SUMMARY FOR THE MONTH OF JULY, 2015
List of updates in the month of July ‘15
1st of July
2015-VIL-258-HP
M/s SAMSUNG INDIA ELECTRONICS PVT LTD Vs STATE OF H.P. & ORS.
Himachal Pradesh Value Added Tax Act, 2005 – Show cause notice seeking to revise the assessment order wherein tax on sale of battery charger was levied at 5% whereas the same should have been levied at 13.75% in view of the judgement of Apex Court in State of Punjab vs. Nokia India Pvt. Ltd. - Maintainability of the writ petition - Alternative remedy - Article 141(1) – HELD - The contention of the petitioner that a subsequent judgement Nokia’s case cannot be used to change the course of past assessment is concerned, it is more than settled that the judgements of the courts declare the law as it was always. Though the courts some time order that the judgements would have prospective effect, but in absence of such restrictions, the law declared by the courts is deemed to be always the law so interpreted i.e. the law as it stood right from the beginning as per its decision - It is not in dispute that respondents authorities constituted under the HPVAT Act and therefore, even if it is assumed that there is an illegal or irregular exercise of jurisdiction the same would not result in the order being without jurisdiction. Even if there has been some defect in the procedure followed during the hearing of the case, it does not follow that the authority has acted without jurisdiction. It may make the order irregular or defective, but the order cannot be a nullity so long as it has been passed by an authority which was competent to pass the order. There is basic difference between want of jurisdiction and an illegal or irregular exercise of jurisdiction and if there is non-compliance of rules of procedure, the same cannot be a ground for granting one of the writs prayed for - In view of Article 141(1) the law declared by Supreme Court shall be binding on all courts - Writ petitioner has not only an alternative and efficacious, rather a proper remedy under the provisions of HPVAT Act, 2005 and therefore, the present petition is not maintainable. Accordingly, the same is dismissed in limine
2015-VIL-259-MAD
M/s K.W.ENGINEERING & SIGNS PVT LTD Vs THE DEPUTY COMMERCIAL TAX OFFICER, KANDAMANGALAM CHECKPOST
Tamil Nadu Value Added Tax Act – Section 67(5) - Detention of goods – Petitioner entered into a contract with M/s Indian Oil for providing Retail Visual Identity – Detention on the ground that the goods moved from Haryana, to various dealers of IOCL in Tamil Nadu and Puducherry, without valid documents and therefore, the transaction is suspected – HELD - the driver of the detained vehicle was very much in possession of the Invoices as well as the LR Copy at the time of interception of the vehicle by the first respondent at Kandamangalam check post. Therefore, the detention order passed by the first respondent on the ground that the detained vehicle was not having the requisite documents cannot stand to any good reason - Though requisite documents have been produced, the first respondent has not followed the procedure while detaining the goods - Accordingly, by setting aside the same, the first respondent is directed to release the vehicle along with the goods - The writ petition stands allowed
2015-VIL-325-CESTAT-AHM-CE
M/s VEER PLASTICS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & S.T.
Central Excise – Refund of duty paid under protest – Denial on the ground of unjust enrichment – HELD - The duty paid under protest and shown as amount receivable in the books of accounts; when the sale price of the finished goods as claimed has not shown any change; it has to be held that doctrine of unjust enrichment is not applicable in the present case. Accordingly, the appeal filed by the appellant is allowed
2015-VIL-321-CESTAT-CHE-CE
TAMILNADU ASBESTOS (PIPES) Vs COMMISSIONER OF CENTRAL EXCISE, TIRICHIRAPALLI
Central Excise - Demand with respect to denial of cenvat credit under CCR and the relevant provisions applicable for reversal of cenvat credit as provided under Rule 57I of CCR – Whether the interest be demanded under Section 11AA of Central Excise Act when the recovery of irregular credit made under Cenvat Credit Rules – HELD – The appellant's contention that the demand of reversal of irregular credit availed on inputs and capital goods and cleared and demand confirmed under erstwhile Rule 57I & 57U of CER, Section 11AA cannot be made applicable for demand of interest, is not justified for the reason that Sub-Rule (3) of Rule 57I and Sub-Rule (8) of Rule 57U of CER clearly stipulates the recovery of interest where the appellant fails to pay amount determined within 3 months from the date of order the interest shall be payable as per Section 11AA of CEA. By virtue of the above provision of Rule 57(I) and Rule 57(U), Section 11AA is made applicable for demand of interest in recovery of modvat cases - The Hon'ble Bombay High Court order in CCE&C Aurangabad Vs Padmashri V.V.Patil S.S.K. Ltd 2007-VIL-12-BOM-CE equally applicable to the present case where interest demand is under Section 11AA - It is evident that the appellants have availed the credit and also utilized the same for payment of excise and enjoyed the amount which is due to the Govt. By virtue of wordings used in Rule 57I (3) and Rule 57U(8) the interest is automatic and shall be payable even if no notice issued – Assessee appeal dismissed
2015-VIL-326-CESTAT-DEL-ST
C.C.E., INDORE Vs M/s AGRO SOLVENT PRODUCTS PVT LTD
Service Tax – Scope of Technical Testing and Analysis service – Activity of weighment, sampling and stuffing of containers – Export of goods – Refund - HELD - Physical testing and analysis would clearly include weighment and sampling also is based on certain physical or chemical characteristics. It is also seen that in this case stuffing required specific conditions / arrangements like putting of silica gel packs together with craft paper which was technical in nature and thus was a specialised job - Testing involves a critical examination, observation or evaluation and analysis involves examination of a complex, its element and their relation, the identification or separation of ingredient of a substance. It is not in dispute that the service was rendered by technical agencies engaged in providing service in relation to technical testing and analysis thus satisfying the definition given in Section 65 (107) - In the present case, for determination of the specifications of protein, fat moisture etc. samples were required to be drawn mixed and then analysed - Service involved is covered within the definition of technical testing and analysis service - Refund is correctly sanctioned – Revenue appeal dismissed
2015-VIL-324-CESTAT-MUM-ST
COMMISSIONER OF CUSTOMS & CENTRAL EXCISE, PANAJI Vs M/s VRINDAVAN ENGINEERS & CONTRACTORS (I) PVT LTD
Service Tax - Site formation and clearance, excavation & earthmoving & demolition - Construction of Market-Cum Community Hall and Park – HELD – Site formation basically refers to earth work or activities related to earthwork or, at the most, drilling for the passage of cables or drain pipes. Whereas the activities undertaken by the respondent indicate a comprehensive works contract which includes appreciable RCC work for foundations, columns and walls apart from construction of walls, laying of pipes. The definition includes creation of passages for pipes. It does not include laying of pipes itself. There is merit in the finding of the Commissioner (Appeals) that if such works are held to be taxable under the site formation service, then every such project would involve the activity of site formation. The nature of work is more akin to a comprehensive works contract. It is not the argument of Revenue that the same may be split up into components including the component of site formation - The work undertaken by the respondent cannot be termed as an activity of "Site formation and clearance, excavation & earthmoving & demolition" – Revenue appeal dismissed
delNoti375[Download link]
Delhi: Amendment in DVAT Sixth Schedule - Regarding Embassy of Portugal
assamNoti104
Assam Health Infrastructure and Services Development Fund (Amendment) Ordinance, 2015
assamNoti17
Assam Health Infrastructure and Services Development Fund Rules, 2015
assamNoti18
Assam: Date of effect of Assam Health Infrastructure and Services Development Fund Act, 2009 and the Assam Health Infrastructure and Services Development Fund (Amendment) Ordinance, 2015
Gujarat Circular [in Gujarati | Download link]
gujCir171: Extension for annual return for 2014-15
gujCir172: Extension for audit report for 2013-14
FCP0107
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
2nd July
2015-VIL-260-AP
M/s SIEMENS LIMITED Vs THE COMMERCIAL TAX OFFICER
Andhra Pradesh Sales Tax (Settlement of Disputes) Act, 2001 – Scheme for Settlement of arrears - Settlement of arrears and issue of Certificate of Settlement - Summary demand notice, after two years of settlement, demanding interest on settled amounts – Application of normal provisions of APGST Act by Revenue for demanding interest on delayed payment - HELD – The Certificate of Settlement issued under Section 12 of the Act is final and conclusive - From the Settlement Certificate issued in Form-III, it is clear that the dispute with regard to payment of tax is settled, and further, in terms of the provision under Section 12 of the Act, once such certificate is issued, such applicant shall be discharged from his liability to make payment of balance amount of such arrears of tax, penalty or interest in dispute. In the absence of any notices or orders levying penalty or interest prior to settlement of dispute on the claim made by the petitioner, once the arrears of tax itself are settled, it is not open to the respondent to pass any further orders for collection of interest on the amount which is already paid - Having settled the dispute under the Act, it is not open for the respondents to pass subsequent orders or issue demand notices for payment of interest – Further, when the claim of the petitioner is considered as per the scheme, in the absence of any specific provision for collection of interest on the amount settled, it is not open for the respondent to collect the same from the petitioner - The impugned demand notices are quashed writ petition is allowed
2015-VIL-63-SC-CE-LB
COMMISSIONER OF CENTRAL EXCISE, DELHI-IV Vs M/s SANDAN VIKAS (I) LTD
Central Excise - Rules of Interpretation - Exemption Notification – Manufacturing of Car air conditioners - For purposes of the Notification, the term "car air-conditioner kit" or "car air-conditioning kit" shall exclude that kit or assembly of parts which contains automotive gas compressor with or without magnetic clutch - HELD - Rule 2(a) of Rules of Interpretation consists of two parts. First part stipulates that incomplete or unfinished goods would fall in heading relating to the completed goods provided the incomplete or unfinished good bears the essential character of the complete or finished goods. Second part predicates unassembled or assembled goods can be treated as goods complete or finished goods - Rule 1 of the Rules of Interpretation lays down that for legal purpose classification shall be determined in accordance with the terms of headings and any relative section or Chapter Notes, provided such headings or Notes do not otherwise require a different interpretation - The Division Bench has quite categorically stated that if the air-conditioning kit does not contain automotive gas compressor with or without magnetic clutch, duty is paid as per item no.8 and if it contains the automotive gas compressor with or without magnetic clutch, it will not come under item no.8 – However, if a kit and compressor are sold in a singular invoice or in one pricing, it will go out of item no.8 and duty will be paid separately, but if there are two invoices for separate pricing, the air-conditioning kit would come under serial no.8 and the automotive gas compressor with or without magnetic clutch will be liable to duty separately - The ratio laid down in Division Bench decision cannot be found to be erroneous – Appeal disposed in favour of Assessee
2015-VIL-261-MP-CE
COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE Vs M/s BHILAI JAYPEE CEMENT PLANT
Central Excise – CENVAT Credit – Capital Goods – Benefit of Cenvat credit on capital good – Availment of irregular credit – Imposition of duty and penalty - HELD - Imposition of penalty that also equal to the amount of the credit facility availed of in a penal consequence and a penal consequence is to be enforced only when the conduct of the assessee shows certain positive action indicating fraud, misstatement collusion etc. - The action of the assessee may be in contravention to the statutory provision but it was with a bonafide reason or belief by interpretation of a judgment of a High Court, then the imposition of penalty in such circumstances was not warranted – Revenue appeal dismissed
2015-VIL-262-ALH-ST
M/s GANESH YADAV Vs UNION OF INDIA
Pre-deposit - Constitutional validity of amendment to Section 35F of the CEA, 1944 - Requirement of a pre-deposit of 7.5% of the duty demanded – HELD - Finance Act (No.2) of 2014, has laid down that the Tribunal or the Commissioner (Appeals) "shall not entertain any appeal" unless the appellant has deposited the duty or, as the case may be, a penalty to the stipulated extent. This provision would, therefore, indicate that it would apply to all appeals which would be filed on and from the date of the enforcement of Section 35F of the Act - The second proviso of Section 35F of the Act is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F (1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance Act (No.2) 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August 2014 shall be governed by the requirement of pre-deposit as stipulated therein. The only category to which the provision will not apply that would be those where the appeals or, as the case may be, stay applications were pending before the appellate authority prior to the commencement of Finance (No.2) Act 2014 – The petitioner would not be justified in urging that the amended provisions of Section 35F(1) of the Act would not apply merely on the ground that the SCN was issued prior to the enforcement of Finance Act (No.2), 2014 - No merit in the constitutional challenge. The petition stands dismissed
2015-VIL-327-CESTAT-DEL-ST
M/s HI-TECH SEAL ENGINEERS Vs CCE, JAIPUR-I
Service Tax - Maintenance and repair service – Appellant providing maintenance and repair service to various thermal plants - Maintenance contract – Demand for period prior to 16.6.2005 – HELD - It was only w.e.f. 16.6.2005 that a maintenance or repair service provided under a contract or agreement (as different from a maintenance contract or agreement) became taxable. The service recipients have certified that the contracts with the appellants were repair contracts and not maintenance contracts – Extended period - The show cause notice in this case was issued on 6.12.2006. The fact that the appellant started paying service tax w.e.f. 16.6.2005 after the definition of ‘maintenance or repair’ service was amended shows their bona fides. Even if the contracts under which the service was rendered were to be interpreted by some as maintenance contracts, the fact remains that it cannot be said to be unreasonable on the part of the appellant to think that these were not maintenance contracts and the fact that it started paying service tax with effect from 16.6.2005 when the words ‘maintenance contract’ was substituted by the word ‘contract’ lends credence to the appellant’s contention regarding their bonafide belief. The matter thus being interpretational and given the conduct of the appellant, there is hardly any scope for sustaining the allegation of suppression on the part of the appellant - The demand would also be hit by time bar as extended period would not be invokable – The impugned order is set aside appeal is allowed
3rd of July
2015-VIL-327-CESTAT-CHE-CE
BHARAT HEAVY ELECTRICALS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III
Central Excise – Demand of interest under Rule 7 (4) of CER - Expression ‘the month for which such amount is determined’ - Finalisation of provisional assessment under Rule 7 of CER and payment of differential duty before finalisation of the provisional assessment – Demand of interest on the differential duty paid on account of price variation raised through the supplementary invoices – HELD – Considering the provisions of Section 4 of the CEA the duty becomes payable on each removal of the goods consequent to the manufacture thereof. Being so, the expression ‘becomes payable’ under Section 37(2)(ibb) would relate to the date on which the duty was payable i.e. at the time of clearance of the goods in terms of the said Act. Merely because the differential amount of duty is ascertained consequent to the finalization of assessment, the due date for payment of such amount never stands changed or extended. It would always relate to the date of removal of the goods thereof. It is only the quantification of the differential amount of duty is ascertained consequent to the finalization of assessment. And that too merely because the assessee was not able to ascertain the exact quantum of duty at the time of clearance of goods. That would not extend or change the due date for payment of duty. The due date for payment of duty is statutorily fixed being the date of removal of the goods consequent to the manufacture thereof, as the same cannot be changed by misinterpreting the provisions relating to the power of the Government to frame the Rules - The provisions specifically states that the interest liability will commence from the month succeeding the month ‘for’ which such amount is determined. The expression ‘for’ refers to the month for which the amount is determined pursuant to finalization of assessment. Apparently, it discloses that the interest liability would commence from the month succeeding the day on which the duty was due and payable in relation to the goods cleared - Appellants own case followed - The impugned order is upheld and appeals are dismissed
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Mizoram: Composition Scheme for Works Contract
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Odisha: Non-levy of mandatory penalty on audit assessment under Central Sales Tax Act
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Punjab Infrastructure (Development and Regulation) Act, 2002 - Rate of Fee
Karnataka VAT Schedule - Updated upto 1st June '15
4th of July
2015-VIL-263-MAD
M/s RAN INDIA STEELS (P) LTD Vs THE ASSISTANT COMMISSIONER (CT)
Tamil Nadu Commercial Tax - power of assessment - Jurisdictional assessing authority – HELD - In the present case, the Assistant Commissioner (CT), (ENT) Namakkal, the 1st respondent herein, has issued the impugned notice. When the petitioner has admittedly submitting the assessments only to the 2nd respondent at Tiruchengode, the 1st respondent, who is an official of the Enforcement Wing of the Commercial Tax Department, cannot embark upon fresh demonstration of the petitioner premises with the aid of the central excise department and the electricity board officials. It is also an admitted fact that the 2nd respondent who is the jurisdictional assessing officer of the petitioner has also conducted an inspection at their factory premises on 27.09.2012 and after spending the whole day in assessing the actual burning loss and the actual consumption of electricity, after inspection, arrived at a finding and based on the finding the 2nd respondent has also framed assessment for the years 2006-07 to 2008-09. Therefore, it is not open to the 1st respondent to undertake any inspection in the guise of demonstration to make assessment – Writ petition allowed
2015-VIL-330-CESTAT-MUM-ST
KETAN MOTORS LTD Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR
Service Tax - Disallowance of CENVAT Credit - Documents pertaining to unregistered premises Centralised registration – HELD - The fact of this application centralized registration having been made is mentioned in the order-in-original and is not disputed. However, the order-in-original states that the centralized registration was not applied for in the proper format and that the appellant had not produced any documents to the effect that they had applied for centralized registration. I find from the letter dated 16/12/2004 that the appellant has stated that they may be given permission to have only one registered place in terms of Rule 3(a) of the Service Tax Rules. This request can be considered as an application for centralized registration. In any case, the centralized registration was granted subsequently on 26/03/2013. The department has not disputed that the input services were received at the branch office and further that they were utilised for providing output services. In fact perusal of the accounting records maintained at the Nagpur office shows the receipt of the services at branch office – Hence, no reason to disallow the Cenvat Credit on the documents pertaining to the branch offices – Assessee appeal allowed
2015-VIL-328-CESTAT-DEL-CE
COMMISSIONER OF CENTRAL EXCISE, DELHI-IV Vs RACHITECH ENGINEERS PVT LTD
Central Excise - Manufacture of chimneys - Component of the boilers for non-conventional energy system - Exemption under Notification No.6/2002-CE dated 01.03.2002 – HELD – In Sl.No.237 of the table to the Notification 6/2002-CE covers "non-conventional energy devices / systems specified in list 9." Sl.No.16 of the list 9 covers "agricultural, forestry, agro industrial, industrial, municipal and urban waste conversion devise producing energy". There is no dispute that the chimneys manufactured by the appellant are meant for biomass burning boilers being manufactured by M/s. ISGEC John Thompson who in turn, supply such broilers to the end-users for production of energy from waste. The Commissioner (Appeals)'s view is that since what is covered by Sl.No.237 of Notification No.6/2002-CE is the non-conventional energy devices/ systems and since there is very thin distinction between part and device, as the device is thing made for a particular purpose and since chimney being an integral part of the biomass fired broiler can be treated as a device for non-conventional energy devices/systems, the exemption under this Notification would be available to the chimneys - Device is a thing made for a particular purpose and as such the chimney meant for biomass fired boiler has to be treated as non-conventional energy device – Revenue appeal dismissed
2015-VIL-329-CESTAT-DEL-CE
M/s JINDAL DRUGS LTD Vs COMMISSIONER OF CENTRAL EXCISE, JAMMU
Central Excise - Denial of CENVAT credit - credit on ASTM, shapes and sections, joists, MSI beam, MS angle, channel, welding rods and black sheet as capital goods - items do not fall under the definition of Capital goods as per Rule 2A of the Cenvat Credit Rules, 2004 – Extended period - HELD - Cenvat credit on the items in question was availed by the appellant during the period 2006-2007 up to 15.2.09 and in their show cause notice, it has been recorded that appellant vide their letter dated 3.3.2010 contended that the Cenvat credit on the subject goods is admissible to them as input of capital goods under the category of input of capital goods have been used for supporting erection of plant and machinery. As during the impugned period availment of Cenvat credit on the items in question was in dispute as there were contrary decision of this Tribunal. Therefore, in such a case extended period of limitation is not invokable - Further, the appellant is located in Jammu and availing the exemption under notification No. 56/2002 wherein whatever duty paid by the appellant from PLA, he is entitled to refund of the same. If in this case appellant has not taken the Cenvat credit therefore, whatever duty they would have paid and they could claim the same as refund. Therefore, I hold that it is a case of revenue neutral situation and in that case also the allegation of suppression cannot be alleged against the appellants – Appeal allowed
mpNoti27
Madhya Pradesh: Notification for Deemed Assessment
6th of July
2015-VIL-264-BOM
M/s PFERD TOOLS PVT LTD Vs THE COMMISSIONER OF SALES TAX, MAHARASHTRA
Bombay Sales Tax Rules, 1959 - Rule 41-D – Set-off in case of export of goods and sale of scarp locally – Set-off in respect of purchases of goods which are used in the manufacture of goods treated as capital assets or parts and components of such capital assets – Adjustment of scrap sale with set-off - HELD - The words “consists principally of sales of waste or scrap goods” are completely ignored by both the Revisional Authority and the Tribunal. The dealer in this case has not been found to have principally dealt with waste or scrap goods. The exported goods were manufactured with the purchases of goods styled as raw materials that have been made by the dealer. In such circumstances, we do not see how the dealer was ineligible or not qualified for the refund under the Rule - The authorities ought to have indicated with clarity and precision as to what is meant by capital goods and which capital goods and of what description have been acquired. If the dealer has treated them as consumables by the claimant-dealer and parts, components and accessories of capital assets alone qualify for retention of 4% of the purchase price in respect of the good which are treated as such, then the obligation and the duty of the authorities was to indicate as above. They have not and in both orders concluded as to which assets could be treated as capital assets and parts and components of which, therefore, get covered by clause (b) of sub-rule (3) of Rule 41-D. In the instant case, when the dealer pointed out the nature of the consumables, then, there was no reason to doubt the veracity and genuineness of his version. When no contrary material was available on record, then, all the more the set-off / refund should not have been denied - The authorities have completely misread and misinterpreted the Rules and the concurrent conclusion is not in accordance with law – Assessee appeal allowed
2015-VIL-19-MSTT
M/s INDUSTRIAL OXYGEN CO. LTD Vs THE STATE OF MAHARASHTRA
Central Sales Tax Act – Sale of goods is in course of import u/s.5(2) second limb of the Act - Transfer of document of title to the goods before crossing the custom frontier of India – Appellant imported Diving Helium from overseas supplier and on arrival of goods at port Bombay, goods were sent for warehousing - Supply from bonded warehouse to Victoria Docks within the territory of Maharashtra State – HELD – Sale of Diving Helium to Essar Shipping Ltd, for supply to ONGC, would not be sale in course of import u/s.5(2) or export u/s.5(1). The property in goods is transferred at 12 Victoria Dock on delivery to Essar Shipping Ltd. The sale is completed at 12 Victoria Dock within the Maharashtra State. It is a local sale. The sales tax levied on Diving Helium as local sale is liable to be confirmed alongwith levy of additional tax u/s.15A and set-off u/r.41E of the Bombay Sales Tax Rules – Appeal dismissed
2015-VIL-332-CESTAT-DEL-CE
M/s VIRGO ALUMINIUM LTD Vs CCE, CHANDIGARH
Central Excise – Area based exemption Notification No. 50/03-CE – Dispute regarding date of start of commercial production – Trial production / Commercial production – HELD – Though the term ‘commercial production’ is not defined in this notification, this term should be construed in contradistinction with the term ‘trial production’, as trial production is followed by the commercial production. ‘Trial production’ is the production during the process of commissioning of a plant. It is only the date on which the commissioning process has been completed, the plant is in a position to produce the goods of the desired quality and as per its installed capacity and some production has been made, that plant can be said to have commenced commercial production, as it is at that stage only that the plant is in a position to start commercial production, that is, the production of the saleable goods as per its installed capacity - what is relevant for determining the day of commencement commercial production is exactly when the process of commissioning was completed and plant was ready to manufacture the goods of the desired quality as per installed capacity - Though the appellant had intimated the Jurisdictional Central Excise officers about availment of this exemption under their letter dated 23/03/2010, their unit was not visited by the Officers during the last week of March, 2010, which was the crucial period for determining as to whether the plant was in position to commence commercial production or not. If the plant had been visited by the Jurisdictional Central Excise officers on 31/03/2010 there would have been no scope for dispute on this point - The impugned order is set aside. The matter is remanded to the original Adjudicating Authority for denovo adjudication. In course of denovo adjudication, the AA must examine Supervisor of the appellant company and also the Member Secretary, Single Window Clearance Agency, who had issued the certificate certifying that the unit had commenced production on 31/03/2010 and also permit the cross examination of both the persons by the appellant, if so desired by them, and only after examining these persons and permitting their cross examination, if asked for by the appellant and considering other evidence on record, the Adjudicating Authority must decide the question as to whether or not the unit had commenced commercial production on or before 31/03/2010 in accordance with law
2015-VIL-331-CESTAT-AHM-CE
M/s STI INDUSTRIES Vs COMMISSIONER OF CENTRAL EXCISE & S.T., VAPI
Cenvat Credit – SCN for availment of cenvat credit on the basis of invoices without receipt of the goods – HELD - Appellant had produced several evidence in respect of receipt of inputs and the same were not disputed and the officers proceeded merely on the basis of statements and in this situation, denial of cenvat credit cannot be sustained - Appellant produced documents that supplier was in existence during the material period as established by their invoices and the Central Excise monthly returns. So, the appellant has discharged their responsibility and therefore, CENVAT credit availed on the basis of invoices of supplier cannot be denied - Appeal allowed
2015-VIL-334-CESTAT-DEL-ST
M/s STEEL STRIPS WHEELS LTD Vs C.C.E., CHANDIGARH
Service Tax – Input Service – Admissibility of credit of service tax paid on the service of the Private Placement of Shares is admissible as input service credit as per the Cenvat Credit Rules – Activity used by the appellant directly or indirectly or in relation to the manufacture of the final products - HELD - It is the case of the appellant, that they raised capital by private placement of Shares, for the purpose of implementing a new project, the Automotive Wheel Line Project in their factory. The contention of the revenue that such financial services rendered to the appellant for the purpose of raising capital is not related to manufacture directly or indirectly cannot be accepted. The definition of "input service" is not restricted being limited to services which are directly linked to the manufacturing activity. But the definition has a wide ambit and covers services which are relating to business activities of manufacture – The service of private placement of shares for raising capital is an input service and credit on the service is to be allowed - The impugned order is set aside and appeal is allowed
2015-VIL-333-CESTAT-DEL-ST
COMMISSIONER, CUSTOMS, CENTRAL EXCISE & SERVICE TAX, BHOPAL Vs M/s KHAJURAHO TRANSPORT AGENCY
Service Tax – Respondent entered into a contract for transportation of the goods which also involved unloading of fertilizer from railway wagons onto trucks, unloading and stacking in warehouse and destacking and loading into trucks. In addition, the respondent was to ensure every necessary steps to protect fertiliser from damage – Demand under cargo handling service – HELD - The Commissioner (Appeals) has categorically observed that a plain reading of the agreement showed that the respondents were mainly hired for transportation of goods. That being the case and having regard to the contention of the respondent that there were no separate charges mentioned for loading/unloading, the impugned service provided under such a composite contract would be classifiable under GTA services by virtue of Section 65 A(2)(b) ibid - Respondent were mainly hired for transportation of goods and that loading/unloading were only incidental to the main activity which was transportation of goods, and therefore, the service provided was covered in the scope of GTA service – Revenue appeal dismiss
hpCorri2
Himachal Pradesh: Partial modification in Notification No.EXN-F(10)-2/2015-Loose dated 3rd June, 2015 - Regarding Amendment of HPVAT Rule 64
kerCir18
Kerala: Extension in time limit for filing application for compounding for the year 2015-16
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Maharashtra: E-payment facility for The Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002
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Uttar Pradesh: Increase in turnover limit for e-Sancharan [in Hindi]
7th of July
2015-VIL-266-RAJ
COMMERCIAL TAXES OFFICER Vs M/s PENAR INDUSTRIES LTD
Rajasthan Sales Tax – Exemption to construction of road – Contract for fixing of Works-Profile Safety Barrier at Toll Plaza - Whether providing and fixing profile-safety steel banker at hazardous location on National Highway is/was related to the roads or not – Expression "pertaining to" and "in relation to" – HELD – Developing / constructing a road over the years require latest technology and it is not merely putting concrete, grit, coal tar etc but many more things. The words “relating to” has a wide meaning and cannot be restricted only to putting of concrete, grit, coal tar etc but it should mean everything relating to road - When the entire work relating to Roads has been charged @1% as per notification dt.28/04/1993, then to say that fixing of Profile Safety Barrier was not used for the purposes of Roads, is unjustified on the part of the AO - Merely putting concrete, grit, coaltar cannot be said to be a road but in the present day conditions, when Mega Highways are being constructed, certainly one is required to have latest technology and safely measures installed which would certainly be part and parcel of roads. To say that fixing of W. Profile Safety Barrier is not relating to road is contrary to what can be said to be part of a road – Revenue revision petition dismissed
2015-VIL-267-MAD
DHARMAPURI DISTRICT CO-OP. MILK PRODUCERS UNION LTD Vs STATE OF TAMIL NADU
Tamil Nadu General Sales Tax Act - Whether the butter and ghee sold by the assessee under a brand name registered under Trade Marks and Merchandise Act, 1958 falls under Entry 8(1) of Part D of I Schedule to the TNGST Act at the reduced rate of tax at 10% for the assessment year 1998-99 – HELD - The controversy that has been raised by the Department can be laid to rest if Entry 8 of Part D of the I Schedule is taken on record - It is not in dispute that the goods falling under Entry 8 of Part D of I Schedule are taxable at the rate of 11% in relation to butter and ghee if sold under the brand name prior to 04.05.1998. The dispute relates to the period on or after 04.05.1998. The rate of tax, as understood by the Department, in respect of butter and ghee sold under the brand name registered under the Trade Marks and Merchandise Act, 1958 continued to have the benefit of reduced rate of tax at 10% in terms of Notification No.73 dated 05.03.1997, as is evident from the Entry itself. Once the Entry shows that the rate of tax would be 10% in terms of the said notification dated 05.03.1997, even after 4.5.1998, the question of the Department demanding tax at the rate of 11% cannot be justified - The Tribunal failed to consider the said Entry – Assessee revision allowed
2015-VIL-20-MSTT
M/s STRESSED ASSETS STABILIZATION FUND Vs STATE OF MAHARASHTRA
Maharashtra Value Added Tax Act, 2002 – Deemed Dealer – Difference of opinion - Whether the transfer of stressed assets of the IDBI to the Applicant Trust amounts to purchase as contemplated under MVAT Act – Whether sale of immovable properties having plants and structures sold by the Applicant on “as is where is” basis can be subjected to tax by the State of Maharashtra – HELD - The SASF is an independent entity formed by the Central Government and has acquired by transfer deed the rights in respect of stressed assets of IDBI. It further appears that the transaction of sale is effected by SASF. As per the Transfer Deed, all the stressed assets in the hands of IDBI were transferred to the Applicant Trust. It also appears that separate sale certificate has been issued by the Applicant Trust in respect of sale of movable property and sale of immovable property is effected by way of registered document. As such, we find that whenever sale of movable property is effected by the Applicant Trust for realization of stressed assets, the same becomes exigible to tax. We are therefore inclined to hold that the Determination Order passed by the Learned Commissioner holding the Applicant Trust as a dealer for the purposes of MVAT Act 2002 is perfectly legal, proper and correct - Prayer of the Appellant to grant prospective effect to the order of the Learned Commissioner of Sales Tax - Difference of opinion – Matter referred to the Hon’ble President to decide that when Tribunal upholding the Commissioner order that appellant as deemed dealer liable to pay tax on the sales of goods, it would be justified to give prospective effect to the said order
2015-VIL-265-MAD-CE
THE COMMISSIONER OF CENTRAL EXCISE Vs M/s DALMIA CEMENTS (BHARAT) LTD
Central Excise – Cenvat Credit - interpretation of Rule 3 (5) and 9 of CCR, 2004 and Rule 11 (1) of CCR, 2002 - Transfer of the right to use - Whether the inputs and capital goods used in a power plant and on which Cenvat credit of duty had been taken could be deemed as removed as such in terms of the provisions of Rule 3 (5) of the CCR, 2004, when the right to use the said power plant along with the land, building, plant and machinery were leased by the assessee for consideration to another company – HELD - Rule 3 (5) only speaks about the removal of goods under cover of invoice referred to in Rule 9 on inputs or capital goods on which cenvat credit has been taken and if such goods are removed as such from the factory or premises of the provider of output service, the manufacturer of the final products or provider of output service, shall be liable to pay an amount equal to the credit availed in respect of such inputs or capital goods - In this case, there is no removal of goods under cover of invoice as provided under Rule 9 of the Cenvat Credit Rules, 2004 and there is nothing in Rule 3 (5) of the CCR, 2004 to invoke the deeming fiction as insisted by the adjudicating authority. The language of Rule 3 (5) is plain and simple. When the inputs or capital goods on which cenvat credit has been taken are removed as such from the factory, then subject to compliance of other requirements, the credit availed in respect of inputs on capital goods shall be paid. This situation has not arisen in the present case, as no invoice has been issued for removal of the goods from the factory premises and, therefore, the said rule is not applicable to the case of the assessee - No reason to interfere with the well considered findings of the Tribunal on the questions of law – Revenue appeal dismissed
2015-VIL-337-CESTAT-DEL-CE
C.C.E. & S.T. RAIPUR Vs M/s CADBURY INDIA LTD AND VICE VERSA
Central Excise – Cenvat Credit - Admissibility of credit on floor spillage and sweeping in the course of the manufacturing final product – waste arising during the course of manufacturing - HELD - In this case the inputs on which Cenvat Credit was availed were destroyed when work was in progress - The provisions of Rule 21 of the CER, 2002 and provisions of Rule 3(5)(c) and CCR, 2004 are not applicable to the facts of this case. Consequently, the goods lost in work in process the assessee is entitled to take Cenvat Credit - The assessee has correctly taken the Cenvat Credit on the inputs which has been lost during the work in progress – Assessee appeal allowed and Revenue appeal is dismissed
2015-VIL-335-CESTAT-AHM-CE
M/s GARDEN SILK MILLS Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, SURAT-I
Central Excise - CENVAT Credit of the duty paid on the specified inputs and capital goods – Contravention of the provisions of Rule 4(1), 6 & 9 of CER, 2002 as Appellant has failed to discharge the duty liability correctly on clearance, failed to observe the condition of registration rules and wrongly availed the benefit of exemption Notification No.30/2004-CE, dt.09.07.2004 as amended – HELD – Issue settled in Bhilosa Industries Pvt. Ltd. Vs CCE 2014-VIL-254-CESTAT-AHM-CE - Revenue is of the view that the word ‘manufacturer’ used in Notification No. 30/2004-C.E. should be interpreted ‘manufacturer’ as a ‘legal entity’ and that the words ‘in his factory’ should include all the factories of the manufacturer as a legal entity. Appellants on the other hand argued that words ‘procured from outside’ used in the notification means that the yarn should have been obtained from outside and the word ‘manufacture’ should be the same factory / assessee to whom demand is issued. That accordingly the expression ‘in his factory’ should be treated as ‘the same factory’ – Appeals are allowed
2015-VIL-336-CESTAT-CHE-ST
M/s THE INDIA CEMENTS LTD Vs COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI
Cenvat Credit Rules, 2004 – Rule 2 (m) - Input credit distribution – Credit distribution by Regional office to Head Office and other regional office - Revenue’s allegation that the credit distributed by Head Office is only permissible to the manufacturer but not the credit distributed by its Regional Offices. Since the term ‘an office’ used in the said Rule which came into force with effect from 10.09.2004 does not include a place beyond head office – HELD - No doubt, the definition of input service distributor using the term ‘an office’ is applicable to the appellant, but the term ‘an office’ cannot be limited to a physical boundary but shall be interpreted as different boundaries which are offices and distribute the credit. The requirement is that credit distributing agency should be ‘an office’ only but not a confined boundary. The reason is probably ‘an office’ maintains record to verify the credit distributed - The term ‘an office’ used in Rule 2 (m) is to be read in plurality in the context in which that is used and any narrow meaning given to the term ‘an office’ would defeat the spirit of the provisions in section 13(2) of General Clauses Act - The assessee is not merely entitled to take credit of the unit where the products is manufactured, but it may also get credit of input tax paid by its head office to arrest cascading effect which is the mandate of Rule 7 – Assessee appeal allowed
2015-VIL-338-CESTAT-DEL-ST
JAIPUR MUNICIPAL CORPORATION Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, JAIPUR-I
Service Tax – Sale of plots on 99 years lease by Municipal Corporation - Whether in nature of Renting of Immovable Property or sale - Invocation of extended period of limitation – HELD - 99 year lease is "virtual" sale, it is not sale per se. Such lease rent is clearly liable to service tax under 'Renting of Immovable Property' service as the definition of renting of immovable property given in Section 65 (90a) of the Finance Act, 1994 includes leasing of immovable property for use in the course or furtherance of business or commerce - There is force in the contention of the appellant that there was confusion with regard to the leviablity of service tax on Renting of Immovable Property - There is a good case to grant stay in respect of the impugned demand pertaining to the period beyond normal period of one year – Pre-deposit ordered - Partial stay granted
2015-VIL-339-CESTAT-MUM-ST
KAYTEE CORPORATION PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I
Service Tax - Commission agent service – Export of service - Taxation of Services (Provided from Outside India and received in India) Rules, 2006 - Refund of tax mistakenly paid on commission amount paid by appellant to the commission agent situated abroad under the reverse charge mechanism for export of goods - Applicability of Section 66A of Finance Act, 1994 – HELD - From the Rule 3(iii)(c), it is clear that the service of overseas agent received by the appellant has been provided from outside India and received by the appellant who is a recipient located in India and the service is used in relation to business or commerce i.e. export business. Therefore, in view of this undisputed position. Section 66A is clearly applicable and according to which the appellant was legally liable for payment of service tax for the period from 19.4.2006. In view of this, the lower authorities have correctly held that the service tax was payable after 19.4.2006 and rightly rejected the refund claim in respect of service tax paid for the period on or after 19.4.2006 – Assessee appeal dismissed
upNoti905
Uttar Pradesh: Amendment in UPVAT Schedule-I and Schedule-II - Regarding Solar Energy devices & Renewable Energy devices
Summary for the month of June [View link]
List of updates in the month of June ‘15
ceNoti18NT
Central Excise: Regarding Digitally signed invoices in Central Excise and Service Tax-Conditions, safeguards and procedures
ceInst060715
Central Excise: Instructions regarding maintenance of Records in Electronic Form and authentication of records by Digital Signature–manner of verification
8th of July
telNotiGO109
Telangana: Date of effect of section 22 of Telangana Value Added Tax (Amendment) Act, 2015 (Act No.4 of 2015)
stCir185
Service Tax: Detailed Manual scrunity of Service Tax Return
wbCir12
West Bengal: Submission of paper copy of returns
wbCir11
West Bengal: Direct credit for VAT refund to dealer’s Bank Account
2015-VIL-268-RAJ
J.K.TYRE & INDUSTRIES LTD Vs STATE OF RAJASTHAN & ORS.
Rajasthan Value Added Tax Act, 2003 – Validity of invocation of power under Section 26 - Escaped assessment – Exemption Notification dated 6.5.1986 exercising powers conferred by Section 8(5) of the CST, 1956 - Partial exemption from the Central Sales Tax payable in respect of the sales of manufactured goods in the course of inter-State trade or commerce – Contention of revenue that assessee collected amount of tax in excess to the tax payable - Distinction in 'refund of tax' and 'exemption from tax' – HELD – True it is, in the instant matter the benefit of exemption given is retained by the petitioner and that has not been transferred to the consumer and in first glance it appears contrary to the concept of extending benefit of exemption to the consumer, but a little deep observation compels us to conclude otherwise – An important aspect of the matter is that all the facts necessary to determine quantum of inter-State sales, the branch transfers and the sale in the State of Rajasthan can be collected only at the end of the assessment year and not at its inception. The partial exemption which is to be given cannot be known at the beginning of the assessment year being based on several factors, a dealer, therefore, cannot proceed for sale with less rate of tax with assumption to have partial exemption at the end of the year. If the actual quantum of concession is not known to the dealer then in no case that can be applied with reduced tax liability. The stand taken by the respondents that the dealer should charge tax with reduced rates virtually amount to insist for doing something that cannot be done without having relevant facts which shall be coming on surface only at the end of assessment year. It is well settled that no one can be compelled to do something that is not possible to do - The purpose of the notification can very well be failed, if the dealers do not act as desired by the State by increasing inter-State sales and reducing branch transfers. The State Government only to have support of the dealers extended partial exemption to them. This incentive is given to the dealers by the State from its own revenue in the form of exemption to have a positive action by the dealers for shifting to inter-State sale from branch transfers, as such, the notification dated 6.5.1986 though uses the term “partial exemption” but in fact is a “partial disbursement of State revenue” earned due to the efforts made by the dealers for its enhancement – Writ petitions deserve acceptance, accordingly, the same are allowed. The initiation of impugned proceedings against the petitioner as per Section 26 of the VAT Act is declared illegal and the notices issued thereunder and orders made thereon are also declared illegal, hence are quashed
2015-VIL-269-KAR
M/s JMC PROJECTS (INDIA) LTD Vs THE STATE OF KARNATAKA
Karnataka Value Added Tax Act, 2003 - Section 63A - Suo moto revisional powers of Joint Commissioner of Commercial Taxes – Applicability of Section 63A of the KVAT Act for assessment prior to 01.04.2006 – HELD – Sub-section (2) of Section 63A of the KVAT Act makes it clear that the Joint Commissioner has the power to exercise revisional jurisdiction for a period which is not prior to four years from the date of the order sought to be revised. Meaning thereby that the Joint Commissioner gets the revisional power only after 01.04.2006 but the period with regard to which such power can be exercised could be prior to 01.04.2006 - It is only the provision as its exists which is to be interpreted and when the Section itself is clear that the Joint Commissioner can revise order which is issued up to four years prior, we need not consider as to whether Section 63A of the KVAT Act would be retrospectively applicable or not - Joint Commissioner has power to revise the assessment order relating to the assessment period 2005-06 under Section 63A of the Act – Assessee petition dismissed
2015-VIL-270-ALH-CE
COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD Vs M/s HINDALCO INDUSTRIES LTD, RENUKOOT
Central Excise – Modvat Credit - Whether the Tribunal is justified in allowing Modvat credit on the ground that "Bus Bars" is an intermediary product and as such liable to benefit of credit under Rule 57-D(2) of the CER, 1944 – Captive use of "Bus-bar" for manufacture of Aluminium - period of dispute from 16.03.1995 to 18.05.1995 – HELD - The dispute of Revenue is that despite the fact that ‘Bus-bar’ was an "intermediary product", since the assessee has not made any declaration that "Bus-bar" in this case is an "Intermediary product" hence assessee is not entitled for the benefit of MODVAT credit - On the question of declaration the Tribunal has recorded a finding of fact that in C/List submitted by appellant the "Bus-bar" was shown to have been used for manufacture of Aluminium and product thereof. This was a clear indication that Bus-bar is an "intermediary product". No other specific type of declaration was required in the statute. Once requirement of statute was specified, the scheme of MODVAT which is for the benefit of assessee does not call for a hyper technical view so as to find out a pretext for denying MODVAT credit - assessee is entitled for MODVAT credit under Rule 57D(2) and the question is answered in favour of assessee and against Revenue
2015-VIL-344-CESTAT-CHE-CE
M/s JONAS WOODHEAD & SONS (I) LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV
Central Excise - Whether duty paid in excess in respect of certain clearances made during a material period is adjustable against short payment of duty in respect of other clearances of that period on finalisation of provisional assessment and resultant excess if any arises upon such adjustment is refundable without crossing bar of unjust enrichment being applicable – Assessable Value - cost of freight post clearance – Sale return - HELD – The ratio laid down by the Karnataka High Court in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. Vs Commissioner of Central Excise 2011-VIL-06-KAR-CE read with mandate of Rule 7 of the CER, 2002, leads to the conclusion that there is no warrant in law to deal with the consequence of each clearance on case to case basis to determine shortage and excess of payment of duty and consequence thereof. The ultimate duty liability of a relevant period is to be determined in final assessment taking into consideration entire clearance of that period in aggregate and if there arises excess payment of duty upon such finalization of making due adjustment, that shall be refundable - There is no material on record to suggest that cost of freight is attributable to clearance of goods. But that relates to the post clearance period. Accordingly, there shall be no levy of duty thereon - In commercial parlance, sales return are common where the buyer do not approve quality of goods or other reasons. Therefore, directing payment of duty on sales returns shall be contrary to Commercial Parlance theory – Assessee appeals are allowed
2015-VIL-341-CESTAT-AHM-CE
COMMISSIONER OF CENTRAL EXCISE, RAJKOT Vs M/s RELIANCE INDUSTRIES LTD
Central Excise - Whether the respondent a 100% EOU at the material time, are required to pay NCCD @ Rs 50/- per MT under Section 134 of Finance Act 2003, at the time of importation of the Crude Oil on the ground that the said NCCD has not been exempted by Notification No. 52/2003 dtd 31.3.2003 – HELD - Present case is squarely covered by the decision of the Tribunal in the respondent’s own case which observed that as a division bench we feel bound by the law declared by the Larger Bench. By following the law declared by the Larger Bench decision in the case of Paras Fab International that 100% EOU is not required to discharge any duty liability in respect of the imported goods warehoused in their premises and used for the purpose of manufacturing in-bond, accordingly, respondents were not required to pay any NCCD, Education Cess and SHE Cess – Revenue appeal dismissed
2015-VIL-346-CESTAT-DEL-ST
M/s CENTRICA INDIA OFFSHORE PRIVATE LIMITED Vs CST, DELHI
Service Tax – Business support service to overseas entity – Denial of refund of unutilised cenvat credit on the ground that support services of business provided to overseas associated enterprises and for which assessee had received remuneration in foreign exchange, was not used outside India but within the Indian territory – HELD - The basis recorded by the learned appellate Commissioner for rejecting the claim for refund is predicated on the conclusion that the service provided by the assessee was not used outside India. Reliance for this is placed in the impugned order on the Board Circular dated 13.05.2011 which purports to clarify the expression ‘accrual of benefit’ and ‘use outside India’ - The interface provided by the assessee to synergize activities of the overseas entities and Indian call centres would be export of services. Since this service accrues to the benefit of the overseas entity and is therefore to be considered as having been used outside India and for the benefit of the overseas entity - The transactions fall within the ambit of export of services, used outside India - The appeal is allowed, the impugned order is set aside and it is declared that the appellant shall be entitled to refund of unutilised cenvat credit
2015-VIL-340-CESTAT-MUM-ST
RELIANCE INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX (LTU), MUMBAI
Service Tax – Input service - CENVAT Credit – Denial of credit of Service Tax paid on premium paid to insurance companies for group insurance/insurance of employees including retired employees / mediclaim under category of ‘insurance auxiliary services-general insurance’ – HELD - The ruling of Hon’ble Karnataka High Court in the case of Millipore India Ltd, after examining the CAS-4 Standards, the Hon’ble High Court accepted that all factors have to be taken into consideration while fixing the cost of the final products. The Hon’ble High Court further observed that the definition of ‘input services’ is too broad. Further it is not disputed in the facts of the case that the premium so paid in the present appeal has formed part of the cost of excisable goods on which Excise Duty has been paid on removal. Therefore, the appellant is entitled to avail, Cenvat credit for the insurance premium paid in respect of group insurance / insurance of employees including retired employees / mediclaim which are covered under the definition of ‘input services’ and have a nexus - Assessee appeal is allowed
Analysis of Shyam Telecom Order
Guest Column: Export benefits cannot be denied even when export proceeds are not realized
Digitally signed invoices
Guest Column: CBEC specifies conditions and safeguards for issuing digitally signed invoices and maintaining e-records
9th of July
2015-VIL-274-ALH
M/s OTIS ELEVATORS COMPANY (INDIA) LTD Vs THE COMMISSIONER OF COMMERCIAL TAXES
Uttar Pradesh VAT Act, 2008 – Assessment – Demand - Rejection of stay application - Assessment relying exclusively on the judgment of the Supreme Court in State of Andhra Pradesh Vs. M/s Kone Elevator – HELD – If the appellant, having a strong prima-facie case, is directed to deposit an amount of assessment so made or penalty so levied it would cause undue hardship to him though there may be no financial strains on the appellant running in a good financial condition - The assessing authority has made the assessment relying exclusively on the earlier judgment of the Supreme Court in State of Andhra Pradesh Vs. M/s Kone Elevator 2005-VIL-04-SC which has now been overruled by the Constitution Bench of the Supreme Court in Kone Elevator India Pvt. Ltd. Vs. State of Tamil Nadu 2014-VIL-12-SC-CB, the assessee is entitled to complete stay of the demand amount – Assessee Revision allowed
2015-VIL-272-AP
THE STATE OF ANDHRA PRADESH Vs M/s DURGA ENTERPRISES
Andhra Pradesh General Sales Tax Act - Whether the commodity, chair seats and back rests made out of ply wood, fall under Entry 17 of the Sixth Schedule or it is an unclassified item falling in the Seventh Schedule – Goods falling under Schedule 6 of Entry 17 attracts duty of 15% and whereas in the unclassified goods falling under Schedule 7 of the Act attract duty element of 10% - HELD - In the present case, the simple test which is required to be applied is whether when asked for seat chairs and seat back rests, the assessee could give ply wood or ply wood boards and whether the trade would accept the same. If the answer is yes straight away the products would need to be classified under Entry 17. If the answer is no, the same would not satisfy the description of Entry 17 - The classification made with regard to the chair seats and chair back-rests are rightly classified by Tribunal as unclassified goods falling under the Schedule 7 as the description of the goods do not satisfy in terms of the description in Entry 17 of the Sixth Schedule of the Act – Revenue appeal dismissed
2015-VIL-345-CESTAT-CHE-CE
TANTECH AGRO CHEMICALS LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY
Central Excise – Validity of suo motu credit taken by the appellant after favourable order by Commissioner, without filing refund claim under Section 11B – HELD - It is evident that amount deposited during investigation is clearly established. Therefore the amount deposited during investigation is only a deposit and not central excise duty - Having held that the amount paid is only a deposit during investigation, it is to state that once adjudication authority dropped the proceedings in this case the consequential benefit is automatic in so far as the deposits made by the appellant during pendency of adjudication proceedings. Therefore, the question of refund claim under Section 11B and time-bar and unjust enrichment does not arise - The impugned order upholding the recovery of credit with interest and imposition of penalty is set aside – Assessee appeal allowed
2015-VIL-273-MAD-CE
COMMISSIONER OF CENTRAL EXCISE, CHENNAI-I Vs M/s TABLETS INDIA LTD
Central Excise - Assessee is engaged in the business of manufacturing medicines, claiming abatement towards quantity discount, freight, cash discounts and turnover tax – Finalisation of provisional assessment – Revenue seeks to revise the order of provisional assessment on assumption that records like RT12 returns was not considered by the lower Authority – HELD - The revised demand for higher duty is merely based on a presumption that one or other factor has not been considered by the Original Authority. When the show cause notice itself clearly demanded a sum of Rs.13,16,071.25, which was based on the records already available, there is no justification how such a demand should be amended without issuing a corrigendum, as rightly pointed out by the Tribunal. When the facts relevant for the purpose of finalising the provisional assessment were already available with the Original Authority and the demand was based on such data, we find justification in the assessee's plea that the Commissioner (Appeals), at the behest of the Department, has proceeded to travel beyond the show cause notice to claim higher duty – Tribunal order upheld and revenue appeal dismissed
2015-VIL-271-GUJ-ST
EAGLE CORPORATION PVT LTD Vs UNION OF INDIA
Service Tax - Liability to pay service tax on the obligations sub-contracted to the petitioner by main contractor – Service tax payment by Contractor on main contract, liability to pay service tax by petitioner (sub-contractor) on sub-contracted portion – Demand confirmed by Settlement Commission – Appellant provided services to different clients for contracted tour and providing bus services on contract basis - HELD - There is an independent contract for providing transportation services / bus services, between the petitioner and M/s M&M (Mahindra & Mahindra) / M/s MLL (Mahindra Logistics) and even between M/s MM / M/s MLL and M/s AMW Ltd - The petitioner cannot be said to be a sub-contractor with respect to the transportation services provided to M/s.AMW Ltd. and therefore, the contention of the petitioner that M/s.MM / M/s.MLL paid service tax on the transportation services rendered to M/s.AMW Ltd. and therefore, the petitioner is not liable to pay service tax and/or the contention that there shall be double taxation if the tax is recovered from the petitioner, has no substance and the same cannot be accepted. The service tax paid by M/s.MM / M/s.MLL with respect to transportation services provided to AMW is with respect to the separate and independent contract - The agreement / contract entered into between the petitioner and M/s.MM / M/s.MLL is an independent contract for providing services of transportation and therefore, the petitioner is not a sub-contractor and therefore, the petitioner is liable to pay service tax on the transportation services / bus services provided by the petitioner to the M/s.MM / M/s.MLL. Under the circumstances, the petitioner is not entitled to any of the reliefs - Assessee contention that proceedings before the Settlement Commission can be said to be an alternate to regular and normal adjudication proceedings – HELD - Considering the provisions of the Act more particularly Section of Chapter V of the Act, by no stretch of imagination it can be said that the proceedings before the learned Settlement Commission is an alternate to adjudication proceedings - Technically speaking, proceedings before the Settlement Commission cannot be in strict-senso said to be an alternate to the adjudication proceedings - With respect to such questions, appropriate remedy would be to proceed with the show cause notice, as the power of adjudication is vested with the appropriate authority - Assessee petition dismissed
2015-VIL-347-CESTAT-MUM-ST
M/s KLAUS MULTIPARKING SYSTEMS PVT LTD Vs CCE PUNE-III
Service Tax - Works Contract - Erection, Commissioning & Installation – Supply and erection of car parking systems - Claim of refund of tax paid during the period 1.10.2003 to 31.03.2005 on the ground service tax on Works contract came into effect after 31.3.2005 – HELD - The larger bench of the Tribunal in the case of L&T Ltd. 2015-VIL-147-CESTAT-DEL-ST-LB has held that vivisection of Works Contract was permissible before the introduction of service tax on Works Contract service. If the service component of an activity was covered under any other category of service under the Finance Act 1994, it would be leviable to service tax. Therefore we do not agree with this contention of the appellant – However, erection of structures was introduced in the definition of ‘erection commissioning or installation’ for the first time in May 2006. There is merit in the contention of the appellant that what has been erected by them is basically a structure – The factual details have not been examined by the adjudicating authority or the appellate authority with reference to the definition of ‘erection, commissioning or installation’ as it underwent amendments from 2003 to 2006. The matter, therefore, needs to be remanded for analysis of facts vis-a-vis the statute prevailing at the relevant time
assamNotiFTX17
Assam Industries (Tax Exemption) Scheme, 2015 - Non-entitlement of input tax credit in certain cases
rajOrder52
Rajasthan: Amendment in RIPS-2014 regarding customized package
harNoti17
Haryana: Punjab Passengers and Goods Taxation (Haryana Amendment) Rules, 2015 - Enhancement in goods tax on loading capacity of vehicle
11th of July
2015-VIL-275-RAJ
ASSISTANT COMMERCIAL TAXES OFFICER Vs M/s BINANI CEMENT LIMITED
Rajasthan Sales Tax Act, 1994 – Import of goods within the State - Rule 53 – Import of telephone cables by Assessee-Cement manufacturer – Declaration in form ST-18A - Penalty consequent to larger bench decision on the issue of mens rea – HELD – Though mens rea is not essential but in the present case, the penalty is not leviable for the reason that it is an admitted fact that the assessee is not a dealer of telephone cables but is a manufacturer of cement and the telephone cable were purchased for its own use and for the use in factory for diverse purposes. There is a definite finding of fact by the appellate authorities which has not been controverted by counsel for the revenue – The provision clearly shows that the declaration form ST-18A need not be furnished, if the goods of the class or classes are specified in the registration certificate would mean that the goods, which were being purchased by the assessee, once having been recorded in the registration certificate, requirement of carrying declaration form ST-18A was not there. Further, in the instant case, both appellate authorities have come to a definite finding of fact in this regard and telephone cables were certainly for its own use in factory/plant of the assessee. Therefore, in the facts and circumstances, the declaration form ST-18-A was not required - The penalty has rightly been deleted by the Tax Board – Revenue revision dismissed
2015-VIL-343-CESTAT-AHM-CE
COMMISSIONER OF CENTRAL EXCISE & S.T., RAJKOT Vs M/s TATA CHEMICALS LIMITED
Central Excise - Assessee availed modvat credit of Rs. 32,45,712/- on capital goods received in their factory prior to 16.03.1995 – Denial of modvat credit wrongly, in view of the amended provisions of Cenvat Credit Rules, vide Notification No. 11/95-CE (NT) dated 16.03.1995 – HELD - sub-rule 2 of Rule 57Q clearly provide that other than those capital goods in respect of which credit of duty allowable under earlier Rule or Notification prior to 16.03.1995, shall be allowed if such goods received in their factory even before 16.03.1995. In the present case, there is no dispute that the respondent received the capital goods prior to 16.3.1995, hence they are eligible to avail cenvat credit – Revenue appeal dismissed
2015-VIL-342-CESTAT-AHM-CE
M/s PHILIPS CARBON BLACK LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAJKOT
Central Excise – Assessee engaged in the manufacture of Carbon Black - During the process of manufacture of Carbon Black, Lean Gas is emerged as by-product, which is used for generation of electricity - The electricity was partly used in the plant and partly sold – As per Revenue, electricity is exempted and therefore they are liable to pay the amount 8% / 10% on value of the electricity under Rule 6 of the CCR - HELD - Credit shall not be denied on the ground that part of the inputs is contained in a by-product - It cannot be claimed by the Revenue that any part of the inputs, that is CBFS or any other inputs which has gone into the manufacture of Carbon Black has been used in the manufacture of electricity - Following the ratio of Hitech Carbon Vs CCE, Allahabad assessee appeal allowed
2015-VIL-348-CESTAT-DEL-ST
MIND EDUTAINMENT PVT LTD Vs CST, NEW DELHI
Service Tax - Refund – Exempted service – Denial of Refund on ground of unjust enrichment – Appellant collected fee inclusive of service tax – Claim of refund the ground tax burden not passed to service recipient – HELD - Before claiming such relief, the applicant has to establish that he has borne the amount for which relief is sought and that he has not passed on the burden to the consumers. In the present case, undisputedly the services were exempted from payment of service tax during the relevant period. It is also not disputed that the appellant paid the tax erroneously. It is apparent from the invoice that it is cum-tax invoice and therefore the incidence of tax is passed on to the customer. Section 12A makes it mandatory to prominently indicate in the documents/invoices the amounts of such duty which will form part of the price. When the invoice states that the value is inclusive of service tax, the contention of the appellant that the incidence of tax has not been passed on to other is untenable - It is not in dispute that the agreement stipulates the value inclusive of taxes. The invoices issued also indicate that amount collected is inclusive of service tax. Undeniably the presumption under section 12B is raised that the incidence of tax is passed on to the customer. In such circumstances the appellant has to establish by evidence that the service tax passed on was returned to the customer. In the absence of such evidence the presumption stands unrebutted - The refund claim is hit by the bar of unjust enrichment. No infirmity with the impugned order passed by the Commissioner (Appeals) in ordering to sanction the refund and credit the same to the Consumer Welfare Fund – Assessee appeal dismissed
Guest Column
Guidelines for detailed manual scrutiny
FCP0107
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
13th of July
2015-VIL-277-KAR
M/s INDIAN OIL CORPORATION LTD Vs ADDITIONAL CHIEF SECRETARY & PRINCIPAL SECRETARY TO GOVERNMENT
Karnataka Sales Tax Act, 1957 – Exemption to sale of ATF and lubricants to Aircrafts registered in foreign countries which is a party to the Convention on International Civil Aviation or which has entered into Air services or Air Transport Agreements with India and operating scheduled or non-scheduled international Air Services to or from India – Validity of the notification issued by State Government requiring additional declaration for granting exemption – Power of State Government to issue executive order / instructions on implementation of Central Government Notification and law – Assessment - HELD – There may be various other airlines originating from foreign countries which are not parties to the said Convention, but in order to identify those airlines which originate from the countries which are parties to the Convention, such a declaration is required - Notification dated 3.12.2003 is neither illegal nor lacks competence and it is also not contrary to the provisions of the Central enactment - There is a distinct purpose in insisting for production of such declaration made by the State Government and hence the contention raised by the assessee on the vires of the said Notification is without any substance - Validity of the assessment order - The petitioner would have to be given an opportunity to produce evidence pointing out the list of countries which are parties to the Convention or which have entered into Agreements with India and in respect of whose aircrafts the sale of ATF and lubricants have taken place to the satisfaction of the respondent-authority. If the respondent is satisfied on the material to be produced by the petitioner, then it could consider the grant of exemption in respect of those transactions – Matter remanded
2015-VIL-351-CESTAT-DEL-CE
M/s FOOD & HEALTH CARE SPECIALITIES & M/s HEINZ INDIA PRIVATE LTD Vs CCE, DELHI-IV
Central Excise - Valuation of Glucon-D - Job work – Assessee paying duty on the value determined in accordance with the Apex Court’s judgment in the case of Ujagar Prints Vs UOI - Revenue contention is that the transactions between FHS & Heinz are not on principal to principal basis and hence, in view of the Apex Court’s judgment in the case of UOI vs. S. Kumars, the assessable value would be the price at which the goods were sold by Heinz to its independent buyers - Whether job worker can be treated as related person and Job work charges are not at arm's length price - Clearance of Glucon-D on the basis of cost of raw-material received plus job charges plus the profit margin – HELD - A job worker and the principal manufacturer can be treated as related persons only when the terms of the job work are such that the job worker is not free to charge the job charges as per the market rate and the job charges are dictated by the principal manufacturer or that the terms of the agreement give unfair advantage to the principal manufacturer over the job worker which would indicate existence of extra commercial consideration and financial interest in the business of each other. On going through the terms of the agreement between the FHS & Heinz we do not find any such clause in the agreement - FHS & Heinz cannot be treated as related persons and accordingly the assessable value of the goods manufactured by FHS would have to be determined in accordance with the Apex Court’s Judgment in the case of Ujagar Prints and Ors. vs UOI i.e. aggregate the cost of the raw material, job charges and job worker’s profit - The impugned order is, therefore, set aside – Assessee appeal allowed
2015-VIL-349-CESTAT-AHM-CE
M/s SHYAM TEXTILE MILLS Vs COMMISSIONER OF CENTRAL EXCISE & S.T., AHMEDABAD
Central Excise – Valuation for the purpose of Compounded Levy Scheme – HELD - Adjudicating authority cannot sit over the certification done by the Chartered Accountant, as per the Accounting Standards and decide the value of the plant and machinery as per his own verifications got made and best judgment - Under the provisions of Rule 96ZNB (1) of CER, 1944 there is no mention of valuation to be done by Accounting Standards by the Chartered Accountant. Subsequent certificate given by the Chartered Accountant to that effect cannot be brushed aside by the adjudicating authority to hold that he will determine the value of the plant and machinery himself. Nowhere in the proceedings it has been pointed out by another competent expert opinion that certificates issued by Chartered Accountant does not conform to the Accounting Standards-10 as laid down by Institute of Chartered Accountants of India. If the adjudicating authority was not satisfied by the certificates given by the Chartered Accountant, then he could have asked the appellant to furnish such a certification as prescribed from another Chartered Accountant but can not himself decide the valuation of plant and machinery on the basis of presumptions, when statute demands such a certification to be done by a Chartered / Cost Accountant – Assessee appeal are allowed
2015-VIL-350-CESTAT-HYD-ST
M/s ZENOTECH LABORATORIES LTD Vs COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, HYDERABAD-IV
Service Tax - Waiver of pre deposit – Demand under Scientific and Technical Consultancy Service and Technical Testing and Analysis Service – HELD - The foreign entities provide the test results to the appellant and this cannot be considered as prima facie covered by the definition of the service provider and further the activity undertaken also cannot be considered as consultancy or advice. Therefore, the appellant has made a prima facie for complete waiver in respect of this demand - Whether the appellants have provided technical testing or analysis service to Ranbaxy – The appellant has to receive the payment for grant of license - HELD - Since the issue involved is complicated, it required details to be considered. While appellant is required to be put to terms, it is not necessary to require them to deposit the entire amount - Partial stay granted
2015-VIL-276-BOM-ST
FUN MULTIPLEX PVT LTD Vs THE UNION OF INDIA AND ORS
Service Tax – Liability to pay service tax on exhibition of movie – Revenue contention that nature of services and to the Association of Persons appear to be classifiable under the head business support services – Maintainability of this Writ Petition – HELD - The Tribunal shall permit the Petitioner to raise all contentions including that the issue must be examined in the light of the arrangements, prevalent practices and customs peculiar to the film industry. Such arrangements and which are in vogue for decades together do not create any relationship and which is assumed to be created by the Revenue. The Circular therefore will have no application and would not apply - Therefore, all contentions on the applicability of the Circular, its interpretation and particularly in the context of the legal provisions are kept open for being raised before the Tribunal. The Tribunal shall consider them and pass appropriate orders in accordance with law – Petition disposed
delCir14
Delhi: Regarding Annexure 2A and 2B
Maharashtra VAT Schedule: Updated upto 30th June 2015 [Download link]
wbCorri100715
West Bengal: Corrigendum to Trade Circular No. 09/2015 dated 27.05.2015
14th of July
2015-VIL-278-GUJ
NESTLE INDIA LIMITED Vs DEPUTY COMMISSIONER OF COMMERCIAL TAX
Gujarat Value Added Tax Act - Rate of tax on Noodles - Classification of ‘Maggi’ Noodles – Whether said item is covered by Entry 9(3) of Schedule I or Entry No.87 of Schedule II to the Act and whether sale of Maggi, Noodles akin to ‘Sev’ / ‘Farsan’ sold as branded product - Validity of order passed beyond the scope of show cause notice – Matter settled in earlier order which was not challenged by Department - HELD – The impugned order passed by the AO cannot be sustained, as the same is beyond the scope and ambit of the show cause notice. It is required to be noted that by said SCN, the petitioner was called upon to show cause why “Maggi Noodles” shall not be treated as “Farsan and Eatables” (except sold in sealed container under a brand) falling under Entry 22 and liable to be taxed at 4%. However, by impugned order, the adjudicating authority has passed the order holding that product “Maggi Noodles” would fall within Entry 87 (Residuary Entry) and liable to be taxed at 12.5% plus additional duty. Under the circumstances, the impugned order cannot be sustained - In a given case, the State/revenue may be right. However, the same is required to be get settled subsequently by appropriate higher forum. However, at the same time, the adjudicating authority/ Assessing Officer cannot be permitted to ignore and/or cannot be permitted to pass a contrary order than order passed by the higher forum, unless there are change circumstances found in the subsequent assessment years - There cannot be any dispute that generally, the principle of res judicata would not be applicable to Tax Laws as every year is a separate unit. However, it is required to be noted that the same would not be applicable in a case where the issue with respect to classification and/or Entry is interpreted by higher forum and the same had attained finality, inasmuch as the same is not challenged and the decision of the higher forum has been followed consistently for number of years, unless there are change circumstances in the subsequent assessment years – Assessee appeal allowed on technical grounds
2015-VIL-352-CESTAT-CHE-CE
M/s JANSONS CLOTHING & CCE, SALEM Vs CCE, SALEM & M/s JANSONS CLOTHING
Central Excise – Fulfilment of export condition as stipulated in the Notification No. 43/2001 dated 26.6.2001 – whether notification has to be interpreted to mean that export has to be made by the appellant only or the goods are to be exported – HELD - The spirit of the notification being to export the goods manufactured using duty free raw material irrespective of the person who exported the same there should not be controversy to bring the appellant to the jaws of the levy. Added to this, the appellant was granted permission for clearing the duty free raw material for use in export of the finished goods supported by proof of export, appellant succeeds. Appeal is allowed accordingly
2015-VIL-353-CESTAT-CHE-ST
M/s ACCEL FRONTLINE LIMITED Vs CCE, CHENNAI-II
Service Tax – Application of Section 80 – Short payment of tax – Adhoc payment of tax in the absence of non-reconciliation of the figures – Wilful default - HELD - Deficiency in deposit of tax is not deliberate but because of non-reconciliation of the figures duly, awaiting the statement from different branches - Revenue is not put to loss for the reason adhoc payments are made to protect interest of Revenue. Soon after reconciliation of the branch figures, adhoc figure is adjusted against the actual liability and deficiency if any is paid immediately. Even such payment is followed by interest which the assessee has made - The reasoning given by the appellant as to the Revenue protection mechanism followed appears to be reasonable to appreciate no deliberate intention of the appellant to be defaulter - In view of above difficulties expressed, the case attracts section 80 of Finance Act, 1994 for which the penalty levied is waived and appeal is allowed
delBill8of2015
The Delhi Value Added Tax (2nd Amendment) Bill, 2015 - Amendment of section 4, 8, 10, 22, 38, 51, 86, 89 & Fourth Schedule
mahaCir11T
Maharashtra: Clarification regarding levy of VAT on transfer of right to use goods of intangible nature - Reference to Bombay High Court judgment in the case of Tata Sons Ltd
mahaCir10T
Maharashtra: Grant of online registration under the MVAT Act, 2002 and CST Act, 1956 - Corrigendum to Trade Circular No.7T of 2015
bihNoti3605
Bihar: Exemption from requirement of carrying declarations as prescribed under Rule 41 of the Bihar VAT Rules, 2005, if the Value of goods transported is Rs. Two lakhs or less
15th of July
2015-VIL-281-UTR
M/s PERNOD RICARD INDIA (PVT) LIMITED Vs STATE OF UTTARAKHAND AND OTHERS
Uttarakhand Value Added Tax Act – Dispute regarding date of effect of change in rate of tax notification – Validity of Multiple notifications – Power of Assessing Officers and Appellate Authorities to decide the question of legality of the rate of Commercial Tax and date of the enforcement of the tax - Articles 154 and 166 of the Constitution of India – IMFL - Doctrine of Promissory Estoppel and Reasonable Expectation - HELD - Assessing Officers and Statutory Appellate Authorities have to assess the tax as per the rates fixed by the State Government, however, none of them have any jurisdiction to look into the question of legality of the rate of Commercial Tax and date of the enforcement of the tax - While construing different Government Orders rule of interpretation should be applied in such a fashion which may result in the harmonious interpretation of the Government Orders - Vide Government Orders dated 31.03.2014 and 01.04.2014, Government decided to charge the tax @ from 20% to 15% w.e.f. 01.04.2014 and by the impugned Government notification dated 23.06.2014 once again, it was reduced @ from 20% to 15%, the intention of the Government is clear that for the assessment year, rate of tax should be charged @ 15% instead of 20%. Now, the only question of interpretation remains is as to whether reduced rate of tax @ 15% should be charged w.e.f. 01.04.2014 or w.e.f. 23.06.2014 - The moment Government vide Notifications/ Government Orders dated 31.03.2014 and 01.04.2014 has decided to charge/calculate commercial Tax @ 15% on different brands of IMFL w.e.f 01.04.2014, now Government is estopped to allege that since, Department of Finance has not reduced the Commercial Tax @ 15% w.e.f. 01.04.2014 and has reduced it w.e.f. 23.06.2014, therefore, petitioner should pay Commercial Tax @ 20% from 01.04.2014 to 22.06.2014 - Applying the principle of promissory estoppel and doctrine of reasonable expectation, the harmonious interpretation of both the Government Orders, would be that reduced rate of 15% would be applicable w.e.f. 01.04.2014. If Government is allowed to charge Commercial Tax @ 20% w.e.f. 01.04.2014 to 23.06.2014, it would amount to arbitrary exercise and unjustified action on the part of the Government which would be hit by Article 14 of the Constitution of India - It is held that rate of tax on the IMFL w.e.f. 01.04.2014 would at the rate of 15% till it is modified by the future Government notification/order - Writ petition succeeds and is allowed. Impugned provisional assessment order and impugned recovery citation are hereby quashed
2015-VIL-280-MAD
VISTA SECURITY TECHNICS PVT LTD & SIEMENS BUILDINGS TECHNOLOGIES PVT LTD Vs THE STATE OF PUDUCHERRY
Central Sales Tax Act - C/F/I Forms - Rule 12(7) of the Central Sales Tax Rules - Denial of time to produce the statutory declaration forms – Sufficient cause or delay - HELD - There is ample power for the authority to grant extension of time. In the instant case, there is justification for invocation of the powers under the proviso to Rule 12(7). The petitioners' explanation that it needed time to obtain the statutory declaration forms from the former company consequent to merger is a just reason in the facts of the case - Since the company got merged with Siemens, they could not trace all the records and could not obtain the relevant C forms from the former company. We hold that the petitioners have shown sufficient cause before the Appellate Authority empowered to receive the declarations - the approach of the Department should be to ensure that what the assessee is rightfully entitled to should be extended to the assessee without harping on technicalities - The Assessing Officer is directed to proceed with the assessment after receiving the necessary statutory declarations and complete the assessment on merits – Matter remanded - Assessee revision allowed
2015-VIL-357-CESTAT-MUM-CE [Downlod link]
MAHINDRA UGINE STEEL CO. LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD
Central Excise – Cenvat Credit – Duty paying document - Rule 11 of CER, 2002 – Eligibility to CENVAT credit on the basis of invoices received first stage registered dealer - Rule 7 of CCR, 2002 – Ineligible CENVAT credit – Procurement of scrap - Bogus purchase - Imposition of penalty – HELD - Goods covered by the invoices firs dealer have never moved to the main appellant’s factory and some other goods have moved. The appellant cannot take the credit of the duty paid shown in such invoices. It is also strange that how the main appellant has accepted the invoice of SSMIPL with whom they did not have direct dealing in these cases - In spite of non-applicability of Rule 26(2), penalty could be levied as the appellant was concerned in selling or dealing with the goods which were liable to confiscation inasmuch as the appellant claimed to have sold the goods in respect of which the cenvat credit was taken. In such a case, Rule 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged - All the appeals are dismissed except the lower of the quantum of penalty on appellant no.2 - Mainly in favour of Revenue
2015-VIL-355-CESTAT-DEL-CE
M/s SHALIMAR ISPAT Vs C.C.E. RAIPUR
Central Excise - Hot Rerolling Mills Annual Capacity Determination Rules, 1997 - Determination of annual capacity of production – Declaration for change in Dia rolls - HELD - In the present case the declaration about parameters in terms of Rule 3(1) had been made on 18.8.1997. The nominal centre distance had already been changed from 210 MM to 185 MM in April 1997 i.e. prior to coming into force of the Capacity Determination Rules, 1997 and as such, this is not a case of change of parameters in terms of Rule 4(2). Since Rule 5 had been introduced w.e.f. 1.9.1997 by notification no., 45/97-CE (NT) dated 30.08.1997, this cannot be given retrospective effect when the notification itself makes it effective w.e.f. 1.9.1997. Therefore, Rule 5 would not be applicable to the cases where the declaration under Rule 3(1) declaring the parameters for determination of annual capacity of production had been made to the Commissioner during period prior to 1.9.1997. An assessee who had made this declaration during period prior to 1.9.1997 would be entitled for determination of his annual capacity of production on the basis of the Capacity determination Rules as the same existed during that period. Since there is no dispute that in the present case the declaration under Rule 3(1) had been made on 18.8.1997, Rule 5 would not be applicable and as such the Apex Court’s Judgment also in the case of Doaba Steel Rolling Mills would not be applicable. In view of this, the impugned order is not sustainable - The same is set aside and assessee appeal is allowed
2015-VIL-64-SC-ST-LB
COMMISSIONER
OF CENTRAL EXCISE, GOA Vs NEW ERA HANDLING AGENCY
Service
Tax - Packaging services – Demand - Assessee provides packaging service to
fertilizer manufactured by other company – Apex court dismissed Revenue appeal
on merit
2015-VIL-279-KER-ST
M/s GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD Vs COMMISSIONER OF CEC&ST, KOCHI
Service Tax – Export of service - Refund of tax paid mistakenly – Refund claim after one year – Rejection of claim citing Section 11B(1) of the CEA, 1944 and barred by limitation – Alternative remedy - HELD - The petitioner assumed that the transaction for which he has paid tax, is covered under the law. However, the law does not cover such transaction for payment of service tax. Therefore, refund is not on account of any mistake of law but mistake of fact the service tax was paid. In that view of the matter it has no colour of tax for the purpose of levy by the Department. The distinguishing feature for attracting the provisions under Section 11B is that the levy should have the colour of validity when it was paid and only consequent upon interpretation of law or adjudication, the levy is liable to be ordered as refund. When payment was effected, if it has no colour of legality, Section 11B is not attracted. This Court is also of the view that levy is not in accordance with the provisions of the service tax and therefore, such payment cannot be taken as a payment made relatable to Section 11B of the Central Excise Act - There is no dispute with regard to the fact that no Service tax is leviable for the service extended by the petitioner. Thus, the writ petition is maintainable when the amount is arbitrarily withheld without any justification under law as the refund claimed by the petitioner is not relatable to Section 11B of the Central Excise Act – Assessee petition allowed
2015-VIL-354-CESTAT-MUM-ST
COMMISSIONER OF SERVICE TAX, MUMBAI Vs NIKHIL COMFORTS
Service Tax – Showcause notice for availing dual benefit of Notification 1/2006-ST and Notification 12/03-ST – "abatement" and "exemption" – HELD - The grounds of appeal which has been taken by the Revenue before us indicates only an unsupported plea that the appellant had availed benefit of Notification 1/2006-ST and benefit of Notification 12/03-ST. There is no supporting evidence to indicate that the respondent had availed benefit of Notification 12/03-ST - The respondent has followed the condition laid down by Notification 1/2006-ST inasmuch as there is no allegation in the show-cause notice that they had availed Cenvat credit on inputs or capital goods or input services. There is nothing on record to indicate that the respondent had claimed or issued invoices for the actual material supplied for the services rendered by them; in this case, installation and commissioning service. In the absence of any evidence that the respondent had claimed dual benefit of Notification 1/2006-ST and Notification 12/03-ST, the Revenue’s appeal fails
Guest Article
Taxability of software under prevailing Indirect Tax Laws and proposed GST
chhgNoti53
Chhattisgarh: Exemption to Steel bars (excluding coil form)
jkNotiSRO221
Jammu & Kashmir: Establishment of check-post
Jammu & Kashmir: Jurisdiction of Assessing Authorities
FCP1407
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
16th of July
2015-VIL-283-P&H
M/s AB SUGARS LTD Vs STATE OF PUNJAB AND ANOTHER
Punjab General Sales Tax Act, 1948 – Liability to pay purchase tax on the purchase of sugarcane under the provisions of the PGST Act, 1948 when purchase tax is levied under the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953 – Petitioner contention that on a harmonious construction of the two Acts, the State can levy purchase tax on purchase of sugarcane only under the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953 – Different views in Apex court judgement in M/s Jagatjit Sugar Mills Co. Ltd. v. State of Punjab and Gobind Sugar Mills Ltd. v. State of Bihar- HELD – We will assume that the observations of the Supreme Court in Gobind Sugar Mills Ltd. v. State of Bihar are of assistance to the appellant. It may have been possible for the appellant to rely upon this judgment to draw an analogy with the provisions of the enactments that fall for our consideration. However, the judgment in M/s Jagatjit Sugar Mills Co. Ltd. v. State of Punjab is directly on point. It dealt with the provisions of the very enactments that fall for our consideration - Once the Supreme Court decides the principle it would be the duty of the High Court to follow the decision - We, therefore, cannot take a view different from the one taken by the Supreme Court in M/s Jagatjit Sugar Mills Co. Ltd. v. State of Punjab on the ground that the Supreme Court did not consider the provisions of the Punjab Sugarcane (Regulation of Purchase and Supply) Act, 1953 - consolidated fund of India - The legislature has imposed the tax. The amounts collected may well be available to the legislature to be spent for the purposes mentioned therein and in the statement of objects and reasons. These are aspects which can be gone into only by the Supreme Court and not by this Court for accepting these submissions would in effect result in this Court holding that the judgment of the Supreme Court in Jagatjit Sugar Mill’s case is not good law – Assessee appeal dismissed
2015-VIL-282-KAR
M/s AMMA CONSTRUCTION INDIA PVT LTD Vs THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES
Karnataka Value Added Tax Act – Section 39 - Reassessment - Validity of reassessment in the absence of material evidence - HELD - The only condition for making further reassessment in addition to earlier assessment is when the authority takes notice of further evidence. But in the instant case, there was no further evidence which came to the notice of the assessing authority - The evidence regarding deduction on the basis of TDS certificate being already before the assessing authority which made reassessment as per and granted an order of refund of excess tax paid could not have later on interfered with the second reassessment order - The assessing authority could not go into the question as to whether TDS certificate could have been issued in the name of petitioner or not, after the completion of assessment proceedings - The assessing authority thus did not have any jurisdiction to do so and therefore subsequent assessment orders and demand notices are quashed - However, if the department is of the view that the assessment made at calls for any further interference, then liberty is reserved to them to take such action in accordance with law – Assessee petition partly allowed
2015-VIL-363-CESTAT-KOL-CE
M/s THE HOOGHLY INFRASTRUCTURE PVT LTD & 33 others Vs COMMISSIONER OF CENTRAL EXCISE, KOLKATA
Central Excise – Brand Name - Manufacture of various jute products - SSI Exemption - Goods bearing brand name or trade name - Affixing of buyer’s name and logo on jute bags – Denial of exemption on the ground that printings on the jute bags satisfy the meaning of ‘brand name’, prescribed at chapter note (iv) of chapter 63 of CETA, 1985 - Appellant’s contention printing/writing on the jute bags have been carried out pursuant to the direction issued by the jute commissioner, being a requirement of the relevant law, as such the jute bags cannot make the jute bags as branded one and there is no connection in the course of trade of jute bags and the buyer whose particulars are printed on the jute bags - Whether the appellants are eligible to the benefit of Notification No.30/2004-CE dated 09.7.2004 as amended by Notification No.12/2011-CE dated 01.3.2011 and Notification No.30/2011-CE dated 24.3.2011 – HELD – As per the Apex Court judgement in Kohinoor Elastics Pvt Ltd vs CCE case on affixing the brand name/trade name of another person, an assessee would be ineligible to avail the benefit of the exemption notification - It is not necessary to examine the reason/cause for affixing the brand-name of another person. It is also clearly laid down that trade does not indicate a trade in its general sense that the goods be brought to the market for sale, but the dealing / trade between the assesse-manufacturer and its customers would meet the requirement. Also, it has been clearly laid down that the goods manufactured need not be sold to the customers, but even if it is used captively by the person whose brand name has been used, the manufacturer would not be eligible to the benefit of the said notification – The appellants have affixed the names, logos and other particulars of another person i.e. FCI etc. to whom the bags are sold/cleared. Therefore, on affixing the particulars which have also been considered as branding by the jute commissioner, since branding charges are also included in the price of the jute bags, hence, it cannot be denied that the jute bags bear the brand name of another person and accordingly not eligible to the benefit of Notification No.12/2011-CE dated 1.3.2011 and 30/11-CE dated 24.3.2011 – Imposition of Penalty - Since the present issue relates to interpretation of the concept of brand name and the brand name has been printed/affixed pursuant to the direction of jute commissioner; besides all facts were within the knowledge of the department, imposition of penalty is set aside and also confirmation of the demands, wherever extended period of limitation has been invoked. In such cases, the duty however, should be computed for the normal period of limitation – In favour of Revenue on merit
2015-VIL-358-CESTAT-AHM-CE
M/s GUJARAT PLYBOND Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX - DAMAN
Central Excise – Cenvat Credit – Eligibility of CENVAT credit with respect to ‘Lead Ingots’ used internal lining or coating of certain reaction vessels – Capital goods – HELD - It is observed lead ingots directly cannot be either capital goods or used as components or spares of the reaction vessels. However, the word accessories are understood to mean anything, which improves the effectiveness of the main article in association of which the accessories are used. In the present proceedings lead ingots are used for internal lining of chemical reaction vessels so that the walls of reaction vessels do not get corroded – According to the settled proposition of law, CENVAT credit with respect to lead ingots used for protective coating/lining of the chemical reaction vessels will be eligible for CENVAT credit – Assessee appeal is allowed
2015-VIL-360-CESTAT-DEL-ST
MR CHARANJEET SINGH KHANUJA Vs CST, INDORE/LUCKNOW/JAIPUR/LUDHIANA
Service Tax – Tax liability services of on direct sales – promotion or marketing or sale of the goods – HELD - The assessees in these cases are distributors, who purchase the goods from Amway at the Distributors Acquisition Price (DAP)) and sell the same in retail at price not exceeding MRP fixed by the Amway. This activity of the Distributors, cannot be treated as promotion, marketing or sale of the goods produced or provided by or belonging to the client (Amway), as the sale of the goods purchased by the Distributors from Amway is not the sale of the goods belonging to their client Amway - Second Level Distributors liable to Service Tax - The activity of a Distributor of identifying other persons, who can be roped in for sale of the Amway products/marketing of the Amway products and who on being sponsored by that Distributor are appointed by Amway as second level of distributors is the activity of marketing or sale of the goods belonging to Amway and the commission received by the Distributor from Amway, which is linked to the performance of his sales group would have to be treated as consideration for Business Auxiliary Service of sales promotion provided to Amway. Therefore, service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group - The impugned orders passed by the Commissioner (Appeals) are set aside and the matters are remanded to the Original Adjudicating Authority for de novo adjudication - Appeal disposed of – Mostly in favour of assessee
2015-VIL-359-CESTAT-AHM-ST
M/s INDIAN OIL CORPORATION LTD Vs COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX-VADODARA-I
Service Tax – Input Service - Admissibility of CENVAT credit of service tax paid on man power supply for Para medical staff availed in the factory premises – HELD - Cenvat Credit with respect to medical facilities provided statutorily under the Factories Act 1948 will be admissible – Once the facility is required to be provided statutorily, it cannot be said that the same is not be in relation to manufacture - Ratio of Karnataka High Court judgment in the case of CCE vs Millipore India Pvt Ltd followed – Assessee appeal allowed
Tamil Nadu Value Added Tax Act, 2006 [Updated] - Download link
Arunachal Prdesh Goods Tax Schedule [Updated] - Download link
harNoti18
Haryana: Increase in rate of tax on Diesel
utrNoti604
Uttarakhand: The Uttarakhand Tax on Entry Of Goods Into Local Areas Act, 2008 - Levy of tax on Sugar brought from other States
wbCir13
West Bengal: Updating of Email-IDs and Mobile Numbers
17th July
2015-VIL-284-KER
M/s EAST COAST CONSTRUCTIONS AND INDUSTRIES LTD Vs COMMERCIAL TAX OFFICER
Central Sales Tax Act, 1956 - Section 6(2) - In-transit sale – C Form – Sale by way of transfer of documents - Exemption under Section 6(2) of the CST Act 1956 - Contract executed for Kerala State Electricity Board - Petitioner made sale in-transit to Board and sought for C Form from KSEB – Denial to issue ‘C' Form by the Board on the ground that the petitioner has not produced any proof of payment of tax under the CST Act – HELD – The first sale alone will be taxable and the tax on subsequent sale will be exempted if dealers are registered. Board cannot insist on proof of tax paid by the first seller but can only demand Form E-2 from the petitioner. Since Board has already admitted supply of materials by the petitioner, they are bound to issue ‘C’ Forms. Board is directed to issue ‘C’ Forms to the petitioner as and when petitioner produces E-2 certificate – Assessee petition allowed
2015-VIL-364-CESTAT-MUM-ST
LARSEN AND TOUBRO LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax – Majority Order - Erection, installation and commissioning service – Vivisection of Works Contract prior to 01/06/2007 – Issue stands covered in favour of the Revenue by the majority decision in L&T Ltd Vs Commissioner of Service Tax, Delhi 2015-VIL-147-CESTAT-DEL-ST-LB as works contract can be vivisected even prior to 1.6.2007 and the service portion discernible in the contract can be subjected to levy of service tax – Issue of limitation of time bar – HELD - In this case, in 2003, when the new service 'installation and commissioning' was introduced, the appellant themselves were vivisecting the lump sum turnkey contracts and were to collect service tax under the category of consulting engineering service. There was no reason whatsoever not to charge, collect and pay the service tax in similar manner in respect of installation and commissioning service when separate consideration for that service was already available in each of these contracts, and installation and commissioning was the dominant service in these contracts - This is a clear cut case of wilful statement as also suppression of facts. Submissions of some letters/contracts in the facts of this case will not make any difference - In the result, agreed with Member (Technical) that extended period of limitation is invokable in the facts and circumstances of the case. The fact that information was available in appellant's records as observed by member (Judicial) is of no consequence - The demand is not time barred under the facts and circumstances except in relation to works contract with CPCL – Assessee appeal partly allowed
2015-VIL-362-CESTAT-DEL-ST
M/s TRIVENI ENGINEERING AND INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE & ST, MEERUT
Service Tax – Admissibility of Cenvat Credit of Service Tax paid on transit insurance payment in respect of insurance of goods during transit from the factory to customer’s premises – Sale of Sugar on FOR destination basis - Place of removal – HELD - In this case, insurance expenses have been paid by the appellant for transportation of the goods upto the place of buyer and same has been reimbursed by the buyer of the goods. Merely because the appellant stand reimbursed part of the expenses does not mean that appellant would become disentitled for the service tax actually paid by them - Appellant is entitled to take cenvat credit of insurance premium charges paid by them when there is no dispute that the goods were delivered at the customers place – Assessee appeal is allowed with consequential relief
2015-VIL-365-CESTAT-BLR-CE
M/s HINDUSTAN ZINC LTD Vs COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM-I
Central Excise - Reversal of Cenvat Credit - Closure and dismantle of Lead plant – Recovery of lead concentrate at the time of dismantling of the plant - No evidence that inputs have been written off as obsolete or unfit for utilization in the books of accounts – HELD – Rule 14 is not applicable since when the credit was taken on Zinc concentrate it was taken correctly and, it cannot be said that the credit was wrongly used since there is no such allegation - Reversal of credit not required - It cannot be said that the assessee had intention to evade duty or avoid payment of tax and there is no clandestine removal. The appellant's claim is that the lead concentrate was received prior to 1994 - Since the duty liability is not contested and even if it is not paid, the assessee has accepted the liability, the penalty can be waived - The Order of Commissioner (A) holding that provisions of Rule 3 relating to reversal do not apply to the factual situation in question does not suffer from any infirmity - Revenue appeal has no merits hence is rejected – Assessee appeal partly allowed
2015-VIL-361-CESTAT-DEL-CE
CCE, LUDHIANA Vs M/s ABHISHEK INDUSTRIES LIMITED
Central Excise - cenvat credit of Additional Duties of Excise (textile and textile articles) - Whether credit availed and utilised during the period when final product was dutiable is to be reversed when subsequently final product is cleared at ‘zero’ rate of duty and also whether such reversal on account of Basic Excise duty and Edu. Cess can be made by utilizing the credit of AED(TTA) – HELD - Reversal of cenvat on the inputs contained in the goods cleared at ‘zero’ rate of duty is not required - When the assessee was not required to reverse the cenvat credit on packing material at the time their final product became exempt, the question of utilized additional duty of excise (T&T) for payment of duty does not arise – Revenue appeal dismissed
hpDraftNoti23
Himachal Pradesh: Draft amendment in HPVAT Schedule 'D' - Motor-spirit (Petrol including Aviation Turbine Fuel and Diesel)
18th of July
punNotiSO30
Punjab: Amendment in PVAT Schedules E - Regarding change in rate of tax on Diesel other than premium diesel
chandNoti1914
Chandigarh: Amendment in Schedules E - Regarding change in rate of tax on Diesel
CENTRAL EXCISE NOTIFICATIONS
ceNoti34: Seeks to further amend Notification No.30/2004-Central Excise dated 09/07/2004
ceNoti35: Seeks to further amend Notification No.1/2011-Central Excise dated 01/03/2011
ceNOti36: Seeks to further amend Notification No.12/2012-Central Excise dated 17/03/2012
Guest Article
Clause by clause analysis of Delhi Value Added Tax (2nd Amendment) Bill, 2015
2015-VIL-366-CESTAT-AHM-CE
M/s CEMA ELECTRIC LIGHTING PRODUCTS INDIA P LTD Vs COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-III
Central Excise – Input Service - Trading Activity - Rule 14 of CCR, 2004 – Denial of credit attributable to Trading related Activity – Services used in Trading activities carried out at branches - HELD – Trading activities have been treated as exempted service w.e.f. 1-4-2011, whereas the present dispute is for the period prior to 01-04-2011. The relevant portion of Rule 6(5) it covers total 17 taxable service where credit shall be allowed in full unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. Revenue has disallowed cenvat credit holding it to be attributable to Appellant’s ‘Trading Activity’. However, from the records it is not forthcoming as to which are these services on which the appellant has taken cenvat credit and also whether the services at trading branches availed is covered under the above mentioned 17 services mentioned under Rule 6(5) of CCR 2004. Although, Appellant claims that they are entitled to 100% credit in respect of services covered under Rule 6(5) of the CCR, 2004, but they have also not come out with clarity on the actual services availed by them. Therefore, this factual aspect needs proper verification of the records of the appellant by the original adjudicating authority. The original adjudicating authority is directed to verify and examine whether such Cenvat Credit is covered under Rule 6(5) for the above 17 services and that these services are not used exclusively in or in relation to the manufacture of exempted goods or providing exempted services – The impugned Order demanding duty with equal penalty deserves to be modified. Accordingly, the duty demand is set aside and for the demand of total Cenvat Credit the matter is remanded to the Adjudicating Authority for fresh consideration – Appeal allowed by remand
2015-VIL-286-DEL-CE
COMMISSIONER OF CENTRAL EXCISE, DELHI Vs BREW FORCE MACHINE PVT LTD
Tribunal – Third proviso to Section 35C(2A) of the Central Excise Act, 1944 - Stay beyond 365 days – Similar provisions in Income Tax - HELD – Court holding that even in terms of third proviso to section 35C(2A) of CEA, 1944, the Tribunal is not be denuded of the power to extend the stay beyond 365 days in deserving cases – Contrary to judgment of the coordinate Division Bench in Haldiram India Pvt. Ltd. that Tribunal is bound by the provision and that the power to extend such interim orders is dependent on the exercise of discretion by the High Court under Article 226 of the Constitution – Matter referred to larger Bench the question of correctness of the decision dated 05.05.2015 2015-VIL-285-DEL-CE in Haldiram India Pvt. Ltd
20th of July
2015-VIL-287-CAL
M/s KEJRIWAL PIPES FITTINGS AND VALVES & ANR. Vs SALES TAX OFFICER
Central Sales Tax Act – C Form – Contemplated sale - Whether the petitioners' claims against the 'C' Forms could be allowed where all the 'C' Forms were received by the issuing dealers before the date of transaction of sale – HELD - Only after completion of sale by a dealer in favour of another dealer seller's obligation to sales tax at four per cent is fixed and only after conclusion of sale, the rights and obligations inter se the parties accrues. Right to charge concessional rate of sales tax coupled with obligation to furnish the declaration forms accrues only upon the sale and not in contemplation of sale. It cannot be comprehended that a 'C' Form can be issued in advance in contemplation of a sale which would occur in future. One is obliged to issue a 'C' Form upon conclusion of sale, provided the person applying for such 'C' Form has discharged his obligation as specifically mentioned in Rule 89 of the West Bengal Sales Tax Rules, 1995 - The writ petition is accordingly dismissed
2015-VIL-367-CESTAT-DEL-ST
STANDARD AUTO AGENCIES Vs C.C.E. & S.T. BHOPAL
Service Tax – Cenvat Credit – Registration of business premises – Setting-up of business – Denial of credit on the ground that the invoices were addressed to the appellants temporary administration office during the process of setting up of business – HELD - On a pragmatic approach, it has to be considered that the appellant needs time to set up business/business premises. Only then can the appellant apply for service tax registration. The appellant cannot be found fault with or denied the benefit otherwise available to the appellant, for the reason that, in the process of setting up of business the appellant used the available office address - Only because the invoices were issued to the temporary administration office used by the appellant during the process of setting up of business, it cannot be said that the appellant did not establish that the capital goods and input services were not used - The Rules which lay down the details that has to be stated in the invoice are to ensure that the benefit of Cenvat Credit is not misused. The appellants have got their premises registered with service tax and the dispute was only during the limited time when the appellant was in the process of setting up the business - The appellants are entitled to the benefit of Cenvat Credit - The impugned order is set aside and appeal is allowed
2015-VIL-369-CESTAT-DEL-ST
M/s HCL TECHNOLOGIES LTD Vs C.C.E. NOIDA
Service Tax – Information Technology Service, Maintenance & Repair Service, Technical testing & Analysis Service and Business Support Service - Input service - Admissibility of credit on various input services – HELD – Cenvat credit/refund allowed for car-parking services, Room Service Charges for auditing, Dry Cleaning Charges, Renting of equipments/event management, Advertisement and Sponsorship Service, Maintenance of Garden and Rent-a-Cab services respectively – Credit disallowed for VAT registration services, out of pocket expenses, Fee for Visa and immigration pertaining to family members and charges for accommodation – Assessee appeal partly allowed
2015-VIL-370-CESTAT-DEL-CE
M/s MAKSON NUTRITION FOOD INDIA PVT LTD Vs CCE, BHOPAL
Central Excise – Section 11B & section 4 - Refund of differential duty - Appellant is contract manufacturer for Hindustan Lever Ltd - Excise duty paid by the appellant on manufacture of products reimbursed by HLL - Differential duty in dispute paid by the appellant by obtaining an unsecured loan from HLL and the appellant is bound to return the same to HLL on receiving the refund – Denial of refund on ground of bar of unjust enrichment - HELD - The goods manufactured by the appellant was sold to HLL in terms of the agreement entered into between them. HLL in turn sells the products to redistributors/stockist - It is for the appellant to establish with documents that the incidence of duty has not been passed on to any other person - We are not able to reach a conclusion whether the claim for refund is hit by the bar of unjust enrichment for the reason that the issue whether the higher duty was absorbed by HLL has not been considered and examined by the authorities below and for this purpose, the matter has to be remanded to the original adjudicating authority. However, if in the invoices raised by the Appellant to HLL, the higher duty paid on the value determined under section 4A had been mentioned and the Appellant had received only the lower amount of duty paid on the value determined under section 4, and the difference between the duty payable under section 4 and the higher duty payable under section 4A had been received by the Appellant from HLL in the form of a loan which had been utilized by the appellant to pay the higher duty to the Department, and which in terms of legally enforceable Agreement of the appellant with HLL was to be returned to HLL as soon as the Appellant gets refund of the excise duty; the refund would not be hit by the bar of unjust enrichment - The impugned order is set aside and matter remanded to determine the issue of unjust enrichment – Assessee appeal allowed by remand
2015-VIL-368-CESTAT-MUM-CE
PADMAVATI PULP & PAPER MILLS Vs COMMISSIONER OF CENTRAL EXCISE, THANE-I
Central Excise – Appellant manufacture of craft paper – Clearance of goods under serial No. 93 of Notification No. 4/2006-CE dated 01/03/2006 on payment of duty - Case of the Revenue is that the goods are covered by serial No. 90 and, therefore, appellant cannot pay duty on the initial clearance of 3500 MT of craft paper – Interest and penalty – HELD - In the present case, serial No.90 has two conditions. The first condition limits exemption for goods cleared for home consumption from a factory in any financial year upto first clearances of an aggregate quantity not exceeding 3500 MT. Further, there is another condition about non-availment of Notification 8/2003. In our view, in view of the above mentioned two conditions, it cannot be said that serial No.90 provides absolute exemption to paper and paper board or articles made therefrom manufactured, starting from the stage of pulp, in a factory, and such pulp contains not less than 75% by weight of pulp made from materials other than bamboo, hard woods, soft woods, reeds - Assessee cannot be forced to pay duty as per serial No.90 of Notification 4/2006 and they have option to pay the duty under other numbers, viz. 91 and 93 - Recovery of interest or imposition of penalty set aside – Assessee appeal allowed
Guest Article
Gearing-up for GST - 2017? - By CA. Madhukar N. Hiregange
apCir6110715
Andhra Pradesh: Check Posts – Detection of goods at Check Posts – Streamlining of procedure and further action
assamCir08
Assam: Use of information from AGMARKNET to calculate approximate/ accruable tax liability in the case of agricultural products
21st of July
2015-VIL-289-KAR
M/s CLEAN FOODS LIMITED Vs THE COMMERCIAL TAX OFFICER, SALES TAX CHECKPOST
Karnataka Value Added Tax Act - Section 64 (1) – Sou Motu Revisional powers of Additional Commissioner and Commissioner - Whether the Addl. Commissioner of Commercial Taxes, Bangalore, justified in invoking the provisions of Section 64 (1) of KVAT Act and set aside the order passed by Joint Commissioner of Commercial Taxes (Appeals), Belgaum – HELD - The documents which were available at the check post as also before the Addl. Commissioner who conducted the suo moto proceedings would clearly indicate that the appellant sought to transport goods from Belgaum to Mumbai - In the light of the documents produced by the appellant himself clearly indicate the names of the consignor and consignee are two Indian companies - Perusal of the documents leads to inference that the transaction is within the country. Therefore, the argument on behalf of the appellant that the goods were being exported directly by the consignor cannot be countenanced - Exercising the suo moto review powers, the Additional Commissioner has rightly recorded the finding of Appellate Authority and restored the penalty imposed in original proceedings – Appeal dismissed
2015-VIL-291-AP
THE STATE OF ANDHRA PRADESH Vs M/s POLYGONE REFRACTORIES LTD
APGST Act – Classification of refractory bricks - Whether the fire bricks fall under entry 32 of 1st Schedule to the Act or are unclassified items – HELD - The fire bricks are nothing but bricks in shape, nature and use and as understood in common parlance in business and commercial circles and thus fall in line with type of commodities mentioned in Entry 32 of the 1st Schedule. Merely because they are made fire resistant, they do not cease to be bricks within Entry 32 of the 1st Schedule to the APGST Act and are to be taxed at the rate specified these under and they cannot be treated as unclassified goods - In the absence of a classification of the entry the generic meaning of the term in common parlance and dictionaries has to be accepted - The impugned order is liable to be set aside - Revenue appeal dismissed
2015-VIL-288-DEL-ST-LB
COMMISSIONER OF SERVICE TAX Vs JAPAN AIRLINES INTERNATIONAL CO. LTD.
Delhi High Court: Larger Bench Order - Whether the Tribunal can examine and go into the question of application of mind on merits by the Committee of Chief Commissioners or Commissioners and whether the decision of the Committee of the Chief Commissioners or Commissioners should be treated as null and void if they have appended signatures to the elaborated notes and objections prepared by the subordinate officers, before the file is put to the Chief Commissioners or Commissioners for examination – Jurisdiction of the Tribunal to reject Revenue appeal on the ground of maintainability - HELD - The duty discharged by the Committee of Commissioners is purely administrative and, cannot be, categorized as a quasi-judicial function, therefore, not require the members of the Committee to meet, consult and give independent reasons – a meeting and / or consultation is not mandatory so long as each member of the Committee has the requisite material placed before him prior to a decision being taken as to whether or not an appeal is to be preferred - As long as there is material on record, and an indication, as in this case, in the form of signatures of the two Commissioners, as to their decision in the matter, a physical meeting and / or consultation is not the requirement of Section 86(2) of the Finance Act - Having regard to the nature of the administrative functions discharged by the Committee of Commissioners, there is no requirement whatsoever under the provisions of Section 86(2) of the Finance Act to give independent reasons for coming to conclusion, which is, in consonance, with a view already on record that an appeal should be filed - The Tribunal has no jurisdiction whatsoever to strike down a decision taken by the Committee of Commissioners on the administrative side. The only aspect that the Tribunal can examine is, as to whether or not there is on record a decision of the Committee of Commissioners to institute an appeal. Once, such a decision is shown to have been taken then, the Tribunal, will entertain the appeal and adjudicate upon the same on merits – In favour of Revenue
2015-VIL-372-CESTAT-AHM-ST
COMMISSIONER OF SERVICE TAX, AHMEDABAD Vs M/s VIRAL MAKERS LTD
Service Tax - Clearing and Forwarding Agent – Agreement for maintaining the sales depot – Demand under C&F Agent service – HELD – The agreement entered between Company and Assessee it is not a Commission Agent agreement. In other words, it is a Depot Agreement - It is clearly evident that the activities of the Assessee would be termed as Sales Depot of the Company. The Company appointed the Assessee as a Depot Manager to be in-charge of the depot and not as a Commission Agent or Consignment Agent. Upon reading of clauses it is clear that the Company entrusted the Assessee as a Depot Manager for clearing and handling of the goods, in their depot upto the sale of the goods in the market. The definition of ‘Clearing and Forwarding Agent’ covers any service either directly or indirectly connected with clearing and forwarding operation in any manner. The expression ‘in any manner’ has wide amplitude. The definition of Commission Agent would apply predominantly on ‘sale or purchase of the goods.’ In the present case, we find that the appointment of the Assessee is not as a Commission Agent, but for Depot Manager, and therefore, it would cover under the definition of ‘Clearing and Forwarding Agent’ – The revenue appeal is allowed
2015-VIL-290-BOM-CE
SHRI DHARAMPAL LALCHAND CHUG Vs COMMISSIONER OF CENTRAL EXCISE, NASHIK
Bombay High Court: Central Excise - Section 11A of CEA, 1944 – Breach of conditions of Exemption Notification – Invocation of extended period of limitation - The disputed period is April, 2002 to January, 2003. However, the show cause notice is dated 27th November, 2009 – SCN beyond the extended period of five years – HELD – Once it is possible to scrutinise and verify the compliance of the terms and conditions on which the exemption has been issued, then, it will not be possible to hold that a separate period is prescribed for recovery of duty in case of this nature or that the period of five years prescribed would have to be computed only when the breach or violation of the Exemption Notification has come to the knowledge of the Department subsequently. It may be that such fact is discovered or comes to the knowledge of the authorities subsequent to the clearance, however, when the Department desires to recover the amount of duty, then, it must adhere to the period prescribed. If the period is prescribed of five years and that has to be computed from the relevant date - we do not find any provision which would enable us to conclude that the date of knowledge or the date of discovery of the fraud by the Revenue will be the determinative and decisive date. If that is beyond the period of five years, then, section 11A will have to be interpreted accordingly is the express stand and which we find cannot be accepted because the plain language of the statute or the words of the section cannot be brushed aside or ignored - The Tribunal's order is exfacie erroneous and unsustainable in law. It is vitiated by complete non application of mind as well. That the fraud is of great magnitude and that involvement or the act is admitted does not mean that recovery of duty because of such fraud or as a result of it can be made at any time under section 11A. This was clearly lost sight of by the Tribunal - The impugned orders are quashed and set aside – Assessee appeal allowed
2015-VIL-371-CESTAT-DEL-CE
PEPSICO INDIA HOLDINGS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, CHANDIGARH-I
Central Excise - Classification of ‘Lays’ - benefit of exemption Notification No. 3/2006-C.E. as ‘ready to eat packaged food or not’ - Whether the fried and salted potato wafers packaged in retail packing for sale and which are sold under the brand name ‘Lays” are classifiable under sub-heading No. 2005 20 00 as “potatoes prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of Heading 2006” or the same are classifiable under Heading No. 2006 90 99 as “food preparations not elsewhere specified or included” – HELD - There is no difference between Chapter 20 of the Central Excise Tariff prior to 1-1-2005 and Chapter 20 of the Central Excise Tariff w.e.f. 1-1-2005, except that the 8-digit tariff is more detailed - Prima facie, the Board’s Circular dated 6-2-88 clarifying that the potato slices fried in edible oil, salted and packed in printed plastic pouches (or other unit containers) are classifiable under Chapter 20 is applicable - Appellant have prima facie case in their favour - the requirement of pre-deposit of duty demand, interest thereon and penalty is waived for hearing of the appeal and recovery thereof is stayed - The stay application is allowed
Bihar VAT Schedule - Updated upto 30th June '15 [Download link]
delCir15
Delhi: Extension of period for filing of online return for 1st quarter of 2015-16
assamCir09
Assam: Regarding monthly/quarterly Return for April-June quarter 2015
22nd of July
CENTRAL EXCISE NOTIFICATION
ceNoti37: Amendment in Notification No.30/2004-Central Excise dated 09/07/2004 - Explanation regarding appropriate duty or appropriate additional duty
ceNoti38: Amendment in Notification No.1/2011-Central Excise dated 01/03/2011 - Section 66B in place of Section 66 and Explanation regarding appropriate duty or appropriate additional duty or appropriate service tax
ceNoti39: Amendment in Notification No.12/2012-Central Excise dated 17/03/2012 - Explanation regarding appropriate duty or appropriate additional duty
[With these notification CBEC resolves the issues raised subsequent to issunace of notification no. 34/2015, 35/2015 & 36/2015]
CENTRAL EXCISE CIRCULAR
ceCir1004: Instructions regarding detailed Scrutiny of Central Excise Returns
ceCir1005: Clarification relating to notifications No.30/2004-CE dated 09.07.2004. No.1/2011-CE dated 01.03.2011 and No.12/2012-CE dated 17.03.2012, as amended
2015-VIL-295-P&H
M/s ELIS EXPORTS Vs THE STATE OF HARYANA AND ANOTHER
Haryana General Sales Tax Act - Sections 31 and 40 - Escaped assessment for Sale of DEPB licence - Reassessment or Revision – The appellant contends case is for re-assessment under Section 31 by the assessing authority and not one for revision under Section 40 - HELD - The assessment order was passed on account of a mistake of law and the Assessing Authority had, in fact, considered the entire record and had not brought to tax the sale proceeds on account of the sale of DEPB in view of the legal position as he perceived it to be – The revisional jurisdiction had rightly been invoked by the revisional authority – Assessee appeal dismissed
2015-VIL-293-DEL
TRIVENI ENGINEERING AND INDUSTRIES LTD Vs COMMISSIONER OF TRADE AND TAXES, DELHI
Central Sales Tax Act, 1956 – Assessment - Exemption under Section 5(2) & Section 6(2) - inter-state sale - Sale in transit – High sea sales – sales in the course of imports - Denial of exemption on the ground that the agreement is for supply of plants / machinery / equipment and not regarding its import and the purchasers are not party to the act of importing goods - There is no privity of contract between the parties in regard to the element import – HELD – The mere fact that the agreement did not contain a clause requiring goods to be imported or that the Appellant had itself got the goods released from the Customs authorities would not by itself be factors determinative of the issue whether it was a sale in the course of import. It would have to be examined whether there was an inextricable link between the said import and the subsequent sale and whether the imported goods could have been diverted to some other buyer or destination. Since the documents produced are unverified copies, no definitive opinion thereon can be expressed at this stage. They would have to be examined in detail by the VATO transaction-wise with reference to the settled legal position as explained in the aforementioned decisions. Consequently, the impugned order pertaining to the claims for exemption with reference to Section 5 (2) CST Act is require to be set aside and the matters remanded to the VATO for a fresh determination - inter-state sale - The default assessment orders of the VATO give no indication of any detailed examination of the documents. It is not clear which document the VATO is referring to when he concludes that the description of the commodity is different or when he concludes that there is ‘diversion of movement of goods from original destination to some other/different destination’ – The impugned order is quashed and matters are remanded for a fresh consideration on the basis of the documents already on record – Assessee appeal allowed by remand
2015-VIL-292-MAD
TATA PROJECTS LIMITED Vs THE ASSISTANT COMMISSIONER (CT)
Tamil Nadu Value Added Tax, 2006 - Opportunity of personal hearing – principles of natural justice - short payment of VAT & erroneous availment of input tax credit – HELD - Since the adjudication in question involved resolution of various factual disputes which involve examination of numerous documents, the representative of the petitioner ought to have been provided with an opportunity of personal hearing - Mere reading of the impugned orders show that the petitioner was not afforded an opportunity to explain their case to the AO. Therefore, as rightly contended by the petitioner, as per the judgment in SRC Projects Ltd the impugned orders are liable to be quashed since the same are passed without giving an opportunity of personal hearing to the petitioner – Assessee petition allowed
2015-VIL-65-SC-CE
M/s COASTAL PAPER LTD Vs COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM
Supreme Court: Central Excise – manufacture of paper - Benefit of Notification No. 22/94-CE dated 01.03.1994 - Concessional rate of duty at 5% for "paper and paperboard or articles made from non-conventional material" – Conditional exemption - Whether pulp of waste gunny bags/jute waste is to be treated as the pulp made from the material 'rags' – HELD - No doubt exemption Notifications call for strict interpretation. However, at the same time when the expression 'rags' is not defined in the Notification, it has to be assigned a particular meaning which defines the purpose for which such a Notification was issued giving by plain meaning, even when there is a total disconnect between the said meaning and the Notification, may lead to absurd results as it would exclude the non-conventional material in the form of waste from jute bags or gunny bags even when this very material was there in the 'Positive List' and qualified for exemption. - It has always been clearly understood that jute or jute waste including old gunny bag waste is non-conventional material. Once that is accepted, could the intention behind Notification No. 22/1994-CE be to exclude this non-conventional material with the insertion of the word 'rags' in the 'Negative List'. It seems difficult to comprehend such a kind of outcome or situation - Paper made out of pulp from rags entitled to benefit of Notification No. 22/94-CE – Assessee appeal allowed
2015-VIL-374-CESTAT-CHE-CE
M/s LAKSHMI PACKAGING PVT LTD Vs CCE, SALEM
Central Excise – Classification of ‘printed of PVC films’ - The appellants classified the printed PVC films under 4901.90 as a product of printing industry whereas Department classified the goods under 3920.39 – HELD – Following the ratio of Apex court decision in Holostick India Ltd. Vs. Union of India - Product ‘printed PVC film' is classifiable under Chapter 490190 chargeable to nil rate of duty – The issue in the case of Holostick India Ltd. Vs. Union of India relates to product ‘hologram’ and the Hon’ble Supreme Court held that it is a product of printing industry classifiable under Chapter 49. The only difference in the present case is the goods are PVC film printed with logos – Assessee appeal allowed
2015-VIL-294-KAR-ST
M/s MADRAS CEMENTS LIMITED Vs THE ADDITIONAL COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II
Karnataka High Court: Service Tax – GTA Service - CENVAT Credit - place of removal – Credit for input service on transportation of the cement – Denial of credit on outward transportation of goods on the ground that the place where sale has taken place or property in goods have passed from the seller to the buyer is the relevant consideration to determine the “place of removal” – HELD - The specific case of the appellant-assessee is that the sale of cement was completed only after delivery was made to the buyer - In the invoice, the price of cement has been calculated keeping in view that the same was to be delivered at the address of buyer and the price term clearly mentions as “FOR destination”, meaning thereby that the buyer need not pay for the transportation as the goods were to be supplied by the seller at the address of the buyer at cost of the seller - As long as the sale of the goods is finalized at the destination, which is at the door step of the buyer, the change in definition of ‘input service’ which came into effect from 01.04.2008 would not make any difference – It is clear from the invoices that title of the goods had passed on from seller to buyer only at the place of destination, which is the address of the buyer. As such, the buyer had no right over the goods till delivered to it. The Tribunal has not considered this aspect and has only relied on the amendment made to the definition of “input service” with effect from 01.04.2008 and rejected the claim of the appellant-assessee after that date - Since the sale had concluded only after the delivery of the goods was made at the address of the buyer, the appellant-assessee would be entitled to the benefit of CENVAT credit on Service Tax paid on outward transportation of goods by the assessee even after 01.04.2008 – Tribunal order set aside and assessee appeal allowed
2015-VIL-373-CESTAT-AHM-ST
COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, DAMAN Vs M/s NAV BHARAT METALLIC OXIDE INDUSTRIES P. LTD
Service Tax - Cenvat Credit - Specified documents in Rule 9 of the CCR, 2004 – Denial of credit on the basis of Debit Note – HELD - Debit note could also belong to the category of Invoice where all the prescribed details are available. As per ‘World Book Dictionary’ also, an invoice means a list of goods sent to a purchaser often showing such other information as price, amounts etc. Similarly, a ‘Bill’ means a statement of money owned for work done or things supplied. Accordingly, a debit note having all the prescribed details could be an invoice or bill. It is not brought out by Revenue as to what are the standard elements of an Invoice or Bill or Challan which are lacking in the debit notes issued to Respondent’s Head Office – Factually also the respondent has taken credit on the basis of ISD invoices issued by HQ and not on the basis of debit notes of the Sales Commission agents. As ISD invoices on the basis of which credit was taken are the prescribed documents, therefore, credit was correctly taken by the Respondent. Accordingly, there is no reason to interfere with the orders passed by the First Appellate Authority - Revenue appeal is rejected
Guest Article
GST Knowledge Series #1
Jharkhand Notification
Notification for extension of JVAT 200 (Q) Return due date upto 15.08.2015 [In Hindi | Download link]
Notification for extension in date for Renewal of Composition Scheme [In Hindi | Download link]
bihNotiSO107
Bihar: Amendment in part-I of schedule-III - Regarding PSC/PCC Pole
telCir107
Telangana VAT Registrations - Computer based Inspections (Advisory visits)
Rajasthan Notification
rajNoti59: Amendment in RVAT Schedule II - Dealers selling food items cooked in heritage hotels categorized as 'Basic' by GOI
rajNoti60: Exemption to Dealers selling food items cooked in heritage hotels categorized as 'Basic' by GOI
23rd of July
2015-VIL-66-SC-ST
COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR Vs M/s GUJARAT MARITIME BOARD
Supreme Court: Service tax – Port Service – Service tax liability on wharfage charges – Agreement and grant of licence to Ultratech Cement for allowing the licensee to construct a jetty and thereafter maintain it at its own cost – Whether any service is rendered by GMB or by any person authorized by GMB in relation to a vessel or goods - Valuation – HELD – During the currency of the agreement it is not the Board but the Licensee who keeps the said jetty in such condition that it is capable of enabling vessels to berth alongside it to load and unload goods. This being the position, no service is rendered by GMB to UCL under the agreement - It is clear that so far as jetties operated by the Board are concerned, the Board itself defrays such expenses. It is only in cases like the present where the jetty is primarily meant for loading and unloading goods belonging to a particular private party that repair and maintenance expenses are to be borne by the private party and not by the Board. It is in this circumstance that we find that there is no service, therefore, rendered by GMB to UCL - There is no doubt on a reading of the agreement that it is the Board itself that charges or recovers wharfage charges from the licensee-UCL and does not authorize UCL to recover such charges from other persons. This being the position, it is clear that no service is rendered by a port or by any person authorized by such port and, therefore, the very first condition for levy of service tax is absent on the facts of the case - Rebate in wharfage charges of 80% is a condition imposed statutorily under Section 35 of the said Act. To say that it is in the nature of lease rent or licence fee, would not be correct inasmuch as a separate licence fee is payable under the agreement. But this would make no difference to the result of this case inasmuch as the very first condition that must be met under the definition of “port service” is not met on the facts of the present case - No service at all was rendered by the Gujarat Maritime Board in relation to any vessel and, therefore, no amount was payable by way of service tax - So far as the direct berthing facilities provided for captive cargo is concerned, the lease rent charged for use of the waterfront also does not include any service in relation to a vessel or goods and cannot be described as “port service” - The appeals of the revenue are, therefore, dismissed accordingly
bihNotiSO169
Bihar Tax on Entry of goods into Local Areas (Amendment) Rules, 2015
jkNotiSRO230
Jammu and Kashmir Motor Spirit and Diesel Oil (Taxation of Sale) Act - Change in rate of tax on sale of motor spirit and diesel
GST Select Committee Report [Exclusively from VATINFOLINE]
Report of The Select Committee On The Constitution (One Hundred & Twenty-Second Amendment) Bill, 2014 - Presented To The Rajya Sabha on 22nd July, 2015 [Download link]
2015-VIL-296-BOM-ST
SAI WARDHA POWER COMPANY LIMITED Vs THE UNION OF INDIA
Service Tax – SEZ unit – Exemption - Denial to issue Form A-2 on the ground that the petitioner was involved in the activity of manufacture and sale of electricity and as sale of electricity did not fall within the list of specified services and refund of service tax were rejected in the past and the petitioner had not achieved the Positive Net Foreign Exchange as per Rule 53 of the Rules of 2006 - Approval in place from the Approval Committee – HELD – Deputy Commissioner was not justified in refusing authorization to the petitioner, in Form A-2 for availing ab initio exemption from payment of service tax. On a perusal of the notifications, it is clear that the petitioner had an option to either pay the service tax in advance or not to pay the same, subject to the conditions provided in the notifications - Once the SEZ unit secures the approval of the 'Approval Committee' to the list of the services on which the SEZ unit wishes to claim exemption from service tax and furnishes a declaration, in Form A-1 verified by the Specified Officer of the SEZ, it is the respondent or for that matter, any Jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise is enjoined with a duty to issue the authorization, in Form A-2 - In terms of Notification No.12 of 2013, the petitioner is enjoined with a duty to submit to the Superintendent of Central Excise, a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax. If that is so, the respondent No.2 could not have refused the authorization to the petitioner-unit in Form A-2 on the ground that some of the claims made by the petitioner for refund had been rejected in the past - There is nothing in Notification No.12 of 2013 that prohibits an SEZ unit from availing the option of not paying the service tax ab initio, if the Positive Net Foreign Exchange is not achieved - The impugned communication is quashed and set aside - Assessee petition is allowed
2015-VIL-375-CESTAT-MUM-ST
IDEAL ROAD BUILDERS PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax - Business Auxiliary Service – Collection of Toll on behalf of NHAI - Demand of the tax, interest and penalty – HELD - Appellant herein is not promoting or marketing or selling goods produced by a client nor is it promoting or marketing services provided by the client - The argument of the Revenue and the finding of the Adjudicating Authority for imposing service tax liability is on the ground that the appellant is appointed as an agent or a representative of NHAI and is providing services on behalf of NHAI. This argument needs to be discarded inasmuch NHAI is not providing any services to any of the users of the National Highway but is doing a sovereign function of developing, maintaining of the highway. The agreement with the appellant and NHAI, does not indicate anywhere that the appellant is appointed as an agent / representative and the said agreement talks of collection of amount as ‘fee’ to be known as ‘toll’ - Appellant is not rendering any service which is incidental or auxiliary on behalf of NHAI – The impugned order set aside and assessee appeal is allowed
2015-VIL-378-CESTAT-CHE-CE
M/s ORCHID HEALTHCARE Vs CCE, CHENNAI-III
Central Excise - Valuation of physician samples of P&P medicaments - Duty paid on cost construction method - Revenue submit that the method of valuation of physician samples under section 4 r/w Rule 8 of Central Excise (Valuation) Rules, 2000 – Imposition of penalty under Rule 25 – HELD - The appellant was paying excise duty on cost construction method ever since they started clearing physician samples of P&P medicines and there was no provision in ER-I return to provide such information. The appellants have maintained that there is no intention on their part to evade central excise duty inasmuch as physician samples have been cleared on payment of duty. The AA has dropped the penalty under section 11AC and also under Rule 25 for the extended period, as there is no malafide intention or suppression of facts considering the fact that the appellants have already paid the differential duty - The appellants are not liable for penalty under Rule 25 – Appeal partly allowed
2015-VIL-377-CESTAT-AHM-CE
M/s INTAS PHARMACEUTICALS LTD Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, AHMEDABAD-II
Central Excise – Cenvat Credit – Eligibility to get the refund claim of duty paid/reversed towards the clearances of old machines as waste from CENVAT credit account - Machinery sold as complete machine and not as waste and scrap – HELD - No evidence has been brought on record by the Revenue to suggest that the capital goods, on which CENVAT Credit was taken in 1997, were cleared as waste and scrap. On the contrary, Appellant has furnished copies of the sale invoices under which the description of the goods is not shown as waste and scrap but as model of old machinery. In view this, the case of the Appellant was covered under the second proviso to Rule 3(5) and not under Rule 3(5A) of CENVAT Credit Rules, 2004. Following the provisions contained in Rule 3(5), after 10 years of use of the capital goods, the amount of credit required to be reversed becomes zero. Accordingly, it is held that the Appellant was not required to reverse CENVAT Credit taken with respect to the capital goods when removed from the factory as capital goods and was not cleared as waste and scrap of capital goods. Appeal filed by the Appellant is, therefore, allowed. However, Appellant should only take the credit in the CENVAT account as the entire amount was not paid in cash
upNoti1041
Uttar Pradesh: Amendment in UPVAT Schedule-IV - Change in rate of tax on Petrol & Diesel
goaOrder1762
Goa: Extension in date for filing of returns for the first quarter of 2015-16 commencing from quarter from 01-04-2015 to 30-06-2015
Guest Article
GST Knowledge Series #2 - Basic DNA of Goods & Service Tax
4th of July
2015-VIL-297-AP
STATE OF ANDHRA PRADESH Vs M/s SIEMENS LIMITED
Central Sales Tax Act - Imposition of penalty on the assessee under Section 10(A)(1) of the Act – Alleged misuse of C form – Conflicting opinions expressed by the Commercial Tax Officers - HELD - The order of the Tribunal would reveal that as a matter of fact, the Tribunal found that there was a bit of uncertainty in relation to the transaction whether the same is required to be assessed under C.S.T. or A.P.G.S.T. Act. Apart from that the Tribunal also found that there was no intention on the part of the assessee which is a requirement at the relevant point of time for levy of penalty - The Tribunal, being the last finding authority and in the absence of such conclusive finding being challenged raising a specific question of perversity, we do not find any questions of law in the present case – Revenue revision case dismissed
2015-VIL-298-MAD-ST
FIFTH AVENUE SOURCING (P) LTD Vs COMMISSIONER OF SERVICE TAX
Service Tax – Pre-deposit – Petition seeking direction to file appeal without making payment of 7.5% of the confirmed tax amount as a pre-condition for making the appeal before the CESTAT – HELD - A close reading of second proviso to Section 35F of the Act makes it abundantly clear that the proviso to this Section shall not apply to stay applications and appeals pending before the appellate authority prior to the commencement of the Finance Act (2 of 2014) - as the amended provisions of the Act are not given retrospective effect as of from an anterior date, it has been construed that the amended provisions are prospective - Appellant would not be required to make the pre-deposit amount of 7.5% pursuant to 2014 Amendment – Decided in favour of Assessee
2015-VIL-379-CESTAT-DEL-ST
MOTILAL NEHRU NATIONAL INSTITUTE OF TECHNOLOGY Vs C.C.EX. & S.TAX, ALLAHABAD
Service Tax – Manpower Recruitment or Supply Agency service – placement charges are collected from students - Demand on tax on consideration received towards facilitating placement of students – HELD - From the definition and the enumeration of this activity as a taxable service, it is clear that what is taxable is the rendition of any service towards recruitment or supply or manpower, temporarily or otherwise to a client. The recipient client must be an employer or prospective employer and the consideration for this service must flow from such employer to the provider of the service. The placement facilitation provided by educational institutions whereunder the placement charges are collected from students and not from an employer or a prospective employer, do not on a fair and reasonable interpretation of the taxable service as defined in the Act, fall outside the purview of either the definitional or enumerative provision of the Act - The concurrent conclusions to the contrary recorded by the primary or lower appellate authorities are fundamentally misconceived, invite invalidation and are accordingly quashed. The appeal is allowed
2015-VIL-67-SC-CE
SARAL WIRE CRAFT PVT LTD Vs COMMISSIONER CUSTOMS, CENTRAL EXCISE & SERVICE TAX, & ORS.
Central Excise – Service of notice - Date calculation of limitation – Adjudication Order served on an employee of the Appellant employed on daily wages – HELD - The Inspector of the Department should have meticulously followed and obeyed the mandate of the statute and tendered the Adjudication Order either on the party on whom it was intended or on its authorized agent and on one else – The clear conclusion is that a miscarriage of justice has taken place, in that the Authorities/Courts below have failed to notice the specific language of Section 37C(a) of the Act which requires that an Order must be tendered on the concerned person or his authorized agent, in other words, on no other person, to ensure efficaciousness - The impugned Orders are set aside and the computation of the period would commence at least from the date on which the Appellant asserts knowledge of its existence, so computed, the Appeal filed before the Commissioner (Appeals) would be within the prescribed period of 60 days and should, therefore, be entertained on merits - The Appeals are accordingly allowed
2015-VIL-376-CESTAT-DEL-CE
M/s PURIFY FILTERS Vs CCE, NEW DELHI
Central Excise – Applicability of Section 11D - Appellant paying Central Excise duty with concessional rate and whereas collected the full rate of excise duty from their buyers resulting in collection of excess amount towards excise duty and retaining the same without depositing to the Government – HELD – It is apparent that maintenance of two sets of same invoice as explained by learned AR and admitted by the appellant is a clear indication of method followed by the appellant for collecting extra amount in the name of Central Excise duty form their buyers - The single clearance document having different factual details in original and triplicate cannot be considered as procedural lapse. The idea behind such act is to represent the price and Central Excise duty differently to the buyer - The appellant did collect amounts representing Central Excise duty and retained the same. As such, the same is to be paid to the credit of the Central Government in terms of Section 11D of the CEA, 1944. It is apparent that the appellant made documentation deliberately to this end and as such are liable for penalty under Rule 173Q - Regarding confiscation of the goods loaded into tempo, the same was in the factory premises and the confiscation was apparently ordered on the grounds of incomplete particulars in the records and discrepancy between the copies of invoice. Since the goods are still in the factory premises and the documentation were required to be completed at the time of clearances, there is no sufficient cause to order the confiscation of said goods. Accordingly, portion of impugned order regarding confiscation of goods is set aside – Appeal partly allowed
punPN230715
Punjab: Public Notice regarding PAN updation
rajNoti69
Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 - Exemption regarding manufacturing of motor vehicles and parts & accessories
triMemo9251
Tripura: VAT Registration - Amount of security deposit
Guest Article
CBEC issues guidelines for detailed scrutiny of Excise Returns
25th of July
2015-VIL-299-MP
M/s MAKSON NUTRITION FOOD (I) PVT LTD Vs ASSISTANT COMMISSIONER, COMMERCIAL TAX
Madhya Pradesh Entry Tax Act - Levy of entry tax plant and machinery imported by the petitioner into the local area for the expansion of its business before commencement of the expanded business – HELD - Assessing Officer has based his finding only because of the order passed by the M.P. Commercial Tax Appellate Board which pertains to payment of VAT for the work done by the petitioner on job work basis for M/s Cadbury India Ltd. However, the question involved in the present assessment proceedings was pertaining to levy of entry tax regarding entry on plant and machinery into a local area. The law governing such imposition of entry tax is entirely different, there are consistent judgments of this court including that of the Supreme Court which lays down the principles that if plant and machinery is brought into local area for expansion of business for construction and improvement of infrastructural facilities, the same cannot be subjected to payment of entry tax. This aspect of the matter has been completely over looked by the Assessing Officer and by incorrectly applying the law the assessment was made. This cannot be approved by us. Accordingly, the impugned order is quashed – Assessee petition is allowed by remand
wbCir14
West Bengal: Setting-up of Large Taxpayer Unit [LTU] unit
mpBill2015
Madhya Padesh VAT (Amendment) Bill, 2015 [in Hindi]
rajNoti64
Rajasthan: Amendment in notification no. F.12(28)FD/Tax/2010-Pt-III-192 dated 24-02-2015 regarding 75% exemption from Entry Tax to the enterprises getting customized package under RIPS-2014
assamCir10
Assam: Entry Tax Exemption under the Assam Industries (Tax Exemption) Scheme, 2015
27th of July
2015-VIL-302-MAD
LUCAS INDIAN SERVICE LIMITED Vs THE COMMERCIAL TAX OFFICER-I, PUDUCHERRY
Central Sales Tax Act - Assessment - Declaration forms – Department's insistence on online uploading of declarations forms and refusal to accept manual filing of hard copy of the declaration forms – consequent tax liability, withholding of downloading and issuance of statutory declaration forms - HELD - There is no provision present under the Puducherry Value Added Tax Rules to submit the declaration forms in the electronic mode as has been suggested by the Department and, therefore, the department's insistence on online uploading of declarations forms is not in consonance with any of the Rules either under the Central Sales Tax Rules or Puducherry Value Added Tax Rules - The approach of the Department should be to ensure that what the assessee is rightfully entitled to should be extended to the assessee without harping on technicalities - As the impugned orders in these cases are set aside, the Department may permit the petitioner to download the statutory declaration forms. The Assessing Authority is also directed to accept the statutory declaration forms in physical form and complete the assessment expeditiously – Assessee petition allowed
2015-VIL-300-P&H-ST
COMMISSIONER CENTRAL EXCISE COMMISSIONERATE, DELHI-III Vs M/s BELLSONICA AUTO COMPONENTS INDIA P. LTD.
Service Tax - Cenvat Credit Rules – Input Service - Admissibility of credit for service tax paid on civil work of constructing a plant/factory and for rental of the immovable property leased by assessee on which the plant is erected – HELD - The land was taken on lease to construct the factory to manufacture the final product. The land and the factory were required directly and in any event indirectly in or in relation to the manufacture of the final product. But for the factory the final product could not have been manufactured and the factory needed to be constructed on land. The land and the factory are used by the manufacturer in any event indirectly in or in relation to the manufacture of the final product - The respondents’ case, therefore, falls within the first part of Rule 2(l) aptly referred as the “means part” - The respondents’ case also falls within the second part of Rule 2(l) i.e. the “inclusive” part. The definition of the words “input service” also specifically includes the services used in relation to setting up of a factory. The doubt in this regard is set at rest by the second part of Section 2(l)(ii) which includes within the ambit of the words ‘input service’ the setting up of a factory and the premises of the provider of the output service. The inclusive definition, therefore, puts the matter, at least so far as the payment for services rendered by the civil contractor for setting up the factory is concerned, beyond doubt. As the plain language of Section 2(l)(ii) indicates, the services mentioned therein are only illustrative. The words “includes services” establish the same. It can hardly be suggested that the lease rental is not for the use of the land in relation to the manufacture of the final product - Therefore, that prior to the amendment of the year 2011 to rule 2(l) the setting up of a factory premises of a provider for output service relating to such a factory fell within the definition of ‘input service’ – Revenue appeal dismissed
2015-VIL-381-CESTAT-DEL-ST
M/s ALLSPHERES ENTERTAINMENT PVT LTD Vs CCE, MEERUT
Service Tax – Cenvat Credit – Unregistered premises - Whether the appellants are entitled to avail the Cenvat Credit on the strength of invoices/bills issued to their Delhi office which is unregistered with Service Tax Department – Late payment of tax – HELD - Rule 4A of Service Tax Rules, 1994 speaks about invoices, bills and challans to be issued by the service provider. It nowhere states that the address of person receiving taxable service should be a registered premises - Again sub-rule (2) of Rule 9 of Cenvat Credit Rules, 2004 also does not state that the premises of the recipient has to be a registered premises in order to avail the Cenvat Credit - There is no allegation that the input services were not received/utilized by the appellant. So also there is no dispute that such input services were not properly accounted. In the absence of any such dispute regarding availment of services and their utilization for payment of service tax or proper accounting of the same, the denial of Cenvat Credit of service tax paid by Nainital office of the appellant on the sole ground that the invoices issued are in the name of the appellant’s unregistered office at Delhi is unjustified – Penalty set aside an late payment free reduced – Assessee appeal allowed
2015-VIL-382-CESTAT-DEL-CE
M/s FEM CARE PHARMA LTD Vs CCE, CHANDIGARH
Central Excise - Area based exemption – Denial of exemption under Notification No. 50/2003-CE dated 10/06/2003 on account of non-furnishing of details regarding the nature of the inputs to be used in manufacturing of final product – Suppression of facts – HELD - The dispute by the Revenue is that as appellant has not filed the declaration regarding nature of inputs, therefore, they are not entitled for the benefit of Notification No. 50/2003-CE. In this case show cause notice has been issued to the appellant after the normal period of limitation but no demand has been raised in the show cause notice for the extended period of limitation. By not invoking extended period of limitation it is clear that the appellant has substantially complied the conditions of the notification for availment of exemption - as in this case it is the view of the Department for not invoking the extended period of limitation that the non-supply of details of nature of inputs is not fatal - when the allegation of suppression has been dropped against the appellant, the appellant is entitled for benefit of exemption Notification No. 50/2003-CE during the impugned period also – Assessee appeal allowed
2015-VIL-380-CESTAT-AHM-CE
M/s ZEST PACKERS PVT LTD & UNICORN PACKERS PVT LTD Vs CCE AHMEDABAD-II
Central Excise - Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 – Rule 10 – Abatement – Non-production of notified goods during any continuous period of 15 days or more – Denial suo moto claim of abatement by assessee – Demand and penalty – HELD – The revenue contention is that the expression ‘shall be abated’ in Rule 10 would indicate that it is mandate of Revenue to grant abatement to the manufacturer and they cannot avail suo motu. On close reading of the provision of Rule 10 of the Rules 2010 read with proviso to Section 3A(3) of the Act, 1944, we are unable to accept the submission. The words ‘the duty calculated on a proportionate basis shall be abated’, in Rule 10, if read with prefix words ‘in case a factory did not produce the notified goods during any continuous period of fifteen days or more’ would make it clear that the duty calculated by the manufacturer as per Rule 7 of the Rules 2010, shall be reduced on a proportionate basis in case of non-production of goods for the period as specified therein. The Rule 10 of the said Rules 2010 further makes it clear that the duty calculated by the manufacturer shall be reduced on a pro-rata basis in case of non-production of goods ‘provided the manufacturer of such goods files an intimation to this effect to the Deputy Commissioner / Assistant Commissioner of Central Excise, as the case may be’. The language of Rule 10, being clear and unambiguous, that the manufacturer is entitled to calculate the duty by reducing the amount on proportionate basis in case the factory did not produce the goods during any continuous period of 15 days or more, provided an intimation was filed to the Assistant Commissioner/ Deputy Commissioner - The impugned orders are set aside. All the appeals filed by the Appellants are allowed
Guest Column
Real Estate: Confusion towards measure of VAT on Builders and Developers
Guest Column
Highlights of Report on the GST Bill by Select Panel of Rajya Sabha
utrNoti630
Uttarakhand: Amendment is Schedule-II(B) and Schedule-I - Regarding exemption to Atta, Maida, Suji, Besan and Dalia
utrNoti438
Uttarakhand: Amendment in Schedule-I - Regarding exemption to Mandua, Chaulai (Amaranth) and their products
Uttarakhand: Regarding Samadhan Yojana (Compounding Scheme) for Builders/Developers [in Hindi] [Download link]
Uttarakhand: Regarding extension of facility to use of e-form 16 to dealers having turnover more than Rs. 100 Crores [in Hindi] [Download link]
telNotiGO119
Telangana: Refund of tax paid to Grey Hounds Welfare Canteen, Telangana
harNoti19
Haryana Value Added Tax (Amendment) Rules, 2015 - Amendment in Rule 25 - Taxable turnover arising from the execution of a works contract or job work
delCir16
Delhi: Extension in date for filing of online return for 1st quarter of 2015-16
28th of July
2015-VIL-303-ALH
M/s D. P.
SAW MILL Vs STATE OF U.P.
Central Sales Tax Act,
1956 – Clause (a) of Section 3 of CST Act - Auction purchase from other State -
Intra-state sale or inter-state sale – Appellant contention that purchases made
is an inter-state sale and, therefore, a direction may be issued to the
respondent to accept Form-C from the petitioner against the auction purchases
of timber by it – HELD – The sale of goods is in the course of inter-State
Trade if the sale and movement of goods from one State to another are integral
part of the same transaction. There must exist a direct nexus between the sale
and movement of goods from one State to another - Movement of goods which takes
place independently of a contract of sale would not fall within the ambit of
the above clause (a) of Section 3 of the Act - Auction sale made by the forest
corporation was complete the moment bid of the petitioner was accepted. Since
the bid took place within the State of U.P. the sale was complete in all
respect within the State of U.P. and as such the sale was an intra-state sale
and not inter-state sale - The writ petition fails and is hereby dismissed
2015-VIL-304-KER
M/s SUPER PACKAGING INDUSTRIES Vs THE SALES TAX OFFICER
Central Sales Tax Act, 1956 - Sales of packing materials - Inter-state sale of paper cartons to various exporters in the course of export outside the State - Exemption claimed under Section 5(3) of the CST Act – Assessee contention that the contract between the exporters and foreign buyers is to export the goods in packed condition. The goods cannot be exported without the aid of packing material. Therefore, the sale of packing materials to exporters is for the purpose of complying with the export orders and it falls within Section 5(3) of the CST Act - Sale supported by Form-H declarations – Denial of exemption – HELD – What is clear from Section 5(3) of the CST Act is that the goods purchased and the goods exported should be the same. The argument of the appellant is that in the orders of the foreign buyers, the goods should be sent as packed goods. But evidently, the exemption under Section 5(3) is in relation to the “goods purchased”. It should precede the sale or purchase occasioning the export of those goods. It cannot be said that the purchase of packing materials get the colour of 'goods' which were “exported” - The appellant will have to establish the identity of the goods sold with the goods meant to be exported. It cannot be said that packing materials as such were meant for export but they were used only for wrapping the “goods which were exported”. The said distinction clearly goes against the contentions of the appellant. It cannot be said that the packing materials sold by the appellant and the goods exported are the same - There is a contract between the exporter and another seller from whom the goods exported were purchased. As far as packing materials are concerned, the intention on the part of both buyer and seller to export, is absent - The provisions of Section 5(3) of the CST Act will not come to the aid of the appellant for claiming exemption – Writ petition dismissed
2015-VIL-69-SC-CE
COMMISSIONER
OF CENTRAL EXCISE, MUMBAI Vs M/s BRITANNIA INDUSTRIES LTD
Central Excise -
Classification of the product wafer which contains ‘Chocolate Cream’ in between
the layers of wafers – HELD - It is not in dispute that the products are
waffles and wafers - the only dispute is as to whether these products contains
chocolate or not – It may be noticed that out of all the products under Chapter
heading 19.05 some contains cocoa, as is clear from the description contained
in the main Heading and if only cocoa is added or is contained in these
products, that would not make it chocolate. Thus, there has to be a difference
between cocoa and the chocolate that is made out of cocoa - Tribunal has not
gone at all into the aforesaid aspect, viz., as to whether the product contains
only cocoa or it contains chocolate. We may record that it is not in dispute
that there is either cocoa or chocolate which is sandwiched between the two
wafers. Thus, it was incumbent upon the CESTAT to see that the said ingredient
is cocoa simplicitor or it is chocolate - The impugned order is set aside and
the matters are remitted back to Tribunal for fresh consideration
2015-VIL-68-SC-CE
COMMISSIONER OF CENTRAL EXCISE, DELHI-III, GURGAON Vs M/s KAP CONES
Central Excise – Revenue appeal - Section 35-E - Review by Committee of Chief Commissioners - Whether Tribunal can condone delay in the order passed by Committee – HELD - Tribunal has ample power to condone the delay in filing the appeal including the one filed under Section 35E(4) of the said Act. The period which can be condoned in relation to filing of the appeal under Section 35E(4) of the said Act would include the period availed by the review committee in terms of Section 35E(1) or 35E(2) of the said Act - The members deciding the lis by the impugned order should have kept themselves abreast to the Full Bench decision of the tribunal so that there would not have been two views as regards the same proposition - Revenue appeal allowed
2015-VIL-386-CESTAT-DEL-CE
M/s PHILIPS ELECTRONIC INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH
Central Excise – Related person - Main appellant-PEIL was earlier owned by M/s. Punjab Anand Lamp Industries Limited (PALI) - Other assessee - M/s. Philips Electronics NV Netherlands (Philips Netherlands) is holding company of PEIL - PEIL in addition to manufacturing lamps, tube lights, electronic products and electrical appliances, were also purchasing lamps from various other parties for sale under brand name-Philips - During period of dispute from 1/3/1994 to 31/5/1998, about 97 to 98 per cent of production of PALI was being sold to PIL and balance 2 to 3 per cent of sale was to M/s. Bajaj Electricals Limited - Department alleged that PALI and PIL are related persons – HELD – When the assessee, in addition to sale of the goods produced by him to related person on regular basis, also sells the same goods on regular basis to independent buyers, the third proviso to section 4 (1) (a) would not apply and in that case the normal price at which the assessee was selling the goods to independent buyers which would be the assessable value even in respect of the sales to related persons - When an assessee has sales on regular basis to independent buyers it cannot be said that assessee has so arranged that goods manufactured by him are generally sold by him to or through a related person and in this regard, quantum of sales to independent buyers is not relevant - It cannot be said that PALI, in respect of their sales to PIL have not paid duty on normal price - When undisputedly 2 to 3 per cent of sales of PALI were to Bajaj Electricals Limited and neither the genuineness of these transactions is disputed by department nor the department has alleged that PALI and Bajaj Electricals Limited were related person within meaning of this term as defined in section 4 (4) (c), department cannot invoke 3rd proviso to section 4 (1) (a) and charge duty in respect of sales of PALI to PIL at sale price of PIL to its dealers - Therefore, irrespective of whether PALI and Philips India Limited were related persons or not, the impugned duty demand against PALI and imposition of penalty on them and Philips India Limited and Philips, Netherlands is not sustainable – Assessee appeal allowed
2015-VIL-385-CESTAT-MUM-CE
M/s SULZER INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-IV
Central Excise – Storage of goods outside factory premises – Application under Rule 4(4) of CER, 2002 for extension of permission - ‘exceptional circumstances’ for storage of goods outside factory premises – Denial of permission - HELD - Department has no locus standi to insist upon the assessee for expansion of factory space - If the contention Revenue is accepted then it applies to each and every industry and the provision of Rule 4(4) of CER, 2002 will become redundant - Expansion of factory is not every time possible due to various factors, therefore the decision of expansion of the factory is the sole discretion of the assssee and department can not insist for that. For consideration of the Assessee's request for permission under Rule 4(4), the existing circumstances have to be seen - when at earlier occasion while granting the permission, the circumstances were exceptional then how at present the same circumstances become unexceptional, particularly when at present no space is available and production and export of goods has increased multifold - Appellant has established that there is exceptional circumstances with regard to nature of goods and shortage of space therefore they deserve for extension of permission – Assessee appeal allowed
2015-VIL-01-ARA
AUTHORITY FOR ADVANCE RULINGS: M/s GSPL INDIA TRANSCO LTD AND M/s GSPL INDIA GASNET LTD
Service Tax - CENVAT Credit – Applicant will be engaged in rendering taxable service in the nature of transport of gas through pipelines and it proposes to avail the benefit of Cenvat credit in respect of the 'capital goods' - Engineering, procurement and construction (EPC) model for laying of gas transmission pipelines - Capital goods being immovable property – Revenue contended that the applicants would receive constructed pipeline system which is embedded to the earth and therefore cannot be termed as ‘goods’ for availing Cenvat credit of duty, as they are neither moveable nor marketable – Secondly, the EPC Contractors who received the duty paid pipes and valves (capital goods) for laying the pipeline, were only eligible to take Cenvat Credit on capital goods under Rule 3 of CCR, 2004 and not the applicants - Duty paying documents – HELD - In the instant case, duty paid pipes and valves are to be received by the applicant, who is service provider. Conditions mentioned in Rule 3 ibid are satisfied by the applicant, therefore he is eligible to take credit - Capital goods (pipes and valves) are to be used for providing output service and it is not relevant whether these goods provide such service by being embedded to the earth. Therefore, we agree with the applicant that the relevant date to determine whether an item qualifies to be 'capital good' is the time of its receipt and not subsequent date - Appellants are eligible to avail Cenvat Credit of excise duty that would be paid on the pipes and valves procured from the manufacturer against the applicant's output service tax liability for services in the nature of transport of gas through pipeline, provided, invoice for said Cenvat Credit of Central Excise duty on pipes & valves, is issued by "registered dealer"
2015-VIL-384-CESTAT-AHM-ST
M/s EMTICI ENGINEERING LTD Vs COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, VADODARA
Service Tax - Sales Promotion, Marketing and After Sales and Services Sales Promotion, Marketing and After Sales and Services - On perusal of the findings of the Adjudicating Authorities in both the appeals, we are unable to understand the facts of the case in so far as the activities of the appellants for the purpose of determining the classification of the Service Tax. In the first appeal, the Adjudicating Authority observed that the appellants were rendering after sales service. In the second appeal, the Adjudicating Authority observed that the appellants were rendering the service as agent of the principal for warehousing the goods, clearing and forwarding and acted as C&F agent. Appellants submitted that they have not received any remuneration in respect of warehousing of the goods. It is difficult to accept the contention of the Learned Advocate that they have rendered the services to their clients without remuneration. In any event, both sides failed to place facts of the case in proper manner for the purpose determination of the classification of the service and to extend the benefit of exemption notification. There is no clarity on the facts of the cases in the impugned orders - Both the appeals are remanded to the Adjudicating Authority to decide afresh
Guest Column
Works Contract - Some fundamental issues
mpBill12
Madhya Padesh VAT (Amendment) Bill, 2015
29th of July
2015-VIL-70-SC-CE
COMMISSIONER OF CENTRAL EXCISE, VAPI Vs M/s GLOBAL HEALTH CARE PRODUCTS
Central Excise – Classification - Whether Close-Up Whitening is toothpaste or not – Toothpaste or dental cleaner – Classification under Heading 3306.10 or 3306.90 - HELD – The finding arrived at by the Tribunal to the effect that Close-Up Whitening is not a toothpaste but a dental cleaner is perfectly just and proper - the ingredients and ratio of all the inputs which go into the manufacturing of a toothpaste and dental cleaner are different and varying - Even the manufacturing process of Close-Up toothpaste and Close-up Whitening is different - Classification of the same product in an earlier avtar/brand was acceptable to the Department as the same was classified under a different name for all these years when the rate of duty under Heading 3306.90 were higher than that under Heading 3306.10. It, thus, observed that mere change of duty and brand name cannot be the reason to alter classification - Even FDA had not registered the product in question as 'toothpaste' but as a dental cleaner. It becomes a supporting factor along with other features of the product – Hence, ‘Close-Up Whitening’ dental cleaner is not a 'toothpaste' but other form of dental hygiene and, therefore will have to be classified under sub-heading 3306.90 as a consequence – Revenue appeal dismissed
hpNoti202507
Himachal Pradesh: Amendment in HPVAT Schedule A & B - Regarding Fabrication of body of trucks and buses, LED bulbs & Energy Efficient Chulhahs
apCir122807
Andhra Pradesh: Input Tax Credit declared in the return in Form VAT 200 for May 2014 - Certain process of adjustment of provisional gross 28 NCCF as on May, 2014 tax period
wbMemo704
West Bengal: Extension in due date of submission of return for quarter ending 30.06.2015
karCir07
Karnataka: Extension of revision option under e-UPaSS module for the tax periods May 2014 to January 2015 enabled for all targeted dealers till 31/08/2015
2015-VIL-305-AP
HANDUM IRON & STEEL ENTERPRISES (P) LTD Vs COMMISSIONER OF COMMERCIAL TAXES
Andhra Pradesh General Sales Tax Act, 1957 - revision of an order of assessment – Power of Commissioner – Turnover - HELD - Commissioner can exercise the power of revision, vested in him under Section 20(1) of the APGST Act, and revise an order passed, or proceeding recorded, by any authority, officer or person subordinate to him under the provisions of the APGST Act, including under Section 20(2) thereof, within four years from the date of service on the dealer, the order of the subordinate officer whose order was under revision - Matter needs to be remitted to the respondent/Commissioner for fresh consideration on merits in regard to the subjection of the turnovers to tax at applicable rates under Section 6A - appeal is allowed and the order impugned insofar as it related to bringing the turnovers of fuel, coal and miscellaneous goods to tax at the applicable rates under Section 6-A of the APGST Act for the year 1992-93 is set aside and the matter is remitted to the Commissioner of Commercial Taxes concerned for fresh consideration – Appeal partly allowed by remand
2015-VIL-391-CESTAT-DEL-ST
C.S.T. DELHI Vs ISHIDA INDIA PVT LTD
Service tax – Export of service – Refund - Receipt of ‘indent commission’ for procuring purchase orders for client/company in Japan – Assessee claims that by providing such services to the Company in Japan, their services were exported and thereby exempted from service tax – Denial of refund claim on the ground that the services provided by the respondents failed to satisfy the condition of export of services – HELD - Cannot agree with the submission of the revenue that the products are finally used in India and therefore there is no export of services as per Rule 3(2)(a) of the Export Service Rules, 2005 - The respondents receive commission for procurement of purchase orders. Therefore the services of the respondents in procuring purchase orders/marketing is definitely utilized/benefited by the Company in Japan. Further it is not in dispute that the respondents received the commission in convertible foreign exchange - If the respondents did not canvass the purchase orders and send it to their client Company in Japan, there would be no supply of goods or use of goods in India at all. So merely because the goods supplied were ultimately used in India, cannot be a reason to hold that there was no export of the output service - In the present case, the effective use and enjoyment of the service of procuring purchase order is by the Company in Japan and therefore the only conclusion possible is that the services were exported – Revenue appeal dismissed
2015-VIL-390-CESTAT-DEL-ST
RKBK AUTOMOBILES PVT. LTD Vs C.C.E., ALLAHABAD
Service tax – Business Auxiliary service - Appellant authorised service station for service or repair of vehicles and for providing BAS - It charged labour and service charges on refurbishment services and raised invoices reflecting the appropriate service tax component as well, but failed to remit service tax to the exchequer - appellant claimed since refurbishment was done on old cars purchased by it was a service to itself, and would not amount to service provided to another – HELD - The fact that sales tax was remitted to the State Exchequer on sale of refurbished vehicles to customers, would not by itself establish an immunity of the appellant to service tax - For the purpose of levy and collection of service tax, appellant’s own invoices raised on RKBK True Value probablise the inference that the appellant is one entity and RKBK True Value is another entity; and that appellant had raised invoices on the other entity reflecting elements of UP Trade Tax and Service Tax. If appellant and RKBK True Value are separate entities, neither would there be an occasion in law or under any accounting practice, for invoices to be raised on oneself and reflecting elements Trade Tax or Service Tax, in such invoices. Sale of goods, as is well established is a transfer of title in goods from one party to another. If, on the appellant’s contention itself and RKBK True Value are merely units of a common legal entity, no question of raising invoices or indicating components of Trade Tax or Service Tax would arise - The plea of providing services to itself, is thus misconceived – Demand confirmed and assessee appeal dismissed
2015-VIL-387-CESTAT-AHM-CE
M/s HITACHI LIFE AND SOLUTION INDIA LIMITED Vs COMMISSIONER OF CENTRAL EXCISE & S.T., AHMEDABAD
Central Excise - Admissibility of CENVAT credit of duty paid on the Trolleys used for carrying components from one part of the assembly line to another part of the assembly line – HELD - There is no dispute on the fact that the Trolleys are used by the appellant for carrying material from one part of the assembly line to another part of the assembly line or the place to and from where assembly of goods is taking place - It has been held by the Larger Bench in the case of Banco Products (India) Limited vs. CCE, Vadodara that credit of Plastic Crates used for handling of materials within the factory is admissible for credit - The nature of function attributable to the Plastic Crates and Trolleys used by the appellant are the same - Therefore, cenvat credit is admissible to the appellant – Assessee appeal allowed
2015-VIL-389-CESTAT-DEL-CE
M/s ARIHANT TILE & MARBLES PVT LTD Vs CCE, JAIPUR
Central Excise – Activity of cutting, dressing, polishing of granite and marbles – Cenvat Credit on the capital goods - show cause notice consequent to Apex Court judgment in the case of Aman Marbles Industries denying cenvat credit on the capital goods on the premise that the activity undertaken by the appellant does not amount to manufacture – HELD - At the time of procurement of capital goods, the appellant was clearing their final product on payment of duty on the understanding that their final product is dutiable and activity undertaken by the appellant amounts to manufacture. Same understanding was of the department – Consequent to the decision of the Hon’ble Apex Court in the case of Aman Marble Industries when Revenue has accepted the duty demand on the final product, the duty paid on final product shall amount to reversal of CENVAT Credit on capital goods. Moreover, when the final product has become not liable to duty in this circumstances whatever CENVAT Credit remain in their CENVAT Credit account shall not be any use of the appellant. Therefore, we hold that at the time of procurement of capital goods, the appellant has taken CENVAT Credit correctly – The impugned order is set aside and the appeal is allowed
2015-VIL-388-CESTAT-CHE-CE
M/s HINDUSTAN PETROLEUM CORPORATION LTD Vs CCE, COIMBATORE
Central Excise – Place of removal – Assessable value – Demand of excise duty on delivery charges and road freight subsidy charges collected from the customers but included in assessable value – Clearance of petroleum products from warehouse - Period when the excise duty on petroleum products paid at the time of clearance for storage depots and when the Administrative Pricing mechanism was in practice – HELD - It is not the case of the department that the petroleum products were received in COCO outlets without payment of duty and sold from the said COCO outlets only on payment of duty. Therefore, there is no justification to treat the COCO outlets as the ‘place of removal’ – Following the ratio of CCE, Vishakapatnam Vs BPCL, IOCL & HPCL revenue appeal is rejected
30th of July
2015-VIL-306-ALH
M/s H.G. INFRA ENGINEERING PVT. LTD Vs DY. COMMISSIONER COMMERCIAL TAX
Uttar Pradesh VAT Act – Section 34 – Deduction of tax - The petitioner was granted a contract by the Agra Development Authority for construction of the road – Acceptance of assessee’s application directing Agra Development Authority not to deduct tax at source since the petitioner is paying the tax in its monthly return – Deputy Commissioner Commercial Tax, Agra Zone vide impugned order directing the Agra Development Authority to deduct 4% of tax on the bills raised by the petitioner - HELD - Once the assessing authority of the petitioner allowed the petitioner the benefit under Section 34 of the Act, no amount could be deducted by the deductor under section 34 of the Act on the bills raised by the petitioner and, therefore, the assessing authority of ADA, could not, in law, issue such an order. On this short point, the impugned order being without any authority of law are quashed – Petition allowed
2015-VIL-307-AP
M/s ORIENT CEMENT Vs THE COMMISSIONER OF COMMERCIAL TAXES, ANDHRA PRADESH
APGST Act – Section 6 (C) - Levy of tax on packing material – Revision of assessment by Commissioner to levy tax on packing material – Power of revision - Whether Commissioner erred in levying tax on HDPE bags at the rate on which tax is leviable on cement – Tax on turnover relating to sale of HDPE bags – HELD - After an elaborate analysis of the purposes for which the HDPE bags were used and its utility, the Commissioner has concluded that both the seller and the buyer did not intend to sell HDPE bags; and their intention was only to sell and buy the cement contained in those HDPE bags. While the submission of the appellant, that the Commissioner could not have placed any reliance on the A-2 returns, without referring to it in the show cause notice, has considerable force, the fact remains that, even if this finding of the Commissioner is ignored, his finding that there was an integrated sale of cement and HDPE bags, and the parties never intended to either sell or buy HDPE bags independent of its contents i.e. cement, is based on an elaborate analysis of the material on record, and the prevalent practice in the cement industry. The Commissioner, on the material on record, rightly contended that there was no intention on the part of the appellant to sell, or on the part of the consignee to buy, the HDPE bags; and these bags were used by the appellant as a convenient and cheap mode of transport - As neither the appellant who sold cement, nor their customers who bought it, intended to purchase HDPE bags independent of its contents i.e. cement, Section 6-C, as it stood prior to its amendment w.e.f. 01.04.1995, is attracted, and in view of the legal fiction provided therein, it must be deemed that the appellant had sold the HDPE bags along with cement, and the sale of HDPE bags was rightly subjected to tax at the same tax rate as was applicable to the sale of cement – Sett-off – There is no reason to examine contentions regarding the extent of sale of packing material during different periods in 1994-95, or the turnover covered by G forms under Section 5(b), or the validity of the appellant’s claim for set off in terms of G.O.Ms. No.374 dated 25.04.1987, in this appeal as these are all matters which the Commissioner should have dealt with while exercising his power of revision under Section 20(1) of the APGST Act - To this limited extent, the matter is remanded to the Commissioner, Commercial Taxes – Decided in favour of revenue on merit
2015-VIL-71-SC-CE
UNION OF INDIA Vs M/s N.S. RATHNAM & SONS
Central Excise – Exemption - Validity of Notifications Nos.102/87-CE and 103/87-CE, whereby whole of the duty of excise was exempted in respect of iron and steel scrap obtained by breaking the ship - exemption of payment of excise duty only to those who had paid customs duty at Rs.1400/- per LDT - another class of persons who also paid custom duty under Section 3 of the Customs Tariff Act, 1975, albeit at a lesser rate, was excluded - Violation of Article 14 of the Constitution - right to equal treatment in similar circumstances – HELD – These two Notifications both dated 27.03.1987 pertain to same goods namely those falling under Heading 72.15 and 73.09 of the second Schedule to the Act. Customs duty is leviable on these goods under Section 3 of the Customs Tariff Act. The said duty can be paid under any of the two methods. When two methods are permissible under the statutory scheme itself, obviously option is that of the assessee to choose in all those methods to pay the custom duty. Duty, thus, paid is to be naturally treated as validly paid. Merely because with the adoption of one particular method the duty that becomes payable is lesser would not mean that two such persons belong to different categories. The important factors for the purposes of parity are same in the instant case, viz. the goods are same; they fall under the same Heading and the custom duty is leviable as per the Act which has been paid - The only option to bring parity was to demand duty on differential amount. That provision should have been incorporated to save the impugned Notification from the vice of arbitrariness. In fact, that would bring both the sub-categories completely at par. Thus, while upholding the view taken by the High Court, we modify the same only to the extent that the respondent herein shall also be entitled to the benefit of the exemption Notification subject to the condition that the duty already paid by the respondent herein on LDT, would be taken into account and only the balance out of it would be subject to excise duty – Appeal disposed
2015-VIL-72-SC-CE
M/s POONAM SPARK (P) LTD. Vs COMMISSIONER OF CENTRAL EXCISE, NEW DELHI
Central Excise – Manufacture - Whether the activity of mounting of Water Purification and Filteration System (WPFS) on a base frame amounts to manufacture – assemble of the components resulting into a new product - HELD - The appellants undertake the job of assembling all the items received from M/s. Perfect Drug Ltd on a base plate and thus brings into existence a new and commercially different commodity known as Water Purification & Filteration System - It is on this basis, a finding of fact is arrived at by all the three Authorities that the activity undertaken by the appellant amounts to “manufacture” within the meaning of Section 2(f) of the Central Excise Act, 1944, since the end result of the process or activity resulted in new and different commercial product - The activity undertaken by the appellant amounts to 'manufacture' – Assessee appeal dismissed
2015-VIL-392-CESTAT-DEL-CE
M/s HERO HONDA MOTORS LTD Vs COMMISSIONER OF CENTRAL EXCISE, DELHI-III
Central Excise - Valuation under sec. 4 of CEA, 1944 – Advertising expenses is incurred by appellant when dealers request the appellant to organize the advertisement of the products in their area and about 40% of the expenses incurred on advertisement are recovered by appellant from dealers – Whether such advertisement expenses incurred by the appellant would be includible in the assessable value to the extent the same have been recovered from dealers – HELD - When it is not disputed that the advertisement of the appellant's products in the areas of the respective dealers also mention the dealers' name and address and those advertisements have also benefitted the dealers, the amount being recovered by the appellant from the dealers cannot be said to be for the reason of or in connection with the sale of goods, as this amount would be for the advertisement and publicity effort of the appellant which has benefitted the dealer - The clauses of requiring the dealers to vigorously promote, develop and maintain sales of the product and parts to the satisfaction of and in the manner required by the appellant cannot be treated as the clause which gives an enforceable legal right to the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers. For this reason also, the advertisement expenses recovered from the dealers would not be includible in the assessable value – Limitation - Advertisement expenses incurred by the assessee from their dealers was the subject matter of the earlier order in the appellant's own case, therefore, the department cannot allege that the appellant had kept the department in dark about the recovery of a part of the advertisement expenses by them from certain dealers - Therefore, the limitation period of 5 years under proviso to section 11A(1)is not invokable and the duty demand is time barred – Assessee appeal allowed
2015-VIL-393-CESTAT-MUM-ST
JINDAL DRILLING & INDUSTRIES LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax - Hiring the drilling rigs and enlisted the same to ONGC by way of charter hire - Demand for Service tax for the payment made by the appellant during July 2007 to September 2007 to the foreign parties – HELD - the service tax liability on the appellant for hiring of rigs to ONGC by making payment to foreign entities is liable to be tax from 16.5.2008 as of supply of tangible goods service – The said activity would not fall under the category of 'Mining of mineral oil and gas service’, it in itself enough to set aside the liability of interest and penalties imposed, in as much as that when there can be no service tax liability, the question of interest and penalty does not arise – Assessee appeal allowed
2015-VIL-394-CESTAT-DEL-ST
M/s NGK INFRASTRUCTURE LTD Vs C.C.E.&S.T., GHAZIABAD
Service Tax – Site Formation and clearance, Excavation and Earthmoving and Demolition service - Extended period of limitation - Penalty u/s 77 & 78 – Service rendered on ‘agricultural land’ – HELD - Mere perusal of definition of the taxable service vis-a-vis the description of work (service) done by the appellant does not leave any scope to even entertain a reasonable doubt, leave alone reasonable belief, that the service rendered may not be covered under the said definition - The appellant has tried to state that it did the work on the agricultural land as confirmed by the Patwari - Suffice to say that even if it is presumed that the land on which work was done was agricultural land, the service rendered by the appellant was not in relation to agriculture. The service rendered in relation to a housing project. The appellant has only tried to obfuscate the issue by saying that the work was on agricultural land - The service rendered was not in relation to agriculture as claimed by the appellant - There was no scope for any confusion even with regard to the said exclusion. It needs to be mentioned that the bona fide belief is not a hallucinatory opinion of an uninformed person. As regards the contention that the appellant had a bona fide belief regarding the non-taxability of the said amount, it has to be said that mere utterance of the words ‘bona fide belief’ does not make it a belief, leave alone bona fide belief. Bona fide belief is a belief entertained by a reasonable person in an appropriate environment - There was no ambiguity or doubt about coverage of the service rendered by the appellant under the scope of Site Formation and Clearance, Excavation and Earthmoving and Demolition service - The extended period as well as Section 78 of the Finance Act, 1994 are invokable in the present case – Assessee appeal dismissed
nagaNoti89
Nagaland: Amendment in Schedule II - Enhancement in rate of tax on Petroleum products
nagaNoti05
Nagaland: Amendment in Schedule IV, V and VIII
punPN300715
Punjab: Last date of e-filing of VAT-15 for the 1st Quarter of 2015-16 extended till 4th August, 2015
jharNotiSO56
Jharkhand: Amendment in Rule 3 - Regarding Registration for JVAT
hpNoti2807
Himachal Pradesh: Draft amendment in Schedule II - Regarding “Bitumen & Coal-tar of all kinds”
telNotiGO122
Telangana: Amendment to 'Explanation I & II' of Schedule VI
31st of July
ceNoti40
Central Excise: Amendment in notification no. 30/2013-CE - Regarding additional categories in the list of exports not eligible under Focus Market Scheme and Incremental Export Incentive Scheme
nagaNoti15
Nagaland: Rate of tax on all sales, by or to the Canteen Store Department (CSD)
nagaNoti130
Nagaland: Mandatory e-Uploading of Sales and Purchase Invoice details
nagaNoti96 [Download link | file size: 775 Kb]
Nagaland: Regarding deduction and deposit of Tax Deducted at Source (TDS) by Government Departments, Establishments and Undertakings etc. on account of Works Contract, Purchases, Sales and Supplies affected by them
hpNoti23
Himachal Pradesh: Amendments in HPVAT Schedule-D - Regarding change in rate of tax on Motor-spirit (Petrol including Aviation Turbine Fuel and Diesel)
delNoti599
Delhi: Amendment in DVAT Third Schedule
kerCir20
Kerala: : Reports of the C&AG – Effective utilization of recurrent defects in C&AG reports in assessment for revenue augmentation and reduction of number of paras in C&AG reports
jharOrder2987
Jharkhand: Regarding extension in date for Karasamadhana Scheme, 2015