SUMMARY FOR THE MONTH OF DECEMBER

List of updates in the month of December ‘15

1st of Dec

2015-VIL-508-GAU

EMAMI LIMITED Vs STATE OF ASSAM

Assam Value Added Tax Act - Classification - Ayurvedic medicines or cosmetics & toilet preparations - Entry 1 of the Fifth Schedule or Entry 21 of the Fourth Schedule – HELD – drugs and medicines falls within the purview of entry 21 of the Fourth Schedule of the Act and taxable at four per cent on MRP basis. The Explanation by notification dated July 29, 2005 states that expression "drugs and medicines" should not include products capable of being used as cosmetic and toilet preparation including toothpaste, tooth powder, cosmetic and toilet articles and soaps - The said Explanation, however, lays emphasis on the term "shall not include" and the same is designed to exclude the goods which are primarily cosmetic in use but have a subsidiary use as drugs and medicines. However, when some goods which are drugs and medicines in their primary use but have cosmetic use as well cannot be treated as product covered by entry 1 of the Fifth Schedule - when a product in common parlance and on user perception is found to be a drug, the same needs to be concluded as drug although it can be used in ancillary measure as cosmetic product as well - the products which are involved in the proceedings are basically treated as drugs and medicines although they have ancillary use as cosmetics and toilet products, and as such, the revenue were not right in treating those articles as cosmetics and toilet products for the purpose of levy of tax at 12.5 per cent in terms of entry No. 1 of the Fifth Schedule to the Act. Rather, tax on those products was to be levied at per cent in terms of entry No. 21 of the Fourth Schedule to the aforesaid Act - the impugned orders are hereby quashed and set aside – Assessee writ petition allowed

2015-VIL-509-MAD

M/s LEDER FX Vs THE DEPUTY COMMERCIAL TAX OFFICER

Tamil Nadu General Sales Tax Act - reassessment proceedings for the purpose of imposition of penalty under Section 16(2) of the Act – turnover relating to transfer of DEPB – Payment of tax before initiation of the assessment proceedings - HELD - when there is no intention for evading of payment of tax and when the entire turnover is very much reflected in the books of accounts, there is no reason for levying penalty - levy of penalty without considering the bona fides of the petitioner-assessee could not be sustained - impugned order is set aside and the writ petition is allowed

2015-VIL-639-CESTAT-MUM-CE

DHANLAXMI RE-ROLLING MILL Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

Central Excise - Section 11A(1) - Recovery of duty - show cause notice issued under Section 11A(1) of CEA, 1944 - whether on depositing the entire duty, interest and 25% of the penalty within 30 days of the show cause notice, all the proceedings against the appellant get concluded or not – HELD - once the appellant has deposited the entire duty along with 25% of the penalty amount within 30 days of the issuance of show cause notice, the entire proceedings against the appellant stand concluded - the redemption fine imposed on the appellant is totally unwarranted and in contravention of the provisions as contained in Section 11A(2) – Assessee appeal allowed

2015-VIL-507-GUJ

STATE OF GUJARAT Vs PEPSICO INDIA HOLDINGS PVT LTD

Gujarat Sales Tax Act, 1969 – Section 44 - Reassessment of turnover escaping assessment – Invocation of extended period of limitation under section 44(a) of the Act – additional tax liability adjusted against exemption limit - HELD - for the purpose of invoking the extended period of limitation under clause (a) of section 44 of the Act, revenue is required to make out a case that the reassessment proceedings had been initiated on account of dealer had concealed such sales or specified sales or purchases or any material particulars relating thereto, or has knowingly furnished incorrect declaration or return - perusal of the order of assessment clearly shows that the assessing authority at the relevant time had taken into consideration the additional tax payable under section 4A of the Act and had duly computed the tax liability after considering the component of additional tax and had adjusted the same against the exemption limit – as such the Commissioner had no reason to believe that the assessee had concealed any material particulars or had furnished incorrect declaration or return. Therefore, the ingredients of clause (a) of section 44 of the Act are clearly not satisfied. Consequently, the Assessing Authority was not justified in invoking the extended period of limitation under section 44(a) of the Act. The Tribunal, therefore, did not commit any legal error in holding that the reassessment was barred by limitation – Revenue appeal dismissed

2015-VIL-506-GUJ

SHRI BAJARANG ROADLINES Vs STATE OF GUJARAT

Gujarat Value Added Tax, 2003 - section 68 – Detention of goods carrying vehicle – Transit pass – detention for purpose of verification of the tax liability - HELD – Additional Commissioner Enforcement, Gujarat had no jurisdiction to take any action in exercise of powers under section 68(4 of the Act - In the facts of the present case, the truck had not been stopped at the place of exit but within the State of Gujarat and hence, there was no question of resorting to the provisions of sub-section (2) of section 69 of the Act - More importantly, a perusal of the impugned seizure memo shows that the truck had not been detained by reason of any of the eventualities contemplated under sub-section (4) of section 68, but for the purpose of verification of the tax liability. Under the circumstances, the entire action of the respondent in detaining the truck in question together with the goods is on all counts, without any authority of law - the impugned seizure memo being without any authority of law cannot be sustained – decided in favour of assessee

2015-VIL-641-CESTAT-MUM-CE

TULSYAN NEC LTD Vs CCEC&ST, BANGALORE-I

Central Excise - Clandestine clearance of HDPE woven sacks/bags - difference between the quantities mentioned in the ‘private register’ and RG-I register – HELD - Unless there is any credible and justifiable explanation for this ‘difference in quantity’ the arguments and the submissions of the appellant on this count cannot be accepted on any judicious criterion. The appellant has consistently tried to wash off the responsibility regarding the activities and operations carried on in their premises by their contractor, who was stitching HDPE fabrics into HDPE woven bags/sacks. Thus the appellant’s explanation that ‘difference in the quantity’ is because of ‘production of bags as job worker’ cannot be accepted as a judicious and justifiable explanation – Demand confirmed except for the production made during the period of November 2003, which has been found to be beyond the time limit of five years from the relevant date - The appellant is also liable to the penalty equivalent to the duty confirmed above under Section 11 AC of the Central Excise Act 1944 – Assessee appeal dismissed

2015-VIL-638-CESTAT-MUM-ST

M/s KANKARIYA AUTOMOBILES PVT LTD Vs CCE&C, AURANGABAD

Service Tax - Cenvat credit - GTA service availed on inward transportation towards transportation of new cars from M/s. Maruti Suzuki to the appellant – Disallowance of credit basis that GTA is in respect of purchase of car which is sold as such and authorized station service has no relation with this transportation service – HELD - unless the vehicles are received and sold, there would not be any servicing of the same - appellant is entitled for Cenvat credit in respect of GTA as input service - credit of GTA of transportation of new vehicle is allowed as Cenvat credit for utilizing the same for payment of service tax on output service i.e. authorized station services - Appeal is partly allowed

2015-VIL-640-CESTAT-MUM-ST

RELIANCE CLINICAL RESEARCH SERVICES PVT LTD & SIRO CLINPHARM PVT LTD Vs CST, MUMBAI-II

Service Tax - Technical Testing and Analysis service – Clinical trial – Period of dispute - 01.07.2003 to 31.03.2006 – Demand - show cause notice invoking extended period - the case of the Revenue that services would be taxable due to an addition of Explanation in respect of the definition of the Technical Testing and Analysis as per Section 65 (106) of the Finance Act, 1994 – HELD - issue is no more res integra and the Tribunal in the case of B.A. Research India Ltd. have gone into very same dispute and in respect of very same Explanation and held that the Explanation is effective prospectively - Reliance placed by the learned D.R in the case of Sulochana Amma in respect of how to read the Explanation to Section will not carry the case any further. That was the case wherein it was in respect of the provisions in Criminal Procedure Code, while in the case in hand there are authoritative pronouncements in the Tribunal’s decision are directly on the very same issue - the impugned orders are unsustainable and liable to be set aside – assessee appeal allowed

2nd of Dec

2015-VIL-508-GAU

EMAMI LIMITED Vs STATE OF ASSAM

2015-VIL-509-MAD

M/s LEDER FX Vs THE DEPUTY COMMERCIAL TAX OFFICER

2015-VIL-639-CESTAT-MUM-CE

DHANLAXMI RE-ROLLING MILL Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

2015-VIL-507-GUJ

STATE OF GUJARAT Vs PEPSICO INDIA HOLDINGS PVT LTD

2015-VIL-506-GUJ

SHRI BAJARANG ROADLINES Vs STATE OF GUJARAT

2015-VIL-641-CESTAT-MUM-CE

TULSYAN NEC LTD Vs CCEC&ST, BANGALORE-I

2015-VIL-638-CESTAT-MUM-ST

M/s KANKARIYA AUTOMOBILES PVT LTD Vs CCE&C, AURANGABAD

2015-VIL-640-CESTAT-MUM-ST

RELIANCE CLINICAL RESEARCH SERVICES PVT LTD & SIRO CLINPHARM PVT LTD Vs CST, MUMBAI-II

3rd of Dec

rajNoti103

Rajasthan Value Added Tax (Fourth Amendment) Rules, 2015 - Amendment in Rule 21, 22A, 41 and 53, Form 65 and Insertion of Form 72

FCP0212

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

ceCir1012

Clarification regarding suspension of benefits under North East Industrial and Investment Promoton Policy (NEIIPP), 2007 and its bearing on Central Excise duty exemption

ceCir1012

Central Excise - Clarification regarding suspension of benefits under North East Industrial and Investment Promoton Policy (NEIIPP), 2007 and its bearing on Central Excise duty exemption

2015-VIL-513-P&H

M/s NEW DEVI GRIT UDYOG Vs STATE OF HARYANA

Haryana Value Added Tax Act - Input tax credit – Proper invoice - failure to produce original purchase invoices – Invoice not having name and TIN number – Denial of credit - HELD - The non mentioning of the buyer's name or TIN number as it is issued by the seller cannot be taken to be fatal against the buyer and benefit of input tax credit declined to the buyer on that basis alone. The purpose of incorporating Rule 54 (3) of the HVAT Rules is to safeguard the interest of the revenue from non-genuine transactions. It is procedural in nature and does not confer any substantive right. In the event of non-mentioning of the name and TIN No. of the buyer, a heavy onus is cast on the said dealer to produce material to discharge the said onus by producing other sufficient evidence to show that the transaction was genuine and it had made payment of VAT to the seller - it is not within the control of the purchaser to ensure that the tax invoice contains his name and TIN No. as it is issued by the seller. Unless a mandatory duty is cast on the seller to issue tax invoice with such particulars, the purchasers cannot be penalized for no fault of theirs - Assessing Officer not justified in declining the benefit of input tax credit only on the ground that the tax invoices did not contain the name of the buyer and also its TIN number – Assessee appeal allowed

2015-VIL-134-SC
TATA SONS LIMITED Vs STATE OF MAHARASHTRA

Sales Tax - The Supreme Court admits Tata Sons petition challenging Bombay High Court order on levy of sales tax on royalty for the use of TATA brand name by its subsidiaries – Levy of penalty stayed

2015-VIL-27-MSTT

THE STATE OF MAHARASHTRA Vs M/s FIAT INDIA PVT LTD

Bombay Sales Tax Act, 1959 - Resale Claim - sales effected under Trade Mark cannot be allowed as Resale in view of the Explanation to Section 2(26) of the Act under Rule 42H of BST Rules, 1959 - To verify this fact matter remanded for re-verification for resale is rightly disallowed or not. After confirming the factual position if resales denies then the appellant is entitled for set-off - Purchase Tax Under Section 41(2) - The appellant transfer the manufactured goods to the branches, the ratio mentioned in the appeal order is at 72% thus, to the extent of 72% the appellant has contravened the declarations given by him under entry 148 of Group-A in Form A-1 thus, to that extent he is automatically liable to pay purchase tax as per section 41(2), and the set-off is available to the appellant against purchase tax so leviable - The impugned order passed by the first appellate authority under the BST Act is hereby quashed, and set-aside, and the matter is remanded back to the first appellate authority for considering the various claims of the appellant and re-work out the final position of refund under the BST Act. This refund is liable to be adjusted towards C.S.T. dues for the same period – Appeal partly allowed

2015-VIL-135-SC-CE

COMMISSIONER OF CENTRAL EXCISE, PANCHKULA Vs M/s LIBERTY SHOES LTD
Central Excise - Bulk sale of shoes to institutional buyers – payment of duty on the basis of MRP after availing abatement of 40% as provided under Section 4A of the CEA, 1944 on both retail sale and institutional sale - Revenue contention that for bulk sale valuation is required to be done as per Section 4 of the Act not under Section 4A – affixing MRP on packages supplied to institutional buyers - HELD - the goods in question which were supplied in packages to the institutional customers had MRP affixed on them. It was further found that clearances were not under Rule 34 of the SWM (PC) Rules which exempts supplies of materials in bulk from the operation of Weights and Measures Act, meaning thereby it was obligatory and essential on the part of the assessee to affix MRP on the goods supplied - footwear is an item which is specified under Section 4A, which is covered by Weights and Measures Act and Rules, and MRP was affixed on the products supplied, which were not exempted under Rule 34 of the Rules, the provision of Section 4A of the Act shall stand attracted – Revenue appeal dismissed

2015-VIL-133-SC-CE
COMMISSIONER OF CENTRAL EXCISE, GUNTUR Vs M/s VIRAT CRANE INDUSTRIES LTD
Central Excise - Benefit of Exemption Notification No. 08/2001-CE – Brand name - Exemption from excise duty ‘Gutkha’ containing chewing Tobacco – SSI unit – Tribunal allowing exemption treating assessee products as ‘Unbranded product’ – Revenue in appeal – HELD - the only question is as to whether branded or unbranded preparations in order to qualify for exemption under the aforesaid Notification, the assessee has to prove that goods are unbranded - assessee contention proceeds on the premise that the branded goods belonging to third party only would be treated as branded and insofar as goods sold under brand name belonging to the assessee are concerned, they have to be treated as unbranded. This contention is clearly misconceived and untenable - The definition of ‘brand name’ in explanation to the notification doesn’t limit the brand name to third party brand name. Therefore, once the goods are sold under any brand name, whether that belongs to the assessee or the third party the goods would be treated as branded name - judgment of the Tribunal is unsustainable in law and is liable to be set aside - assessee is not entitled to any exemption under the aforesaid Notification – Revenue appeal allowed

2015-VIL-648-CESTAT-AHM-CE

COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VAPI Vs M/s SARLA POLYESTER LTD

Central Excise – Clandestine removal - Demand alongwith interest and penalties - Revenue appeal against benefit of cum-duty – HELD - Appellants are directly involved in the clandestine removal of the goods and therefore, penalties imposed under the Rule 26 of the Rules would be warranted. The words ‘in any manner’ in Rule 26 of the Rules has wide amplitude and covered - Assessees are given option to pay penalty 25% of the duty alongwith entire amount of duty and interest within 30 days – Revenue appeal rejected

2015-VIL-647-CESTAT-MUM-ST

JET AIRWAYS (INDIA) LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I

Service Tax - Appellant offering ‘Jet Escapes Package’ to their passengers who visit their website for booking air travel service offered by them - whether the activity would get covered as taxable service provided under ‘tour operator service’ - HELD – the advertisement does not indicate that appellant would plan, schedule or organize the tours for the passengers - the definition mandates for the services to be rendered by persons engaged in business of operating tours in a tourist vehicle or a contract carriage. It is on record that the passengers when they wants to opt for ‘Jet Escapes Package’, organize own travel dates and appellant is not helping them in planning or organizing or scheduling of tours - appellant has not planned, scheduled or organized tours for their passengers - service is not covered under the category of ‘tours operator service’ – impugned order set aside and assessee appeal allowed

2015-VIL-646-CESTAT-AHM-ST

M/s PRADEEP SINGH ASSOCIATES Vs COMMISSIONER OF CENTRAL EXCISE & S.T., SURAT

Service Tax - Chartered Accountant Services – Denial of credit on membership fees of Club – HELD – The amount claimed as input service is nothing but membership fees - There is no nexus between the membership fees and the output service which is Chartered Accountant Services – there is force in the arguments of the ld.AR that the same cannot be treated as charges related to business activities for the output service – Assessee appeal dismissed

2015-VIL-645-CESTAT-AHM-ST

M/s NOBLES CONSTRUCTIONS GUJARAT PVT LTD Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Service Tax – Refund of excess amount paid – Amount paid by mistake - Denial of refund on the ground of limitation – HELD – the excess amount paid should be treated as deposit only. As only the part of the amount could be utilised subsequently and the balance amount could not be utilised, the balance amount which is only a deposit, should be refunded - time-limit prescribed under Section 11B is not applicable in the instant case – Assessee appeal allowed

e704FAQ

Maharashtra: e-704 (Audit Report) Frequently Asked Questions

4th of Dec

punNotiSO57

Punjab: Amendment in PVAT Schedules ‘B’ and 'E' - Reduction in rate of tax on LED lights & Dry fruits

punNotiSO56

Punjab: Reduction in rate of CST on Paper Board

utrNoti338

Uttarakhand Tax On Entry Of Goods Into Local Areas, (Amendment) Act, 2015 - Amendment in Section 4 & Addition of Section 4-A (Tax on e-commerce)

utrNoti332

Uttarakhand Value Added Tax (Amendment) Act, 2015 - Amendment in Section 48 & Addition of a new proviso in Section 49

utrNoti334

Uttarakhand Cess Act 2015

karCir17

Karnakata: Refund of input tax paid on purchase of inputs by a registered dealer who is a co-developer of Special Economic Zone [SEZ]

CEAreport

Summary of Report of Committee headed by the Chief Economic Adviser Dr. Arvind Subramanian on possible Tax rates under GST

5th of Dec

utrNoti885

Uttarakhand: Amendment in Schedule-III of the UVAT, 2005 - Change in rate of tax on Diesel

mpNoti38

Madhya Pradesh: Amendment in Schedule-I - Regarding "Neemuch Stones"

Guest Article

GST: CEA led Panel recommends RNR at 15 - 15.5% and eliminating Additional Tax of 1% on inter-state supply of goods

7th of Dec

chhgNoti67

Chhattisgarh: Draft amendment in Part III of Schedule II - Revision in rate of tax on Foreign and Indian made Foreign Liquor sold through dealer holding F.L.-10 License

chhgCir9662

Chhattisgarh: Circular regarding time limit Statutory Form

cbecPR

CBEC Press Release: Extension in date for payment of Central Excise duty and Service Tax for the month of Nov '15 - for the assessee in the State of Tamil Nadu

Guest Article

GST Law: India Inc grapples with new regime - Existing inefficiencies to continue

FCP0512

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

2015-VIL-514-ORI

M/s BANSAPANI IRON LTD Vs STATE OF ODISHA

Orissa Value Added Tax Act - Section 2(8) – Amendment in definition of Capital Goods - petitioner plea that this amendment ought to be given retrospective effect – inclusion of spare parts in ‘capital goods’ – clarificatory or substantiative amendment - HELD - the Orissa Value Added Tax (Amendment) Act, 2007 did not itself declare the date from which the statute came into operation and left it to the Government to issue the appointed date through Notification. The Notification was issued thereafter indicating 1st day of June, 2008 as the appointed date - the same cannot be any clearer indication of legislative intent other than the Notification notifying the appointed date, from which the Act would come into operation - prior to 2008 amendment to the OVAT Act, spare parts were dealt separately other than capital goods. It is only on and from the date, on which spare parts became covered under the term “capital goods” with the 2008 amendment came into force – the amendment amounts a substantiate change insofar as taxability of a transaction is concerned – Court is not in agreement the petitioner that such amendment is merely clarificatory in nature - revision stands dismissed

2015-VIL-516-ALH

M/s SHREE BALAJI CONCAST P LIMITED Vs COMMISSIONER OF COMMERCIAL TAX U.P.

Uttar Pradesh VAT Act – Section 48 – Rule 54 - Seizure of goods on the ground that Form-21 accompanying the goods filled up by two pens in different inks and the entries made in one of the inks were likely to evaporate after some time – HELD - The Act and the Rules does not prescribe the type or the nature of the ink to be used in filling up the prescribed Form. There is no provision under the Act which provide for seizing the goods on account of use of improper ink in filing up the Forms or for the reasons that some of the entries made in the documents would ultimately vanish - the Tribunal committed an error in affirming the order of seizer. The goods were not liable to be seized for the reason that the entries in the prescribed Form accompanying the goods were in such ink as would not last long – Assessee revision allowed

2015-VIL-515-P&H

SAMSUNG INDIA ELECTRONICS PVT LIMITED Vs STATE OF PUNJAB

Punjab Value Added Tax Act, 2005 - Rate of tax on mobile battery charger – composite package alongwith accessories – HELD - Mobile phone charger is an accessory to cell phone and is not a part of the cell phone - issue already settled against the petitioner by the Apex Court in Nokia India case - petitioner was unable to distinguish the judgment passed by the Apex Court - the issue with regard to the vires of Section 29(4) of the Act stands concluded against the petitioner rendered in M/s Amrit Banaspati Company Limited's case – assessee petition dismissed

2015-VIL-517-GUJ-CE

THE COMMISSIONER Vs M/s THAKKAR TOBACCO PRODUCTS P LTD

Central Excise - Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 – Rule 10 – Abatement - closure of factory for more than 15 days - suo moto claim of abatement by assessee – Demand – HELD - On a plain reading of rule 10 of the PMPM Rules, it is apparent that while the same provides that duty calculated on a proportionate basis shall be abated, it does not provide for any procedure for doing so. Thus, whereas rules 96ZQ, 96ZO and 96ZP of the Central Excise Rules, 1944, which also are schemes under the compounded levy scheme, there were express provisions for making an order of abatement by the Commissioner, rule 10 of the PMPM Rules is wholly silent in that regard. Under the circumstances, having regard to the fact that rules 96ZQ, 96ZP and 96ZO provided for making an order of abatement, however, there is no corresponding provision in the PMPM Rules, it can be inferred that the rule making authority has consciously omitted making such provision. Therefore, in the absence of any specific provision for making an order of abatement, it cannot be said that the action of the assessee in calculating the duty on a proportionate basis and setting off the same against the duty payable in the succeeding month is, in any manner, violative of the rules or the statutory scheme – Revenue appeal dismissed

2015-VIL-649-CESTAT-MUM-CE

CENTRAL CABLES LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI

Central Excise - Valuation – includability or otherwise of an amount received as additional inspection conducted on the products at the instance of buyer - third party inspection – HELD - the purchase orders specific to inasmuch material should be despatched after third party inspection - it is very clear that the inspection charges received as reimbursement by the appellant on third party inspection charges at the instance of the buyer is not includable in the assessable value of the products cleared by them - the impugned order is not sustainable and liable to be set aside – assessee appeal allowed

2015-VIL-650-CESTAT-MUM-CE

COMMISSIONER OF CENTRAL EXCISE, PUNE-II Vs M/s ANWAR OILS

Central Excise - activity of repacking of refined edible oil in retail packs from tankers and labeling with brand name – Demand – HELD - the activity of packing refined edible oil received in tankers into small containers cannot be treated as manufacturing activity - issue is no more res integra and settled in favour of the assessee by Apex Court in the case of Amritlal Chemaux Ltd – Revenue appeal dismissed

2015-VIL-652-CESTAT-BLR-ST

M/s DELL INDIA PVT LTD Vs COMMISSIONER OF SERVICE TAX, BANGALORE

Service Tax - Demand of interest on wrong/ erroneous availment of CENVAT Credit - Rule 14 of CENVAT Credit Rules – reversal of credit - levy of interest and equivalent penalty – HELD - the activities and the operations of an assessee (manufacturer or service provider) have to follow the provisions of Rule 14 of CENVAT Credit Rules as they existed before 1.4.2012; and after 1.4.2012 when the subject amendment was made, an assessee would be entitled to the benefit as provided by the said amendment - When the liability is very clear and the amendment made effective from 1.4.2012 and not been made effective retrospectively, one cannot do away the law as it was in existence, when such wrong or erroneous credit was taken by the assessee - When no intention to evade payment of service tax is proved beyond doubt it will not be right to impose penalty under Section 78 read with Rule 15(3) of CRR Rules, 2004 - appeal does not succeed on the issue of interest but the appellant will get relief on the penalty part as the penalty imposed on them has been set aside – Appeal partly allowed

2015-VIL-651-CESTAT-BLR-ST

MALAYALAM COMMUNICATIONS LTD Vs CCEC&ST, TRIVANDRUM

Service Tax - Power of Commissioner to issue a revision order when the appeal is pending before the Commissioner (A) – HELD – though Commissioner has power of revision he/she did not have any revision power in respect of an issue, if appeal against such an issue was pending before Commissioner (A) during the relevant period - that Commissioner in his revision order passed an order in respect of penalty under provisions of Section 76 of the Finance Act, 1994. He also passed the order upholding the demands and penalties which were upheld by the lower adjudicating authority - the revision order of the Commissioner in respect of demand of interest on the service tax and penalties imposed under Section 77 by the lower authority is not sustainable and is hereby declared contravening the provisions of law i.e., the then provisions of Section 84 of the Finance Act, 1994. However, the revision order of the Commissioner in respect of penalty under Section 76 of the Finance Act, 1994 is sustainable as this issue was not challenged by the appellant before Commissioner (A) – appeal disposed

chhgNoti68

Chhattisgarh: Amendment in Part-III of Schedule-II - Revision in rate of tax on Foreign and Indian made Foreign Liquor sold through dealer holding FL-10 License

8th of Dec

2015-VIL-518-KAR

M/s S. B. AUDIO AND VIDEO Vs ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES

Karnataka Value Added Tax Act – discounts, additional discount, incentives – Credit Note - Denial of exemption in respect of discounts granted subsequent to the issuance of tax invoice - provisions of Rule 3(2)(c) of the KVAT Rules – HELD - the dealer is entitled to give further discounts even after the sale has been completed provided the discounts are the customary practice in the trade or otherwise known as trade discounts - discount is allowable under the tax invoice or sale bill and a further discount is also permissible by way of credit note and debit note subject to the condition it is demonstrated that the discounts are trade discounts or pursuant to a contract or agreement entered into between the seller and the dealer. The onus of proving the said fact is on the assessee and he ought to demonstrate that the discount given by him is in accordance with the provisions of the Act and Rules - both the parties have failed to place on record the material particulars that ought to have been considered and nothing is forthcoming as to what has been appreciated in the instant case – Impugned order set aside and matter remanded to the Assessing Authority to pass fresh orders

2015-VIL-520-MAD

M/s FIRST GARMENT MFG CO. (INDIA) PVT LTD Vs THE ASSISTANT COMMISSIONER

Tamil Nadu Value Added Tax Act - Admissibility of Input Tax Credit on Zero Rate Sales after the prescribed statutory period n under Section 18 of the Act - belated filing of Form-W – Denial of credit – HELD - The respondents herein have turned down their request in refunding the Input Tax Credit on the primary ground that such claim is beyond the statutory period. Though the learned counsel for the respondents emphasis that Section 18(3) is mandatory in nature, it does not have the effect as envisaged in Section 19(11) of the Act. It is true that the Input Tax Credit is a concession but such concession is extended to the Companies / Dealers in order to encourage them to do exports - as regards the Input Tax Credit, the Officer cannot cite the reason that Form-W was filed belatedly and thus they cannot reject the claim of the petitioners - It is made clear since the petitioners have approached this Court within a reasonable time, this Court has taken into consideration the petitioners submission herein. It is further made clear that by this judgment this Court has interpreted the time limit alone however the other formalities as stated in Form-W shall be in tact in all respects so as to say that it has to be complied with by the dealers/purchasers, as the case may be, if he chooses to claim the refund of Input Tax Credit – In favour of assessee

2015-VIL-519-GUJ-CE

WAGHBAKRIWALA RAYONS Vs COMMISSIONER OF CENTRAL EXCISE AND SURAT

Central Excise – pre-deposit as condition precedent for re-adjudication by adjudicating authority - Clandestine removal of goods – HELD - right from 31.07.2006 to 29.01.2013, when intimation of personal hearing was given, the matters had been kept in abeyance by the authorities - the finding recorded by the Tribunal that the appellants have indulged in delaying the adjudication proceedings, is clearly erroneous and contrary to the record of the case - the finding that the petitioners have delayed the adjudication proceedings and therefore, are required to be put to certain conditions to ensure that they cooperate in the adjudication proceedings is erroneous, inasmuch as, the facts as emerging from the record reveal that the proceedings were delayed not on account of any default on the part of the petitioners, but on account of the fact that the authorities had taken all the cases to the call book - the impugned order passed by the Tribunal being based upon an erroneous finding of fact as well as being discriminatory qua other assessees, cannot be sustained to the extent the same directs the petitioners to pre-deposit – Tribunal order quashed and set aside – assessee petition allowed

2015-VIL-654-CESTAT-AHM-CE

M/s UNIVERSAL MEDICARE PVT LTD & M/s BANNER PHARMACAPS PRIVATE LTD Vs CCEC&ST, VAPI

Central Excise – Classification of the products ‘Primosa’ and ‘Simrose’ - Chapter Heading No. 15159091 of CETA as claimed by the assessee or Sub-heading No. 30049069 of CETA as held by the Adjudicating Authority - encapsulated fixed vegetable oil - Dietary Food Supplement’ – HELD - the products ‘Primosa’ and ‘Simrose’ would be classifiable under Heading No. 15159091 of CETA and not under sub-heading No. 30049069 of CETA and the demand of duty alongwith interest and penalty cannot be sustained. The impugned orders are set-aside. All the appeals filed by the assessee are allowed. The appeal filed by the Revenue is rejected

2015-VIL-653-CESTAT-AHM-ST

M/s BPC PROJECTS & INFRASTRUCTURE PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & S.T., AHMEDABAD

Service Tax – Audit objection – voluntarily payment - Assessee plea that the issue has to be examined on merits and they should, as they had not admitted the audit objection nor accepted the audit report at any stage – HELD - It is observed that assessee had not accepted the contentions of the audit. It is not on record that the audit party had raised the same objections, which they have confirmed in their audit report, to the appellant earlier. It is also not on record that the appellant had accepted these objections finally before they were included in the audit report. Therefore, in all fairness, the appellant should be given an opportunity to present their case before the adjudicating authority alongwith whatever evidences they have to substantiate their case. The adjudicating authority is free to decide the issue on merit as per law – In favour of assessee

2015-VIL-521-BOM-ST

M/s QUALITY FABRICATORS AND ERECTORS Vs THE DEPUTY DIRECTOR, DGCEI, ZONAL UNIT MUMBAI

Service Tax – evasion - Recovery - Demand based on the allegations of breach and intentional violation of the provisions of the Finance Act, 1994 – Denial of liability by assessee – Revenue order for freezing of bank of assessee – HELD - The word 'due' has been interpreted to mean something which is payable and recoverable. The Hon'ble Apex Court has held that it does not refer merely to a liability created by the charging sections to pay the tax under the relevant law. It refers to an ascertained liability for payment of tax quantified in accordance with law - Assessment and valuation alone will enable the Revenue to recover the amount of taxes and recovery cannot precede prior important steps. Merely because there is incidence and charge of tax will not be of assistance as the charging section and machinery provisions all enable together, the Revenue to assess the tax. Unless and until there is a crystallization of a demand by proper adjudication order and on hearing the Petitioner, there was no question of any recovery – Impugned order quash and set aside on the ground that these are nothing but recovery measures initiated to recover the amount due as service tax which has not been determined and crystallized pursuant to any adjudication order – Assessee petition allowed

ceNoti24NT

Central Excise: Amendment in Jurisdiction Notification No. 27/2014-Central Excise (N.T.)

telNotiGO229

Telangana: Errata to G.O.Ms.No.109, Revenue (CT-II) Department, dated: 07.07.2015

Guest Article

GST Draft Law – 10 Things you must know

9th of Dec

2015-VIL-136-SC-CE

M/s STEEL AUTHORITY OF INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIPUR

Central Excise Act, 1944 – Section 11AB - Interest on the differential duty - whether interest is leviable under Section 11AB on the differential duty amount paid under supplementary invoices due to price increase by virtue of price variation clause in the sale contract – duty short paid – Validity of judgement in the case of SKF Ltd and International Auto - HELD – for the purposes of Section 11AB, the expression 'ought to have been paid' would mean the time when the price is agreed upon by the seller and the buyer. In other words, the right of the seller to receive the revised price crystallises only when the buyer agrees to sanctions the same, and only at that time can liability to pay duty, if at all, on the revised price arise. Both parties are not aware of the final price at the time when the goods are removed. In the context of price revision subsequent to clearance, duty 'ought to be paid' only after the sanctioning of the revised priced by the buyer. The differential duty on account of price revision is paid in the month when the revised price is agreed between the seller (assessee) and the buyer and it ought to have been paid only at that time and not before – The interest clock for differential duty will start ticking from the date differential duty is due, i.e., the date of agreement of escalated prices and not before. This concept gets clarified with the latest amendment in 2015 to Section 11A with regard to the 'relevant date' for payment of interest - It would be impossible to expect the assessee to pay the excise duty, at the time of clearance of the goods, on the basis of price escalation that took place at a later date in future. Therefore, as on the date of clearance when excise duty was paid, it could not be treated as 'short paid' on the said date. As a consequence when the principal amount, namely, the excise duty itself was not payable (i.e. on the differential) on the date of clearance of the goods, there cannot be any question of law to pay interest - No doubt, on receipt of differential price, when the buyer agreed to escalation in the price, further excise duty also become payable and on that reckoning one can say that the excise duty originally paid became 'short paid'. However, that would only attract payment on differential excise duty and not the interest thereon – the decision in SKF Ltd and Auto International require a re-look for the reasons given - Registry is directed to place the matter before the Hon'ble Chief Justice of India for constituting a Larger Bench to go into the issue involved in this case which is of seminal importance having far reaching ramifications – Matter referred to Larger bench

2015-VIL-522-KAR

M/s MANIPAL MEDIA NETWORK LIMITED Vs THE STATE OF KARNATAKA

Central Sales Tax Act, 1956 - stock transfer of newsprint – non-furnishing of Form-F – Denial of exemption - Assessee plea for liberal view for newspaper industry – HELD - Since the Act mandates exemption to be granted only if the assessee fulfils a particular condition, which, admittedly has not been fulfilled by the assessee, the Court is not left with any discretion in allowing the exemption, and such view as has been taken by the authorities below is completely justified – Assessee petition dismissed

upNoti1708

Uttar Pradesh: Amendment in UPVAT Schedule-I - Regarding 'Engine and generating set operated by Biomass/Biogas and parts thereof'

upNoti1709

Uttar Pradesh: Amendment in UPVAT Schedule-I and Schedule-II - Regarding 'Brushes which are used for painting and varnishing'

F.No.96/85/2015-CX.I [Download link | File size: 770 Kb]

CBEC Instruction: Minutes of Central Excise Tariff Conference held in Chandigarh on 28th and 29th October, 2015 - Decisions regarding various technical issues of assessment and applicability of law

2015-VIL-523-DEL-ST

PRINCIPAL COMMISSIONER OF SERVICE TAX DELHI–II Vs TOPS SECURITY LTD

Service tax - Benefit of payment of reduced penalty to the extent of 25% in terms of the 3rd proviso to Section 78 (1) of the Finance Act 1994 (as it stood prior to its substitution by the Finance Act 2015) within 30 days from the date of the order of the Tribunal – HELD - As far as Section 78 (1) r/w Section 83 of the Finance Act, 1994 is concerned, Section 11AC of the CE Act is not ipso facto applicable - The appellate authority cannot at the appellate stage give the option to an Assessee to pay the reduced penalty within a time that is beyond what is stipulated in the third proviso to Section 78 (1) of the Finance Act, 1994 - The option to pay the reduced penalty comes to an end on the expiry of thirty days from the date of communication of the adjudication order. It is only where the service tax is enhanced by an appellate authority that, in terms of the proviso to Section 78 (2) of the Finance Act, 1994, the time period for paying the reduced penalty at 25% of such enhanced service tax is computed from the date of communication of the appellate order - The Tribunal could not have permitted the assessee to pay the reduced penalty amount in terms of the second proviso to Section 78 (1) of the Finance Act, 1994 within thirty days from the date of the impugned order of the CESTAT. Such a direction was contrary to the third proviso to Section 78 (1) of the Finance Act, 1994 and therefore legally unsustainable – Revenue appeal allowed

2015-VIL-05-ARA

M/s NORTH AMERICAN COAL CORPORATION INDIA PVT. LTD.

Advance Ruling - Tripartite agreement between US company, India subsidiary and employee - Foreign employees on deputation in India subsidiary - Interpretation of term ‘service’ and ‘salary’ - social security of foreign employee while he is in India is being taken care of by the US company – HELD - there can be no question of attracting the service tax for the salary paid in view of the clear language of Section 65 (44) (b) - there shall be no liability to pay service tax on the salary and the allowances payable by the applicant to the employee in terms of the dual employment agreement and such salary will not be eligible to levy the service tax as per the provisions of the Finance Act

10th of Dec

Chief Economic Adviser Report on Revenue Neutral Rate & structure of Rates for GST: Report on the Revenue Neutral Rate and structure of Rates for GST [Download link | File size 1.43Mb]

stNoti26

Service Tax: Extension in date for payment of Service Tax for the month of Nov '15 - for the assessee in the State of Tamil Nadu

ceNoti25NT

Central Excise: Extension in date for payment of Central Excise duty for the month of Nov '15 - for the assessee in the State of Tamil Nadu

2015-VIL-137-SC

SODEXO SVC INDIA PRIVATE LIMITED Vs STATE OF MAHARASHTRA

Maharashtra Municipal Corporation Act - Section 2(25) – Goods - levy of Octroi or Local Body Tax on Sodexo Meal Vouchers - pre-paid payment instruments – HELD - It is to be borne in mind that the vouchers are not 'sold' by the appellant to its customers, as wrongly perceived by the High Court, and this fundamental mistake in understanding the whole scheme of arrangement has led to wrong conclusion by the High Court. The High Court has also wrongly observed that vouchers are capable of being sold by the appellant after they are brought into the limits of the city. These vouchers are printed for a particular customer, which are used by the said customer for distribution to its employees and these vouchers are not transferrable at all - the appropriate test would be as to whether such vouchers can be traded and sold separately. The answer is in the negative. Therefore, this test of ascertaining the same to be 'goods' is not satisfied - Sodexo Meal Vouchers are not 'goods' within the meaning of Section 2(25) of the Act and, therefore, not liable for either Octroi or LBT – High Court order overturned - Assessee appeal allowed

Sodexo

Analysis of Supreme Court judgement in the case of SODEXO SVC INDIA PRIVATE LIMITED Vs STATE OF MAHARASHTRA

2015-VIL-524-UTR

SHRI DHANVARSHA STEEL LIMITED Vs STATE OF UTTARAKHAND

U.P. Trade Tax Act - Section 21 (1) and (2) - reassessment - reason to believe for escaped assessment to tax – HELD - in view of the material collected by the Directorate of Central Excise (Intelligence) as well as statement made by one of the Directors of petitioner-company, it can very well be said that there was tangible material before the Revenue and have sufficient reason to believe that certain supply has escaped assessment of tax – the impugned orders passed by the revenue do not warrant any interference – Assessee petition dismissed

2015-VIL-525-DEL-CE

COMMISSIONER OF CENTRAL EXCISE, DELHI-I Vs VISHNU & CO. PVT LTD

Central Excise - Clandestine removal – Seizure of goods – Gutka & Pan masala - penalty – question of law – HELD - Broadly the evidence gathered by the Department can be categorized into primary evidence in the form of original documents collected from the entity i.e. VCPL, the transporters and other associate entities and secondary evidence in the form of report of SIIR, the retracted statements of some of the persons examined in the course of investigation and other material stated to be of a corroborative nature - The CESTAT has not only discussed the report of SIIR but has given cogent reasons why it was unable to accept it as a reliable piece of evidence - Department has been unable to show that the impugned order suffers from illegality or is perverse so as to warrant interference in the present appeals. The view taken by the CESTAT is based on a thorough analysis of the evidence on record and is a plausible one. It does not give rise to any substantial question of law – Revenue appeal dismissed

2015-VIL-655-CESTAT-DEL-ST

CCE, PANCHKULA Vs M/s HINDUSTAN PUMPS ELECTRICAL ENGINEERING (P) LTD

Service Tax - Section 65(105)(zee) - Franchise services - transfer of technical know-how and marketing of products – Payment of one-time franchise charges – agreement and received consideration prior to 01/07/2003 - HELD - The fourth limb of definition of franchise agreement is that the franchisee is put under an obligation not to engage in selling or providing similar goods or services or process, to any other person. The agreement entered by the respondents does not stipulate any such condition imposing an obligation upon franchisee - On such score, the agreement does not fit into the definition of franchise agreement as it stood during the relevant period. Since the agreement does not satisfy condition no. (iv) of the definition of franchise agreement, the services provided in pursuance of the agreement also will not fall into the category of franchisee service. The demand has been rightly set aside by the Commissioner appeals – Revenue appeal dismissed

goaNoti3859

Goa: industrial inputs and packing materials - benefit of concessional rate of tax to M/s IFB Industries Ltd

11th of Dec

2015-VIL-526-KAR

M/s JK TYRE & INDUSTRIES LTD Vs THE STATE OF KARNATAKA

Karnataka Tax on Entry of Goods Act, 1979 - Section 17(1) - Rectification of mistakes – Assessment - exemption from payment of entry tax on raw materials purchased for export of the manufactured goods - benefit of notifications with regard to both export as well as expansion of existing unit – Change in opinion – Denial of exemption at a later date – HELD - The mistake which is to be rectified should be apparent on the face of the record. It should not be a case of change of opinion. In the present case, the calculation made by the Assessing Officer, is admitted by both the parties to be as per the record - if a Unit is entitled to benefit of exemption under two notifications, which are independent of each other, and law does not bar or prohibit grant of such benefit, the assessee would be entitled to benefit under both the notifications. The first notification is with regard to the export and the other one is with regard to the expansion of an existing Unit - the assessee is qualified for grant of exemption under both the notifications - Since it was a conscious decision taken by the Assessing Officer in granting benefit to the assessee under both the notifications, eventhough the said benefit was rightly given, but if according to the Revenue, the same was incorrectly given, it could not be corrected by invoking the provisions of Section 17 of the Act - As such, on merits, as well as on the question of invocation of the provisions of Section 17 of the Act, the questions of law are to be answered in favour of the assessee and against the Revenue

2015-VIL-527-ALH-CE

PREMIUM SUITING (P) LIMITED Vs COMMISSIONER OF CENTRAL EXCISE

Central Excise – SSI exemption – combination of units – Demand - HELD - The exemption can be claimed only if the aggregate value of the clearances of all excisable goods does not exceed Rs.3 crores. The fact that the two factories are of one manufacturer is clear from the fact that common balance sheet is being filed. It is therefore irrelevant to contend that the two factories have separate entrances managing staff or central excise registration. What is relevant is that a manufacturer, if he has one or more factories, would be entitled for exemption at concessional rate of duty if the aggregate value of clearances of all excisable goods does not exceed Rs.3 crores. Since the appellant has another factory, which is manufacturing an excisable commodity, its clearances have to be added while considering the exemption notification. Since the aggregate clearances exceeded the limit of Rs.3 crores, the appellant was not entitled for exemption – Assessee appeal dismissed

2015-VIL-660-CESTAT-MUM-CE

M/s EXCEL INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Central Excise – Valuation - whether the assessable value as adopted by the appellant based upon cost of production for discharge of duty liability on the goods cleared from their own unit is correct or the said duty liability needs to be discharged on the value which has been adopted by the appellant for the independent buyers – HELD – The undisputed facts are that the intermediate products cleared from the appellant factory are consumed by their own unit for manufacturing of final product on which duty liability is discharged - the question of revenue neutrality is only question which needs to gone into - there was no reason to mis-declare the assessable value of the goods cleared to their own unit. The appellant was correct in stating that any duty liability discharged on the goods cleared to their own unit is eligible for CENVAT Credit and there could not be any reason to mis-declare the price - the impugned order to the extent it confirms the demand raised beyond the period of limitation is liable to be set aside. The demands raised within the period of limitation are liable to be confirmed with interest - Since the issue is of interpretation of law, penalty is not warranted accordingly, the penalty is set aside – Appeal partly allowed

2015-VIL-658-CESTAT-DEL-ST

M/s EICHER MOTORS LTD Vs COMMISSIONER OF CENTRAL EXCISE, INDORE

Service Tax - section 65 (12)/(105) (zm)/ (zp) of the Finance Act, 1994 - Hire purchase agreements - Demand under Banking and Other Financial Services and also on interest earned on loans – service rendered prior to 16.08.2002 – HELD - appellant does not qualify to be called a financial institution - the appellant does not qualify to be called non-banking financial company. So, it is established that the appellant is not a banking company nor a financial institution including a non-banking financial company and therefore the service rendered by it prior to 16.08.2002 was not covered under BOFS because prior to that date financial leasing services including equipment leasing and hire purchase by a body corporate were covered under BOFS only if such body corporate satisfied the requirement of being a banking company or a financial institution including a non-banking financial company - service tax is leviable under BOFS in those cases where even if the hire purchase agreements were entered into prior to 16.08.2002, the delivery of vehicles took place on or after 16.08.2002 - The issue whether the income from interest on loans was includible in the assessable value for the purpose of charging service tax is no longer res integra and has been decided in favour of the assessee – Assessee appeal partly allowed

2015-VIL-657-CESTAT-AHM-ST

M/s PUNJAN BUILDERS Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-II

Service Tax - Construction services – denial of benefit of abatement on the ground that assessee had also availed the benefit of Cenvat Credit - reversal of CENVAT Credit – Revenue contention reversal of CENVAT Credit does not absolve from violation of the conditions of notification - HELD – Assessee has paid the interest on an amount of credit availed from the date of availment upto the date of reversal of credit - if the credit is specifically reversed, the benefit of notification should not be denied – Assessee appeal allowed

ceOrder01

Central Excise: Extension of date for submission of returns in Central Excise - For the assessee in the State of Tamil Nadu

kerCir30 & kerCir31

Regarding condonation of delay in filing the appeals and observation of the Hon'ble High Court of Kerala

dndReg2

Daman and Diu Value Added Tax (Amendment) Regulation, 2015 - Enhancement in rate of tax under Third Schedule from four to five percent

telNotiGO235

Telangana: Reduction in the time limit of ninety days prescribed for refund of tax in Section 38 of the said Act, to sixty days

telCir172

Telangana: Regarding mandatory usage of e-waybills by VAT dealers

tnCir45

Tamil Nadu: Inter-State transactions falling under Section 8(1) of the CST Act, 1956 - Issue of manual 'C' and "F" Forms

Guest Article

31 Points You Must Know About MODEL GST ACT, 2016 (Section Wise Avenue Analysis)

Detailed Report of CEA led Panel on RNR released - The Report bats for lower exemptions and higher threshold for GST

chndNoti3646

Chandigarh: Amendment in Schedule 'B and Schedule 'E'

12th of Dec

mpNoti39

Madhya Pradesh: Amendment in MPVAT Rule 23 - Revised return pertaining to the year 2014-15 can be furnished upto 31st December, 2015 by a dealer having an annual turnover exceeding Rs. One Crore

mpNoti40

Madhya Pradesh: Amendment in MPVAT Rule 54 - Audit report pertaining to the year 2014-15 can be furnished upto 31st December, 2015 without a late fee

14th of Dec

2015-VIL-529-MAD

M/s CHERAN CEMENTS LIMITED Vs THE JOINT COMMISSIONER (CT)

Tamil Nadu General Sales Tax Act, 1959 - Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 – Section 7 - Interest Free Sales Tax Deferral Scheme - Though the appellant was entitled to defer payment upto 2008, it exhausted the entire ceiling limit even before October, 2004 - breach of the agreement - rejection of the applications for settlement – Levy of interest – HELD - In the Samadhan Scheme there is no scope for interpreting clauses (a) and (c) of Section 7, as mutually exclusive of each other - the expression 'arrears' need not necessarily be confined to 'admitted arrears'. It could also connote 'disputed arrears' or 'arrears claimed as due'. Therefore, the interpretation sought to be given on the basis of various Samadhan Schemes, cannot also be accepted - This case is governed not merely by the statutory provisions relating to payment of interest, but also by the agreement executed with reference to the interest free deferral scheme. A person who had collected tax from the customers and allowed to retain it under a deferred payment scheme, cannot claim that he would pay 40% of what was collected by him together with interest calculated from the date of assessment. This is not the purport of the Samadhan Scheme – Assessee petition dismissed

2015-VIL-528-MAD

NURTURE TRADERS PVT LTD Vs ASSISTANT COMMISSIONER (CT)

Tamil Nadu Value Added Tax Act – Closure of business - retrospective date of cancellation of registration – HELD - in case of a voluntary closure of business on the part of the petitioner, the cancellation can only be effected from the date of submitting the application for cancellation and not from the date of granting certificate of registration - the respondent is directed to give effect to the cancellation of registration certificate of the petitioner as requested by the petitioner – Assessee petition allowed

2015-VIL-663-CESTAT-MUM-CE

M/s RAPTAKOS BRETT & CO. LTD. Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

Central Excise - whether during the course of assessment of provisional assessment, excess duty paid by the appellant can be adjusted against short payment paid at the time of finalisation of provisional assessment – HELD - the adjustment of excess duty paid by the appellant against short duty on finalisation of the provisional assessment is permissible - impugned order is set aside and assessee appeals are allowed

2015-VIL-138-SC-CE

COMMISSIONER OF CENTRAL EXCISE MUMBAI Vs M/s VIKRAM ISPAT LTD
Central Excise - in view of the provision of Section 35-G of the Central Excise Act, an application which raises the question with respect to rate of duty or to the value of goods for the purposes of assessment, cannot lie to the High Court - the question raised is clearly concerning the rate of duty to be applied – High Court rightly dismissed Revenue appeal

2015-VIL-530-MAD-ST

M/s VEDANTA LIMITED Vs COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI

Service Tax - Appeal seeking modification in Tribunal order of pre-deposit for seven Crores - services rendered outside India – underwriters services - Demand under reverse charge – HELD - as per the amendment brought forth during the year, 2014, the appellant may be liable to make a pre-deposit of only 7.5% of the demand - in view of the facts and circumstances of the case, impugned order is set aside and appellant is directed to deposit a sum of Rs.5 crores, as pre-deposit towards the service tax - The penalty and the interest imposed on the appellant stands waived till the disposal of the appeal – Assessee appeal partly allowed

2015-VIL-659-CESTAT-MUM-ST

MAHALAKSHMI INFRAPROJECTS LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR

Service Tax- Taxability of the services rendered by the appellant under Erection, Commissioning and Installation Services; Site formation Services and GTA Services - project of lift irrigation scheme – HELD - the service tax liability on the Erection Commissioning and Installation Services for MKVDC; the contract/work order is nothing but a works contract. The lower authorities have tried to vivisect the said works order and charge service tax liability under the erection commissioning and installation services which in our view is incorrect, the law has been settled by the Supreme Court in the case of CCE Vs. Larsen & Toubro Ltd - Service tax liability under the category of Site Formation Services - issue is also now covered by the Larger bench decision of the tribunal in the case of Lanco Infratech Ltd Vs CCE - GTA Service - the appellant had discharged the tax under the head GTA services before the issuance of show cause notice and has also paid the interest due - the penalties imposed on the appellants needs to be set aside by invoking the provisions of section 80 of the Finance Act, 1994 - To that extent appeal is allowed partly

Guest Column

What is the ‘draft GST law’ all about?

IIPdec15

Quick Estimates of Index of Industrial Production and Use-Based Index for the Month of October, 2015

15th of Dec

upNoti1821

Uttar Pradesh: Amendment in UPVAT Part-B of Schedule-II - Inclusion of 'accessories packed with Cell Phones' in IT product

upNoti1822

Uttar Pradesh: Amendment regarding 'Members of the Central Security Forces and P.A.C. Employees of Uttar Pradesh'

2015-VIL-531-ALH-LB

M/s RAM SEWAK MADAN MOHAN Vs THE COMMISSIONER, COMMERCIAL TAXES, U.P.

Larger Bench - Uttar Pradesh VAT Act – repeal of the UP Trade Tax Act – power of revision under Section 10-B UP Trade Tax Act under the repealed legislation – HELD - where an order of assessment has been made under the provisions of the repealed Act, the remedy which is available to the revenue under Section 10-B of the UP Trade Tax Act would survive the repeal. There are no express words in the repealing enactment indicative of an intention to abrogate that remedy. On the contrary, there are sufficient provisions in the repealing enactment to indicate that the remedy of a revision in respect of an assessment made under the UP Trade Tax Act is saved notwithstanding the repeal - the judgments of the two Division Benches of this Court in Dharma Rice Mill and Kumar Rice Mills, insofar as they hold that the remedy of a revision against an order of assessment under the UP Trade Tax Act provided to the Commissioner under Section 10-B survives the repeal lay down the correct principle of law - The remedy is saved by virtue of the provisions of Section 81 of the Uttar Pradesh Value Added Tax Act 2008 read with Section 6 of the Uttar Pradesh General Clauses Act 1904

2015-VIL-532-GUJ

FENESTA BUILDING SYSTEMS Vs STATE OF GUJARAT

Gujarat Value Added Tax Act - sections 68 and 69 - Seizure of truck together with goods – HELD – From the facts as emerging from the record it appears that no condition of any penalty has been imposed upon the petitioner for release of the goods. It appears that the respondents only want to verify the actual facts of the case in view of the discrepancy of the truck number and also to examine the tax liability of the petitioner under the Act - the respondents are not in any manner prohibited from carrying out such verification in accordance with law, however, for that purpose, it is not necessary to detain the truck along with the goods in question - The respondents are directed to forthwith release the truck in question together with the goods – Assessee petition allowed

2015-VIL-139-SC-CE

M/s GUJARAT INDUSTRIES Vs COMMISSIONER OF CENTRAL EXCISE-I, AHMEDABAD

Central Excise Act - Section 2(f)(i) - Manufacture – marketability - Chapter Note 4 of Chapter 72 – Whether the process of cold-rolling on the hot-rolled stainless steel patta/pattis amount to 'manufacture' – Limitation - HELD - the appellant was undertaking cold-rolling process on its cold-rolling mills on the hot-rolled strips which were sent to it for the job work of reducing the gauge. The process of reducing the gauge by cold-rolling was also a process of hardening or tempering - The fact that a degree of hardness can be achieved will not dilute the applicability of the Chapter Note 4 because every degree of hardening or type of tempering resulting from cold-rolling of flat-rolled products would amount to manufacturing within the meaning of Chapter Note 4 of Chapter 72. The fact that annealing and pickling was done earlier by job work, will not make any difference because hardening or tempering of such flat-rolled products comes about only after cold-rolling. Having regard to the variety of flat-rolled products, which are cold-rolled, it cannot be said that the goods are not marketable - it is difficult to accept that the assessee was under bona fide belief that excise duty was not payable and that it was not permissible for the Department to avail the larger period of limitation by invoking proviso to Section 11A of the Act – the plea of the assessee that the impugned notice was time barred is rejected - Assessee appeal dismissed

2015-VIL-140-SC-CE

COMMISSIONER OF CENTRAL EXCISE Vs M/s TETRA PAK CONVERTING (P) LTD

Central Excise - Modvat Credit – Benefit of CER 57A(4) - Whether sealing strips are used in the manufacture of aseptic packaging paper – Revenue appeal dismissed by High Court solely on the ground that no question of law arises – HELD - a question of law would arise as to when the assessee does not uses the same itself and the said sealing strips are used by the buyer on the goods sold by the assessee, whether the benefit of Rule 57A(4) would still be admissible to the assessee – we do not agree with the observations of the High Court as question of law clearly arises which had to be determined by the High Court - the impugned judgment is set aside and matter remanded to the High Court - Appeal disposed of

2015-VIL-665-CESTAT-MUM-CE

SHRI VENKATESH YEDIDHA & M/s IRONY CLOTHING PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI

Central Excise – SSI exemption - clubbing of clearances – Brand name – Confiscation – HELD - It is undisputed that Venky & Co., is a sole proprietorship firm and ICPL is a Private Ltd firm - Board has specifically stated and clarified that Limited Companies whether public or private are separate entities and partnership firm is separate entity than the Ltd. Company - In the case in hand, the Limited Co. being separate entity and distinct from share holders, it cannot be said that appellant having 90% of shares in ICPL by virtue of being proprietor of Venky & Co., the clearances could be clubbed - In our view Revenue is arguing against their own Circular which is incorrect - Accordingly, the clearances effected by the sole proprietorship firm Vinky & Co. and ICPL cannot be clubbed for arriving at the total clearances of ICPL. This view of ours is also from the fact that both the entities are located at different places and registered with authorities under whose jurisdiction they fall - Brand name - the Brand name ‘Irony’ was assigned to the appellant ICPL by Venky & Co. by an assigned deed - Nothing is brought on record to show that even after assigning the Brand ‘Irony’, Venky & Co. were using and clearing the products with the said Brand name. In the absence of any such evidence by virtue of being Brand assigned to them, ICPL is entitled to avail the benefit of small scale exemption - the clearances effected by ICPL under the Brand ‘Irony’ are eligible for exemption while the clearances effected on the Brand ‘Terminator’ are not eligible for exemption - As regards the confiscation of the goods which was seized during the proceedings, no reason to interfere with the impugned order as the adjudicating authority has given an option to redeem the same on payment of fine of Rs.50,000/- which, in facts of this case is seems to be reasonable – Assessee appeal partly allowed

2015-VIL-664-CESTAT-DEL-ST

M/s SEPCO ELECTRIC POWER CONSTRUCTION CORPORATION Vs CCE, RAIPUR

Service Tax – Consulting engineer service - Work Contract – Contract for engineering and technical services for the captive power projects - period of dispute August 2003 to November 2005 – Demand with interest and penalties - HELD – Each of the four contracts would need to be analysed in greater detail vis-a-vis the other three contracts to arrive at a firm view whether the contract under consideration is essentially inseparable and integral part of other three contracts i.e whether all four contracts are essentially inseparable and constitute one whole under which works contract service was rendered. However, the impugned demand has been confirmed under Consulting Engineer Service and during the relevant period, the appellant being a body corporate was not covered under the definition of consulting engineer as per the Delhi High Court order in Simplex Infrastructure case - service rendered by the appellant could not be classified under Consulting Engineer Service - the impugned demand is not sustainable. Accordingly, assessee appeal is allowed

2015-VIL-666-CESTAT-CHE-ST

M/s JSW STEEL LTD Vs COMMISSIONER OF SERVICE TAX, SALEM

Service Tax - external commercial borrowing – Payment of arranger fee to foreign branch of ICICI Bank - non-payment of service tax - penalty under Section 76, 77 and 78 - bonafide reason – HELD – The appellant assessee on being informed about their liability to pay service tax have readily accepted and discharged their liability in full - the appellants were eligible for cenvat credit on the service tax paid on the reverse charge mechanism, there is bonafide reason for invoking section 80 - this is a case where the appellants have been able to show reasonable cause for delayed payment under bonafide belief as to taxability of service and in view of the revenue neutral situation, the penalties imposed on the appellants cannot be sustained and has to be set aside. In the result, the amount paid towards service tax and interest thereon and appropriated is sustained and penalties imposed on the appellants are set aside – The appeal is partly allowed

Guest Article

Accumulated Education Cess Balance: All Hopes in Vain!

delOrder1103

Delhi: Reward scheme for market / trade association

utrNoti1035

Uttarakhand: Amendment in Schedule of the Uttarakhand Tax on Entry of Goods Into Local Areas Act, 2008 - Inclusion of 'goods purchased /ordered through online shopping or through e-commerce'

utrNoti977

Uttarakhand: Regarding rate of tax on goods purchased /ordered through online shopping or through e-commerce

utrNoti4495 [Download link | File size 950Kb - in Hindi]

Uttarakhand: Procedures to be followed with respect to entry tax on e-commerce and online shopping

hpNoti71412

Himachal Pradesh Value Added Tax (Fifth Amendment) Rules, 2015 - Amendment in Rule 40-B

bihNotiSO357 & bihNotiSO359

Bihar Value Added Tax (Amendment) Rules, 2015 - Date of effect of provisions

delCir32

Delhi: Filing of reconciliation return for the year 2014-15

stCir190

Service Tax: Applicability of service tax on the services received by apparel exporters in relation to fabrication of garments

16th of Dec

2015-VIL-141-SC-CE

COMMISSIONER OF CENTRAL EXCISE, MYSORE Vs M/s TVS MOTORS COMPANY LTD

Central Excise Act – Section 4 – Valuation – Transaction value - Whether the ‘pre-delivery inspection charges’ and ‘after sales service charges’ are to be included in the assessable value – HELD - PDI charges and free ASS charges would not be included in the assessable value under Section 4 of the Act for the purposes of paying excise duty - The view taken by Tribunal in favour of assessees in this behalf is correct in law. Appeals of the Department are dismissed – the Larger Bench view in Maruti Suzuki does not lay down the law correctly and is, therefore, overruled and the appeals filed by the assessees are allowed – Decided in favour of assessee

punNoti4

Punjab Development of Trade, Commerce and Industries (Validation) Ordinance, 2015

Guest Article

Punjab: New Entry Tax Ordinance

2015-VIL-533-DEL

M/s CITI BANK Vs COMMISSIONER OF SALES TAX

Delhi Sales Tax Act, 1975 – Sale – dealer - disposal of repossessed cars by Bank – HELD - Disposal of repossessed cars by the Bank constitutes a sale' under the DST Act - the Bank which has disposed of the cars repossessed from defaulting borrowers is a dealer within the meaning of Section 2(e) read with Section 2 (c) of the DST Act - the activity of banking carried on by the Bank amounts to business under Clause (i) of Section 2 (c) of the DST Act - sale of the repossessed cars by the Appellant Bank is incidental or ancillary or in connection with the Appellant’s business – In favour of Revenue

2015-VIL-668-CESTAT-KOL-CE

M/s MARLIN STEEL FABRIAN INDUSTRIAL ESTATE & M/s B.C.A. CABLES Vs CCE, SHILLONG

Central Excise – Manufacture - twisting together of Aluminium wire rods alongwith steel wires - whether Aluminium wire Rods /Aluminium wires (30 in number) when twisted with a core of steel wires (7 in number) amounts to manufacture of a different manufactured product – HELD - Plaited wire bands and the like of Aluminium with a steel core fall under CETA 76.04 and have a different name, character and use. The certificate given by a Chief Engineer of Govt. of Mizoram cannot be considered as an authority that there is no change in the raw material and the finished product, when there is a change in the classification of the finished goods to 76.14 - activities undertaken by the appellants amount to manufacture of finished goods falling under CETA 76.14 – Appeals allowed by way of remand only for the limited purpose of re-quantification of duties and penalties

2015-VIL-667-CESTAT-BLR-ST

M/s MOVIK NET WORK INDIA PVT LTD Vs COMMISSIONER OF SERVICE TAX, BANGALORE

Service Tax - Information Technology Service - refund of service tax prior to registration – HELD - Revenue’s argument that the assess need to file refund claim every month/quarter and they should have registration prior to filing of the refund claim can not be accepted as a valid argument - these procedural requirements cannot stifle the implementation of the substantive law on the subject. It is pointed out that ‘Information Technology Service’ came under the net of service tax law during that period only and assessee would not immediately fathom full implications of the law announced; therefore, a slight delay in filing for the registration by the assessee with the Department cannot become a valid ground for rejecting their refund claim – Assessee appeal allowed

2015-VIL-669-CESTAT-DEL-ST

M/s SURYA PHARMACEUTICALS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II

Service Tax – Appellant is manufacture of Bulk drugs and registered under Goods Transport Agency (GTA) service and Business Auxiliary (BAS) service - payment of service tax under GTA and BAS services by utilizing their credit in Cenvat Credit account instead of paying the same in cash - whether appellants are entitled to use the Cenvat Credit to discharge their service tax liability in regard to GTA and BAS service, when they are not the service provider for such services – Demand – HELD - Taxation of Service Rules, 2006 enacted under the Finance Act, 1994 inter alia lays contains provisions governing the services which are provided from outside India and received in India. Rule 5 of the said Rules prevents the utilization of credit for discharging Service Tax on taxable services provided from outside India and received in India. In view thereof the demand of service tax as deemed provider of BAS services as per the impugned order does not warrant any interference. The same is upheld - The impugned order to the extent of demand of service tax on account of GTA services is set aside - imposing penalty would not be appropriate and the same is set aside – Assessee appeal partly allowed

FCP1612

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

17th of Dec

telNotiGO237

Telangana: Amendment in TVAT Schedule VI - Change of rate of tax/VAT on Petrol & Diesel

2015-VIL-536-UTR

M/s NARENDRA SINGH BISHT Vs THE COMMISSIONER, COMMERCIAL TAX

U.P. Trade Tax Act, 1948 - Contract between Club and revisionist-assessee for supply of cooked food - tax liability on the sales of cooked food and other eatables – HELD - Profit is always with sale and in the present case, the entire money has been received by sale and was given to revisionist-assessee, after deducting 12 per cent. Thus, it is the revisionist, who earned profit from sale and, therefore, has rightly been assessed. In such circumstances, if the club is compelled to pay tax on sale, grave injustice would be done to him - it is clear that the task of the club was nothing except to allow the assessee to use the infrastructure made available by the club as well as the title of the club as it’s brand name upon all the vouchers. When total money from sale after deduction was given to the revisionist, the question of holding club liable to pay tax does not arise - in certain circumstances, a party, though accepts payment and mentions in book of account, cannot be held liable for tax liability. This is also one of such cases - questions of law are answered against the revisionist - revisions dismissed

2015-VIL-535-MAD

M/s BRIGHT POINT INDIA PVT LTD Vs THE ASSISTANT COMMISSIONER

Tamil Nadu Value Added Tax Act 2006 - Revision of assessment – Denial of input tax credit – escapement of assessable taxable – principles of natural justice - HELD - The authority, without affording sufficient opportunity to the petitioner, passed the impugned order, despite specific request made by the petitioner on those lines. Originally, the assessment was completed, accepting the returns filed by the petitioner under Section 22(2) of the Act. The said assessment was sought to be re-opened by the authority under Section 27 of the Act, for escapement of assessment on the basis of the report filed by the Enforcement Wing authorities, which resulted in disallowance of sales return as well as reversal of ITC, which according to the learned counsel for the petitioner is not justifiable and the petitioner is entitled for the same. Apparently, without providing a reasonable opportunity to the petitioner of being heard the impugned order came to be passed. On this score itself, the impugned order is set aside and the matter is remitted back to the assessing authority for fresh consideration

2015-VIL-670-CESTAT-AHM-ST

M/s ADANI PORT & SPECIAL ECONOMIC ZONE LTD & M/s ADANI PETRONET PORT PVT LTD Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Service Tax – Port Service - Cenvat Credit on various inputs, capital goods and input services - The first category includes Cargo Handling Service, Custom House Agents, Dredging Service, Manpower Recruitment and Supply Agency Services, Pilotage Services, Port Services, Port Services (Marine Consultancy), Storage and Warehousing Services, Supply of Tangible Goods and Surveyors Services which are all input services used directly for providing the output taxable service (direct nexus). It is observed that since all these input services have direct nexus to the output service, the appellants are eligible for taking credit of the same - The second category of the services includes: Architect Services, Banking and Financial Services, Commercial or Industrial Construction Services, Construction Services, Consulting Engineers, Erection, Commissioning or Installation, General Insurance, Insurance Auxiliary Services, Insurance Services, Life Insurance Services, Maintenance and Repair Services, Management Consultant, Scientific and Technical Consultancy, Security Services, Technical Inspection and Certification and Technical Testing and Analysis which are covered under Rule 6(5) of the CENVAT Credit Rules, 2004. These services would be eligible for availing CENVAT Credit as the said input services are used for providing output services, and are also covered under Rule 6(5) of the CENVAT Credit Rules, 2004 - Third category includes Advertisement Agency, Banking and Financial Services, Chartered Accountant, Commercial Training and Coaching, Credit Rating Agency, Goods Transport Agency, Manpower Recruitment Agency, Market Research Agency Services, Scientific and Technical Consultancy, Security Services, Share Registry Services, Steamer Agent’s Services, Technical Inspection and Certification, Technical Testing and Analysis and Transport of Goods by Cruise Ship which falls under the inclusive part of the definition of input services, as defined under Rule 2(l) of CCR, 2004. Hence CENVAT Credit on these services also would be eligible - The services mentioned under Category-IV are the services which the Appellants claimed to be in relation to business activities. It is observed that the Appellant have claimed under this category, the services of Air Travel Agency, Airport Services, Auth. Service Station’s Services, Business Auxiliary Services, Business Exhibition Services, Business Support Services, Cable Operator’s Services, Cleaning Activity Services, Convention Service, Courier Services, Depository Services, Design Services, Erection, Commissioning or Installation, Event Management Service, General Insurance, Health Services, Information Technology Software Services, Insurance Auxiliary Service, Internet Service, Maintenance & Repair Services, Mandap Keeper, Membership of Clubs, Online Information & Database Access, Outdoor Catering Services, Pandal/Shamiana Services, Passenger Embarking For Foreign Travel, Photography Services, Rent-A-Cab Services, Renting of Immovable Property, Site Formation Services, Sponsorship Services, Stock Exchange Services, Survey & Map Making, Telephone Services, Work Contract Services - except for Air Travel Agency, Airport Services, Mandap Keeper Services, Membership of Clubs, Passenger Embarking for Foreign Travel, and Sponsorship Services, all the other services will be eligible to be treated as input services used in relation to business activities. As regards, Air Travel Agency, Air Port Services, Mandap Keeper Services, Membership of Clubs, Passenger Embarking for Foreign Travel, Sponsorship Service, it is not clear from data to what extent they are in relation to the business activities / output service viz. Port service. Hence, it needs to be examined by the lower Adjudicating authority whether these services are eligible to be treated as input services for providing the output services viz. Port Service. However, all other services in this category would be clearly ‘in relation to business activities’, and hence would be eligible for CENVAT Credit - Under Category V, Architect Service, Company Secretary Service, Consulting Engineers Service, Legal Consultancy Service and Management Consultant Service as Professional Services used for providing output taxable service. It is observed that the Hon'ble High Court of Gujarat has held in their own case that profession fees will be input services. The inclusive part of definition also mentions similar services and says ‘such as’ - these services will be eligible to be treated as input services, and credit of the same would be eligible - Appellant has listed under Category VI, Commercial or Industrial Construction Services and Construction Service. It is observed that in Appellant’s own case, Hon'ble High Court of Gujarat has held that credit is available on construction of jetty for output service viz. ‘Port Service’. The Hon'ble High Court of Andhra Pradesh in Sai Samhita Storages case held that Construction of Warehouses is eligible for credit for output service, Storage and Warehousing services. Tribunal has also held in same vein the cases of Reliance Infratel Ltd and in the case of Navratna S.G. Highway - Therefore, the Appellants are eligible for credit on these services - The nexus between the Input and Output services is clearly evident from the records except for items namely Air Travel Agency, Airport Service, Mandap Keeper Service, Membership of Clubs, Passenger Embarking for Foreigner and Sponsorship Service which requires to be examined by the Adjudicating authority. So, there is no reason to deny CENVAT Credit on the input services except the items mentioned above. It is a case of eligibility of CENVAT Credit on input, input service and capital goods and most of the items are admissible and therefore, imposition of penalty is not warranted – Largely in favour of assessee

2015-VIL-534-ALH-ST

M/s KUNJ POWER PROJECT PVT LTD Vs UNION OF INDIA

Service Tax (Provisional Attachment of Property) Rules, 2008 - Rule 3 - procedure for provisional attachment of property - Attachment of property and bank accounts - Violation of principle of natural justice – HELD - the proposal submitted by the Deputy Commissioner, clearly indicated that first the property should be attached and thereafter notice should be issued. This proposal was approved by the Commissioner without any application of mind and without considering the provision of the Rules and the circular - Action for attachment would only have been initiated by the Commissioner and could not have been initiated by the Deputy Commissioner. Such action on the part of the Deputy Commissioner is patently illegal and without jurisdiction - the action of the respondents was not malafide and consequently considering this fact, we issue only a warning to respondents 2 & 3 that they need to be careful while resorting to exercise the powers contemplated under Rule 3 of the Rules of 2008. Such exercise of power has to be resorted to with utmost circumspection and with maximum care and caution - the impugned orders are quashed. The Writ Petition is allowed with cost of Rs.25,000/-, which shall be paid by the respondents to the petitioner - Registry is also directed to send a certified copy of this Order to the CBEC with specific instruction to issue a circular to all the officers ensuring that the powers under Rule 3 should be exercised with utmost care and caution and should not be exercised frivolously – Writ petition allowed

2015-VIL-671-CESTAT-AHM-CE

COMMISSIONER OF CENTRAL EXCISE-AHMEDABAD-II Vs M/s GUJARAT TELEPHONE CABLES LTD

Central Excise - Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 – Rule 22 - demand of duty alongwith interest and penalty - Respondent-Companies are being wound up and no application was filed by the liquidator for continuance of the proceedings. Rule 22 of the Rules, 1982 – HELD – reading of Rule 22 of the Rules, 1982, makes it clear that when a Respondent in the case of a company, is being wound up, the appeal or application shall abate, unless an application is made for continuance of such proceedings by administrator, receiver, liquidator or other legal representative of the appellant or respondent, as the case may be. In the present case, the Respondent-companies are wound up. Hence, the revenue appeal against the respondent shall be abated - appeals dismissed as abated

FCP1712

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

18th of Dec

2015-VIL-537-AP

M/s A.B.MAURI INDIA PVT LTD Vs THE DEPUTY COMMERCIAL TAX OFFICER

Andhra Pradesh Value Added Tax Act - Section 4(4)(iii) – levying purchase tax – Stock transfer in the course of export out of the territory of India – Input Tax credit - HELD – The goods were no doubt transferred from the Secunderabad branch to another of its branches at Cochin, the very same goods are said to have been exported from the Cochin branch to foreign buyers outside the country. If the goods have been exported, and have not been disposed of otherwise than by way of export out of the territory of India, the ingredients of Section 4(4)(iii) would not be satisfied and, consequently, such export outside the territory of India would not fall within the ambit of Section 4(4)(iii) of the Act - Where the movement of the goods from the registered office in one State is occasioned by the order placed by a foreign buyer, or is an incident of such a contract, its movement from the very beginning, from the State all the way until delivery is received by the foreign buyer, is movement of goods for the purpose of export - If goods, transferred from the one branch to another branch, have been exported to foreign buyers outside the country, and such exports satisfy the ingredients of Section 5(1) of the CST Act, no tax can be levied on the stock transfer as it is not a case of a mere stock transfer, and the entire process appear to be in the course of export of the goods outside the territory of India, in terms of Section 5(1) of the CST Act - Form-F is required to be furnished by the branch, which receives the goods, to the branch which transferred the goods to enable the latter to establish, as stipulated in Section 6A (1) of the CST Act, that the transfer of the goods, outside the State, was not by way of sale - the assessing authority shall, after examining whether these goods were exported out of the country and whether the conditions stipulated in Section 5(1) of the CST Act have been fulfilled, also consider whether or not the petitioner should be extended input tax credit under Section 13 of the APVAT Act read with Rule 20(8) of the APVAT Rules, treating these stock transfers as sale in the course of export out of the territory of India – Petition disposed in favour of assessee

2015-VIL-673-CESTAT-AHM-CE

COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, DAMAN Vs M/s VALSON INDUSTRIES LTD

Central Excise - duty free clearance of ‘yarn waste’ which is produced during the manufacture of final product, ‘Polyester Dyed Yarn’ – Benefit of notification – HELD - appellants are not eligible for duty exemption for yarn waste, under Notification No.89/95-CE as contended by the Revenue. However, this does not preclude appellants from availing the benefit of Notification No.30/2004-CE, which is altogether a separate and independent notification. Not eligible for the benefit of one notification, does not mean that the party is not eligible for the benefit provided under another notification, as far as they fulfill the provisions of the said notification. Therefore, no irregularity in the clearance of yarn waste free of duty by the appellant in accordance with Sr.No.8 of the Table of the Notification No.30/2004-CE - the Order-in-Appeal setting aside the demand of duty, interest and imposition of penalty is correct to that extent

2015-VIL-672-CESTAT-CHE-CE

COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY Vs SHRUSHTHI PLASTICS (P) LTD

Central Excise - Simultaneous availment of SSI exemption and modvat credit – HELD - appellants have rightly paid excise duty on the goods bearing the brand name of ‘HLL’ and accordingly filed declaration to avail Modvat credit on the inputs used in the manufacture of branded goods belonging to another person which is outside the scope of SSI exemption under Notification 8/99 - By following the Hon'ble Supreme Court judgement hold that the assessee are eligible for Modvat credit on the inputs used in the manufacture of goods bearing the brand name of ‘HLL’ - the impugned order is upheld and the Revenue's appeal is rejected

2015-VIL-674-CESTAT-AHM-ST

M/s PAUL MASON CONSULTING INDIA PVT LIMITED Vs COMMISSIONER OF CENTRAL EXCISE & S.T., VADODARA

Cenvat Credit - relevant date for time-limit for filing refund claim in respect of CENVAT credit accumulated as a result of services exported – HELD - CENVAT credit though not a duty, by making Section 11B applicable to refund of CENVAT credit, CENVAT credit has been equated with duty, by way of Notification No. 27/2012 dated 18.06.2012. Therefore, the time limit would be as prescribed in Section 11B. However, as per the decision of the Hon'ble Gujarat High Court in Swagat Synthetics the relevant date would be the date when the cause for refund has arisen, and this would obviously be when the export has taken place - the refund claims filed within one year of export invoice would not be hit by the mischief of time-bar - The impugned are modified accordingly – disposed in favour of assessee

2015-VIL-675-CESTAT-BLR-ST

DELL INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BANGALORE

Service Tax – SEZ unit - Denial of refund claims on the ground that the services did not have nexus with the authorized operations, even though the services were in the list of approved services by the Approval Committee – HELD - once the Approval Committee which has the Commissioner of Customs also as a Member issues certificate that services received by the assessee are in relation to their authorized operations, subsequently a contradictory decision cannot be taken by the officers of Customs. As regards services wholly consumed within SEZ, even though there is no necessity to discharge service tax liability, it was held that this does not mean that in a case where service tax has been paid, assessee is not eligible for refund – Assessee appeal allowed

cbecOrder163

CBEC: Monetary limits for filing appeals by the Department before CESTAT/High Courts and Supreme Court

cbecOrder69

CBEC: Authorizing officers of the Zone to appear before CESTAT Bench

mpNoti44

Madhya Pradesh: Amendment in MPVAT Schedule-II - Change in rate of tax on certain items and increase in residual rate

mpBill21

Madhya Pradesh Second Amendment Bill, 2015

goaOrder25

Goa: Constitution of State Level Empowered Committee on GST

harNotiLeg22

Haryana: The Haryana Value Added Tax (Second Amendment) Act, 2015 [in Hindi | English version awaited]

19th of Dec

ceNoti26

Central Excise: Extension in date for payment of Central Excise Duty for the month of Nov '15 - for the assessee in the State of Tamil Nadu & UT of Puducherry

stNoti27

Service Tax: Extension in date for payment of Service Tax for the month of Nov '15 - for the assessee in the State of Tamil Nadu & UT of Puducherry

20th of Dec

tnNotiGO126

Tamil Nadu: Amendment to Rule 7 of TNVAT Rules, 2007 - e-filing of returns - last date extended for dealers of certain rain affected districts & Amendment to Rule 3 Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas Rules, 1990 - Filing of returns - last date extended for dealers of certain rain affected districts

karNotiFD125

Karnataka: Tax exempion on Sale of Application Forms Prospectus & Brochures

21st of Dec

delNoti954

Delhi Value Added Tax (Amendment) Rules, 2015 - Amendment in Rule 7 & 43

2015-VIL-538-KAR

CENTUM ELECTRONICS LIMITED Vs STATE OF KARNATAKA

Karnataka Value Added Tax Act – Exemption to Information Technology Units - refund of Central Sales Tax – denial the benefit under CST Act on the ground that assessee had collected tax and then claimed refund – HELD - The procedure for grant of exemption under the KVAT Act was that the output tax is to be collected and input tax is to be deducted, and net tax has to be paid, then only the net tax paid would be refunded, would clearly mean that after 1.4.2005, the condition of ineligibility of the unit if it collects tax, had been done away with - revision by the Joint Commissioner, by invoking the provisions of Section 63A of the KVAT Act, only for the purpose of CST Act on the ground that assessee had collected tax, cannot be justified, in as much as the same benefit had been granted, and is being continued to be granted, to the assessee after 1.4.2005 in the case of KVAT Act - the procedure under the KVAT Act was to be followed for Central Sales Tax also and thus, the refund given to the petitioner/assessee was fully justified and ought not to have been reversed - the petitioner is admittedly eligible for grant of exemption. As such, the petitioner cannot be denied the benefit on technical grounds – assessee petition allowed

2015-VIL-677-CESTAT-MUM-CE

BHAIRAV SYNTHETICS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, THANE-I

Central Excise - clearances of dutiable and exempted final products - appellants availed cenvat credit on grey fabrics to the extent of 20% of the total duty paid and forgo the credit to the extent of 80% - SCN for wrong availment of cenvat credit a/w interest and penalty – Rule 6(2) of the CCR, 2002 – Board circular - HELD – the instructions issued by Circular No. 703/19/2003-CX are binding on the Revenue and revenue cannot be allowed to argue against it - the justification given for not following the Board’s circular is not at all legally valid and tenable in law - the appellant has availed 20% of the cenvat credit and forgone 80% of it on the basis of pro rata use of inputs used in dutiable and exempted goods. As per the appellant, they have maintained separate records for receipt of consumption and inventory of inputs meant for use in the manufacture of dutiable final products and exempted products. As per the circular it is sufficient compliance of Rule 6(2) of the Cenvat Credit Rules - the appellant’s case is fully covered by the given circular. Moreover, the benefit of credit is sought to be denied on purely technical grounds. It is settled law that substantive benefit cannot be denied merely on technical grounds – impugned order is liable to be set aside, assessee appeal allowed

2015-VIL-676-CESTAT-MUM-CE

INNOVASSYNTH TECHNOLOGIES (INDIA) LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Central Excise - payment of differential duty – Imposition of interest and penalty - show-cause notice 12.05.2006 demanding differential duty for the period 2001-2002 and 2002-03 – HELD - the Hon’ble High Court of Gujarat in the case of CCE v. Gujarat Narmada Fertilizers Co. Ltd has held that extended period cannot be invoked for the demand of duty. The same arguments may be used for seeking relief from imposition of penalty and interest - the impugned order is unsustainable and liable to be set aside – assessee appeal is allowed

2015-VIL-679-CESTAT-DEL-ST

CCE, RAIPUR Vs M/s DROLIA ELECTROSTEELS (P) LTD

Service Tax - whether amount paid as transportation charges fall within the scope of GTA service even though the charges recovered pertained not only to transport of goods but also for loading and unloading – HELD – Circular No. 104/07/2008-ST clarifies that in such a situation the entire service was to be treated as GTA service and not cargo handling service - Commissioner (Appeals) was justified in holding that the said CBEC clarification is squarely applicable to the facts of the present case and therefore the impugned service was GTA service and not cargo handling service - Revenue appeal dismissed

2015-VIL-678-CESTAT-DEL-ST

HARINDER GOYAL Vs CCE, CHANDIGARH

Service Tax - Business Auxiliary Service - appellant engaged by HPCL to run company owned outlet - demand of service tax alongwith interest and penalty – HELD - the entire operation of petrol pump was done by the appellant as per the terms of the agreements - service of sale of goods produced or provided by or belonging to the client is clearly covered under limb (i) of the definition of Business Auxiliary Service - the appellant was not a supplier of man power to the service recipient and therefore the contention of the appellant in this regard is found to be untenable - no infirmity in the impugned order – Assessee appeal dismissed

22nd of Dec

2015-VIL-543-GUJ

ATUL AUTO LTD Vs STATE OF GUJARAT

Gujarat Sales Tax Act, 1969 - section 4A - Levy of additional tax on sale or purchase of exempted goods - mode and manner of payment of additional tax - Whether the appellant is liable to additional tax under section 4 of the Act on the sales which are exempted by Entry pursuant to notification under section 49(2) of the Act - Whether the Tribunal has exceeded its jurisdiction in holding that the appellant was required to deposit additional tax in cash – HELD - the legislature, appears to have consciously provided for additional tax to be computed at the rate of 10% of the sales tax, general sales tax or, as the case may be, purchase tax payable by a dealer, so as to ensure that such tax is payable only when the sale/purchase of goods is otherwise exigible to tax. In other words, in case where no tax is payable on the sale or purchase of goods, the legislature did not intend that additional tax should be collected thereon. Otherwise, there was no need to add the words “on the sales tax, general sales tax or, as the case may be, purchase tax, payable by such dealer”. When the additional tax is to be computed on the tax payable, in the absence of any tax being payable, the question of computing additional tax thereof would not arise - if the dealer is called upon to pay the additional tax in cash, an anomalous situation arises, inasmuch as, on the one hand, he has to bear the burden of tax and on the other hand, he cannot pass on the same to the purchaser. The additional tax being a tax on the sale or purchase of goods liable to tax under the Act, the legislative intent would normally be that such tax should be recovered from the buyer of the goods. However, in view of the bar contained in section 56 of the Act, in case where the sale or purchase is exempt from tax, the dealer would not be in a position to recover the additional tax from the purchaser, thereby frustrating the very object of the provision namely, to tax the sale or purchase and would result in taxing the dealer instead of the sale or purchase - The Tribunal was not justified in holding that additional tax was payable under section 4A of the Act by the dealers even for the period prior to 3rd March, 2001, either in cash or by way of adjustment. To that extent, the impugned orders passed by the Tribunal, cannot be sustained - the Tribunal has exceeded its jurisdiction in holding that the appellant was required to deposit additional tax in cash, when such aspect was not even the controversy before it in the appeal of the appellant – Assessee appeal allowed

2015-VIL-541-DEL

YONGNAM ENGINEERING & CONSTRUCTION (PVT) LTD Vs COMMISSIONER, DVAT

Delhi Value Added Tax Act, 2004 – validity of VATO order passed under Section 36A(8) by virtue of delegation of power by Commissioner under Section 68 – HELD - the Commissioner has delegated various powers under different Sections of the said Act, but there has been no delegation of powers insofar as Section 36A is concerned - an order passed under the so-called “authority” of the Commissioner would not be valid order, when Section 36A(8) specifically provides that it is the Commissioner who has to pass the order in writing – Since there has been no such delegation of the Commissioner’s powers in favour of the VATO for passing an order under Section 36A the impugned order is liable to be quashed as the VATO did not have the jurisdiction to pass such an order – Assessee petition allowed

2015-VIL-542-AP

M/s HINDUSTAN ISPAT PRIVATE LIMITED Vs THE COMMERCIAL TAX OFFICER

Andhra Pradesh Value Added Tax Act – Assessment – disallowance of input tax credit - discretion to entertain the Writ Petition - alternative remedy – HLED - It is not in dispute that the petitioner has an alternative remedy of appeal under Section 31(1) of the Act. It is also not in dispute that exercise of jurisdiction, under Article 226 of the Constitution of India, is discretionary and the High Court has the discretion not to entertain the writ petition where there exists an alternative statutory remedy. As the High Court has the discretion to relegate the petitioner to the alternative remedy of appeal, exercise of discretion by the High Court to refuse to entertain a writ petition, on the ground that all the contentions urged therein can as well be urged before the appellate authority, cannot be said to suffer from an error apparent necessitating review. The review petition fails and is, accordingly, dismissed

2015-VIL-540-CHG-CE

COMMISSIONER, CENTRAL EXCISE & CUSTOMS, RAIPUR Vs M/s VANDANA VIDYUT LTD

Cenvat Credit Rules – Rule 14 - Recovery of CENVAT credit wrongly taken – though the credit was wrongly availed but remained as a paper enter only – reversal of credit before utilization – Levy of interest – HELD - under Rule 14, even if the CENVAT credit was taken by making paper entries by one not entitled to the same, the liability for interest arises irrespective of its reversal before utilization. The conclusion of the Tribunal that the CENVAT credit having remained a paper entry only liability for interest would not arise in absence of utilization is erroneous - the taking of CENVAT credit precedes the utilisation. If CENVAT credit had been wrongly taken, that is an independent liability by itself irrespective of its utilisation which may have followed, as far as taxing statutes are concerned - We regret our inability to concur with views in Bill Forge Pvt Ltd that the mere taking of CENVAT credit wrongly by making entries would not invite liability for interest unless it had been utilised also. In our respectful opinion, that would be against the discussion and the law laid down in Ind-Swift Laboratories Ltd that the liability for interest arises on the wrong taking independent of utilisation – Tribunal order set aside and revenue appeal allowed

2015-VIL-684-CESTAT-MUM-CE

SHREE KRISHNA NYLON PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

Central Excise – refund claim for excess duty paid – Credit Note – HELD - even if the excess duty for which refund is sought for is collected but subsequently returned by way of credit note, it cannot be said that the incidence of refund amount has been passed on - since the appellant accounted for the said amount as ‘receivable’ under the head of loan and advances in the balance sheet, it is a sufficient evidence to hold that incidence of duty has not been passed on, otherwise the amount cannot be accounted for as receivable - it is not open for the Revenue to challenge the finding of the Commissioner (Appeals)’s order without filing any appeal against the same. Therefore, the impugned order of the Commissioner (Appeals) cannot be sustained - appellant is entitled for the refund and the learned lower adjudicating authority has rightly sanctioned the refund claim – Assessee appeal is allowed

2015-VIL-681-CESTAT-DEL-CE

M/s SHREE CEMENT LTD Vs COMMISSIONER OF CENTRAL EXCISE, JAIPUR

Central Excise – Cenvat Credit Rules - Admissibility of Cenvat credit prior to start of manufacture and for their utilization – distribution of credit by ISD before start of production – HELD - A plain reading of Rule 3 and Rule 7 the Rules clarifies that there is no restriction to the effect that if any assessee avail cenvat credit on procurement of inputs (prior to start of manufacture), is not entitled to take cenvat credit. Infact, without procuring inputs, or some inputs service, assessee cannot start manufacturing activity. Therefore, it cannot be said that an assessee who is a manufacturer of excisable goods is to be denied the cenvat credit of duty paid on inputs or input service availed prior to start of manufacturing activity - therefore, the appellant has correctly taken the cenvat credit - the appellant is having the case on merits as well as on limitation – the impugned order is set aside and appeal allowed

2015-VIL-683-CESTAT-CHE-ST

M/s TUTICORIN PORT TRUST Vs CCE, TIRUNELVELI

Service Tax - Port services – Taxability of monthly Royalty charges collected by the appellant towards Development of Berth as Container Terminal and its operation and maintenance on BOT basis – Demand under port services - The period of dispute from June 2003 to January 2007 – HELD - the role of the appellant and the number of activities/services rendered are direct and explicit activities carried out in the development of C.H.T. by the licencee - The clause are specific that the appellant shall provide entry berthing, sailing, piolatage, towage, maintenance of entrance channel draft at 8.24 MT and 10.4 MT dredging of the water way leading to the container terminal and maintenance of dredged draft, water ride safety and safety of navigation etc., In addition, the appellant also provide supply of electricity and water subject to payment by the licencee – These activities form part of the obligation of the appellant as built in BOT agreement for the development of container terminal. Therefore, the agreement itself makes it clear that the appellant has to provide certain services which are essential for movement of vessels and goods. Therefore, it is established beyond doubt that all the activities provided in the development of Berth on container terminal are rightly covered under port services. The consideration received by the appellant in the form of royalty charges is taxable under ‘Port Services’ - BOT agreement cannot be compared or equated to any normal agreement of leasing of property - The term Licence used in the present BOT agreement is to include the Licensor, Licensed Premises and Licence period and they are used with full meaning and these cannot be by any stretch of imagination can be called or termed as Lessor or Leased Premises or Lease Period - the Royalty charges received by the appellant from Licensee as per Licence Agreement for Development of VII Berth as Container Terminal, operation and maintenance on BOT basis is chargeable to service tax under Port Service - there is enough justification in favour of Revenue and the appellant's claim on limitation is not tenable and the demand is rightly confirmed by invoking longer period - The demand is upheld but for the cum tax benefit. The penalty imposed under Section 76 and 78 are waived – Decided mainly in favour of revenue

2015-VIL-680-CESTAT-DEL-ST

AIRPORT AUTHORITY OF INDIA Vs COMMISSIONER OF SERVICE TAX, DELHI

Service Tax - Airport services - Interpretation of term "any service provided" – HELD - the definition of 'Airport Services' under Section 65 (105) (zzm) includes any service and service tax is chargeable on the revenue collected from Renting and Leasing out of space inside airport – Limitation - This is a fit case for invoking Section 80 according to which notwithstanding anything contained in Section 76, 77 & 78, no penalty shall be imposable on an assessee for any failure referred to in the said provisions if the assessee prove that there was reasonable cause for the said failure - invoking Section 80, the penalty under Section 76 and Section 77 has to be set aside – Appeal partly allowed

2015-VIL-539-CHG-ST

COMMISSIONER, CENTRAL EXCISE CUSTOMS AND SERVICE TAX, BILASPUR Vs M/s ARJUNA CARRIERS PVT LTD

Service Tax – Revenue appeal against Tribunal order – HELD - Recitals in the order sheet are sacrosanct so far as the superior Court is concerned with regard to what may or may not have transpired before the Tribunal. If the Appellant is of the opinion that its arguments and contentions have not been considered, the proper remedy for the Appellant is to first move before the Tribunal itself inviting its attention to the same - Under Section 35G of the Central Excise Act, an appeal lies to this Court from an order of the Tribunal in which a substantial question of law may arise for determination. This jurisdiction cannot be converted into a regular first appeal – Revenue appeal dismissed

mahaCir19T

Maharashtra: Downloading of Digitally Signed Registration Certificate

apCir238

Andhra Pradesh: Extension of time for filing of monthly Form VAT-200 Return for November 2015

2015-VIL-544-KAR

NATIONAL MINERAL DEVELOPMENT CORPORATION LIMITED & VEDANTA LTD AND OTHERS Vs STATE OF KARNATAKA

[Total pages - 425 | judgement starts from page no. 129 | File size: 4.8Mb]

Karnataka High Court: Karnataka Forest Act, 1963 - Forest Development Tax - Whether the grant of mining leases in the lands belonging to Government under the M.M.R.D. Act would amount to disposal by sale or otherwise of minerals, by the State Government and whether the amount paid as royalty is ‘consideration’ paid for such disposal by sale or otherwise? (ii) Whether the State has legislative competence to levy, forest development tax on the royalty amount paid by the Lessees to the State Government in regard to the mining leases granted under the M.M.R.D. Act? (iii) If the levy is invalid, whether such declaration should be given effect only prospectively – HELD - Having regard to the context in which expression "a body" is used in Section 98-A of the Act, it would mean an artificial person created by a legal authority, such as a corporation, or an aggregate of individuals or groups or a body corporate. Thus, the expression “a body” can never have reference to an individual or a natural person - The expression “a body” need not be only a public authority or body; even a private body, comprising of natural or juristic persons, as an aggregate, having an independent legal persona, could be referred to as “a body” - Thus, leaseholders of mines and quarries in forest areas, whether as individual persons whether natural or juristic entities, cannot be construed to be “a body”, within the meaning of Section 98-A of the Act - It is held that Notification dated 16/08/2008 issued by the State Government under Section 98-A of the Act, is contrary to the expression “a body notified by the State Government” and is hence, ultra vires that section. Consequently, lease holders or quarry holders in forest areas are not liable to collect FDT when they dispose minerals as a forest produce by sale or otherwise or even if they use it for captive consumption. The Notification dated 16/08/2008 and Communications dated 23/08/2008, 12/09/2008 and 22/10/2008 are quashed as far as lease holders or quarry holders in forest areas are concerned. Also, Demand notices issued pursuant to the aforesaid notification and Communications are also quashed as far as they are concerned. The writ petitions filed by the lease holders or quarry holders in forest areas succeed - It is held that FDT is a tax leviable under Entry 54 List II and it is not a fee within the scope of Entry 47 of List III. FDT being in the nature of a sales tax - it is neither compensatory nor regulatory in nature. It is compulsory exaction and not a fee - As FDT is in the nature of a sales tax on sale of minerals as a forest produce, the levy is not applicable when the sale is made for the purpose of exports or in the course of inter-state trade. In other words, the levy of FDT is subject to Article 286 of the Constitution - It is held that the State Legislature is not denuded of its legislative competence to levy FDT on the disposal of minerals as a forest produce despite a declaration having been made by the Parliament under Section 2 of the MMDR Act. In the context of Entry 54 of List I, it is held that the general power of regulation and control of minerals under MMDR Act does not include the power of taxation. Further, FDT being in the nature of a sales tax, is within the exclusive domain of the State Legislature under Entry 54 List II. That MMDR Act does not provide for any provision with regard to levy of tax on sale of minerals as a forest produce and in the absence of any express provision, such a provision cannot be implied. It is thus held that the State Legislature is fully competent to levy FDT on sale of minerals as a forest produce - The F.C. Act, 1980 (Central enactment) and Karnataka Forest Act, 1963 (State enactment) are not in conflict with each other and there is no overlapping of provisions between the two enactments although, both the enactments are relatable to Entry 17-A of List III. Therefore, there is no repugnancy of the State enactment in relation to the Central enactment; neither does the doctrine of occupied field apply in the present case - Further, E.P.Act is enacted by virtue of the residuary clause in Entry 97 of List I whereas, Karnataka Forest Act, 1963 was enacted when the subject forest was in List II and the said subject now being enumerated in List III, makes no difference. The two enactments being relatable to entries in two different lists, the doctrine of repugnancy and the doctrine of occupied field do not apply - Levy of FDT is at the rate of 8% on the disposal of minerals as a forest produce whether by sale or otherwise and not at 12% - the purchasers of minerals as a forest produce are liable to pay FDT at 8% on the sale consideration when they have purchased or would purchase from the State Government or from a corporation, owned or controlled by the State Government

24th of Dec

goaFaq

Goa: Frequently asked questions [FAQs] on taxation of developers

tnNotiGO122

Tamil Nadu: Authorises officers of the Commercial Taxes Department to make assessment under the TNVAT Act

cbecInst69

CBEC: Regarding imposition of cost by CESTAT on grounds of quality of adjudication order

FCP2312

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

2015-VIL-546-RAJ

COMMERCIAL TAXES OFFICER Vs M/s RAMDEV FOOD PRODUCTS PVT LTD

Rajasthan Sales Tax Act – spices/ Masala / Kirana items / Packed Masala – rate of tax on Asafoetida (Hing) – HELD - Even if we take common and commercial parlance meaning of the term “Masala”, spices/Kirana items being sold singly would not come within the meaning of the term “Packed Masala” and in common and commercial parlance, Masala is always treated to be mixing of two and more spices and since Asafoetida (Hing) is not mixture of two and more spices, therefore, it cannot be termed as a Masala. It is also worth mentioning that the claim of assessee that in most of the States Asafoetida (Hing) finds place in the list of Kirana goods - Accordingly, the Tax Board has correctly analyzed the Entry No.82 and no contrary view can be taken in the facts and circumstances of the instant petitions. When the very levy of rate of tax @ 4% has been found to be properly levied then the question of penalty does not arise – Revenue revision petitions dismissed

2015-VIL-547-MAD

M/s HEWLETT PACKARD INDIA SALES PRIVATE LIMITED Vs THE DEPUTY COMMISSIONER

Tamil Nadu VAT Act – Classification of multifunction network printers – HELD - the Division Bench of this Court in Canon India (P) Ltd., Vs. State of Tamil Nadu after elaborate discussions, has considered that the products similar to that of the petitioner partake the character of peripheral of a computer and therefore classifiable under the entry taxable at 4%. Since the products of the petitioner naturally fall under Entry 68 Part B, it will attract levy of 4% tax instead of 12.5% tax under the residuary entry – In favour of assessee

2015-VIL-142-SC-CE

UNION OF INDIA Vs GUJARAT INSECTICIDES LTD

Central Excise – Refund of amount paid under protest – HELD - the duty for which the claim of refund is made, was paid under protest during the pendency of the adjudication proceedings and the finding of fact is that the intermediary product was not marketable. It would therefore follow that there was no question of passing on this element of duty to consumers/buyers – Refund allowed - Revenue appeal dismissed

2015-VIL-545-RAJ-CE

M/s GRAVITA INDIA LTD Vs UNION OF INDIA

Central Excise Act – Section 11B - Export of goods – Rejection of rebate claim of refund on the ground of limitation as petitioner failed to receive the export documents and shipping bills from the Customs Authorities at the port of export – Limitation - circumstances beyond control of assessee – relevant date for computation of limitation – HELD - Where the lapse as to non-availability of requisite document is on account of Central Excise Department or Customs Department, this would be mitigating circumstance flowing from the legislative scheme. Limitation is to be considered in the light of availability of requisite documents and should be taken to begin when documents necessary for substantiating the claim of refund are furnished by the department, which should be the starting point for computation of limitation - The respondents are directed to allow the refund/rebate to the petitioner together with statutory rate of interest, applicable as per the Rules – Writ petition allowed

2015-VIL-685-CESTAT-AHM-CE

M/s NATIONAL IMPEX Vs CCEC&ST, DAMAN

Central Excise - 100% EOU - Failure to produce proof of export – non-furnishing of export documents – HELD - The expression ‘Goods if allowed to be sold in India’ in the proviso to the Notification No 125/84-CE would cover the goods sold on the basis of permission of the Development Authority - excise duty on such sale in DTA is chargeable under the main Section 3(1) of the Central Excise Act 1944. Thus, it is clear, if the goods are not exported and the appellant fails to furnish proof of export, the duty will be demanded on such goods - There is no ingredient available on record to invoke Section 11AC in this case. So, the imposition of penalty under Section 11AC is not warranted - demand of duty alongwith interest is upheld – Appeal partly allowed

2015-VIL-686-CESTAT-MUM-ST

DHL EXPRESS (I) PVT. LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI

Service Tax - Courier service / Business Support service - Valuation - Payment of service tax under Best Judgment method – appellants did not declared the ‘Gross amount charged' instead declared the net amount after adjusting payables against receivables in ST-3 return – Taxability of network fee – ‘Billed' and ‘Unbilled' transactions – Cum Tax benefit – Demand, interest and penalty – HELD - The activity being carried out by the appellants is transportation of documents, goods or articles. Since this is a more specific classification available it has to be preferred over a more general classification. Thus it is a clear case of courier service provided by the appellants – Network fee is net amount paid received by DHLI after netting gross amount it has to receive as co-loader with the amount payable to appellants as service charges for services received. Representing the Network fee as a fee for co-loading is misrepresentation - Since the consideration that is paid to co-loader can only be exempt in respect of the billed consignments where tax has been paid on gross amounts received, the claim that DHLI is a co-loader in respect of Unbilled consignments is incorrect - Appellants are getting a consideration from the DHLI on the costs plus basis. The figures for the Network fee are arrived on net basis after deducting the appellant's consideration, not only of billed consignments but also of Unbilled consignments in respect of which no services are provided by DHLI to appellants and other costs. Thus it is held that adjustment of the receivables for service provided against the amounts payable for the service received, or incentives and costs, is incorrect. The service tax in each case has to be paid on the Gross value of each service separately – The appellants have filed the returns but have, according to the Order, failed to assess the tax in accordance with the provisions of the Act or rules made thereunder. They have not paid tax on the ‘Unbilled transactions in respect of provision of service to the DHLI. Thus it is possible to determine the assessable value on the best judgement method by virtue of clause (b) of the section 72 of the Act – The demand in respect of services received by appellant and where service tax has been demanded on reverse charge basis is set aside for the period beyond the normal period of limitation - For the demand in respect of services provided by appellant to DHLI in respect of Unbilled consignments the benefit of calculation of tax on cum duty basis is allowed - The penalty under Section 78 is reduced correspondingly to the revised amount of demand worked out after allowing cum duty benefit and limitation - Penalty under Section 77 is upheld – Appeal partly allowed

2015-VIL-682-CESTAT-BLR-ST

KERNEX MICROSYSTEMS (INDIA) LTD Vs CCEC&ST, HYDERABAD-II

Service Tax - CENVAT credit for the input services viz. advertisement, DVD film production, campaigning in electronic and print media etc. which were used for collecting capital through IPO - capital for expansion of manufacturing facilities – HELD - The definition of ‘input service’ also includes all the input services which are used in relation to setting up of a factory and specifically mentions advertisement or sales promotion, activities relating to business, financing and so on - it is not an issue now when the appellant’s pleading to claim CENVAT credit only in respect of new unit - appellant is entitled to the CENVAT credit – Appeal allowed

28th of Dec

2015-VIL-549-P&H

M/s AMBUJA CEMENT LIMITED Vs STATE OF PUNJAB

Punjab Value Added Tax Act - Jurisdiction of Appellate Authority to go beyond the grounds of appeal - Miscalculation of notional tax liability - department contends new ground that matter needed fresh consideration as stock transfer value is on lower side – Remand of matter – dismissal of assessee appeal by tribunal - HELD – The matter is no longer res integra - Appellate Authority has no power to go beyond the grounds of appeal - The first appellate authority was not justified in remanding the matter for fresh assessment for considering those issues which were not subject matter of appeal before it. Consequently, the impugned order passed by the Tribunal as well as order passed by the DETC(A) for remanding the matter for fresh assessment are set aside and the matter is remanded to the first appellate authority

2015-VIL-548-P&H

STATE OF HARYANA Vs M/s OM PESTICIDES

Haryana Value Added Tax Act, 2003 – Classification - pesticides and insecticides - Entry 38B of Schedule B - expression “used for plants only” – Denial of exemption on the ground that assesses were not selling pesticides, weedicides and insecticides but were manufacturing it - intermediate products – HELD - Products in question are technical grade in concentrated form imported in or manufactured in the State and are further diluted by the formulators by adding inerts or some emulsifying agents for the end use - By process of dilution these items do not cease to be insecticides / pesticides or weedicides as the dilution process does not amount to any manufacture - the goods in question are insecticides/pesticides. Hence, eligible for exemption – Revenue appeals are dismissed on merits as well as on the ground of limitation

2015-VIL-143-SC-CE

AMBUJA CEMENT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH

Central Excise - Interpretation of Exemption Notification No. 67/95 - Dutiability of the intermediary product 'Clinker' obtained at an intermediary stage in the production of 'Cement' – Captive consumption – Rule 6 of the CENVAT Credit Rules - HELD - The case is that since the exempted goods ('Cement') is cleared by the appellant who is a manufacturer of (a) 'dutiable final products' ('Clinker') and (b) 'exempted final products' ('Cement') after discharging the "obligation" prescribed in Rule 6 of the CCR, 2001, clause (vi) of the notification applies. In such a case, exemption is available in respect of 'Clinker' which is captively consumed in the manufacture of 'Cement' as per the opening part of the Notification - A plain reading of clause (vi) of the notification would show that it only contemplates a situation where 'a manufacturer manufactures both dutiable as well as exempt final products'. There may be different final products manufactured by the same manufacturer. The final products may be made out of the same product or out of different products. Clause (vi) does not contemplate that the manufacturer should manufacture only 'one final product' or that if he manufactures only one product that product itself should be both dutiable and exempted. The basis adopted by the Tribunal that the 'same final product' should be partly dutiable and partly exempt, is neither a requirement of clause (vi) nor a requirement of Rule 6 - Tribunal decision is erroneous and is liable to be set aside – Assessee appeal allowed

2015-VIL-690-CESTAT-CHE-CE

STERLITE INDUSTRIES INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI

Central Excise - Manufacture of Copper Anode from copper concentrate – Denial of benefit of captive consumption Notification No.67/95-CE on the oxygen gas produced and captively consumed in the manufacture of Copper Anode on the ground that Sulphuric Acid is a final product cleared at 'Nil' rate and that since oxygen is captively used in the manufacture of Copper Anode (dutiable) and Sulphuric Acid (exempted) assessee are not eligible for Notification 67/95 – HELD – It is evident that oxygen produced in their plant is captively consumed and used only in the copper concentrate for purification and not diverted elsewhere for process of conversion of SO2 or SO3 or to Sulphuric Acid. Therefore, on merit itself it is established that oxygen produced captively is not used as an input in the manufacture of Sulphuric Acid and appellant is eligible for Notfn 67/95 on oxygen on merit - so long as Oxygen produced is used captively in the manufacture of final product (i.e.) copper concentrate and cleared on payment of duty, the appellants are rightly eligible for exemption under Notfn 67/95 for oxygen - there is no justification for the revenue's view that Oxygen is used in the manufacture of Sulphuric Acid - as per Notfn 67/95, both input oxygen and the final products are rightly covered in the Table of the Notification. Proviso (vi) of the notification stipulates that this notification is applicable provided appellant complied with Rule (6) of CCR 2001. The only condition is that Sub-Rule (2) of Rule 6 of CCR is required to be complied with. In the present case, as per sub-rule (2), appellant manufactured oxygen used in the manufacture of excisable product and they had no obligation to maintain separate accounts for oxygen used in the manufacture of Sulphuric Acid. It is established that appellant did not use oxygen produced in the manufacture of Sulphuric Acid. Accordingly, conditions of Notfn 67/95 are complied - Appellants are eligible for benefit of Notfn 67/95 and the duty demand on the quantity of oxygen so used in the manufacture of sulphuric acid set aside - Assessee appeal is allowed

2015-VIL-689-CESTAT-MUM-CE

M/s BEDMUTHA WIRE COMPANY LTD Vs COMMISSIONER OF CENTRAL EXCISE, NASHIK

Central Excise - CENVAT Credit availed on MS wire rods and various chemicals utilised for drawing of MS Wires - period Sept, 02 to March, 04 – HELD – vide Circular No. 831/8/2006-CX the Board has specifically stated that The Taxation Laws (Amendment) Act, 2006 has regularized the credit taken at the input stage (wire rods) and the credit taken by the downstream user who draws the wire - as per the Board’s Circular the demands raised is incorrect and the impugned order needs to be set aside – Assessee appeal is allowed

2015-VIL-688-CESTAT-MUM-ST

LONA INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Service Tax – Cenvat Credit Rules - Entitlement to cenvat credit on input services prior to registration of ISD but distributed by the ISD after taking registration to only manufacturing unit - time limit for availing the credit of input services – HELD - Cenvat Credit Rules, 2004 do not prescribe any time limit for taking the credit. If the credit is admissible and the documents for availing the credit are available, credit can be taken at any time. The Cenvat Credit Rules do not prohibit availment of cenvat credit in respect of inputs/input services which have been received prior to registration. The Cenvat Credit Rules contain no express restriction on distribution of credit earned prior to taking the registration by the ISD also. Hence the ISD can avail credit of service tax paid on input services received prior to registration - in this case there is only one manufacturing unit of the appellant and the Revenue was well aware of this fact from the very beginning - In view of this, the appeal of the assessee is allowed

2015-VIL-687-CESTAT-AHM-ST

M/s ONE ADVERTISING & COMMUNICATION SERVICES LIMITED Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Service Tax – Input service – Denial of service tax on insurance premium paid for Mediclaim cover – HELD - when inputs/ input services are taken by the employees or offered to the employees as ‘welfare measure’ and is voluntary in nature, the same cannot be held to have any nexus with the Output Service and in such scenario, CENVAT credit of the duty/ service tax on such inputs/ input services would not be available - assessee is not eligible to take CENVAT credit in respect of the Mediclaim which is in the nature of a welfare measure and voluntary – Demand confirmed, penalty set aside - Assessee appeal dismissed

Article

Winter Session: Lawmakers let another GST opportunity go abegging with washout of winter session

goaNoti129

Goa: Exemption from levy and payment of output tax, in respect of goods specified in the Schedule 'G' of GVAT Act

kerNotiSRO782

Kerala: Reduction in tax rate on the sale of High Flash High Speed Diesel to foreign going vessels - Applicable on the sales made through intermediary agents

upCir1516054

Uttar Pradesh: Clarification regarding Transport Memo (Form-21)

29th of Dec

2015-VIL-27-MSTT

M/s TECHNOCRAT ENGINEERS Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act – Section 2(24) – Sales - section 2(25) – Sale price - section 42 - Works Contract – Computation of tax - Leviablity of VAT on service tax component - inclusion of service tax quantum in taxable turnover – Composition Scheme – HELD – As per Explanation–II of the section 2(25) the sale price shall not include tax paid payable to a seller in respect of such sale. Revenue cannot say that, this word, “tax” is relating only to sales tax - Even if the service tax amount is included in the total consideration of contract receipt it cannot be the receipt of contractor on which tax is leviable - In total consideration, the service charges amount will become the part of total receipt by the Contractor but service tax amount on service charges will not become part of total receipt, because appellant contractor wants to pay the said amount to the Central Excise Department - In sub-clause (a) and (b) of sub-section (3) of Section 42, the wording is used “equal to 5%, of total contract value of the works contract of any other case” here the meaning of total contract value is to be determined appropriately – The amount against the property transferred in the goods and against the labour charges utilized in the said work, it will become a contract value. The various taxes levied separately, and those are to be deposited with the Govt. authorities will not constitute the total receipt against the said contract value hence element of service tax will not be a part of sale prices even before amendment of 01/04/2015 - The service tax collected separately by the appellant is not includible in total contract value for composition money at 8% - Appellant is entitled for interest for interest under section 52 of the Act on the excess amount liable to be paid to him on account payment made in appeal - The matter is remanded to the First Appellate Authority to determine the correct tax liability and to work out interest amount on refund admissible to appellant – Assessee appeal allowed

2015-VIL-551-MAD

M/s AUTOPRINT MACHINERY MANUFACTURERS (P) LTD Vs THE COMMERICIAL TAX OFFICER (FAC), COIMBATORE

Central Sales Tax act - Levy penalty under Section 10(a) of the Act on account of certain items not been included in the registration certificate - mens rea – HELD - While invoking Section 10(a) of the CST Act for the purpose of levying penalty, the authority should satisfy himself whether the items in dispute are admissible items which are serving the specific purpose stipulated in the Form-B certificate. If that is dealt with properly, the question of false representation involving mens rea can be answered. Without dealing with such an issue, the authority and the respondent in a single line rejected the contention of the petitioner which is nothing but non application of mind. Hence, the impugned order cannot be sustained - the impugned order is set aside and matter is remanded back to the assessment authority

2015-VIL-550-MAD-CE

V.V. MINERAL Vs THE COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI

Central Excise – Mining activity - SCN for levy of duty on mining of mineral ores manufactured out of sea sand – Exemption under Notification No.63/95 - whether the petitioner comes within the purview of Mines Act and hence entitled to exemption under Notification No.63/95 - serving of the relied upon documents by revenue – HELD - the revenue are bound to determine the preliminary issue as to whether the petitioner's firm are exempted from the levy of central excise by virtue of Notification Nos.63/95 dated 16.03.1995 and 4/2006 dated 01.03.2006 after giving a personal hearing - the interim order passed by this Court directing the respondents to furnish all the requisite documents to the petitioner and to determine the preliminary issue is hereby made absolute and confirmed - the impugned order informing the petitioner that it is not reasonable to call for the documents which are not cited as relied upon documents in the show cause notice dated, is partly set aside and a direction is issued to the CCE, Tirunelveli, to furnish the documents sought for by the petitioner and thereafter consider the representation of the petitioner with regard to the preliminary issue to decide whether the Central Excise Department has any jurisdiction to assess and levy central excise from the petitioner in view of section 5A(1) of the Central Excise Act giving exemption to certain products from the application of the Central Excise Act - The writ petition is partly allowed

2015-VIL-693-CESTAT-DEL-CE

BABAJI UDYOG Vs CCE, DELHI-II

Central Excise - penalty under Rule 26 of CER, 2002 - if the main noticee discharges the duty liability alongwith interest and 25% penalty, whether the proceedings would come to an end in regard to other co-noticees also – HELD - when the proceedings against the manufacturer / assessee stand concluded on payment of disputed amount of duty plus interest and 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 against other persons like traders who had purchased the goods, transporters who had transported the goods cleared by manufacturer / assessee, the directors / employees of the manufacturer / assessee company – Assessee appeal allowed

2015-VIL-552-KAR-ST

CCE&ST, MANGALORE Vs M/s MANGALORE REFINERY & PETROCHEMICALS LTD

Service Tax – Credit of tax paid on services of repair, maintenance of company vehicles and rent-a-cab services – HELD - service tax paid for services of repair, maintenance of company vehicles/rent-a-cab services are in relation to the business activities and these are input services - the CENVAT credit for repair on Company vehicles and, rent-a-cab services would come within the realm of Rule 3 of CCR, 2004 r/w with Section 66 of the Finance Act, 1994 - assessee is entitled for the Cenvat credit - Precedent value of decisions and judgments accepted by revenue for reason of monetary limit - The argument advanced by learned counsel for the revenue that in view of the policy decision taken by the Central Government that for the reasons of monetary value the judgment of M/s Stanzen Toyotetsu India (P) Ltd is not challenged thus, the said judgment has no value as a precedent in the subsequent cases is totally misconceived. The decision of the Central Government to challenge a judgment or not is within its wisdom and reason. Such decision is not binding on the Courts - the judgment passed by the co-ordinate Bench of this Court has binding value and this Court is bound by the said judgment, unless it is disagreed and referred to a larger Bench – Revenue appeal dismissed

2015-VIL-691-CESTAT-DEL-ST

GAIL (INDIA) LTD Vs C.C.E.&S.T., LTU, NEW DELHI

Service Tax – Availment of credit on the basis of invoices in the name of branch offices - denial of cenvat credit along with interest and penalties – HELD - if a person is discharging service tax liability from his registered premises, the benefit of cenvat credit on the service tax paid by the service provider cannot be denied on the ground that the invoices are in the name of branch offices which were not separately registered - the impugned order is unsustainable and is accordingly quashed – Assessee appeal allowed

2015-VIL-692-CESTAT-DEL-ST

M/s CARLSBERG INDIA PVT LTD Vs C.S.T., DELHI

Service Tax - demands were confirmed on the amount of royalty paid to M/s. Carlsberg Denmark - franchise service – HELD – in the present case no amount was received by the appellant ‘as royalty/franchise service’; indeed the appellant paid the amount to foreign based company. The appellant did not provide the alleged services, but was the recipient of the alleged services. Similarly, the appellant had contended that it had provided the figures for the period 2010-11 and 2011-12, but still the best judgement assessment under Section 72 ibid has been resorted to - the impugned order makes it so amply clear that the order fatally suffers from lack of analysis/discussion regarding the contentions and arguments of the appellant and makes a mockery of the quasi-judicial process in-as-much-as it is not merely non-speaking, but also absurd in parts - in the absence of analysis/reasoning with reference to the contentions of the appellant, the conclusions drawn in the impugned order are rendered lifeless - the impugned order set aside and matter remanded to the adjudicating authority for de novo adjudication – Matter remanded

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Delhi: Clarification regarding registeration and file prescribed returns by dealers engaged in e-Commerce

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Odisha Entry Tax Act, 1999 - Exempts all scheduled goods brought into the processing area of a Special Economic Zones (SEZ) by a Developer, Co-Developer and Units of a SEZ

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Odisha Value Added Tax Act, 2004 - Exempts the goods sold in course of execution of works contract to a Developer, Co-Developer and Units of a Special Economic Zones

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Punjab: Amendment in PVAT Schedules ‘B’ and 'E' - Regarding 'Sarson and binola Khal'

30th of Dec

2015-VIL-553-BOM

NIPHAD SAHAKARI SAKHAR KARKHANA LTD Vs STATE OF MAHARASHTRA

Maharashtra Purchase Tax on Sugarcane Act, 1962 – definitions of ‘purchase’, ‘purchase price’ and ‘turnover purchases’ - Validity of amendments carried out Maharashtra Tax Laws (Levy and Amendment) Act, 1995 so as to levy of tax on the purchases of sugarcane based on the purchase price instead of the quantity purchased - amendment resulting in addition of amount charged by the cultivator for transporting the sugarcane to the factory gate or the expenses incurred for harvesting the sugarcane in the farm in forming part of the purchase price - Sale of Goods Act - sections 10 to 12 of the Maharashtra (Levy and Amendment) Act, 2002 – HELD - There is a inherent fallacy in the submission of the Petitioners that components which are not germane or relevant to the purchase of sugarcane and the price paid therefor are taken into consideration by the legislature - the term “purchase price” is defined in such a way as to include amounts mentioned in sub-clauses (i) to (iii) of section 2(f-b) of the Act of 1962. Once it is apparent that the components or elements stated therein go into fixation of purchase price and that is the measure for computation of the tax, then, depending upon facts and circumstances in each case, the occupier can point out that not all components or elements are included in the purchase price in his case - it is the turnover of purchases meaning the aggregate of the amounts of purchase price paid and payable by an occupier, on which tax is levied and collected. The turnover is computed on the basis of the purchase transactions and the price paid for the same. Thus, it would be open for the Petitioners to point out that the turnover of purchases in their case involves payment of purchase price without the elements that are set out in the definition of the term “purchase price” - the levy of tax cannot be confused with the measure of tax - cannot be presumed on the strength of the arguments of the Petitioners that the tax is not on turnover of purchase of sugarcane, but on expenditure or amount incurred on cultivation and supply of sugarcane - the purchase price determined would take care of all these expenses or expenditure, but they may be incurred by the transporter or such other entity at the time or before delivery of the Sugarcane - If sum total of the purchases would constitute the turnover and the measure of that would be the amount of purchase price paid and payable by an occupier during the given period, then, it is only to enable the assessment and collection of tax in accordance with law that these provisions have been inserted. Thus, we are in complete agreement with Revenue on the legality and validity of the tax. It is not unconstitutional and ultra vires as alleged - the amendment made by the Amendment Act of 1st May, 2002 did not come into effect at all. That has been clarified now by the Maharashtra Act VIII of 2003. Once these amendments made with effect from 1st May, 2002 stood deleted from a prior date, then, the consequences are clear - if one statute is repealed by a second which in turn is repealed by a third, the effect is to revive the first statute unless a contrary indication is indicated in the third statute – Appeal dismissed

2015-VIL-694-CESTAT-MUM-CE-LB

M/s SAI WARDHA POWER LTD Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR

Central Excise - Larger Bench – Central Excise Act – SEZ Act - Whether in terms of clause (b) of proviso to section 35B(1) of the Central Excise Act, appeals against orders relating to rebate on goods supplied to SEZ, will lie to the Appellate Tribunal – segregation of rebate matters into two categories for appeal purposes; one category in respect of exports to a place outside India and another category in respect of so called deemed exports from DTA to SEZ - HELD - It appears that a suitable amendment to the proviso to section 35B was overlooked in 2005 to bring supplies to SEZ under its ambit. Nevertheless, the question arises whether the said legal provision can be ignored to reach a conclusion that the second category of cases will also get covered under the proviso to Section 35B - an interpretation holding such inclusion as valid will not lead to ousting of jurisdiction without reason. It will not lead to an impermissible illegality; it will only rationalize and streamline the procedural law as it was intended to be. It will not render anything redundant or unworkable. The conclusion that, even supplies to a SEZ will get covered by the proviso to section 35B will only result in an ancillary or natural consequence of reading the words "deemed export" into the word "export" in the proviso to section 35B - there is no conflict or inconsistency between the provisions of the SEZ Act and Central Excise Act so as to invoke the provisions of section 51 of the SEZ Act - in respect of rebate on goods supplied from DTA to SEZ within India, the appeals would not lie to the Appellate Tribunal under clause (b) of proviso to Section 35(1) of the Central Excise Act

2015-VIL-695-CESTAT-BLR-CE

FOSROC CHEMICALS INDIA PVT LTD Vs CCEC&ST, BANGALORE-LTU

Central Excise – Availing of credit by ISD in respect of services which were exclusively used exempted unit in terms of area based exemption notification - Rule 7 of CCR, 2004 – assessee contention that credit reversed for services used exclusively in exempted unit, however, where the credit has been taken on common services, a part of which has also been used in a unit engaged in the manufacture of exempted goods, ISD is entitled to take the credit of whole of service tax and to distribute to their other units – imposition of penalty – HELD – In terms of Rule 7(b), the service tax attributable to service used in a unit 'exclusively' engaged in the manufacture of exempted goods is not available. The expression 'exclusively' appearing in the said Rule relates to the unit and not to the service tax. The unit has to be exclusively engaged in the manufacture of exempted goods meaning thereby that if service tax stands utilized in a unit which is manufacturing exempted as also dutiable goods, the said Rule will have no application - the expression "exclusively" cannot be associated with the service tax availed by a unit manufacturing exempted goods - credit of service tax in respect of services used in the exempted unit is not available to the appellant's ISD – impugned order disallowing proportionate credit is upheld, penalty reduced – Assessee appeal partly allowed

2015-VIL-697-CESTAT-MUM-ST

M/s VAMONA DEVELOPERS PVT LTD Vs CCEC&ST, PUNE-III

Service Tax - Construction and sale of commercial properties – Input Service - show cause notice proposing to deny the credit on the ground that the appellant is not eligible for credit as input services have resulted in an immoveable property which is neither excisable nor any service tax is payable on the same - Rule 2(l) of CCR, 2004 – HELD – almost the entire credit has been availed on input services which have been used for providing the output service that is Renting of Immoveable Property Service for which there was no restriction under the clause (i) of the definition of ‘input service’. The inclusive part of the definition of input service allowed services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service etc. The words ‘setting up’ were deleted only from 1.4.2011 - there is no provision in the Cenvat Credit Rules which imposes a restriction on availment of credit on input services procured before registration is taken - substantial benefit cannot be denied to them and the delay in taking credit can be ignored especially when there is no violation of legal provisions – the appellant are eligible for the credit in terms of the definition of input service – assessee appeal allowed

2015-VIL-696-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, GOA Vs KAMAT CONSTRUCTIONS & RESORTS PVT LTD

Service Tax - availing of cenvat credit on capital goods which was procured during 2005-06 and installed in hotel which started functioning from 21 May, 2009 – HELD - The capital goods which were purchased by the respondent were installed in the hotel premises and were undoubtedly used for providing output services - the revenue ground of appeal is not controverting the findings by any evidence which can be considered for coming with conclusion other than what first appellate authority has arrived at that the cenvat credit on the capital goods is allowable, which were received even when the respondent was not registered as service provider. It is common knowledge that the capital goods are received for installation during the construction activity and the service tax liability arises when the hotel starts functioning – Revenue appeal dismissed

Guest Column

GST Returns: Whether a Compliance Nightmare?

goaNoti130

Goa: Compulsory e-filing of quarterly returns

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Goa: Regarding online filingof single annual return in Form VAT-III

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West Bengal: Draft Amendmentin WBVAT Schedule A and in Part-I of Schedule C

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Gujarat: Regarding setting-up of check post and barriers at Saputara

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Himachal Pradesh: Constitution ofState Empowered Committee on Goods and Service Tax (GST)

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

31st of Dec

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Tamil Nadu: Furnishing of Audit Report in Form WW - Extension in date for dealers of certain rain affected districts

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Rajasthan: Date for filing Return for FY 14-15 extended to 31 January 2016

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Uttar Pradesh: Extension in date for filing of Annual Return (52, 52A & 52B) [in Hindi]

FCP3012

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

2015-VIL-554-KAR

NANDI INFRASTRUCTURE CORRIDOR ENTERPRISE LIMITED Vs THE STATE OF KARNATAKA

Karnataka Value Added Tax Act - Sections 5(1) and 5(2) - Exemption of tax - framework agreement (FWA) for exemption from levy of tax - Infrastructure project – Assessee appeal against Single Judge order seeking tax exemption under the KVAT Act placing reliance on the assurance or promise granted by the Government of Karnataka under FWA – petition for continuation of exemption promised under KST regime in VAT regime - notifications issued under the KST regime granting exemption to infrastructure project till 13.1.2005 – Revenue contention that with KVAT Act coming into force, no such power is vested with the State Government to extend tax concession, incentive and holidays to the dealers except as provided under sections 5[1] and 5[2] of the KVAT Act – HELD - by no stretch of imagination, the assessee-company could be construed as a new industrial unit to attract the provisions of Section 5(2) of the KVAT Act. Accordingly, the arguments advanced by the State that the assessee-company is only entitled to the reimbursement of net value added tax paid during the KVAT regime, requires to be negated - The exemption that was granted under the KST regime by issuing notifications under section 8-A of the KST Act - Such power of granting exemption is very well embedded in the latter portion of Section 5(1) of the KVAT Act, which specifics granting of exemption “subject to such restrictions and conditions as may be specified in the notifications”. Hence, State Government is empowered to grant exemption under section 5(1) of the KVAT Act on the sale of machinery, equipments and construction material to a dealer undertaking an infrastructure project. State cannot contend that it has no power to exempt the dealer unlike KST Act. It is virtually exemption of tax on the goods, subject to certain restrictions and conditions - State is empowered to issue exemption notification to the appellant company on the sale of goods and cannot deny extending the exemption benefit agreed upon, on the pretext that it has no powers under KVAT Act to extend such exemption. The terms agreed in the FWA amounts to promissory estoppels - There is no bar under the scheme of the KVAT Act to deny the benefit of exemption as extended under the KST Act - The doctrine of promissory estoppel is rightly applicable to the facts of the present case and the Government cannot resile from its promises or assurances of exempting the tax under the KVAT Act – However, Court cannot direct the State Government to issue any notification exempting the non-affiliates of the appellant company from the tax payable under the provisions of the KVAT Act in terms of FWA - the order passed by the learned single Judge is set aside - Government Order No.FD.07.CET.09 dated 07.12.2011 is set aside and State Government is directed to issue appropriate exemption notifications – Assessee appeal allowed

2015-VIL-699-CESTAT-AHM-CE

PARRY ENGINEERING & ELECTRONICS P LTD Vs C.C.E.-AHMEDABAD-II

Cenvat Credit of input service on installation and erection of wind mills which are located far away from factory – HELD – issue is no more res integra in view of the decision of the Hon’ble Bombay High Court in the case of CCE&C, Aurangabad Vs. Endurance Technology Pvt Ltd - Further, the present appeals were referred to the larger bench by the Divisional bench to decide the issue whether the assessee is eligible to avail Cenvat Credit of an amount paid as Service Tax by a Service provider in respect of installation and erection, maintenance or any other services rendered at wind mills, which are located away from the factory premises and electricity generated out of such wind mills is consumed at the factory premises after such power is to put through the common grid. The larger bench of the Tribunal by interim order answered, the issue in favour of the assessee – There is no reason to take the different view as taken by the Hon’ble High Court and the larger bench – Assessee appeal allowed

2015-VIL-698-CESTAT-MUM-CE

CCE PUNE II DAULAT SSK LTD.

Central Excise - assessee cleared sugar as Levy sugar in excess of the percentage of Levy sugar that can be cleared by them at concessional rate - Revenue contention that quantity of sugar cleared in excess as Levy sugar of the allotted Levy sugar, the duty liability has to be discharged as a free sale sugar – HELD - the first appellate authority has correctly set out the reasoning that any clearances made under Clause 2(1) of Levy Sugar Supply (Control) Order, 1979, even in excess of the levy entitlement of the producer has to be treated as supplied under Section 3(2)(f) of Essential Commodities Act, 1955 only - as the excess supply of levy sugar has been made under clause 2(1) of the Levy Sugar Supply (Control) Order, 1979, the same falls under the category of supply requisitioned by Central Government under Section 3(2)(f) of Essential Commodities Act, 1955. The clearance of said levy sugar in this case, therefore, falls under CSH 1701.31 of the Central Excise Tariff Act, 1985 - the impugned orders are correct and legal and there is no infirmity – Revenue appeals rejected

2015-VIL-700-CESTAT-AHM-ST

COMMISSIONER OF CENTRAL EXCISE & S.T., SURAT Vs M/s HAUBACH COLOUR PVT LIMITED

Service Tax - CENVAT credit of service tax paid by the Banking and other Financial Service provider - input service in connection with export activities of finished excisable goods – HELD - Banking and other Financial services will be covered under the definition of ‘Input Service’ and CENVAT credit of service tax paid on the same would be eligible as credit for the manufacture of goods, especially when they are 100% EOU – Revenue appeal dismissed

2015-VIL-701-CESTAT-BLR-ST

PRABHAKAR C SUVARNA Vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, MANGALORE

Service Tax - payment of service tax by mistake – refund filed after the prescribed period of one year – Refund denied on ground of limitation – HELD - the authorities working under the Central Excise law are bound by the provisions of law including the provisions of limitation prescribed in terms of Section 11B of the Central Excise Act. The said limitation period for claiming refund cannot be extended in any circumstances including the payments made by an error of law or under mistake - no merit in the appeal and the same is accordingly rejected

2015-VIL-702-CESTAT-BLR-ST

POORNIMA CARGO MOVERS Vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, MANGALORE

Service Tax - supply of manpower - service provided to 100% EOU – Delay in payment of tax - imposition of penalties under Sections 77 & 78 - wilfull suppression and fraud – HELD - service of supply of manpower had come under the tax net about three months back and where the service recipient was a 100% EOU leading them to believe that liability of service tax was not payable - assessee deserves relief in case of penalties imposed on them under Sections 77 and 78 of the Finance Act, 1994 and the same are hereby set aside - However provisions of Section 80 of Finance Act, 1994 gives relief from imposition of penalty in case of penalties imposed under Sections 77 & 78 of the Finance Act, 1994 only. Here the appellant has been penalized under Section 70 also, when they had delayed the filing of their half-yearly return contravening the relevant provisions of law of Service Tax. This penalty of Rs.4000/- imposed under Section 70 of the Finance Act, 1994 on the appellant assessee does not deserve to be set aside and, therefore, is hereby sustained – Appeal partly allowed

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Chhattisgarh: Extension of time limit for furnishing of Form-18 for FY 2012-13

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Chhattisgarh Entry Tax Act - Increase in rate of tax on Cigarette, Gudakhu, Pan Masala containing tobacco

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Chhattisgarh Entry Tax Act - Withdrawal of exemption to Pan Masala