – Work contract - taxability of Transferable Development Rights (TDR) - word ‘other valuable consideration’ - transfer of goods in this works contract - measurement for taxation – HELD - the appellant has taken up the work of building contract on land taken for development and was to carry on construction under SLR and in pursuance of which, he is to receive TDR as consideration - the present contract is works contract – as per the definition of sale under the section 2(24) the word ‘other valuable consideration’ would include anything that would directly or indirectly fetch some element of money or any other consideration. In the present case, TDR which is mentioned as Transfer Development Rights can be converted into money and therefore TDR would be a valuable consideration - the contention of the appellant that the transaction is barter or free of cost or without consideration cannot be accepted – the argument of the appellant that there was no measurement for calculation of tax cannot be accepted in view of changed circumstance, wherein State has amended rule 58 – penalty set aside – decided in favour of revenue

 

2016-VIL-396-CESTAT-DEL-CU

M/s XING INTERNATIONAL Vs C.C. NEW DELHI (IMPORT AND GENERAL)

Custom – LED panels or LED Television – HELD - goods were branded LED Panels and encased in TV casing but without the speakers, without the remote controls, without the power cables, without the Mother board and without the sockets. The box in which the goods were contained is also found to have been labeled LED panel - as per the sale invoices the appellant has been selling these goods to the various traders in the name of LED panels only – the LED panels devoid of speakers, remote controls, power cables, Mother board and sockets can scarcely be called as having essential characteristics of Television. Indeed in the trade, LED panels are commonly available and they become television when speaker and mother board and other parts mentioned earlier are attached thereto - the goods have to be treated as LED panels and not as LED Television – appeal allowed

 

2016-VIL-395-CESTAT-HYD-CE

M/s LASER SHAVING (I) P. LTD Vs CCE, HYDERABAD

Central Excise – credit of Education Cess and Secondary and Higher Education Cess debited in the DEPB certificates - payment of additional duty of excise - benefit of Notification No.89/2005-Cus dt. 04/10/2005 – revenue contention that Notification No.89/2005-Cus. dt. 04/10/2005, though credit on CVD is allowed, it does not mention anything about Education Cess payable as part of CVD – HELD - Section 3(1) of Customs Tariff Act, 1975 show that the rate of CVD applicable on the imported goods is the rate of total duties of excise which is inclusive of Education Cess and Secondary and Higher Education Cess payable on the aggregate of the other duties of excise. Therefore the assessee contention that Education Cess and Secondary & Higher Education Cess payable on that part of CVD which is equal to the basic excise duty is a part of CVD itself is not without substance - The formula provided under Rule 3(7) of the CCR uses an expression “CVD” but the same is defined to be the “Additional Duty of Customs”. Hence, the expression would include not only the amount equivalent to the excise duty but also the amount equivalent to the cess on such excise duty - The denial of credit is unjustified, the impugned order is set aside – assessee appeal is allowed

 

2016-VIL-397-CESTAT-ALH-CE

M/s TRIVENI ENGINEERING & INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, MEERUT-I

Central Excise - Cenvat credit on the items viz. paints, thinner, rustex, loctite, shrink-komp and STD.D.A utilized in repairing and maintenance of plant and machinery – HELD - all the items in question except shrink-komp, which is quick setting cement used for reinforcement of foundation, are eligible input as these items have been used for maintenance of plant and machineries, which is essential to keep the machineries available for production for the next crushing season – assessee appeal partly allowed

 

2016-VIL-398-CESTAT-HYD-ST

M/s D.E. SHAW INDIA SOFTWARE PVT LTD Vs CC,CE&ST, HYDERABAD-II

Service tax – export of services – refund of unutilised CENVAT credit - rejection of refund claim without issue of show-cause notice – computation of maximum refund – HELD - Non-issuance of notice deprives the assessee of a fair opportunity to know the allegation as well as to put forward his defence. This is blatant violation of the principles of natural justice - The unilateral order passed by the original authority so far as to the rejection of refund claim is illegal in the eye of law. The impugned order which upholds such rejection is also therefore unsustainable - the formula used the word ‘total CENVAT credit taken on input services’. Therefore the inadmissible part of input services cannot be deducted before applying the formula – Thus, there has been in a way application of the formula twice over- The proportionate reduction of Rs.83,774/- has happened due to the wrong application of formula. The impugned order to the extent of upholding the reduction of amount of Rs.83,774/- is set aside - The appellant is eligible for refund of as claimed in the refund application – assessee appeal allowed

 

Guest Article

MVAT Automation Process

 

telCir133

Telangana: Instruction regarding Inspections/Audits & Assessments

 

14^th of June

 

Draft of Central / State Goods and Services Tax Act, 2016

 

2016-VIL-33-SC

STATE OF WEST BENGAL Vs CALCUTTA CLUB LIMITED

West Bengal Sales Tax Act, 1994 – Section 2(30) – Sale - levy of sales tax on sale of food and drinks to the permanent members of respondent-club – principle of mutuality – Matter referred to larger Bench and with following three questions: i. Whether the doctrine of mutuality is still applicable to incorporated clubs or any club after the 46th amendment to Article 366 (29A) of the Constitution of India? ii. Whether the judgment of this Court in Young Men’s Indian Association still holds the field even after the 46th amendment of the Constitution of India; and whether the decisions in Cosmopolitan Club and Fateh Maidan Club which remitted the matter applying the doctrine of mutuality after the constitutional amendment can be treated to be stating the correct principle of law? iii. Whether the 46th amendment to the Constitution, by deeming fiction provides that provision of food and beverages by the incorporated clubs to its permanent members constitute sale thereby holding the same to be liable to sales tax?

 

2016-VIL-304-GUJ

HYNOUP FOOD & OIL INDUSTRIES LTD Vs STATE OF GUJARAT

Gujarat Value Added Tax Act, 2003 - section 73 (4) – pre-deposit – dismissal of appeal by Tribunal on ground of condition of pre-deposit – appellant contention pending scheme for reconstruction, under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 no condition for pre-deposit could have been imposed – HELD - requirement of pre-deposit envisaged under section 73 with possibility of partial or total waiver would not fall within the scope of sub-section (1) of section 22 of SICA. The condition of pre-deposit is neither a proceeding for execution, distress or the like against the properties of the company nor can it be equated with any proceedings for recovery much-less in the nature of a suit - if any proceedings are pending before the BIFR or the appellate authority, that by itself not mean that the pre-deposit requirement under sub-section (4) of section 73 of the GVAT Act would be obliterated. However, directing deposit of 25% of the due tax demand was excessive – pre-deposit reduced to 50 lakhs – appeal disposed

 

2016-VIL-401-CESTAT-ALH-CU

M/s SSA INTERNATIONAL LTD Vs COMMISSIONER OF CUSTOMS, NOIDA

Customs – import of food items which are not meeting the standards under Food Safety and Standards (Food Products Standard and Food Additives) Regulations, 2011 - confiscation under Section 111 (d) of the Customs Act, 1962 and levy of redemption fine – malafide intention – HELD - there is no malafide intention on the part of the appellant. The two laboratories in the country of export found that the goods under export were in good condition. It is also a matter of fact that a period of more than two months had expired from the date of shipping to the date of sending the sample for testing and as such, during this period, the goods suffered damage and no malafide is attributable to the appellants - assessee appeal is allowed and the redemption fine and penalty are set aside

 

2016-VIL-404-CESTAT-CHE-CU

M/s ADORE FONTECH LTD Vs COMMISSIONER OF CUSTOMS (PORT-EXPORT), CHENNAI

Customs - denial refund of Additional Duty of Customs suffered on the imports – HELD - the Adjudicating Authority has not understood the implication of the word “self” mentioned in the invoices. Once “self” is mentioned it may be a case that sale has not been effected. These are contract of future sale at the respective place of sale - Once the ingredient of the Sale of Goods Act, 1930 is complied with, in that circumstance, sales can be said to have been effected. Otherwise it is a mere case of stock transfer in the guise of sale. If the authority is satisfied that sale has been effected and appropriate VAT/sales tax thereon has been paid into the Treasury, the appellant cannot be denied refund of Additional Duty of Customs suffered on the imports - the authority should make in depth examination of the transactions testing that from origin to termination thereof in order to claim the refund – matter remanded

 

2016-VIL-402-CESTAT-ALH-CE

COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD Vs M/s SARTHEK ENTERPRISES LTD

Central Excise – Valuation – Revenue appeal against deductions for freight element incurred after the point of removal of goods from the factory gate – includability of freight element or cost of transportation recovered on equalized / average basis, though on separate invoices, incurred after the point of removal of goods from the factory gate – HELD – it is noted that there are two separate contracts, one is for sale and another is for transportation, packing, forwarding and insurance purposes. One cannot say that the sale of the goods was not completed at the factory gate – the another contract for is only for the purposes of those activities which are mentioned in the said contract and in the respective invoices as there are separate invoices in this regard. The transportation, packing, forwarding, insurance etc. are not part of the value of the goods, there cannot be any claim of duty of Central Excise on that separate part, which concerns with transportation etc. only - when there are separate contract for sale of the goods and for transportation etc., it is held that the said transportation charges cannot be included in the assessable value of the goods for the purposes of computation of Central Excise duty – revenue appeal dismissed

 

2016-VIL-405-CESTAT-MUM-CE

COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I Vs M/s PUNIKIM

Central Excise – manufacture - demand of duty on process of pleating and embossing on processed fabrics – SCN alleging that the process of pleating and embossing of fabrics amounts to manufacture and was not exempted during the period 1.4.2003 to 1.10.2003 – HELD - in absence of any evidence to the effect that pleating and embossing results in a permanent change in the fabrics - only process which resulted in reasonable permanent change in the processed fabrics could amount to manufacture - Revenue appeals are dismissed

 

2016-VIL-400-CESTAT-HYD-ST

M/s ALLIANCE GLOBAL SERVICES IT PVT LTD Vs CCE&ST, HYDERABAD-IV

Service Tax – Information Technology Software Services - refund of accumulated credit – rejection of refund on ground of nexus with output service – works contract services for doing minor repair works – HELD - the exclusion portion of the definition introduced w.e.f. 01-04-2011 which excludes service portion in the execution of a works contract and construction services - in the present case, the works done as per the invoice though classified as works contract services in the invoices would not fall in the exclusion portion as it is not for construction of building, civil structure or part thereof or for laying foundation or structures for capital goods. These services were used for fixing doors etc. which is nothing but renovation, repair of premises of the service provider - such services qualify as input services and that they do not fall in the exclusion portion of the definition - The word "include" in the statutory definition of 'input' is generally used to enlarge the meaning of the preceding words and it is by way of extension and not with restriction - appellant is eligible for credit/refund of the service tax paid on various input services – assessee appeal allowed

 

2016-VIL-305-JHR-ST

G.B. ENGINEERS Vs UNION OF INDIA

Service Tax – erection, commissioning and installation services – refund of service tax paid prior to 16.06.2005 – refund of tax paid voluntarily and by mistake – revenue contention that limitation period is applicable as service tax was not paid under protest – HELD - Section 11B of the Central Excise Act r/w Section 83 of the Finance Act, 1994 are not applicable in the present case because, the amount paid by the petitioner is never under the Central Excise Tax nor under the service tax when there is no liability to make the payment - the amount paid under the mistake of facts or under mistake of law or under both, the same cannot be retained by the Union of India under the one or other pretext when a service provider is not liable to service tax and if any payment is made, it cannot be covered under Section 11B of the Central Excise Act to be read with Section 83 of the Finance Act, 1994 - amount to be refunded to the petitioner or will be adjusted against the other future liability – writ petition allowed

 

delOrder363

Delhi: Reward/Appreciation scheme for such Good dealers

 

tnCir06

Tamil Nadu: Regarding issue of Manual 'C' & 'F' Forms

 

cuNoti26ADD

Customs: Extends the levy of anti-dumping duty on imports of Pentaerythritol, originating in, or exported from the People's Republic of China

 

cuNoti85NT

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

 

15^th of June

 

harOrder950

Haryana: Grant of Registration Certificate under HVAT Act, 2003/CST Act, 1956 within one working day to the Industrial Units being set up on Self Owned Premises/Land

 

harOrder940

Haryana: Implementation of Single ID system

 

ceNoti25

Central Excise: Amend to notification No.67/95-CE dated 16.03.1995 - for the words “Free Trade Zone” the words “Special Economic Zone” shall be substituted

 

ceNoti24

Central Excise: Amend to notification No.214/86-CE dated 25.03.1986 - for the words “Free Trade Zone” the words “Special Economic Zone” shall be substituted

 

ceCir1031

Central Excise: Regarding levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of Rs. 1000 or more

 

cuCir28

Customs: Single Window Project - Simplification of procedure in SWIFT for clearance of consignments related to drugs & cosmetics

 

Guest Article

Draft Model GST Law in public domain

 

2016-VIL-306-KER

M/s FEDERAL HOUSE CONSTRUCTION CO-OPERATIVE SOCIETY LTD Vs CTO (WORKS CONTRACT)

Kerala Value Added Tax Act, 2003 – Assessment – Work Contact – Compounding rate - validity of notice under Section 25(1), when the return is not rejected under Section 22 of the Act within the prescribed period under KVAT Rule 35 – HELD - when a fact situation gives rise to a situation warranting interference under Section 25(1), Section 22 cannot control Section 25. Section 25 is an independent power available to the Department to consider and take action in respect of escaped assessment, under assessment etc - merely because the authorities did not invoke Section 22 within the prescribed period it does not preclude them from invoking Section 25, if the facts give rise to an eventuality as provided therein - In order to invoke Section 8 (a) of the Act, option is to be exercised by the works contractor. Option can be exercised only on compliance of the statutory format. In so far as the petitioner did not comply with such procedure, the Department was justified in acting accordingly as if petitioner had not opted for payment of tax at compounded rate - it is admitted that the society purchased and constructed Flat with the fund received as advance from the prospective buyers and subsequently transferred the property by registration after collecting balance amount - The society and the members are having separate legal entity hence the Society is liable to pay tax as per the KVAT Act - if at all there is a contention contrary to the same or with regard to the factual aspect, it is for the petitioner to agitate the same in a proper appeal – writ petition dismissed

 

2016-VIL-307-MAD

DCCT Vs THE TAMIL NADU INDUSTRIAL CO-OP RUBBERISED COIR PRODUCTS LTD

Tamil Nadu General Sales Tax Act – manufacture of rubberised coir mattresses - product made up of rubberised coir or foam rubber product – revenue seeks to classify rubberised coir products as foam rubber products and levied tax at 12% instead of 5% - HELD - The appellate authority has observed that, “Before latexgum is used in the process of binding the coir fibre, it is called rubberised coir products and it could not be termed as foam rubber product” - merely because, the latex gum was used, in the process of binding the coir fibre, the end product cannot be termed as foam rubber product – Appellate authority has recorded a categorical finding that the product is only made of rubberised coir, taxable at 5%, which fact has been concurred by the Tribunal - No strong material grounds have been made out to reverse the concurrence finding of fact recorded – revenue appeal dismissed

 

2016-VIL-308-GUJ-CU

RATNAMANI METALS AND TUBES LTD Vs UNION OF INDIA

Customs – benefit of duty drawback - Eligibility of brand rate of duty drawback where inputs used in the manufacture of export products are imported availing of DEPB - whether when an importer utilises DEPB scrip for the purpose of customs duty on inputs and raw materials, benefit of duty drawback would be available upon export of the final product – HELD - rule 3 of Drawback Rules, 1995 does not prohibit a claim of drawback as per the specified rates if the duty on the imported goods is not paid in cash but by surrendering credit in the DEPB scrip. Thus neither section 75 of the Customs Act, nor rule 3 of the Rules of 1995, provide any restriction on claim of drawback, if the basic duty of customs is paid through DEPB - with effect from 1.9.2004, Foreign Trade Policy provided that additional customs duty/excise duty paid in cash or through debit under DEPB shall be adjusted as CENVAT credit or duty drawback as per the rules. It was in this background provided that additional customs duty paid through debit under DEPB shall also be allowed as brand rate of duty drawback - Impugned orders are reversed and assessee petition allowed

 

2016-VIL-406-CESTAT-BLR-ST

M/s HML AGENCIES (P) LIMITED Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, MANGALORE

Service tax – Port services – demand of service tax for various services provided during the period of April 2004 to March 2007 within the ‘Port area’ - handling shipment of iron ore – revenue seeks to classifying the services under Cargo Handling Service or under Port Service – HELD – the definition of ‘port services’, as it was defined for the period prior to 1.7.2010 and for the period after 1.7.2010 and reading of corresponding taxable service(s) under Section 65(105)(zn) and (zzl), makes it clear that services rendered within the port area cannot be called and categorised as ‘port service’ for levying service tax when the definition of ‘port service’ during the relevant period did not exactly cover such services which were rendered by them for ‘transportation of goods’, ‘handling of cargo’, etc., within Port area - all the services which are rendered within ‘a port’ or within ‘other port’ have to be categorised as ‘port services’ only irrespective of provisions of Section 65A of Finance Act, 1994. However, these provisions and this position is effective only from 1.7.2010 – if such services have been rendered during the period prior to 1.7.2010, earlier provisions of law of Service Tax concerning ‘port services’ will only be applicable - in respect of the respective services rendered by the appellant during the relevant period, appellant cannot be made liable to pay service tax under the category of ‘port services’. Consequently the impugned order confirming the demand along with interest and imposing penalties under various provisions of the Finance act, 1994 is hereby set aside and the appeal is allowed

 

2016-VIL-407-CESTAT-HYD-ST

CC,CE&ST, HYDERABAD-IV Vs M/s HINDUSTAN AERONAUTICS LTD

Service tax – penalty for availing irregular credit – manufacturing exempted goods revenue appeal against waiver of penalty invoking Section 80 of the Finance Act, 1994 – malafide intention – HELD – assessee being a public sector undertaking there was no mala fide intention to evade payment of service tax - The respondent had availed credit on their interpretation of law and the credit availed and utilized was fully disclosed in their accounts and returns. When there was no objection raised even after audit, they cannot be blamed for holding the impression that their interpretation is correct - the Commissioner (Appeals) has rightly set aside the penalty – revenue appeal is dismissed

 

2016-VIL-309-GUJ-CE

THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS Vs KRISHAK BHARTI COOPERATIVE LTD

Central Excise – Revenue application for condonation of delay for revival of Tax Appeals of year 2007 – initial delay due to seeking clearance of Committee of Disputes and further delay in seeking revival of the appeals, notwithstanding no requirement of COD clearance – HELD - the applicant had moved CBEC for doing the needful for obtaining clearance from the COD and it was awaiting a response from the COD - While it is true that there is a considerable delay in filing the present applications, the reasons put forth by the applicant for the delay caused in filing the applications, are plausible and acceptable - strictly speaking, the question of invoking the bar of limitation would not arise, inasmuch as, the appeals had been disposed of with liberty to the applicant to move for revival once the approval of the COD was obtained. However, the COD does not appear to have decided the applications filed by the applicant and now in the light of the decision of the Supreme Court in the case of ECIL, such requirement is no longer necessary - the fact that huge amount of revenue is involved in the present appeals, the delay is required to be condoned, more particularly because huge amount of public money is involved – revenue applications succeed and are allowed

 

2016-VIL-403-CESTAT-HYD-CE

M/s GRINDWELL NORTON LTD Vs CCE, TIRUPATI

Central Excise – Cenvat credit – Capital goods - credit on air receiver and corrugated hoses - the reason for disallowance of credit by Commissioner (Appeals) is that the related invoices were not submitted – admissibility of input service credit on payroll processing and C Form collection service – HELD - The original authority after verification of invoices disallowed the credit on the ground that these goods do not qualify as capital goods. In such circumstances, it was not legal or proper for the Commissioner (Appeals) to deny credit saying that the invoices are not produced - Further the appellant has explained that the hoses are used to connect / transport silicon carbide just like pipes. Air receivers serve the purpose of air compressors in the manufacture of final product. These goods are integral to the manufacturing process and would fall within the definition of capital goods/parts - credit on Air receiver and corrugated hoses is admissible - Payroll processing of employees is part of maintaining proper accounts. So also C-Form has to be collected and submitted which is necessary for upkeep of tax accounting. As such, the credit on these input services is admissible - appeal is allowed

 

kerNoti371

Kerala Value Added Tax (Amendment) Rules, 2016 - Amendment of Rule 19 - Regarding security to be furnished by certain dealers

 

cuNoti86NT

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