SUMMARY FOR THE MONTH OF MAY, 2015
List of updates in the month of May ‘15
1st of May
2015-VIL-182-BOM-CE
COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, VAPI Vs M/s SUN PHARMACEUTICAL INDUSTRIES LTD
Central Excise – Remission of duty - Goods unfit for consumption - Self-destruction of goods by assessee – Prior information to department – Destruction of goods in the absence of the officer of the department – HELD – In the present case, undoubtedly after the goods became contaminated and though several reminders were sent to the department, the department chose to remain silent and as such the Respondent was left with no other option, but to destroy the goods as there was a risk of entire production area being contaminated and hazardous to the human-being. These goods were destroyed only after giving intimation to the department - The Chapter 18 of the Excise Manual provides for a time-bound programme in which the officer of the department is expected to act in such matters. Undoubtedly, in the present case the department has not acted in the time-bound programme - The department cannot be permitted to take advantage of its own wrong - Department cannot be heard to say that respondent is not entitled to remission since goods were destroyed in the absence of representative of department – Appeal dismissed
CENTRAL EXCISE NOTIFICATION
ceNoti23: Amendment in Notification No. 62/95 – CE, dated the 16th March, 1995 and Notification No. 63/95- CE, dated the 16th March, 1995
ceNoti24: Amends Notification No. 12/2012- Central Excise, dated the 17th March, 2012
ceNoti25: Amends notification No. 16/2010-Central Excise, dated the 27th February, 2010
ceNoti26: Amends notification No. 14/2015-Central Excise, dated the 1st March, 2015
ceNoti27: Amends notification No. 14/2015-Central Excise, dated the 1st March, 2015
ceNoti12NT: Amendment in CENVAT Credit Rules, 2004
ceNoti13NT: Amends the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010
stNoti12
Service Tax: Amends notification No. 25/2012-ST dated the 20th June, 2012 so as to exempt certain specified services
DOjsTRU letter
Do JS TRU Letter: Post-Budget discussions on the Finance Bill, 2015 in Lok Sabha - Certain further changes in Central Excise, Customs duty rates & Service Tax
tnNotiGO50
Tamil Nadu Value Added Tax Rules, 2007 - Amendment to sub-rule (1) of rule 16-A
wbOrder290415
West Bengal: Extension of last date of Return submission for Q.E./Y.E. 31.03.2015
4th of May
2015-VIL-184-MAD
TVL. PRASAD PROPERTIES & INVESTMENT PVT. LTD Vs THE STATE OF TAMIL NADU
Tamil Nadu General Sales Tax Act - Refund of the amount pre-deposited - tax case (revisions) in decided favour of assessee – Refund of amount deposit – Implementation of order of High Court – Maintainability of further miscellaneous petition after disposal of the tax case revision, even if such petition does not touch upon the merits of the matter that has already been decided – interest on delayed payment - HELD - Power of the Court does not end with the passing of the order, but more so, in seeing that the order is implemented in letter and spirit, howsoever difficult it may be – For complete and substantial justice and to see that the orders passed by this Court are implemented in letter and spirit, in exercise of inherent powers under Section 151 of the Code of Civil Procedure, the department is directed to give effect to the order passed by this Court forthwith, as the petitioner, having succeeded in the tax case revisions, is entitled to refund of deposit - In this case, inspite of the order being despatched by the Court, almost a year having passed, the department has not refunded the amount back to the petitioner. Therefore, invoking Rule 34 of the TNGST Rules, the petitioner is entitled to interest on delayed payment beyond the period of three months from the date of communication of the order - Therefore, the department is liable to pay interest on the amount deposited pursuant to the order of the Court as provided under Rule 34 – Petition allowed
2015-VIL-183-MAD
THIRU.S.PHILIP Vs THE COMMERCIAL TAX OFFICER
Tamil Nadu General Sales Tax Act - Section 27 – Reassessment – Limitation - Period of 5 years in terms of Section 27(1)(a) of the Act - amended provision for the assessment period – HELD – The revision order was passed beyond 5 years and the authority has taken note of the omitted provision that the period of limitation is six years and passed the order which is not permissible in law - Beyond the period of limitation, no proceedings can be initiated and the amended Act 23 of 2012 increasing the period to six years from the date of assessment came into effect only from 19.06.2012 - respondent cannot apply the amended provision for the assessment period which is already over – Appeal allowed
2015-VIL-214-CESTAT-CHE-CE
COMMISSIONER OF CENTRAL EXCISE, COIMBATORE Vs AQUASUB ENGINEERING
Central Excise – Finalisation of assessment - Refund - unjust enrichment - evidence to show that the price has not been changed – HELD - It is clear that respondents opted for provisional assessment for want of cost of raw materials consumed in the manufacture of exempted goods and placed much reliance on the certificate of the Chartered Accountant. In a number of decisions of Hon'ble Apex Court and High Court as well as Tribunal, the courts have consistently held that when there is no change in the price of the final product cleared and there is no increase in the rate of duty, the bar of unjust enrichment is not applicable – The assessee paid duty on the intermediate goods which are used in the manufacture of power driven pumps which are exempted from duty. There is no change in the price of the final product. Therefore, the bar of unjust enrichment is not applicable in the present case - Accordingly, both the impugned orders are upheld and Revenue's appeals are rejected
2015-VIL-213-CESTAT-AHM-CE
M/s SM ENERGY TEKNIK & ELECTRONICS LTD Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-II
Central Excise – Denial of Modvat Credit solely on the basis of RTO report - HELD - In the present case, it was found that the input supplier supplied input accompanied with Central Excise invoice. There is no dispute of genuinity of invoice. It is clearly evident from the statement of input supplied by the transporter. In such a situation, the statements of transporter are contrary to statement of input supplier, cannot be relied upon, as they did not turn up from cross-examination. The RTO report had not given a clear picture of applicability in respect of the consignments. In the facts of the present case, RTO report cannot be sole basis of denial of MODVAT Credit. There is no dispute that the Appellant paid the cheques to the input supplier and the entire transaction was duly recorded in statutory records - Hence, no reason to deny the MODVAT Credit and to impose penalty – Appeal allowed
2015-VIL-216-CESTAT-MUM-ST
CAPGEMINI INDIA PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax – Business Auxiliary Services and Information Technology Software Services – Refund of unutilized CENVAT Credit - Export of services - Denial of refund on the ground that export invoices raised by the appellant does not indicate export of any service either under BAS or ITSS and hence there was no export of output service within the meaning of Export of Service Rules, 2005 or Rule 5 of Cenvat Credit Rules, 2004 – HELD - Once an assessee has registered himself as provider of output services, it cannot be disputed by revenue that the appellant had not exported any services which falls within the meaning of Export of Service Rules, 2005 - appellant had registered with Hardware Technology Park and Software Technology Park of the Central Government which is an indicator that they are providing some services which are exported and do not fall under the exclusion clause of Export of Service Rules - In an extreme case, even if the services rendered by the appellant, assuming does not fall under the category of BAS and ITSS, revenue has not classified the said services as to one of the services which are falling under the exclusion of clause of Rule 3 of Export of Service Rules which itself, as an indicator that the appellant had exported the services, rejecting a refund claim on flimsy ground runs contrary to the government policy is an unacceptable position - information which has been indicated on the invoice is sufficient to come to a conclusion that the invoice was in respect of the export of software by the appellant to their sister/parent concern - Appellant is eligible for refund of an amount of unutilized credit lying balance in their CENVAT account during the material period, lower authorities to sanction the refund after re-quantifying the amount – Appeal allowed
2015-VIL-215-CESTAT-DEL-ST
BANK OF INDIA Vs CCE & ST, INDORE
Service Tax – Banking and financial service - Currency chest service - Input service - Denial of Cenvat credit on rent-a-cab service on the ground that it was utilised for providing currency chest service which is not a taxable service – HELD - Cash chest service is not a taxable service at all under the Finance Act, 1994 and therefore to say that it is an exempted service defies logic inasmuch a service can be exempted only if it is taxable to begin with. Cash management including transport of cash to and from the currency chest is relatable to providing banking and financial services and the services (security services and rent-a-cab service) are required for such cash management / transfer and therefore they are clearly within the ambit of ‘input services’ - The impugned services constitutes input service in respect of the appellants non-exempt output service. Accordingly, the impugned input credit is clearly admissible which makes the impugned demand unsustainable – Assessee appeal allowed
Guest Column
Credit of Education Cess & SHEC can be used for payment of Excise Duty by Manufacturers
chhgNoti45
Chhattisgarh: Enhancement in period for completion of assessment
delCir05
Delhi: Direction regarding mismatch of Annexures 2A/2B
delCir06
Delhi: Change in Nodal Officer for Zone-II
5th of May
2015-VIL-187-KAR
M/s INDUS TOWERS LIMITED Vs STATE OF KARNATAKA
Karnataka Value Added Tax Act – Section 2 – Return – Revised return - Imposition of penalty under section 72(2) of the Act for under-statement of tax liability, which was more than 5% of the tax paid during the relevant period – Payment of tax and filing of revised return voluntarily subsequent to ‘Nil’ return – HELD - The definition of ‘return’ under sub-section (28) of Sec.2 clearly means to be a ‘return’ including a ‘revised return’. Hence, under the KVAT Act, there cannot be any dispute that ‘revised return’ is also a ‘return’ - While dealing with cases under the Income Tax Act, the High Courts have held that once a valid revised return is filed by the assessee, it completely effaces or obliterates the original return and therefore, it is only the revised return that has to be taken into account for the purpose of making assessment - Though the judgments relate to the Income Tax Act but for the purpose of the KVAT Act also, on the same principle, the original return would be obliterated once the revised return has been filed by the assessee and duly accepted by the Department - Once the revised return has been accepted and acted upon by the parties, then it is only the revised return which has to be taken as the sole return for the purpose of sub-section (2) of S.72 – With the filing of revised return it cannot be said that there was any understatement of the tax liability by the petitioner to any extent in its revised return (which was the only return to be considered), as in terms of the said revised return, the entire tax along with interest, had been paid. In such view of the matter, the provision of sub-section (2) of S.72 of the KVAT Act would not be attracted - Revision petition is allowed and order of the Tribunal and the authorities below is set aside
2015-VIL-44-SC
PRADIP NANJEE GALA Vs SALES TAX OFFICER AND ORS.
Bombay Sales Tax Act, 1959 - Settlement of sales tax dues - liability of an individual partner – HELD - The settlement, if any, reached between the appellant and the State Government for part payment of tax liability by the partner of an assessee-Firm would not fall under the four corners of the Act or the Rules as has been claimed by the appellant since the beginning of the proceedings under the Act - In the absence of any specific provision contained in the Act or the Rules, there could be no settlement with an individual partner so as to discharge him from his obligation to pay the sales tax dues payable by the assessee-Firm. The partners of the Firm are jointly and severally liable to pay the tax dues of the assessee-Firm and no provision under the Act contemplates a settlement between a partner of the assessee-Firm and the Commissioner to determine individual liability - Appeal is dismissed with costs
2015-VIL-43-SC-CE
NIRLON LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI
Central Excise Act - Extended period of limitation - Appellant is the manufacturer of Tyre Cord Yarn (TCY) and Tyre Cord Fabric (TCB) - Valuation of Tyre Cord Yarn (TCY) which are removed for captive consumption - Difference between the goods which were cleared at the factory gate to be sold to the third parties and removed for captive consumption by the appellant itself - HELD - Two types of goods were different in nature. The question is about the intention, namely, whether it was done with bona fide belief or there was some mala fide intentions in doing so. It is here we agree with the contention of the learned senior counsel for the appellant, that when the entire exercise was revenue neutral, the appellant could not have achieved any purpose to evade the duty - Therefore, it was not permissible for the respondent to invoke the proviso to Section 11A(1) of the Act and apply the extended period of limitation – Demand confirmed insofar as it pertains to show cause notice dated 25.02.2000. However, the demand from February, 1996 till February, 2000 would be beyond limitation and that part of the demand is set aside - Once it is found that there was no mala fide intention on the part of the appellant, the penalty is set aside as well - Assessee appeal is partly allowed
2015-VIL-217-CESTAT-DEL-CE
CCE, DELHI-IV Vs M/s DEE DEVELOPMENT ENGINEERS (P) LTD
Central Excise - Non-conventional Energy Devices/Systems - Assessee manufactures certain components of boilers of Biomass Energy Producing System – The boilers for Biomass Energy Producing System are manufactured by ISGEC - Whether the parts of the boilers of Biomass Energy Producing Systems being manufactured by the respondent and which are not consumed within their factory would be eligible for exemption under notification no.6/2002-CE – HELD - Since the scope of entry against ‘non-conventional energy device/systems specified in List 9’ is confined by what is mentioned in List 9, there is no scope for interpreting the word ‘device’ in this entry so as to cover ‘parts of non-conventional energy system’ within this entry - The parts of the Non-conventional Energy Devices/Systems would be covered for full exemption duty under this exemption only when such parts are used within the factory in which the same have been manufactured for manufacture of non-conventional energy producing systems. In other words, this exemption notification is applicable only to those parts manufactured in a factory which are captively used for manufacture of non-conventional energy devices/systems - The impugned order is set aside and revenue appeal is allowed
2015-VIL-185-P&H-ST
AJAY KUMAR GUPTA Vs CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL & ANOTHER
Service Tax - Legal consultancy service - Appellant not liable to pay the service tax though he had collected the same – Delay in deposit of tax thus collected - Amount collected by the assessee but not paid to the Department till the enquiry was conducted – Validity of simultaneous penalty under sections 76 and 78 – Suppression of facts and contravention of the provisions - HELD - Once the appellant was not liable to pay under the provisions of Section 68 since he was not providing taxable service at that point of time, the penalty imposable under Section 76 was rightly deleted by the Commissioner (Appeals) - Once the service tax was not leviable under Section 68 at that point of time and the liability was only to deposit the tax under Section 73A(2), which has been done on 15.11.2008, after delay, but due to the service being not taxable at the relevant time when the invoices were raised, the case would not fall under the provisions of Section 78 for invoking of the penalty, as has been held by the Tribunal. It was the categorical stand of the appellant that the service tax had been collected by mistake, on account of the new provision and the office of the appellant was not fully acquainted with the interpretation of the statute due to which the default had occurred and therefore, in view of the defence taken, the Tribunal was not justified, to hold that there was a wilful suppression of facts, to bring it within the ambit of Section 78 - Appeal is allowed and the order of the Tribunal is set aside and that of the Commissioner (Appeals) is restored
Guest Article
CBEC clarifies - Clearance from DTA to SEZ is Export and eligible for rebate of duty
sikNoti166
Sikkim: Rate of tax on sale of liquor, beer and all other alcoholic drinks by the CSD and Unit Run Canteens of Defence Establishments
punNotiSO70
Punjab Value Added Tax (Amendment) Rules, 2015 - Amendment in Rule 47
wbOrder300415
West Bengal: Regarding submission of Revised return for Q.E. 30.09.2014
AprilSummary [Download link]
Summary for the Month of April, 2015 - List Of Updates in the month of April
6th of May
2015-VIL-186-ALH
M/s
BHAWANA HOUSING PVT. LTD. Vs ADDL. COMMISSIONER GRADE-1, COMMERCIAL TAX AND
OTHERS
Uttar Pradesh Value Added
Tax Act – Section 17 - Registration of dealer – Failure to register –
Registration from back date – HELD – The petitioner was not registered under
the Trade Tax Act earlier and that he made an application with late fee for
registration under the Value Added Tax for first time on 21.02.2011 - The
payment of the late fee under the Proviso only makes the application for
registration competent for being considered for registration. This payment of late
fee will not have the effect of grant of registration from any back date as is
claimed by the petitioner. During the period, the petitioner was not
registered, he is to be treated as an unregistered dealer under the VAT Act -
The Commissioner rightly held that in respect of persons, who had valid
registration under the Trade Tax upto 31st Dec 2007, but could not make the
application under the VAT Act, then it is in their case Section 17(3)(4)(5) of
the VAT Act apply and registration from back date on deposit of the late fee is
permissible. But the provision do not apply in respect of persons, who make
application for registration for the first time under the VAT Act for
registration, their case is covered under sub-section 2 of Section 17 of the
Act - No illegality in the order of Addl. Commissioner – Writ petition
dismissed
2015-VIL-46-SC-CE
M/s B.P.L. LIMITED Vs COMMISSIONER OF CENTRAL EXCISE, COCHIN-II
Central Excise – Classification of Cardiac Defibrillator - Appellant classified the items under C.E.T. heading 9018 and claimed exemption under Notification No.8/96 dated 23.09.1996 and Notification No.4/97 dated 01.03.97 respectively – As per Revenue the Defibrillators were not eligible to the benefit of the said exemption Notifications - Difference between the 'actual use' and 'intended for use' – HELD - Appellant's goods in question which are primarily meant for external use, simply because it can be used internally as well but not without the paddles and paddle is optional accessory, it is difficult to hold that conditions contained in the exemption Notifications are satisfied - Appellant's product which is basically for external use but capable of using during open heart surgery if the optional accessory of internal defibrillators paddles are also provided, cannot be treated as defibrillators for internal use are contemplated in the exemption provisions – Appeal dismissed
2015-VIL-218-CESTAT-DEL-CE
M/s RAMA VISION LIMITED Vs CCE, MEERUT-I
Central Excise – Capacity enhancement – Area specific exemption under notification no. 50/2003-CE - Dispute regarding whether the appellant have expanded their installed capacity by more than 25% - Denial of exemption on the basis of report of Professor of the Department of Electronics and Computer Engineering in IIT, Roorkee and ignoring certificate of Chartered Engineer – HELD - Chartered Engineer is as much an expert as a Professor of IIT - there is merit in the appellant’s plea that a Professor of the Department of Electronics and Computer Science is not competent to give opinion on the question whether substantial expansion of installed capacity of production had been undertaken, which is a discipline of Mechanical Engineering - Since the Commissioner’s conclusion is based on the expert opinion, his cross examination by the appellant should have been permitted, as the report of IIT Professor is only an opinion whose correctness has to be tested by his cross examination. The Commissioner in the impugned order simply relies upon the IIT Professor report on the ground that it is a later report and he is an independent authority and therefore no reasons to doubt the same, but does not discuss as to why the certificate given by the Chartered Engineer is not correct - Impugned orders is set aside – Matter remanded to the Commissioner for denovo adjudication
2015-VIL-187-BOM-ST
ICICI BANK LIMITED Vs THE UNION OF INDIA
Finance Act, 1994 – Credit card transaction - Interchange fees - Merchant Service Fee - Service tax liability on interchange fees – Validity of demand when neither there is adjudication on the return filed by the assessee nor issuance of a show cause notice as required under Section 73 of the said Act - Service tax was paid under protest - Whether, without there being any adjudication in any of the proceedings as provided under Chapter 5 of the Finance Act, 1994 coercive steps can be taken by the Revenue, for recovery of service tax or penalty or interest – HELD - In the present case though the Petitioners have filed return, there has been no adjudication under section 72 of the said Act. After the Petitioners have filed return that they are not liable to pay the service tax, the authorities are not bound to take a decision, deciding the said issue. If the services rendered by the Petitioners are chargeable to service tax and Petitioner has not paid the same, in exercise of the power vested in him, the Central Excise Officer is very well empowered to make assessment of the value of taxable services to the best of his judgment and determine sum payable by the petitioner or refundable to it. Admittedly, this has not been done – The contention of revenue that the provisions of section 73 cannot be invoked, this contention deserves to be heard only to be rejected. On one hand, revenue coerces assessee to pay service tax on threat of taking action under Section 87 of the said Act, which can have drastic consequences and when an assessee succumbs to the said pressure and deposits the sum under protest, innocuous argument is made that since now payment is made, provisions of section 73 cannot be invoked - The amount which is payable by a person can be said to be payable only after, there is determination as provided under Section 72 or section 73 of the said Act. We find that neither of that has been done - The law enforcers cannot be permitted to do something which is not permissible within the four corners of law. The impugned communication which demands the Petitioner to make payment of the interest and also threatens them that in the event the said payment of interest is not made, coercive action under Section 87 would be taken, would not be sustainable in law
2015-VIL-45-SC-ST
M/s COAL HANDLERS PRIVATE LTD Vs COMMISSIONER OF CENTRAL EXCISE RANGE KOLKATA – I
Service Tax - Finance Act, 1994 - Clearing & Forwarding Agents – Whether (i) following up the allotment of coal rakes by the Railways; (ii) expediting and supervising the loading and labeling of rail wagons; (iii) drawing the samples of coal loaded on the wagons; (iv) complying with the formalities relating to payments for freight to the Railways; and (v) dispatching of rail receipts to respective Principals; were liable to service tax under the provisions of the Act – HELD - The primary job of the appellant, as per the contract between the appellant and the Ambuja companies, is of supervising and liaisoning with the coal company as well as the Railways to see that the material required by Ambuja companies is loaded as per the schedule. At no stage custody of the coal is taken by the appellant or transportation of the coal, as forwarders, is arranged by the appellant. We are, thus, of the clear opinion that the services rendered by the appellant would not qualify as C&F Agent within the meaning of Section 65(25) of the Act - Appeals are allowed and the impugned orders passed by the Tribunal are set aside by quashing the demand of service tax made from the appellants
ceCir1003
Central Excise: Clarification regarding Cenvat Credit in transit sale through dealer
DELHI CIRCULAR/NOTIFICATION
delCir07: Review of System Generated Orders
delCir08: Default Assessment under CST Act
delCir09: Modification of Circular No.27 of 2014-15 dated 27/02/2015
delNoti137: Regarding Embassy of Finland
delNoti155: Regarding State bank of Patiala
RAJASTHAN NOTIFICATION
rajNoti15: Notification regarding amendment in Schedule II of RVAT Act 2003 - Inclusion of M/s Honda Cars India Ltd
rajNoti16: Exemption from VAT on the sale of goods made by the registered dealer to M/s Honda Cars India Ltd. to the extent the rate of tax exceeds 4%
Statewise Forms
Comprehensive list of Road permit /way bill upto 01.05.2015
FCP0505
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
0605news
News updates
mahaCir5T
Maharashtra: Online grant of registration under the Maharashtra Value Added Tax Act, 2002 and Central Sales Tax Act, 1956
utrNoti383
Uttarakhand: Continuation of exemption to IT Industry and addition of "Mobile Handsets" in the list of IT Goods
telNotiGO50
Telangana: The Telangana State Value Added Tax Act, 2005 – Amendment to Schedule IV - Auto Components sold to Automobile Manufacturing Units located in the State
GSTupdate
Lok Sabha passes the GST Constitutional Amendment Bill with 2/3rd majority
GujGuidelines
Gujarat: Guideline for Electronically Generated Form-402, 403, 405-Transit pass [in Gujarati]
7th of May
2015-VIL-188-MAD
MADRAS AUTO GLASS Vs THE STATE OF TAMIL NADU
Tamil Nadu General Sales Tax Act - whether the windscreen glasses sold by the assessee fall under Entry 11 Part E of the I Schedule, taxable at 12% or under Entry 43(ii) of Part D of I Schedule of the TNGST Act, taxable at 8% - HELD – In the instant case it is correct to apply the user theory, more particularly in a case where the goods sold is specifically parts and accessories of motor vehicles - Entry 43(ii) of Part D of I Schedule specifically deals with parts and accessories of motor vehicle, while Entry 11 of Part E of I Schedule deals with general glass and glasswares. When there is a specific entry in the statute, the same should be applied while making the assessment. It is not in dispute that the assessee is a dealer in automobile glasses and has supplied their goods to the automobile manufacturers - The issue is answered in favour of the assessee and against the Revenue
2015-VIL-222-CESTAT-MUM-ST
ALKYL AMINES CHEMICALS LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III
Service Tax - Business Auxiliary Services – production of goods or provision of services on behalf of the client - Amount received for job-work on the goods supplied by the client - Conversion of ‘Para Nitro Cumene’, in to ‘Para Cumidines’ - whether the activity would amount to manufacture or not – Demand under BAS since appellant is processing goods on behalf clients and is not discharging the Central Excise duty – HELD - Both the lower authorities have wrongly concluded that the processing activity undertaken by the appellant does not amount to ‘manufacture’ – The activity of processing in the appellant’s factory premises is definitely an activity of ‘manufacture’ inasmuch as, the finished goods coming into existence after processing are different from the inputs which are put into use - When there is a chemical reaction involved, the finished goods coming after the chemical reaction cannot be said to have been not manufactured. We perused the chemical formula and the properties of the inputs and of the final goods and we find that there is a difference between the two which would mean that the finished goods ‘Para Cumidine’ is arising out of a manufacturing process. In our considered view, the activity undertaken by the appellant would amount to manufacture even if it is under a job-work procedure - In view of the above factual matrix, we find that the impugned order is unsustainable and liable to be set aside and allow the appeal
2015-VIL-221-CESTAT-DEL-ST
C.C.E. & S.TAX (LTU), DELHI Vs WHIRLPOOL OF INDIA LTD
Service Tax – GTA service - Admissibility of Cenvat credit of the service tax under GTA – Denial of credit on the basis of amendment in the Cenvat Credit Rules, 2004 w.e.f. 1.3.2008 wherein GTA service providers shall not be allowed to avail input credit under CCR, 2004 as Rule 2 has been amended to exclude goods transport agency from the scope of output service – HELD - Notwithstanding the vagueness of the basis of the allegation in the show cause notice, the show cause notices do not mention as to how the said amendment w.e.f. 1.3.2008 made the respondents ineligible for the impugned credit. Indeed the said amendment does not even remotely have any bearing on the issue of admissibility of the Cenvat credit of service tax paid on GTA services - according to the CBEC Circular No. 97/8/2007-ST, dated 23.8.2007, service tax paid on GTA service by the respondents for transportation of goods upto their depot was eligible for cenvat credit - No merit in Revenue’s appeals and the same are therefore dismissed
2015-VIL-220-CESTAT-CHE-CE
M/s UMS RADIO FACTORY, UNIT I & UNIT II Vs CCE, COIMBATORE
Central Excise Rules - Availment of modvat credit on capital goods – Shifting of machine from one unit to another – Reversal of credit - Imposed of penalty under Rule 173Q – HELD – Appellants duly intimated the Department prior to the importation of capital goods, which is mandatory for availing capital goods credit. They have also intimated that the said capital goods were shifted to unit-II which is on record. The allegation that the appellants have not received the capital goods is not well founded with any supported evidence. There is no verification report either from the Range Superintendent or from the division authorities concerned - Appellants have removed the capital goods from unit-I to unit-II without installing the same and reversed the entire credit. Therefore, reversal of credit is in conformity with Rule 57Q(8) of CER,1944 - Appellants followed the procedure correctly in conformity with Rule 57Q, 57(T) and 57(S) and rightly availed and reversed the same at the time of removal of capital goods to their unit-II. Accordingly, the impugned order disallowing credit availed against the first appellant and imposition of equivalent penalty is set aside – Appeal allowed
2015-VIL-219-CESTAT-CHE-CE
HINDUSTAN PENCIL PVT LTD Vs CCE, COIMBATORE
Central Excise – Marketability of mixture of graphite and clay – Revenue seeks to classify it under Heading 6815 1020 discarding the claim of the appellant that it is not liable to duty for no marketable goods manufactured – HELD – Mixture of graphite and clay cannot be bought and sold in absence of evidence of any marketability, hence not liable to duty - Assessee appeal allowed following the ratio of Umesh Pencil Processors Pvt. Ltd. Vs. CCE, Coimbatore
FCP0505
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
0705news
News updates
8th May
chhgAct17of2015
Chhattisgarh Value Added Tax (Amendment) Act, 2015 - Amendment in Schedule I and II
biharFinAct2015
Bihar Finance Act, 2015 - Amendment in Bihar Value Added Tax Act, 2005 and Bihar tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1993
apCir455
Andhra Pradesh: APVAT Act, 2005 and CST Act, 1956 – Check posts-Data entry in GIS module - Certain changes made
apCir476
Andhra Pradesh: Dealer VAT Registration - Modification of Registration Process
M/s KETI CONSTRUCTION (I) LTD Vs COMMERCIAL TAXES OFFICER
Rajasthan Value Added Tax Act – Work contract - Works contract for Sewerage Treatment Plant (STP) regarding design, construction, supply, erection, testing, commissioning – Whether the contract falls within the definition of "civil work" being covered by notification No.12(63)FD/Tax/2005-80 dt. 11/08/2006 and liable to get exemption on payment of exemption fees @ 1.5% of the total value of the contract – HELD – On reading of the work assigned to the petitioner, and the Notification there was composite agreement of contract and the major activity being of laying of pipeline with material, water treatment plant etc., then it would certainly be falling in item/category No.3 of the notification and all the three authorities in unison have come to a finding of fact based on the terms of the contract. Accordingly, once it is a finding of fact based on the terms of the contract, no question of law can be said to arise out of the order of the Tax Board and this Court does not find any perversity, illegality and impropriety in the order impugned so as to call for interference - Assessee is liable to charge exemption fees @ 2.25% - Appeal dismissed
AME DE VERRE (P) LTD Vs COMMISSIONER TRADE AND TAXES
Delhi Value Added Tax Act – Appellant is in the business of sale of stained glass products such as panels, lamp shades and other miscellaneous glass articles including decorative items sold under the brand name of "Baldi" – Imported items - residuary entry - Classification of goods sold by the appellant-assessee under the brand name of "Baldi" - Handicrafts items – HELD - The fact that "Baldi" items are imported from Italy seems to have been considered by both authorities, the Commissioner and the Tribunal, as a factor which clinches the issue. There is nothing in the DVAT Act, or the Rules framed therein or, for that matter, any other instruction, notification etc. to require that a commodity in order to be accepted as "Handicrafts" must be one indigenously made or, to put it conversely, must not be one imported into India - Expression "Handicrafts" has to be construed in the sense it is commonly understood. Since the legislative entry does not qualify it by any other pre-requisites, the restrictive interpretation put on it by the authorities below cannot be approved - High price cannot, rather ought not, become a negative factor. By the same logic, the mere consideration that a decorative item would find pride of place in plush homes, of rich or affluent, cannot take away from the properties on account of which it qualifies to be treated as "Handicrafts" - It is basic that if the facts cover the case under a specific provision, the residuary clause would not apply – Hence, said items fall in the category of "Handicrafts" within the meaning of the expression used in entry no.128 of the third schedule of DVAT Act and, therefore, chargeable to VAT at the rate applicable to the said third schedule – Appeal allowed
M/s SERVO-MED INDUSTRIES PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI
Central Excise – Basic principles of Manufacture – Distinction between manufacture and marketability – Whether syringes and needles, (which had already borne the payment of excise duty in the hands of their manufacturers), be made to pay excise duty again as a result of sterilization - Retaining of essential character test - Test of no commercial user without further process – HELD - Where the goods remain exactly the same even after a particular process, there is obviously no manufacture involved. Processes which remove foreign matter from goods complete in themselves and/or processes which clean goods that are complete in themselves fall within this category - The added process of sterilization does not mean that such articles are not complete articles in themselves or that the process of sterilization produces a transformation in the original articles leading to new articles known to the market as such - If the Department were right, every time such instruments are sterilized, the same surgical instrument is brought forth again and again by way of manufacture and excisable duty is chargeable on the same. This would lead to an absurd result and fly in the face of common sense - The syringe and needle retains its essential character as such even after sterilization – Hence, there is no manufacture – Appeal allowed
ANITA PRINTS Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II
Central Excise - Valuation of goods - Non inclusion of value towards the shrinkage and amount of transportation charges – Inclusion of cost of inward transportation and the octroi – HELD - Show cause notice does not rely upon any documents which indicate the value which is attributed to the transport and octroi in the said show cause notice - It is a settled law that when the department raises demands on the assesse, the onus has to be discharged by the department by submitting tangible evidences. In the absence of any such evidence which indicates the specific amounts as have been paid by the appellant, the entire fulcrum of the show cause notice is displaced and any order confirming the demand raised on such show cause notice has to go – On merit also the appellant being a job worker, the duty liability which has to be discharged by them, is to be worked out on the basis of price of raw material + job working charges including profit - Appellant had followed the law as has been settled by the Apex Court in the case of Ujagar Prints – The impugned order is unsustainable and liable to be set aside and the appeal is allowed
THE COMMISSIONER OF SERVICE TAX Vs M/s TANDUS FLOORING INDIA PVT. LTD.
Service tax - Place of Provision of Service Rules, 2012 - Marketing and sales support for the distribution of goods proposed to be sold by Tandus U.S. and Tandus China to the customers located in India through their own dealers or directly – Respondent was to receive service fees in freely convertible foreign exchange – Advance Ruling Authority held that the place of provision of service to be provided by the applicant to Tandus China and Tandus US shall be the location of the service recipients, i.e. in China and US respectively, in accordance with Rule 3 of Place of Provision of Service Rules, 2012; and The provision of service by the applicant to the two recipients named above will amount to export of service – Revenue in appeal – HELD - An order which has been passed on a concession given by the Commissioner cannot be challenged by the Commissioner himself. It is not the case of the writ petitioner (Commissioner) that certain material and the relevant Circulars were placed before the Authority and were not considered. After considering the entire case on merits and deciding in favour of the respondent-Company, the questions raised were answered in favour of the assessee on merits and also on the basis of the concession given by the Commissioner that the case of the respondent- Company was covered by the Circular of the Department dated 24.02.2009. The Commissioner cannot be permitted to now turn around and challenge the said order which was passed by the Authority on the basis of his own statement - A new ground cannot be taken in the writ petition, especially, when the same is a ground relatable to facts and not solely on a question of law - In such view of the matter, on this ground also, we would not be inclined to interfere with the order of the Authority – Appeal dismissed
M/s WEST BENGAL STATE ELECTRICITY TRANSMISSION COMPANY LTD Vs COMMISSIONER OF SERVICE TAX, KOLKATA
Service Tax - Business Support Service - Transmission and distribution of electricity - Benefit of Notification No.45 /2010 ST dt. 20.07.2010 – HELD – The exemption Notification has been interpreted in the case of M.P.Power Transmission Co. Ltd. and in the case of Noida Power Co. Ltd wherein it has been held that no service tax is required to be paid for rendering services in relation to transmission and distribution of electricity during the period mentioned in the said Notification. We have no reason to disagree with the said decisions of the co-ordinate Bench of this Tribunal. Besides, in view of the clarification issued by the Board, the Appellant-assessee are eligible to the benefit of the said Notification. In the result, the impugned Order is set aside to the extent of confirming the demand against the Appellant – Appeal allowed
Guest Article
CBEC clarifies - Dealer Registration NOT mandatory for transit sale
13th May
THE STATE OF KARNATAKA Vs SHREE RENUKA SUGARS LIMITED
Karnataka Sales Tax Act, 1957 – Incentives/exemption – Refund of purchase tax paid - Whether purchase tax includes cess and, hence, eligible for refund – HELD - Refund of purchase tax under Government Order No.FD.277 CSL 2001 dated 19.3.2002, shall be limited to purchase of sugar cane, used in the manufacture of sugar and such sugar being exported out of the territory of India. This Government Order shall not be applicable to any sugar factory which was availing the exemption of purchase tax under any of the package of incentives and concessions offered by the Government of Karnataka. The sugar factory which was availing exemption of purchase tax under the G.O. dated 6.6.1973, as in the present case, was not eligible to avail the benefit of the G.O. dated 19.3.2002 as per clause (4) of the said G.O. As such, placing reliance on the explanation appended thereto to determine the meaning of ‘purchase tax paid’ does not arise - Even otherwise, the demand raised is for the recovery of road cess declared as interest free loan towards purchase of tax collected for the assessment years 2004-05 to 2009-10. By now, 10 years period has lapsed and the respondent shall be liable to pay the purchase tax collected, as per the Government Order dated 06.06.1973 – The order passed by the learned Single Judge is not sustainable – Appeal allowed
M/s ARJANDAS METAL INDUSTRIES PVT LTD Vs THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI
Central Excise – Pre-deposit – Financial hardship – HELD - In the present case, the learned CESTAT has found some substance in the contention of the appellant and has directed him to pre-deposit only 50% of the duty demand confirmed against the appellant and not the entire 100% of the amount. It can thus be seen from the facts and circumstances of the present case that the learned CESTAT has taken into consideration all the three factors i.e. prima facie case, undue hardship and the interest of Revenue. Insofar as the factor i.e. undue hardship is concerned, it does not appear that the said contention was duly established by the appellant by producing sufficient evidence before the learned Tribunal - No error in the findings recorded by the learned Tribunal in the impugned order – Appeal dismissed
THE MADRAS ALUMINIUM CO. LTD Vs COMMISSIONER OF CENTRAL EXCISE, SALEM
Cenvat Credit Rules, 2004 - Denial of cenvat credit availed on the inputs supplied including freight and insurance charges upto the point of delivery and passed on higher duty amount - assessable value – HELD - appellant submits that the duty paid was more than due in as much as freight charges were wrongly included in the assessable value of goods. However, learned Counsel for the Revenue is unable to show any law that even if duty paid was in excess of the amount due, without excess amount being refunded, the assessee will be debarred from availing the CENVAT credit - The appellants correctly availed the credit and the demand on reversal of credit is not sustainable – Appeal allowed
FORTIS CLINICAL RESEARCH LTD Vs COMMISSIONER OF SERVICE TAX, DELHI
Service Tax - Waiver of pre deposit - Business Support Service – HELD - On perusal of one of the inspection orders which reveals that the inspection was to verify compliance to good practices in accordance with law. It can be nobody's case that inspecting agency which only inspected the facility without rendering any advice could be covered under the category of management or business consultant as they did not provide any service directly or indirectly in connection of management of any organisation or business nor did they provide any advice, consultancy or technical assistance in relation to any area of management. Prima facie thus, this component of demand is on a weak wicket - Appellants have been able to make out a good case for waiver of pre-deposit and we order accordingly staying recovery of the impugned liability during pendency of the appeal - Stay granted
JOHN DEERE EQUIPMENTS PVT LTD & DEERE AND CO. Vs COMMISSIONER OF CENTRAL EXCISE PUNE – III
Service Tax - Consulting Engineer Service - technical collaboration agreement for receiving consulting engineer's service – Demand under reverse charge mechanism on JDE and on DEC – HELD – The demand of service tax on JDE is on reverse charge mechanism while on DEC is on the ground that they have rendered the services. Demand of service tax liability does not survive in view of the law as settled by the in the case of Indian National Ship Owner's Association vs. Union of India. In the case of JDE, the service tax demand has been confirmed by invoking the provisions of Rule 2(1)(d)(iv) of the Service Tax Rules - As per the law settled, demand of service under reverse charge mechanism can only be w.e.f. 18/04/2006 - Impugned order confirming demand on JDE is not sustainable and is liable to be set aside - As regards the appeal filed by DEC, appellant is an entity situated at Illinois in USA. The provisions of Finance Act, 1994 do not apply to an entity who is not situated within India. There is no dispute that the said DEC has no office or any permanent establishment in India. In view of this factual matrix the provisions of Finance Act, 1994 are not applicable to an entity who is situated abroad having no office or permanent establishment in India. The impugned order confirming the demand on DEC is liable to be set aside – Appeals are allowed
apNotiGO158
Andhra Pradesh: Reduction of tax on Subabul from 14.5% to 5%
utrNoti143
Uttarakhand: Amendment in Schedule-III - Regarding spirits and spirituous liquors of all kinds and Country liquors
Delhi VAT Schedule [Updated till 1st May 2015] - Download link
Guest Column:
14th May
STATE OF GUJARAT Vs ESSAR OIL LTD
Gujarat Valued Added Tax Act - Central Sales Tax Act - Interim order - pre-deposit - recovery & refund - tax liability and demand - Whether Tribunal following its earlier decision in other case, is justified in directing first appellate authority for disposing of the appeals within a stipulated time period where it was brought to the notice of the Tribunal that the appeals against its decision in that case were pending before the High Court and the Court was seized with the matter – Whether Tribunal can direct the State to refund/return the amount deposited by the assessee pursuant to the interim order with interest at the rate of 18% per annum in a miscellaneous application – HELD - Once it was brought to the notice of the Tribunal that the appeals against its decision in the case of ONGC Limited are pending before this Court and this Court is seized with the matter, even to avoid any further multiplicity of proceedings, the Tribunal could not have insisted for disposing of the appeals by the first appellate authority following its earlier decision in the case of ONGC Limited, which are the subject matter of appeals before this Court and that too within stipulated period - Under the circumstances, the judgment and order passed by the Tribunal directing the first appellate authority to decide the appeals before it within a period of three months and that too after following the decision of the Tribunal in the case of ONGC Ltd deserves to be quashed and set aside - The impugned order passed by the Tribunal directing the assessee to return/refund the amount of the amount deposited by the assessee is hereby modified to the extent that it is directed that on furnishing unconditional and irrevocable Bank Guarantee of like amount in favour of the Commissioner of Commercial Tax if furnished within 15 days from today, the State shall return the said amount to the assessee forthwith - Tax appeals and Special Civil Applications partly allowed
M/s HPL SOCOMAC LTD Vs COMMISSIONER OF CENTRAL EXCISE, GURGAON
Central Excise - Valuation - price had been fixed before removal from the factory premises - Reduction in contract price after clearance – HELD - Since duty has been paid on the basis of the original price in the purchase order, the difference between the said rate and the reduced rate has to be refunded: Since duty has been paid on the basis of the original price in the purchase order, the difference between the said rate and the reduced rate would have to be repaid to the appellant. This amount had been claimed by the appellant on 20.11.2002 and had been turned down by the impugned orders. The said amount will now as a consequence of the setting aside of these orders be ordered to be repaid to the appellant together with interest at 9% per annum from November, 2002 till the date of payment – Assessee appeal allowed
TRIZETTO INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE-III
Service Tax – Rejection of refund claim - SEZ unit - Notification 17/2011-ST dated 01/03/2011 - Rejection has been made only on the ground that the approval committee of the concerned SEZ issued the certificate on 09/12/2011 – HELD - There is no dispute that the input services on which refund has been claimed has been used in the export of services. There is also no dispute that the appellant applied for approval to the competent authority well before they undertook the transaction of the export. Merely because there was a delay in grant of approval, that cannot take away the right accrued to the appellant for exemption from service tax in respect of the input services - Appellant is rightly entitled for the benefit of refund under Notification 17/2011-ST dated 01/03/2011 - Decided in favour of assessee
Maharashtra: Amendments to various Acts administered by the Sales Tax Department and notifications issued thereunder
Andhra Pradesh: AP VAT Act, 2005 — Excess Input Tax Credit or net Credit Carried Forwarded (NCCF) as on the Appointed date - Apportionment between the two successor states
Andhra Pradesh: APVAT Act & CST Act – eWaybills for inter-state movement of incoming and outgoing goods vehicles- Exemption of mandatory usage of eWaybills to PSU Oil Companies
West Bengal: Introduction of e-service for Cancellation of C & F Forms in bulk for filing Revised Return
West Bengal: Uploading of Post-Assessment Refund details by the Dealers
Rajasthan: Regarding manner for early refund
GST Constitutional Amendment Bill sent to Select Panel of Rajya Sabha
15th May
CONFEDERATION OF REAL ESTATES DEVELOPERS' ASSOCIATION OF INDIA, MAHARASHTRA Vs THE STATE OF MAHARASHTRA
Maharashtra Value Added Tax, 2002 - constitutional validity and propriety of notification dated January 29, 2014 – Maintainability of writ petition - tax on transfer of property in goods - Valuation of goods under Rule 58 of the MVAT Rules – Writ petition to permit petitioners to deduct consideration / profit of sale of land while determining sale price for the purpose of Rule 58 (1) and determination of value of works contract on percentage of material consumption instead of stages given under the notification of January 29, 2014 and to allow them to submit revised VAT returns with 'material cost plus gross profit' method and certain other directions to determine value of works contract and to declare that notification of January 29, 2014 to be ultra vires the provisions of MVAT Act 2002 inter alia for want of requirement of previous publication required under section 83 of the Maharashtra Value Added Tax and Rules 58 (1A) and 58 (1B) of MVAT Rules, 2005 and circular 12 T dated 17th April, 2014 to be bad in law and other reliefs – HELD - The first essential characteristic of MVAT is it is a tax on transfer of property in goods, secondly, uniformity of incidence is also a characteristic of the tax and thirdly the collection of tax. MVAT can be imposed on assessable value determined with reference to transfer of goods at the stage as referred to in the table. It is legislature's power to legislate in respect of the basis for determining the measure of tax. The computation being made strictly in accordance with the express provisions under the rules, there is no warrant for confining the value as sought to be submitted by the assessee. It is open for the legislature to adopt any basis for determining the value of a taxable article. The measure for assessing the levy need not correspond completely to the nature of levy, and no fault can be found with the measure so long as it bears nexus with the charge - Once it is permissible, it is open for the legislature or its delegates to adopt one of those methods on principle of uniformity. It was held by the Supreme Court that it would be permissible for the state legislature to prescribe a formula for determination of charges and to allow deductions of amount. Proviso to rule 58 (1A) and 58 (1B) were enacted to deal with such a situation - While the Supreme Court had directed that the Government has to bring clarity in the rules, it had not disturbed rule 58 (1A), requiring valuation of land pursuant to Annual Statement of Rates of Bombay TMV Rules, 1995. Thus, application of and governance of valuation of lands pursuant to the same, would not be open for re-examination in the challenge in the present batch of petitions - While prescribing the modalities of valuation under rule 58 and particularly under rules 58 (1), 58 (1A) and 58 (1B) of MVAT Rules, the object all along appears to adopt a standard and measure for assessment of subject of tax and the object is neither lost sight of nor is obfuscated. The rules all along have in view and nexus with subject of tax - Allegation with respect to the notifications and Rules being bad for want of previous publication, cannot be sustained in the facts and circumstances of the case, particularly having regard to that the amendments to Rule 58 of the MVAT Rules, have been introduced by the State Government having been satisfied that circumstances exists for immediate action and as such, it had dispensed with the requirement of previous publication. It has come in the reply of the respondents that the notification clarifies that the Government of Maharashtra was satisfied that the circumstances exist, which render it necessary to take immediate action to amend MVAT Rules and to dispense with condition of previous publication under proviso to section 83 (4) of the MVAT Act. It cannot be said that the government had no power, authority or jurisdiction to make the rules operative without previous publication. As such, it cannot be said that absence of previous publication would render the rules defective, illegal, ultra vires or bad in law - The rules cannot be said to travel beyond the parent act or for that matter alters the character or nature of the tax. We, therefore, do not hesitate to reject the challenge on the ground that the measure provided is beyond the subject for want of nexus to the essential character of levy. It cannot be said that the object underlying rules has no link to and nexus with essential character of the tax being levied – Writ petition dismissed
M/s DHARAMPAL SATYAPAL LTD Vs DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI AND ORS
Central Excise – Section 11A - Recovery of duty - principles of natural justice - Whether recovery proceedings can be initiated without show-cause notice under Section 11A of the Excise Act, which is mandatory – Withdrawal of exemption of central excise – HELD – every violation of a facet of natural justice may not lead to the conclusion that order passed is always null and void. The validity of the order has to be decided on the touchstone of 'prejudice'. The ultimate test is always the same, viz., the test of prejudice or the test of fair hearing - the appellant was accorded certain benefits under Notification dated July 08, 1999. This Notification stands nullified by Section 154 of the Act of 2003, which has been given retrospective effect. The legal consequence of the aforesaid statutory provision is that the amount with which the appellant was benefitted under the aforesaid Notification becomes refundable. Even after the notice is issued, the appellant cannot take any plea to retain the said amount on any ground whatsoever as it is bound by the dicta in R.C. Tobacco (supra). Likewise, even the officer who passed the order has no choice but to follow the dicta in R.C. Tobacco (supra). It is important to note that as far as quantification of the amount is concerned, it is not disputed at all. In such a situation, issuance of notice would be an empty formality and we are of the firm opinion that the case stands covered by 'useless formality theory' - Therefore, on the facts of this case, we are of the opinion that non-issuance of notice before sending communication dated June 23, 2003 has not resulted in any prejudice to the appellant and it may not be feasible to direct the respondents to take fresh action
after issuing notice as that would be a mere formality – Appeal dismissed
2015-VIL-230-CESTAT-230-DEL-ST
M/s IND SWIFT LANDS LTD Vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH-I
Service Tax - Construction service – Refund of tax paid under protest - Limitation - Appellants have clearly mentioned in their letter to the Asstt. Commissioner that appellant is depositing Service Tax under the pressure of department – HELD - As there is no prescribed form to raise protest for payment of service tax under the provisions of Finance Act, 1994, the letter written to Asstt. Commissioner clearly shows that service tax paid by the appellant is under protest - For deposits made under protest, the provision of section 11B of the CEA, 1944 are not applicable - Refund - Unjust enrichment - Appellant has written letters to the intended buyers of the flat that the dispute is going on between the appellant and CBEC about whether service tax is payable or not and in these letters it is clearly mentioned that the price agreed by the buyers is not inclusive of service tax and appellant is paying service tax from their own pocket if later on liability of service tax arises, the same will be paid by the intended buyers of the flat along with the agreed price of the flat - fact has been certified from the Certificate issued by the CA and amount recoverable as tax as reflected in their balance sheet - Appellant has discharged their burden of unjust enrichment, hence, entitled to refund claim - appeal allowed
FIRST FLIGHT COURIERS LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI
Service Tax - Short payment of Service Tax for the period April 2004 to August 2004 in respect of appellant's twenty four branches - Appellant discharged tax liability and interest on or before 20/11/2004 - SCN issued for appropriation of the amount paid and imposition of penalties - adjudicating authority upholding the charges levelled and imposing penalties and interest - Appellant appeal and reliance on sec 73(3) of Finance Act,1994 and submitting that the said section envisages non-issuance of SCN when ST liability is paid in full with interest – HELD - Perusal of the SCN indicates that appellant has been alleged to have short paid tax and which may be due to some calculation error - there is no allegation that during the material period, 24 branches had not discharged ST liability and on the contrary SCN indicates that there was short payment of duty - The provisions of Section 73 (3) of the Finance Act, would be applicable in the facts and circumstances of this case. The said section provides for discharge of service tax by an assessee on his own assessment thereof or on the basis of tax ascertained by the Central Excise Officer, discharge of service tax liability along with interest and inform the jurisdictional Assistant Commissioner of Central Excise, as the case may be the Deputy Commissioner of Central Excise of such payment in writing, no show-cause notice be issued to the assessee under sub-section (1) of the Section 73 of the Finance Act, 1994. In the case in hand, we do find the appellant had informed the concerned Central Excise officers as discharge of service tax liability as to ascertained and brought to their notice by them during the investigation - This is a fit case for invoking the provisions of Section 80 of the Finance Act, 1994 for setting aside the penalties imposed – Appeal allowed
16th May
Extract of The Finance Act, 2015 (Act No. 20 of 2015) - Indirect Taxes
Rajasthan: Digital signatures etc. related to electronic filing of return, making e-payment, issuance of an invoice and orders under RVAT Act, 2003
West Bengal: Grant of Registration under the WBVAT Act, 2003, WBST Act, 1994, WBTEGLA Act, 2012 and CST Act, 1956, to the dealers who have applied for Trade Licence
West Bengal: Procedure for adjustment of Cash Security paid by dealers at the time of Registration
Uttar Pradesh: Directions regarding implementation of e-sancharan made mandatory above 50 lakh [in Hindi]
17th May
MRF LIMITED Vs COMMISSIONER OF TRADE AND TAXES
Delhi Value Added Tax Act, 2004 – deductibility of discounts on sales – Trade discount - turnover discount – Credit note – Cash discount - Admissibility of the claim for deduction on account of “turnover discount” @ 1% given by the assessee to its dealers – HELD – On facts, the Revenue does not refute that in the scheme of turnover discount applied by the assessee here each of its dealers would be entitled to 1% rebate in the sale price irrespective of any particular sales target. It makes no difference that the discount was calculated at quarterly basis and accorded through “credit notes”. The credit notes, issued pursuant to the understanding indicated in the sale invoices declaring upfront the entitlement of the purchaser for such trade discount, would get effectuated by suitable adjustment in the payment of the sales price collected in their wake. The net effect apparently has been of the price being correspondingly varied, the amount received or receivable, thus, not being inclusive of the discount allowed - The Tribunal proceeded on the wrong premise that the assessee had been in receipt of the sale price equivalent to the catalogue price from which it would subsequently allow reimbursement on the basis of turnover. Since the said assumption is factually incorrect and the turnover discount occurred “apart from and outside” the calculation of the sale price, rather “prior to it” no question arises for deduction of any trade discount from the sale price - In our view, thus, the turnover for the assessment years in question was correctly computed by the appellant herein after deducting the turnover discount granted to its dealers and rightly so declared in the returns. The assessing authorities have unjustly denied the benefit of deduction on such account - On inter-State sale - Assessee (appellant) herein itself did not treat the transactions in question in its record as inter-State sales. The provision contained in Section 6A(1) of the Central Sales Tax Act, 1956 places the burden of proving a transfer of goods claimed to have been effected “otherwise than by way of sale” upon the dealer - Assessee itself treated the movement of goods from Faridabad to Delhi “otherwise than by way of sale” within the meaning of the clause contained in Section 6A of the CST Act and not only reflected it so in its stock registers but also, more importantly, made a formal declaration to such effect by issuing “form F” - There is nothing on which it can be inferred that the movement of goods from Haryana to Delhi had been occasioned by the sale of such goods - The claim of the assessee about the inter-State sale of the goods, thus, remained unfounded and was rightly rejected by the authorities below including the Tribunal – Appeal partly allowed
HYVA (INDIA) PRIVATE LIMITED Vs UNION OF INDIA
Central Excise - Valuation - Validity of Rule 10A of The Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Job work - Imposition of penalty - Manufacture or production of the goods on behalf of a principal manufacturer from the inputs or goods supplied by the principal manufacturer or by any other person authorised by him – HELD - Rule 10A (i), comes into play when the excisable goods are sold by the principal manufacturer for delivery at the time of removal of the goods from the factory of the job-worker and where the principal manufacturer and buyer of the goods are not related and the price is the sole consideration for the sale. Since the goods are sold by the principal manufacturer for delivery at the time of removal of the goods from the factory of the job-worker and the other condition being fulfilled the value of the excisable goods is taken to be the transaction value of the said goods sold by the principal manufacturer - It would be also clear from a reading of Rule 11 and the preceding rules that a combined or conjoint reading of these rules would enable us to conclude that it is only in cases covered by Rule 10A clauses (i) and (ii) that the value of the excisable goods is measured or computed at the transaction value of the goods sold by the principal manufacturer. In cases which are not covered by clause (i) or clause (ii) of Rule 10A, all the provisions of the foregoing rules viz. rules earlier to Rule 10A wherever applicable shall mutatis mutandis apply for determination of the value of excisable goods. Therefore, Rule 10A is a rule enabling determination of the value of excisable goods and hence cannot be read as a stand-alone or isolated provision. There is neither any merit in the challenge to the validity and legality nor is it necessary to read the Rule down or restrict its application as prayed for by the petitioners before us - Rule which is termed as invalid and ultra vires the parent Act is incorporated and inserted in the Central Excise Valuation (Determination of Price of Excisable Goods) Amendment Rules, 2007. These rules, therefore, would not receive an interpretation and as strict as required to be placed on the charging sections. There are three components of a taxing statute viz. subject of tax, person liable to pay the tax and the rate at which the tax is levied - We do not find that while valuing excisable goods for purposes of charging the duty of excise in the case of job-worker by taking into consideration the transaction value of the goods sold by the principal manufacturer, the rule in any way travels beyond the Act or alters the character or nature of the tax or duty - The argument that measure provided by Rule 10A is beyond the subject since it ceases to have nexus with the essential character of levy rejected - Writ petition dismissed - However, levy of penalties set aside – Petition partly allowed
M/s NATIONAL BUILDING CONSTRUCTION CORPORATION LTD Vs COMMISSIONER OF SERVICE TAX
Service Tax – Works contract services - Construction of residential complex intended for personal use - Denial of refund claim - Unjust enrichment – HELD - If the activity of the assessee is outside the purview of the taxable service qua the definition of the taxable service whether the sub-contractors had provided any taxable service and if so had remitted service tax, is a wholly irrelevant issue in the adjudication process. On whether assessee provided a taxable service, Government clarification dated 24.05.2010 is conclusive and the answer is that the appellant had not provided a taxable service. If that be so, the assessee is entitled to refund subject to fulfilment of the statutory requirement under Section 11B read with Section 12A and 12B of the Central Excise Act, 1944. On a conjoint reading of these provisions, the legislative trajectory is clear, that a claimant for refund of tax is required to establish that the burden of service tax (an indirect tax) was not passed on. If there is a passing of the burden, the doctrine of unjust enrichment kicks in and a refund claim would not be admissible nor can Revenue retain such amount. Even if there be unjust enrichment, the unauthorised tax remitted by an assessee or collected by the Government cannot be retained but must be credited to the Consumer Welfare Fund - Despite a series of correspondence between the assessee and Revenue officers, there is no material which has come on record to infer that the burden of service tax was not passed on by the appellant and the doctrine of unjust enrichment is therefore excluded - Matter remanded – Appeal allowed
assamNoti21
Assam: Assam Entry Tax Act, 2008 - Exemption to all state government department from payment of Entry Tax on import of vehicle
assamNoti100
Assam: Rate of tax on Tea sold in auction at Guwahati tea auction centre or any other tea auction centre constituted by the Government
assamCir05
Assam: Assessment under the Central Sales Tax Act, 1956
hpNoti8
Himachal Pradesh: Central Sales Tax Act (Himachal Pradesh) Amendment Rules, 2015 - Amendment of Rule 7
hpNoti17
Himachal Pradesh: Regarding tax exemption under CST Act for new industries
kerCir13
Kerala: Extension in time limit for filing application for compounding and registration renewal for the year 2015-16
Guest Column
Finance Bill, 2015 enacted - Service Tax rate of 14% shall come into effect only from date to be notified
19th of May
2015-VIL-198-TRI
M/s RUCHI SOYA INDUSTRIES LTD Vs THE STATE OF TRIPURA
Tripura Value Added Tax Act, 2004 – Seizure of goods due to undervaluation – Checkpost - Disposal of seized goods – Maximum retail price or Declared value – Stock transfer of goods - HELD - Power to seize is granted only when the goods are without documents or are not supported by documents or the documents are false or forged. In the present case the documents were there and the documents were not forged but according to the State, the value of the goods given in the documents was incorrect - The Officer did not at all consider the fact that the petitioner was the manufacturer of the goods and this was in a sense a case of stock transfer. The goods would have been sold to the stockist, then to the wholesaler and then to the retailer. Each of these would be entitled to some profit. We do not understand how the officer-in-charge of the check post could say with certainty that the goods were undervalued - In many cases like the present case, where the registered dealers are transporting the goods, it may not be necessary to seize the goods. The value of the goods can be noted down and the goods can be handed over to the driver or the person-in-charge of the vehicle under a surety bond that after they are taken to the destination they shall be produced before the concerned taxation officer. The seizure of goods should be the last resort and not the first action to be taken by the officer-in-charge of the check post. In the present case action of seizure was based on no evidence and is totally illegal – Auction of seized goods – Normally a minimum period of 15 days must be provided between the publication of the auction notice in the newspaper and the date of auction - Reserve price at less than the value shown by the dealer - We fail to understand how the Assistant Commissioner has been empowered to issue such a communication. In a welfare State, we expect the State to work for the benefit of the citizens. It appears that this formula has been fixed by only ensuring that the tax and penalty is recovered. We are shocked by this attitude of the State. We are constrained to observe that the State cannot act like an unscrupulous person. Why should the State fix the reserve price at less than the value shown by the dealer? In the present case, the dealer had shown the value of the goods at Rs.4,80,000/-. The seizing authority had valued goods at Rs.11,52,000/- but the reserve price was fixed at Rs.1,68,640/- and finally the goods were auctioned for a paltry amount of Rs.1,76,000/- which means that 16000 liters of palmolein oil have been sold for Rs.1,76,000/- i.e. @ Rs.11/- per litter. This is absolutely shocking and gives rise to a doubt that the officials manning the check post are hand in glove with the persons who take part in the auctions so that valuable goods are sold away at throw away prices - As far as the present auction is concerned, it does not comply either with the provisions of the Act or the Rules or even with any reasonable view which can be taken in such a matter. The rate at which the oil was auctioned clearly indicates that the officer who seized the goods was not aware of the market value of the oil - This by itself shows that the auction is totally arbitrary and unconscionable. The procedure followed is so arbitrary that it shocks the judicial conscience of this Court and as such is liable to be set aside in exercise of the writ jurisdiction. In this view of the matter, the entire action of the State is highly irresponsible, arbitrary and unconscionable and is, therefore, liable to be struck down. The same is, accordingly, struck down - The petitioner has been deprived of his goods and he has been paid nothing. Therefore, while setting aside the seizure order and after holding that the auction is totally illegal, the State shall pay to the petitioner a sum of Rs.4,80,000/- which was the declared value of goods after deducting therefrom the amount of tax payable. No penalty shall be levied. The balance amount be paid along with interest @12% per annum from the date of seizure of the goods till payment of the amount along with costs of this petition – Petition allowed
2015-VIL-199-DEL
HARI DURGA TRAVELS Vs COMMISSIONER OF TRADE & TAXES, DELHI
Delhi Value Added Tax Act, 2004 – Transfer of right to use the goods – Sale of goods - Deemed sale - Hiring of Deluxe buses by state transport corporation - transfer of the effective control and possession - Whether the agreement between the appellant and Delhi Transport Corporation giving on hire buses as per requirement of the latter specified its transfer of right to use of goods so as to be liable to VAT under Section 2(zc)(vi) of DVAT Act – HELD – The Tribunal has fallen into error by concluding that the contract in question has resulted in transfer of the effective control and possession of the vehicles (goods for purposes at hand) unto DTC. On the contrary, the various terms of the contract make it vividly clear that the possession has always remained with the owner. The goods are specified, the right to deploy them is conferred on the third party, but the custody of the goods is retained by the owner who remains responsible for keeping them fit for use in terms of the contractual obligations. The registration certificate and the permits continue to be in the control and possession of the owner. It remains responsible for maintenance, repairs, etc. and also keeps the other party indemnified against any claim for loss or damage on account of operations. The rights conferred on DTC by such contract, therefore, do not result in the goods (vehicles) being “delivered” to DTC at any stage. In this case there is no vesting of possession to the exclusion of owner - Thus, the contract in question does not pass the muster of Article 366(29A)(d) as held in the case of Bharat Sanchar Nigam Ltd so as to be treated as transfer of a right to use the goods or a deemed sale - The transaction has been wrongly treated as “sale of goods” by the authorities below. In this view, we need not even go into the question of severability or liability towards service tax – Appeal allowed
JINDAL DRUGS LTD Vs COMMISSIONER OF CENTRAL EXCISE, BELAPUR
Central Excise – Majority order - Manufacturing - Re-packing or labeling done of the imported goods - Argument of the revenue that labelling or relabeling must enhance the marketability is contrary to the plain reading of note 3 to Chapter 18 - Labelling per se will amount to manufacture – HELD - Contention of the revenue does not merit acceptance as to that labelling must enhance the marketability. The argument of the revenue that labelling or relabeling must enhance the marketability is contrary to the plain reading of note 3 to Chapter 18 - The contention raised on behalf of the revenue would render the amendment to various chapter notes including note 3 to Chapter 18 substituting the word "and" with "or". The amendment is made with a view of separate each of the activities covered by note 3 to Chapter 18 to be independent activities and each of them deem to be manufacture - Labelling per se will amount to manufacture in view of the first part of note 3 of Chapter 18. There is no requirement in said note 3 that the labelling should enhance the marketability. It only the last part of note 3 that provides for adoption of any other treatment to render the product marketable. The note 3 is deeming provisions. It deems three of the specified activities as deemed manufacture - The activity of labelling undertaken by the appellant amounts to manufacture in terms of note 3 of chapter 18 of CETA, 1985 - Limitation - The only conclusion that can be drawn from the documents on record is that the appellant kept the department informed that it will be doing the activity of labelling or relabeling or packing or repacking. In such a situation, it will not be possible for me to hold that the department was unaware of the activity undertaken by the Appellant - Considering the totality of the circumstances, I agree with the Member (Judicial) that the extended period is not available to the department in the present case – Penalty - The appellant have undertaken the activity of labelling, which is covered by note 3 and amounts to manufacture. The appellant are entitled to credit of duty paid on the coco butter received from Jammu factory in view of special dispensation contained in Rule 12 and credit of CVD paid on the imported coco butter - There is no suppression on the part of the appellant and extended period is not available to the department. The Appellant have rightly granted rebate. Therefore no penalty can be imposed on the appellant – appeal allowed by majority
2015-VIL-233-CESTAT-CHE-ST
COMMISSIONER OF SERVICE TAX CHENNAI Vs DOOSAN INFRACORE (INDIA) PVT LTD
Cenvat Credit - Appellant is engaged in the management, maintenance & repair services of heavy engineering – Admissibility cenvat credit of IT network services – HELD - The network services availed by the appellant to make its own mail/server functional having its integral connection to generate the output service is a tool for such output service. Therefore, appellant deserves relief on this count - Revenue’s appeals on this count is dismissed – Allowance of credit under GTA service - Learned Commissioner (Appeals) verified that transport service provider was registered and has discharged tax liability of the said amount verifiable from the invoices. He has also noticed that service provider has discharged this amount of service tax. Accordingly, he held that there cannot be double taxation for which appellant-assessee should get the relief - In absence of any contrary evidence as to the deposit of that amount of service tax by the GTA service provider, Commissioner (Appeals) has reached to a proper conclusion for which the Revenue's appeal on this count is dismissed – Revenue appeal dismissed
hpNoti6
Himachal Pradesh Value Added Tax (Amendment) Act, 2015 - Amendment of section 4, 7, 21, 34 & Insertion of new section 50-A
wbNoti665FT
West Bengal: Change in rate of tax on Cigarettes
delCir10
Delhi: Extension in date for filing of online return for the 4th quarter of 2014-15
mpNoti23
Madhya Pradesh: Amendments in the Madhya Pradesh VAT Rules, 2006 - Rule 11 & 75
FCP1705
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
harNoti4
Haryana Value Added Tax (Amendment) Act, 2015 - Amendment in Section 59 & 60 [Power to amend Schedule & Power to amend Rules]
Inst150515
CBEC: Clarifiation regarding non-filing of SLPs before Supreme Court in the cases where presently revenue is below the threshold limit while appeal filed before 01.09.2011 in High Court
SERVICE TAX NOTIFICATIONS
stNoti13: Amendment in Notification No.26/2012-Service Tax, dated the 20th June, 2012
stNoti14: Rate of Service Tax increased from 12% to 14% (including cesses)
stNoti15: Date of effect of provisions under Notification No. 05/2015-ST 1st March 2015
stNoti16: Date of effect of provisions under Notification No. 06/2015-ST 1st March 2015
stNoti17: Exemption to taxable services provided under the Power System Development Fund Scheme of the Ministry of Power System Development Fund Scheme of the Ministry of Power
doLetter-TRU: Letter from JS (TRU-I) - Clarification regarding certain provisions under The Finance Bill, 2015
CENTRAL EXCISE NOTIFICATIONS
ceNoti14NT: CENVAT Credit (Third Amendment) Rules, 2015 - Amendment in Rule 6
ceNoti15NT: Amendments in the notification No. 12/2014-C.E (N.T.), dated 3rd March, 2014
20th of May
2015-VIL-200-AP
OMEGA SHELTERS (P) LIMITED Vs THE ASST. COMMISSIONER (CT)(LTU)
Andhra Pradesh Value Added Tax Act – Composition Scheme - Works contracts - construction and in the sale of “residential apartments, houses, buildings, commercial complexes etc - Denial of the benefit of composition to real estate developers under Section 4(7)(d) of the APVAT Act for the construction made by them after execution of a registered sale deed whereby a semi- constructed apartment/flat was sold to the purchaser – Post-sale completion / finishing works contract - HELD – If dealers engaged in the construction and sale of residential apartments, houses, buildings or commercial complexes exercise the option, and comply with the conditions stipulated in Section 4(7)(d) and Rule 17(4), they cannot be denied the benefit of composition thereunder for the construction made by them, for the very same person, after execution of a registered deed for the sale of a semi- finished structure. Denial of the benefits of the composition scheme under Section 4(7)(d) to such dealers, for the post-sale construction made in terms of the initial agreement, is illegal and is contrary to the provisions of the AP VAT Act and the Rules made thereunder. The impugned assessment orders must therefore be, and are accordingly, set aside. The assessing authorities shall re-examine the matter and pass orders afresh in accordance with law – Petition allowed
2015-VIL-234-CESTAT-DEL-CE
JAIN ISPAT & ALLIANZ STEEL LTD Vs COMMISSIONER OF CENTRAL EXCISE, INDORE
Central Excise - Majority Order - Penalty under Rule 26 Central Excise Rules, 2002 - Issue of fake invoices by registered dealers without supply of goods – HELD - Penalty under Rule 26, whether under sub-Rule (1) of Rule 26 or under sub-Rule (2) of Rule 26 can be imposed on a juristic person also i.e. on a company or a firm. Moreover, if a private limited company or public limited company or a partnership or a proprietorship firm as a registered dealer issues bogus invoices without supply of any material to enable another person avail the Cenvat credit it would not be correct to say that in such cases the person who had issued the bogus invoices would not be liable for penalty under Rule-26 (2) of CER, 2002 – Pre-deposit ordered
2015-VIL-233-CESTAT-DEL-ST
DABUR RESEARCH FOUNDATION Vs COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, GHAZIABAD
Service Tax - Waiver of pre-deposit - Intellectual Property Right Services - Transfer of Know-How - HELD - As per agreements, the applicant has transferred their ownership right and knowhow to their clients and by receiving the consideration from their client. The clients have become absolutely owner of these rights. In these circumstances, we are convinced that the argument advanced by ld. Counsel for the applicant that it is a transaction of sale of goods i.e tangible goods. Therefore applicant is not liable to be taxed under Intellectual Property Right Services, the same view has been supported by the CBEC circular No. 80/10/2004-ST dated 17.9.2004 - Applicant has made out a case of complete waiver of pre-deposit. Therefore, we waive the requirement of pre-deposit of entire amount of service tax interest and penalties and stay recovery thereof, during the pendency of the appeal - Stay granted
mahaCir7T [Download link | File size 948Kb]
Maharshtra: Modification in Trade Circular 5T of 2015 - Online grant of registration under the MVAT Act, 2002 and CST Act, 1956
hpNotiEXN8
Himachal Pradesh Value Added Tax (2nd Amendment) Rules, 2015 - Common Return Form VAT-XV
Guest Column
Service Tax rate increased from 12.36% to 14% (subsuming EC and SHEC) effective from June 1, 2015 and other changes in Service Tax and Central Excise
2005news
News Updates
FCP2005
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
21st of May
2015-VIL-201-GUJ [Download link - File size 877Kb | 89 Pages; Let us know if you require this judgement in PDF]
B G EXPLORATION AND PRODUCTION INDIA LIMITED Vs STATE OF GUJARAT
Gujarat Sales Tax Act - Central Sales Tax Act - Exploration and production of oil and gas - Contracts for development and exploration of Panna-Mukta and Mid-South Tapti Oil and Gas fields, in the west-coast off shore, India - Location of the oil/gas fields is beyond the territorial waters of India - Production Sharing Contract (PSC) – Taxability under CST and GST Act on supply of Natural Gas by ‘Contractor’ to GAIL, the sole distributor appointed by Government of India – Various question of law answered as: i. On a conjoint reading of the Production Sharing Contract and the Interim Sales and Purchase Agreement, it is apparent that what was agreed to be sold and purchased was Natural Gas. ii. At the stage when the PSC came to be executed, the gas was not discovered and was still in the wells and it was not even certain as to whether the Government of India would purchase all the Gas that is produced and delivered. Therefore, though under the PSC 100% of the deliverability of ANG and NANG and Condensate was agreed to be produced and delivered, the goods viz., natural gas cannot be said to be ascertained goods at the time when the Production Sharing Contract came to be executed. Clause (a) of section 4(2) of the Central Sales Tax Act, 1956 would not be applicable to the transactions in question. iii. On a combined reading of the PSC and the Interim Sales Purchase Agreement (ISPA), the delivery point is at the downstream weld at the underwater connection between the Sellers’ pipeline and ONGC’s underwater Gas transmission line/lines which transport Gas from the Bassein Field to Hazira area, viz., the “Delivery Point” as contemplated under clause (a)(iv) of Article 21.5.13 of the PSC and not downstream of the sweetening and separation facility owned and operated by ONGC. iv. The ISPA executed between the constituents of the Contractor and the GAIL cannot amend, modify, vary or supplement the PSC. The price clause as contained in the ISPA which provides for payment at the rate of 90% of the Gas price specified in Article 21.5.13(d) of the PSC for the net MMBtu of gas delivered at the downstream of ONGC facility at Hazira, would not modify the principal agreement between the parties, namely that the Gas is to be delivered at the Delivery Point as contemplated in clause (a)(iv) of Article 21.5.13 of the PSC nor can the same be read to mean that the parties had agreed to sell and purchase sweetened Gas. v. The price clause contained in the ISPA is only a mechanism by which the parties have decided the price of the goods and cannot be relied upon to decide the situs of the sale. Merely because the Sellers have decided to charge on the basis of what is ultimately received by the Buyer cannot be determinative of the fact as to where the sale takes place. vi. The goods, viz., Natural Gas were ascertained goods at the time when they came to be separated and measured at the Offshore Processing Facility. The ascertained goods upon being separated and measured came to be appropriated to the contract and delivered at the Delivery Point. In terms of Article 27.2 of the PSC, the title to the goods also passed to the Buyer at the Delivery Point. The situs of the sale is the Offshore Processing Facility where the goods were appropriated to the contract. Therefore, it cannot be said that the goods in question were within the State of Gujarat at the time of their appropriation to the contract of sale so as to fall within the ambit of clause (b) of section 4(2) of the Central Sales Tax Act, 1956. The transactions in question are, therefore, not amenable to tax under the provisions of the Gujarat Sales Tax Act, 1969. vii. Merely because the Natural Gas upon being delivered at the Delivery Point was commingled with other gases, does not mean that it was not in a deliverable state because having regard to its unique physical properties, large volumes of Natural Gas can be transported only in a continuous stream and once delivered in the pipeline for transportation, it becomes commingled with other natural gas. Individual molecules are not separately indentified and cannot be accurately tracked or traced. As a result, natural gas is sold and purchased on a “quality and quantity” basis. viii. The act of sweetening of natural gas, having taken place post appropriation, after the goods were delivered and the title had passed to the Buyer outside the State of Gujarat, merely because post appropriation the goods were subjected to the process of sweetening within the State of Gujarat it cannot be said that the sale of goods has taken place within the State of Gujarat. ix. Since the provisions of the Customs Act, 1962 have been extended beyond the designated area, the Panna Mukta oil fields from where the movement of goods is occasioned fall within the customs frontiers of India Consequently, the sale of goods cannot be said to have taken place in the course of import of goods into the territory of India as contemplated under sub-section (2) of section 5 of the Central Sales Tax Act, 1956. x. Since the the sale of goods has taken place outside the State of Gujarat, the question as to whether or not subjecting the Natural Gas to the process of sweetening amounts to manufacture becomes redundant, and hence, it not necessary to enter into the merits of the question as to whether or not the processing of the Natural Gas at ONGC’s sweetening and separation facility at Hazira, whereby the sour gas is converted into sweetened gas, amounts to manufacture. xi. The show cause notices which form the basis of the impugned assessment orders are without jurisdiction as the same have been issued without formation of the requisite opinion as required under the provisions of section 41 and 44 of the Gujarat Sales Tax Act, 1969 and are based on a mere change of opinion. xii. As the controversy involved in the present case goes to the very root of the jurisdiction of the Sales Tax Officer to levy sales tax under the provisions of the GST Act, 1969, the availability of an alternative statutory remedy would not preclude the petitioners from invoking the extraordinary jurisdiction of this court under Article 226 of the Constitution of India - The operation of the judgment stayed for a period of ten weeks so as to enable the respondents to approach the higher forum
2015-VIL-236-CESTAT-DEL-CE
M/s BSNL Vs C.C.E, ROHTAK
Central Excise – Telephone exchange - Appellant have purchased the switching equipment and other integral essential parts of the system such as power plant required for producing 48V DC power on which the system is operated, inverter for power break down etc., and assembled these equipments into a digital local telephone exchange - Department alleged that the assembly, installation and commissioning of the switching equipments, power supply, inverter etc., has resulted into emergence of a new goods called ‘digital local telephone exchange’ and seeks to charge duty on the digital local telephone exchanges’ alleged to have been manufactured by classifying the same under heading 8517 of the Central Excise Tariff - Whether assembly installation and commissioning of switching system along with power plant, inverter etc. would amount to manufacture – HELD - In our view the main component of a telephone exchange is switching system which is an electrical apparatus for line telephony. The power plant and inverter are only auxiliary equipments. Power plant supplies the 48V DC current for functioning the switching system and inverter is required for standby period in case of power break down. Thus, the goods which have been purchased i.e. Switching systems have remained the switching systems only even after installation and in our view no new commodity with distinct commercial identity or character or use has emerged – From the technical literature produced by the appellant, it is clear that the switching systems are commonly called telephone exchanges and hence, on installation of a switching system, no new goods with distinct commercial identity and distinct characteristics or uses have emerged. The impugned orders, therefore, are not sustainable. The same are set aside. The appeals are allowed
2015-VIL-235-CESTAT-CHE-CE
M/s VIDHWATH ELECTRICALS & M/s ELECTRICAL ENGG. & EQPT. COMPANY Vs CCE, CHENNAI-IV
Central Excise - Demand solely on the basis of the figures indicated in the Account current as shown in ER-1 returns – Clerical mistake – HELD - It is evident from the e-receipts credit in the PLA account was available before the next clearance. Both the lower authorities confirmed the demand only on the ground that the appellant failed to produce sufficient evidence of payment details. Considering the proof of payment of e-receipts, which is on record and the same can be verified from the system ACES data base by the adjudicating authority, confirming the demand only on the basis of ER-1 entry is not justified. Accordingly, the impugned order is set aside and the matter is remanded to the adjudicating authority with a direction to reconcile the figures in the account current of both the appellants by taking into account the e-receipts already made and to consider the amendment of ER-1 returns filed by the appellants to decide the issue afresh - Appeals are allowed by way of remand
2015-VIL-237-CESTAT-MUM-ST
RAMA MARKETING Vs COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR
Service Tax - Business Auxiliary Service – Trading activity by sole selling agent - Appellant is providing services as a sole selling agent and discharged service tax on incentive received – Demand of tax on profit made in respect of the purchase and sale transactions of the raw materials – HELD - The charge against the appellant is that the profit generated from the sale of packaging and raw materials was the earning of the service provider and, therefore, since the appellant is providing the services of sole selling agent, it forms part of the consideration for the services rendered. This charge is quite absurd - Section 66 read with Section 67 of the Finance Act, 1994, as they stood at the relevant time, provided for charge of service tax on the gross amount charged for the services rendered in respect of a taxable service. It did not provide for charging of service tax on the gross profit involved in a sale and purchase transaction - The appellant is undertaking two functions - one as a sole selling agent on which service tax liability is discharged. The second transaction which the appellant undertakes is procuring raw materials and packing materials on which he has discharged VAT liability; thereafter, he has sold these packing materials and raw materials on a profit, again discharging VAT liability on the sale price. Thus, the profit earned is in respect of a trading transaction in respect of packing materials and raw materials and has nothing to do with the activity of sole selling agent. In fact, these two transactions could have been performed by two separate entities. Merely because one entity has performed both transactions, the distinct and different nature of the transactions does not get obliterated. Therefore, the profit earned in purchase/sale transactions cannot be subject to service tax in respect of a service rendered as a sole selling agent for the goods manufactured – The impugned demands are clearly unsustainable in law and, therefore, merits to be set aside – Appeal allowed
2015-VIL-238-CESTAT-MUM-ST
COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, NAGPUR Vs NOBLE GRAINS INDIA PVT LTD
Service Tax – Denial of refund on the ground that assessee-respondent has manufacturing unit at Akola while the documents pertaining to export were prepared by their registered office at Indore and hence the refund claims of the service tax paid on the services, which were utilised for export, would be required to be filed with the Indore Commissionerate – HELD – There is no dispute that the consignments which were exported were cleared from the Akola factory; the jurisdiction for claiming the refund of service tax paid on such services which are in connection with the export of goods cannot be shifted to their Indore Commissionerate as the registered office of the respondent-assessee being at Indore cannot be a reason for shifting the jurisdiction to Indore. It is undisputed that the manufacturing activity has taken place at Akola and falls within the jurisdiction of the Commissionerate at Nagpur. Secondly, there is no dispute as to that the respondent is a manufacturer-exporter, a category which is covered under Notification No. 41/2007-ST - Assessee, being a manufacturer-exporter, goods cleared for export, are from the factory falling within the Nagpur Commissionerate and have correctly filed the refund claims at Nagpur Commissionerate and are eligible for the refunds. It is avowed policy of the Central Government that all exports should be of the goods and not taxes. Keeping in mind such a policy, the impugned orders upholding the claim of the assessee are correct, proper and legal and do not suffer from any infirmity – Appeal dismissed
jkFormST61
Jammu & Kashmir: Format for revised Form ST-61
Jharkhand Notifications
jharNotiSO44, jharNotiSO45, jharNotiSO46 & jharNotiSO47: Exemption to Central Master Canteen of Central Reserve Police Force (CRPF), Canteen Stores Defence Regimental Units and Central Police Canteen of 106 Rapid Action Force (RAF)
Guest Column
Taxability of newly taxable services
22nd of May
2015-VIL-203-UTR
HINDUSTAN UNILEVER LTD Vs STATE OF UTTARAKHAND
Uttarakhand VAT Act – Denial of benefit of Input Tax credit on transfer of stock to the warehouse or godowns situated in the other States, other than by way of sale – Stock Transfer - exemption to goods locally produced – HELD - Section 6 of the Act would demonstrate that Legislature, at its wisdom, has not considered the transfer of stock to other States, other than by way of sale, as sale, therefore, transfer of stock by manufacturer to other States, should not be considered as inter-State sale - Moreover, bare reading of proviso of sub-Section (3) of Section 6 and sub-Section (4) (a) (ii) of Section 6 shall demonstrate that sub-Section (3) speaks about stock transfer to other State, other than by way of sale while sub Section 4 (a) (ii) speaks about sale outside the State coupled with dispatch or stock transfer of goods. Both sub-Sections cover different fields - Raw material, consumables, containers, packing materials are different components used for the purpose of manufacturing finished goods. Therefore, packing material cannot be treated at par or as part of the goods or capital goods or raw material - Since transfer of stock to other States, other than by way of sale, is not being treated as inter-State sale in the State of Uttarakhand and petitioner-company was never asked to pay Central Tax thereon, therefore, petitioner cannot claim ITC, as a matter of right on stock transfer, other than by way of sale – Contention that sub Section (3) of Section (6) of the Act is hit by Articles 301 and 304 of the Constitution of India - In the present case, State has not imposed any tax on the goods imported from outside the State rather Legislature, at its wisdom, has given extra benefit of ITC over 2% on the raw materials purchased, in the event of transfer of stock other than by way of sale - Giving extra benefit in favour of registered trader does not amount to violation of Articles 301 and 304 of the Constitution of India. Consequently, all the petitions fail and are hereby dismissed
2015-VIL-202-MAD
M/s BHARAT STEELS Vs THE COMMERCIAL TAX OFFICER
Tamil Nadu Value Added Tax Act – Input Tax Credit - Reverse the Input Tax Credit on the ground that the petitioner had made excess input tax credit on the purchase whereas the sellers have reported less sales in their returns – HELD - That sub-section (16) of section 19 states that the input-tax credit availed is provisional. It however, does not empower the authority to revoke the input-tax credit availed of on a plea that the selling dealer has not paid the tax. It only relates to incorrect, incomplete or improper claim of input-tax credit by the dealer - The liability had to be fastened on the selling dealer and not on the petitioner-dealer which had shown proof of payment of tax on purchases made - The impugned orders is set aside and the matters is remanded back to the authority concerned to consider the case of the petitioner afresh on merits
2015-VIL-240-CESTAT-DEL-ST
AMWAY INDIA ENTERPRISES PVT LTD Vs C.S.T., DELHI
Service Tax – Intellectual property Rights and Franchise Service – Demand of Service tax on expenditure incurred in foreign exchange on taxable service namely Intellectual Property Right service received from its associate enterprises based abroad - Franchisee service on the income received by it in the form of subscription from various distributors appointed by the company which were given the representational rights to sell the products of the appellant. All these products bore the various brand names belonging to the appellant – Non-speaking order - HELD – both sides have rightly agreed that the impugned adjudication order relating to the confirmation of service tax demand under intellectual property service is a non-speaking one - The impugned order to the extent it relates to the impugned demand under intellectual property service is required to be set aside and remanded to the primary adjudicating authority with a direction to pass a speaking order after adverting to submissions of the appellants – Franchise service - The word franchise is defined in Section 65 (47) of Finance Act 1994 and therefore any reference to the meaning of the said word in other countries is of no direct relevance, because for the purpose of this case, we have to go only and only by the definition of franchise given in Section 65 (47) ibid. Therefore, it will be pointless to indulge in any analysis with regard to the meaning of the word franchise in other countries – The distributor, also known as an Amway Business Owner (ABO), is not merely having right to sell Amway product; he also does presentation of Amway’s Sales & Marketing Plan which inter alia also includes Amway’s system, procedures and policies regarding presentation of Amway’s products, the Amway’s business and Amway’s organization. The ABO is also required to conduct and behave in the manner prescribed so as not to jeopardize the reputation of Amway - Thus it again becomes evident that the ABO has been given right to represent Amway business and ABO/distributor is not merely granted right to sell Amway products but he has the representational rights to sell such products - The meanings of the word ‘represent’ are in fact far wider (in scope) than required to hold on the basis of aforesaid analysis that ABOs clearly had representational right to sell goods indentified with Amway - demand under franchise service is upheld and impugned order to the extent it relates to the demand under IPR service is set aside and matter remanded to the primary adjudicating authority for de novo adjudication and passing a speaking order
2015-VIL-239-CESTAT-MUM-CE
M/s SAI WARDHA POWER LTD Vs COMMISSIONER OF CENTRAL EXCISE, NAGPUR
Central Excise – Maintainability of appeal - Refund/rebate against the supply of goods to the SEZ located in India, whether the appeal lies before Tribunal or a Revision Application is to be filed before the Jt. Secy. (Revisionary Authority) to GOI – Divergence of views – HELD - We are of the view that in the present case where refund/rebate is related to supplies made to SEZ within India, this Tribunal has jurisdiction to entertain the appeal. However as per judgment cited by rivals it is observed that in some of the judgments this Tribunal has entertained the appeals and disposed on the merits, and in some of the cases this Tribunal has viewed that this Tribunal does not have jurisdiction in the identical cases. It is also seen that even the Joint Secretary - Revisionary Authority to GOI also entertained the identical cases and disposed of the same on merits. This shows that there are clearly divergent views among Benches of this Tribunal as well as the JS (Revisionary Authority) to Government of India. Therefore, we are of the considered view that the matter should be placed before the Larger Bench to decide the preliminary issue that in the matter of refund/rebate against the supply of goods to the SEZ located in India, whether the appeal lies before this Appellate Tribunal or a Revision Application before the Joint Secretary (Revisionary Authority) to GOI - Matter referred to Larger Bench
jharNoti25
Jharkhand Value Added Tax (Amendment) Act, 2015 - Amendment of Section 2, 18, 57, 74 & 80
rajNoti5693
Rajasthan: Class of dealers to generate Form VAT-47A or the identification number through the official website of the Department
rajNoti5695
Rajasthan: Class of dealers to generate Form VAT-49A or the identification number through the official website of the Department
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Trade Notice: Vadodara-II Commissionerate: Shifting of office - New official addess
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FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
23rd of May
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Maharashtra Value Added Tax (Amendment) Rules, 2015 - Amendment of Rule 8 & rule 58; Form 302 & 316
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Delhi: Extension in date for filing of online return for the 4th quarter of 2014-15
25th of May
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Central Excise: amend notification No. 6/2005-CE dated 1.3.2005 - Omission of entry regarding Additional Excise Duty of 5% leviable on waters including mineral waters and aerated waters containing added sugar
2015-VIL-204-GUJ
STATE OF GUJARAT Vs ESDEE PAINTS LTD
Gujarat Value Added Tax Act – Section 10A - Turnover of tax – Ad-hoc payment – HELD - Ad-hoc payment cannot be said to be payment in accordance with sub-section (1)(2) or (3) Section 47, the appellant is held liable to pay interest on such ad-hoc payment – However, the interest so levied, would be limited form the date of expiry of the time prescribed to the date when the ad-hoc payment is made, subject to however that the difference of the tax paid and tax assessed exceeds 10% of the tax paid – Revenue appeal dismissed
2015-VIL-11-MSTT
M/s ASIAN PAINTS LTD Vs THE COMMISSIONER OF SALES TAX, MAHARASHTRA
Maharashtra Value Added Tax Act, 2002 – Set-off - Admissibility of set-off against purchase of Duty Free Import Licences - clause (f) of the Rules 54 of the MVAT Rules – HELD - Import license is neither defined under the MVAT Ac t nor under the MVAT Rules. Hence DFIA Licenses would be understood in the manner a common man would understand them – DFIA Licence was excluded for the purposes of set-off under rule 41 (f) of the MVAT Rules, and therefore, the Ld. Commissioner has rightly concluded that, the appellant is not entitled to claim set-off on the purchases of DFIA Licence. No fault can be found in the order of determination passed by the Ld. Commissioner - In view of the separate entry and separate notification issued by the Government from time to time regarding “Duty Free Replenishment Certificate” (DFRC), and “Duty Free Import Authorization” (DFIA) Licenses, there was no confusion at all that, both the Licences were not held to be identical for the purposes of claiming set-off. The fact that, DFIA Licence was not included in Rule 54 (f) of the MVAT Rules, 2005 for the availability of set-off which clearly goes to show that, this is not the fit case for giving the prospective effect to the determination order passed by the Ld. Commissioner – Appeal dismissed
2015-VIL-241-CESTAT-MUM-CE
M/s LEBEN LABORATORIES PVT LTD Vs CCE, NAGPUR
Central Excise - Rule 4(4) of CER, 2002 – Storage of finished/manufactured goods outside the factory premises without payment of duty on the ground of shortage of space – Denial of request of appellant for extension of permission to store the goods outside the factory premises – HELD - The request for extension of permission cannot be rejected on the ground that exceptional circumstances cannot be perpetual - The Commissioner’s interpretation of sub-rule 4(4) that the ‘exceptional circumstances’ cannot continue in perpetuity is not correct, as he has read this expression in isolation and if the ‘exceptional circumstances’ caused by the nature of the goods or shortage of storage space continue, the permission for outside storage under this sub-rule has to be granted subject to the conditions for safeguarding the interest of Revenue – The impugned order is set aside with direction to the CCE, Nagpur to extend the permission for storing the finished goods outside the factory premises – Appeal allowed
2015-VIL-50-SC-CE
COMMISSIONER OF CENTRAL EXCISE Vs M/s AMRITLAL CHEMAUX LTD
Central Excise – Assessee buys dyes & dye bases, napthols & fast bases, and chrome pigments in bulk from a manufacturer in bulk quantities in bulk packing – Process of repacking and / or labelling thereupon - Manufacturing process or not - Chapter Note 11 of Chapter 29 and Chapter Note 3 of Chapter 32 – HELD - It is clear from the plain language of the aforesaid Chapter Notes which use both the expression 'or' as well as 'and' at different places. Thus, by using the two expressions, the intention of the legislature is manifest that insofar as the process of label or relabeling of containers is concerned, it would amount to manufacture only if the other condition, viz., repacking from bulk to retail pack is also satisfied - hough the show cause notice covered all the three products, viz., dyes & dye bases, napthols & fast bases, as well as chrome pigments, the final order which was passed by the adjudicating authority, did not levy any excise duty on dyes and dye bases - Insofar as the napthols & fast bases is concerned, even from the order of the Commissioner, it becomes clear that though there was repacking and even relabeling, the repacking of bulk was not into retail packing as the goods after repacking were supplied to industrial consumers on wholesale basis. It is specifically stated so by the assessee which fact is not denied by the Commissioner. Therefore, both the conditions mentioned in the Chapter Notes are not satisfied - Insofar as the chrome pigments are concerned, the assessee only obliterated the name which was appearing on containers and the name of the assessee along with the logo is stenciled on such container that may amount to relabeling. However, the process of repacking was not undertaken at all by the assessee. Thus, here also both the eligibility conditions which are to be fulfilled have not been satisfied – No merit in this appeal which is accordingly dismissed
2015-VIL-242-CESTAT-AHM-ST
THE GUJARAT TEA DEPOT CO. Vs C.S.T. SERVICE TAX, AHMEDABAD
Cenvat Credit – Admissibility of Cenvat Credit under the CCE, 2004 on Packaging Services, Security Services, Telephone Services & Chartered Account Services – Packing of Tea by availing the services of packer - Appellant contention activity has to be undertaken to protect their ownership right over the Trade Mark – HELD – In the certificate / opinion produced by appellant no provision of the Trade Marks Act/Rules is mentioned under which it is not obligatory on the part of the appellant to compulsorily use the Trade Mark himself. Lending its trade mark, getting royalty & paying service tax on the part of appellant should be sufficient to establish that his Trade Mark has been used. Under the present factual matrix it can not be held that packaging Services are availed by the appellant directly for protecting their Trade Mark/Brand Name. Therefore, the packaging Services availed by the appellant has to be considered to have been utilized for making of tea bags and can not be considered to be availed directly or indirectly in maintaining/protection of appellant’s Trade Mark – Security Services - As per Rule 6 (5) of the CCR, 2005 credit of service tax on security services is correctly availed by the appellant - Credit of Chartered Accounts Services & Telephone Services were availed both for undertaking trading activity and for providing ‘Intellectual Property Right Services’ - As no separate figures are available for such services it will be appropriate that appellant only takes proportionate value wise credit on such services and pay the remaining amounts with interest - Invocation of extended period - Improper credit taken was detected by the department officers only. At no stage of appellant approached the department for any guidance that there was any confusion in admissibility of credit on the impugned services. Therefore, extended period will be applicable - Appellant’s case is thus covered by the provisions of Section 80 of the Finance Act, 1994 and accordingly penalties imposed are set aside - Appeal filed by the appellant is partly allowed
Guest Column
Whether Sodexo meal vouchers are goods for the purpose of levy of Octroi and Local Body Tax (LBT)
Tamil Nadu VAT Schedule - Updated upto 1st May '15 [Download link]
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Andhra Pradesh: Amendment in Schedule-I - Addition of ‘Bio-Gas’ manufactured from ‘Organic Waste’
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Andhra Pradesh: Amendment in Schedule-I - Addition of 'Sales of e-bid RLNG by GAIL/GSPCL to the Gas based Power Plants in Andhra Pradesh State under the proposal for utilization of stranded gas based generation capacity approved by the Government of India'
26th of May
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Central excise: Amends Notification no. 22/2003- Central Excise - Regarding Letter of Permission (LoP)
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Central excise: Amends Notification no. 22/2003- Central Excise and Notification no. 23/2003- Central Excise - Regarding Additional Duties of Excise (Textile and Textile Articles) Act, 1978
2015-VIL-207-P&H
THE JALANDHAR IRON & STEEL MERCHANTS ASSOCIATION (REGD.), JALANDHAR Vs STATE OF PUNJAB AND OTHERS
Punjab Value Added Tax Act – Section 13 - Input tax credit - purchased goods for resale/sale and manufacture - Power of State to reduce the rate of input tax credit already earned by reference to the sale of goods lying in stock or the reduced rate of tax – Lack of enabling provision in the Act - Validity of application of amended Rule 21(8) of the PVAT Rules, prior to amendment of the proviso to Section 13 of the Act - Whether on 21.01.2014 there was any provision in the statute that empowered the State of Punjab to notify Rule 21(8) of the PVAT Rules – HELD - The State may be well within its power to alter the terms & conditions of availing input tax credit by a piece of subordinate legislation but as subordinate legislation may only be notified if it is relatable to statutory power enabling the State to notify such a rule, but the absence of such a provision in the statute, empowering the State to notify such a rule, between 21.01.2014 and 01.04.2014, did not empower the State to notify Rule 21(8) of the Rules on 21.01.2014 - On the date of introduction of sub Rule (8) of Rule 21 of the Rules, the State did not possess any power, emanating from the Act, to confine the availing of input tax credit to the reduced rate of tax on stock in trade i.e. transactions that had concluded with the dealer already earning input tax credit - The amendment in the rule, which came into effect prior to the amendment the Act could, therefore, not be enforced, by the State before 01.04.2014 to take away a vested right already determined without statutory sanction - In the absence of any provision in the statute enabling the State of Punjab to notify Rule 21(8) of the Rules w.e.f. 21.01.2014, the said provision would come into effect from 01.04.2014. However, since the notification by which Rule 21(8) of the Rules was added to the Rules, was obviously issued in view of the fact that the respondents were simultaneously, or soon thereafter, reducing the rate of taxation on various goods and as such, the notification was intended to ensure that the public exchequer does not suffer a loss by granting input tax credit at higher rates than the tax actually deposited (after lowering the rate of taxation), we grant liberty that if the public exchequer is adversely affected on account of the fact that the notification of Rule 21(8) of the Rules to be an act of excessive delegation, the respondents may roll back the lowered rates of taxation, as per law, for the period between 21.01.2014 to 31.03.2014 to the level at which it was existing prior to the notification lowering such rate – Writ Petition allowed
2015-VIL-206-RAJ
BSL LIMITED Vs COMMISSIONER, COMMERCIAL TAXES & ANR
Rajasthan Value Added Tax Act – Assessment - Imposition of penalty u/s 64 & 64 of RST Act – Erroneous claim of 100% exemption claim on purchase of raw material - Bonafide belief in construing the exemption Notification - Assessing officer made provisional assessment while deleting penalty - Commissioner invoked its jurisdiction to impose penalty – principles of natural justice – Penalty - HELD – The learned Commissioner has over-stepped its jurisdiction in finding fault with the orders passed by the Assessing Authority for non-imposition of penalty. As a matter of fact, there is nothing on record to show that the Assessing Authority has exercised its discretion arbitrarily or capriciously and therefore interference with the discretionary orders of the Assessing Authority by the learned Commissioner is per-se a decision based on mere ipse-dixit or change in the opinion – Remand order - The folly, which is apparently clear from the order passed by the learned Commissioner under Section 87 of the RST Act, has been further perpetuated by the Assessing Authority after the remand order, inasmuch as the Assessing Authority has also not cared to issue any notice to the assessee before imposing penalty under Section 64 of the RST Act. It is clearly apparent that after remand order, all the assessment orders were passed by the Assessing Authority castigating the assessee for violation of declaration exposing it for the penalty envisaged therein without affording opportunity of being heard - Section 69 of the Act of 1994 also opens with non-obstante clause that no penalty under this Act shall be imposed unless a reasonable opportunity of being heard is afforded to the dealer or the person concerned. In this view of the matter, even on the touchstone of RST Act, observance of principles of natural justice is to be adhered to mandatorily before imposition of penalty against an erring assessee - use of the expression “falsely represents” is indicative of the fact that the offence under Section 10(b) of the Act comes into existence only where a dealer acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct. Therefore, in proceedings for levy of penalty under Section 10-A of the Act, burden would be on the Revenue to prove the existence of circumstances constituting the said offence - finding of mens rea is a condition precedent for levying penalty under Section 10(b) read with Section 10-A of the Act – Limitation - A plain reading of sub-sec.(2) of Section 87 makes it crystal clear that learned Commissioner can exercise revisional powers under sub-sec.(1) of Section 87 within a period of five years from the date order sought to be revived was passed - The order passed by the learned Commissioner speak volumes about the fact that the same was passed on 10th August 2005 and therefore not persuaded to hold that it has exercised powers of revision vis-ŕ-vis two assessment year after expiry of period of limitation – Appeal partly allowed
2015-VIL-243-CESTAT-MUM-CE
TATA MOTORS LTD Vs CCE, PUNE-I
Central Excise - Whether an adjustment is possible against the short payment of duty vis-ŕ-vis excess payment made by the assessee during the relevant period when the assessments were provisional and subsequently finalized – HELD - The excess payment can be adjusted against any dues of an assessee is the ratio which has been correctly followed by the adjudicating authority in the case in hand - The question of unjust enrichment has not been raised or addressed before the first appellate authority and the adjudicating authority while in this case it is clearly held that there is no unjust enrichment. Be that as it may, the reliance placed by the learned D.R. on the Larger Bench decision may not carry the revenue’s case any further as the decision of the Hon’ble High Court of Karnataka in Toyota Kirloskar Auto Parts Pvt. Ltd. vs. CCE will prevail over the decisions of the Tribunal which is a settled law – Appeal allowed
2015-VIL-208-MAD-CE
M/s MALLADI DRUGS & PHARMACEUTICALS LTD Vs THE UNION OF INDIA
Central Excise – Demand of duty along with interest by denying the benefit of CENVAT credit – HELD – Judgement of Indsur Global Ltd followed - The right to pay duty by utilising the CENVAT credit that had accrued cannot be defeated, unless it is a case of illegal or irregular credit - The right that has accrued to an assessee by way of CENVAT credit, that is duty paid on the inputs, cannot be taken away under a rule, which only provides for the manner and method of payment of duty and for levying of interest, if there is a default. The object of the term ‘without utilizing the CENVAT credit’ would run counter to the scheme of availment of the CENVAT credit on the duty paid inputs. It is a legitimate right that has accrued to an assessee and that cannot be denied arbitrarily under the provision under challenge. We, therefore, have no hesitation to concur with the reasoning of the Gujarat High Court that Rule 8(3A) is ultra vires of Article 14 on the ground of arbitrariness – Appeal allowed
2015-VIL-244-CESTAT-MUM-ST
CCE, NASHIK & HINDUSTAN AERONAUTICS LTD Vs HINDUSTAN AERONAUTICS LTD & CCE, NASHIK
Scientific and technical consultancy services - Reverse charge mechanism - Intellectual property services (IPR) rendered by foreign firms - Discharge of service tax liability on the reverse charge mechanism for the services rendered by order "Rosonbornexport" in pursuance of an agreement entered for licence technical documentation for production of fighter aircraft – HELD - the official status of "Rosonbornexport" is an exclusive state intermediary agency and provides guaranteed state support of all export import operations. The said status of the "Rosonbornexport" indicates that it is neither science or technology institution or organisation. In our considered view, the definition of "scientific and technical consultancy services" may not be applicable in the facts and circumstances of this case. Revenue has not brought on record any evidence to contradict the submissions of the appellant assessee. In the absence of any contrary evidence we have to hold that "Rosonbornexport" is not a science or technology institution or organisation which gives any advise, consultancy or technical assistance in one or more discipline of science or technology - transfer of trade name and formulae transferred for a consideration cannot be services which would fall under "Scientific or Technical Consultancy Service" - the impugned order is set aside and appeal filed by the assessee appellant is allowed and the appeal filed by the revenue is rejected
2015-VIL-205-RAJ-ST
R S I D & INVESTMENT CORP LTD Vs UOI / COMMISSIONER OF CENTRAL EXCISE NCR
Central Excise - Waiver of pre deposit - option to pay 7.5% or 10% of demand under the new substituted provisions of Section 35F - Since orders were passed before the amendment was made effective – HELD - In Paramount Security Vs Union of India & Ors., a Division Bench of this Court, considering the effect of new substituted provisions of Section 35F with effect from 06.08.2014, recorded an opinion that the effect of the amendment cannot be restricted only for those appeals which are filed after 06.08.2014. Such a restriction will be violative of Article 14 of the Constitution of India. The amended provisions, thus, will apply to even those orders, which have been passed before the amendment was made effective. While issuing notices of the writ and the stay petition, the Division Bench had directed that, in the meantime, the appeal shall not be dismissed by the Tribunal, provided the petitioner complies with the condition of pre-deposit in terms of amending Section 35F, introduced with effect from 06.08.2014, within a period of four weeks. - No good ground to take a different view, at the stage of passing of an interim order - Conditionally in favour of assessee
Guest Column
Refund of excess Excise duty permissible on reduction in contract price after clearance of goods from factory – Analysis of HPL Socomac Ltd. Vs. Commissioner of Central Excise 2015-VIL-48-SC-CE
FCP2605
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
27th of May
2015-VIL-209-GUJ
STATE OF GUJARAT Vs ESSAR OIL LTD
Gujarat Valued Added Tax Act – Assessment – Pre-deposit – Bank guarantee – Similar appeal pending in Hon’ble High Court – Direction of Tribunal to first appellate authority to decide the appeals pending before it within a period of three months – HELD - The proper course on the part of the learned Tribunal would have been to remand the matter to the first appellate authority without any further directions and wait for the outcome of the appeals by the High Court - It is very unfortunate that despite the pendency of appeal against the order in the case of ONGC Ltd before the High Court, the learned Tribunal still insisted and directed the first appellate authority to decide the appeals within three months and that too after following the decision of the Tribunal in the case of ONGC Ltd and in accordance with law - Applications insofar as directing the first appellate authority to decide the appeals pending before it within a period of three months and to follow the judgment of the Tribunal in the case of ONGC Ltd as well as the direction issued by the learned Tribunal the respondent – original appellant to refund the amount deposited by the respondent – original appellant pursuant to the interim order are hereby quashed and set aside - It is directed that on furnishing unconditional and irrevocable Bank Guarantee of like amount in favour of the Commissioner of Commercial Tax if furnished within 15 days from today - The appellant State shall return the deposited amount to the respondent forthwith - As on the identical issues, the appeals in the case of ONGC Ltd are pending before this Court and the decision of this Court in the appeals in the case of ONGC Ltd has a direct bearing on the appeals in the present case and to avoid any further multiplicity of proceedings, the first appellate authority is directed to decide and dispose of the appeals pending before it after the decision of the Division Bench of this Court in the appeals in the case of ONGC Limited – Appeal partly allowed
2015-VIL-210-GUJ
SHREE BHAIRAV METAL CORPORATION Vs STATE OF GUJARAT
Gujarat Valued Added Tax Act - Input tax credit – Denial of Input Tax Credit on purchases made by the petitioner from dealer whose registration certificate came to be cancelled ab initio – Assessing Officer allowed the ITC claimed by the petitioner – dealer subsequently in exercise of revisional jurisdiction, the first revisional authority disallowed the ITC claimed by the petitioner – Transaction with bogus and non-genuine dealer - HELD – The claim of the purchaser like the petitioner–dealer of the ITC on the purchases made from such seller, whose registration certificate has been cancelled ab initio on the ground that such seller had indulged into billing activities only, is required to be considered - An opportunity is required to be given to such dealer/purchaser to prove the genuineness of the transaction and/or to justify its claim of ITC. In the present case, the first revisional authority had disallowed the ITC claimed, however, the petitioner dealer was not served with the copy of the order in the case of M/s Lucky Enterprises cancelling its registration certificate ab initio - So far as contention of the petitioner that the petitioner produced necessary documentary evidence such as bills, vouchers, weigh bills/slips and the payments were made by cheques and therefore, the first revisional authority ought not have disallowed the ITC is concerned, as such, it cannot be accepted – The dealer is also required to prove and establish the actual movement of goods from the place of the seller to the place of the purchaser by leading cogent evidence and mere production of the bills, vouchers etc. is not sufficient to claim the ITC - The matter is required to be remanded to the adjudicating authority to consider the claim of the petitioner for ITC claimed on the alleged purchases made by the petitioner from M/s Lucky Enterprises after giving an opportunity to the petitioner afresh. However, it is made clear that there is no question of now allowing and/or permitting the petitioner to lead fresh evidence as it will tantamount to afterthought - It is made clear that the impugned orders are set aside solely on the ground that they were found to be in breach of principles of natural justice, inasmuch as the petitioner was not served with the copy of the order in the case of M/s Lucky Enterprises, the basis of which the ITC has been denied – Partly allowed with remand
2015-VIL-246-CESTAT-AHM-CE
M/s PIPAVAV SHIPYARD LTD Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, BHAAVNAGAR
Central Excise – Cenvat Credit – Input Service - Appellant is EOU unit manufacturing ship building and the services of ship repairs/refit – Ship is classifiable under Central Excise Tariff Heading 8901 chargeable to Nil rate of duty - Revenue seeks to deny CENVAT Credit for manufacturing of the exempted final product in contravention of Rule 6(1) of CENVAT Credit Rules, 2004 – ER-1 return & ST-3 returns - HELD - In the instant case, the Appellant fabricates Dry Dock for manufacturing ships, excisable goods and to provide output service namely repair service, which is covered under the definition of ‘Input Service’ under Rule 2(l) of CENVAT Credit Rules, 2004 - The expression ‘any service’ read with ‘for providing an output service’ would cover wide encompass of the definition of input service - CENVAT Credit availed on input service, input and capital goods for setting up Dry Dock would be allowed for providing output service namely repair/refit service. This is also covered in the inclusive part of the definition of ‘input service’. Hence, the finding of the Adjudicating authority, is that the Appellant is exclusively engaged in the manufacture of exempted final product ‘Ships’ and CENVAT Credit on input, capital goods is inadmissible, cannot be sustainable - Input service credit was denied mainly on the basis that the input service credit availed on the input services was shown in ER-1 return instead of ST-3 returns - CBEC vide Circular F.No.381/23/2010/862, dt.30.03.2000, clarified that cross utilisation of credit of input and input service - The CENVAT credit on input, capital goods and input services which are used in manufacturing of goods or providing output service is available in a common pool and can be used for payment of excise duty or service tax. Ultimately, the CENVAT Credit taken during the period shown in ER-1 or ST-3 return could be same - There is no restriction for utilisation of common input credit availed on the inputs and also on input service for payment of excise duty or service tax. Hence, we do not find any reason to deny the input service credit on the ground that it was shown in the ER-1 return.
Cenvat Credit on the strength of invoices issued by the Appellant’s head office at Mumbai as ISD (Input Service Distributor) - There is a denial of CENVAT credit availed on input service on the ground that credit was taken on the strength of invoices issued by the Appellant’s head office at Mumbai as ISD. It is observed by the Adjudicating authority that the head office address was not mentioned in the LOP issued by the DGFT. We find that there is no dispute that the head office is registered as ISD with the Service Tax authorities. As per CENVAT Credit Rules, the Appellants are eligible to avail the credit on the invoices issued by the ISD. There is no reason to deny the credit on the ground that the address of the ISD was not mentioned in the LOP
The denial of CENVAT Credit alongwith interest and penalties cannot be sustained - The impugned order is set aside. Assessee appeal is allowed with consequential relief
2015-VIL-245-CESTAT-MUM-CE
M/s HINDUSTAN COCA-COLA BEVERAGES PVT LTD Vs CCE, THANE-I
Central Excise – Rule 3(4) of Cenvat Credit Rules, 2001 – Clearances of capital goods to sister concern – Demand of duty on the value of the capital goods cleared ‘as such’ based upon the Valuation Rules – Demand of CENVAT Credit availed by the appellant’s predecessor in respect of the capital goods which were removed by the main appellant to their sister unit - HELD – As per Rule 3(4) of CCR, 2001, during the relevant period, capital goods on which CENVAT Credit has been taken are removed from the factory of the manufacturer of final product is required to pay an amount equivalent to the duty of excise on the said capital goods on removal. As is noted from the facts that the appellant herein had not manufactured any goods at the factory premises, which were purchased by them along with capital goods - It is also to be noted that when CENVAT Credit is availed by the manufacturer and is not contested by the department during the material period and credit was availed, the purchaser of the capital goods cannot be saddled with the duty liability of CENVAT Credit which was availed by the original manufacturer as I do not find any provisions of law which indicate so - The findings of the first appellate authority as to the CENVAT scheme placed onus on the user of CENVAT Credit to maintain proper documents and accounts hence the main appellant is liable to discharge the duty liability, is also incorrect inasmuch as, it is on record that the main appellant herein has not utilised CENVAT Credit of the capital goods which were received by M/s. McCoy. The first appellate authority has also recorded in the findings that non-transfer of CENVAT Credit does not mean non-applicability of CENVAT scheme to the appellant is also an erroneous findings inasmuch as the provisions of Cenvat Credit Rules puts onus on the manufacturer of the final product who has availed CENVAT Credit of the Central Excise duty paid on the capital goods. It is undisputed that the main appellant has purchased the capital goods from M/s McCoy and had not availed benefit of CENVAT Credit on the capital goods by the M/s McCoy - Department should have demanded the Central Excise duty equivalent to CENVAT Credit availed on capital goods from M/s. McCoy, as having sold the assets they have parted with the capital goods on which CENVAT Credit was availed - The impugned order which confirmed the demand of duty as ineligible CENVAT Credit is unsustainable and liable to set aside – Appeal allowed
2015-VIL-248-CESTAT-CHE-ST
M/s G.E.T. ENGINEERING CONSTRUCTIONS PVT LTD Vs CST, CHENNAI
Service Tax - Erection, Commissioning and Installation service – Delay payment of service tax – Payment of service tax and interest before issue of show cause notice - Imposition of penalty under Section 76 of the Finance Act – HELD - There is no dispute on the facts that the appellants have paid service tax on the value of service rendered on monthly basis only during October, 2006 to September, 2007 there was a delay and as seen from the SCN, the number of days of delay are 8, 22,17, 17, 5, 9, 9, 5, 3, & 11 for each month. I find that the appellants are rendering Erection, Commissioning and Installation service to various customers under turnkey projects across India and to arrive monthly service tax liability they need to collect the data from all their sites. Therefore, the number of days of delay indicated above appears to be genuine and justified. As rightly pleaded by the appellants, this is not the case of default payment and the appellants remitted the interest amount during the audit - Considering the number of days of delay is few days, the penalty imposed by the adjudicating authority under Section 76 is not sustainable. Accordingly, the impugned order imposing penalty under Section 76 of the Finance Act is set aside and the appeal is allowed
2015-VIL-247-CESTAT-CHE-ST
M/s P.A.P. EXPORTS Vs CCE, TRICHY
Service Tax – Refund – Time barred – Tax paid under protest – HELD – The adjudicating authority has held that no service tax is payable for the period prior to 18.04.2006. It clearly evident that the appellants have paid the service tax amount under protest - When the demand was dropped for the period prior to 18.04.2008, they are eligible for the consequential refund and they have rightly filed the refund claim on 05.12.2011, which is well within the time limit of one year from the date of order. Hence, the appellants are rightly entitled for the refund as the service tax was paid under protest and no time limit applies - Even otherwise, the appellant had duly filed the refund claim within one year from the date of receipt of the adjudication Order. It is also seen from the impugned order that the appellate authority has taken a different stand which was not part of the show cause notice or part of the adjudication order. The adjudicating authority has rejected the refund as time barred by taking the date of payment of service tax as the relevant date and held that it is time barred and even the show cause notice also alleges the same. Whereas, the appellate authority has gone beyond the adjudication order and the show cause notice and taken relevant date as the date of re-submission of the refund claim and the appellate order is beyond the scope of adjudication order - Considering the fact that it is established from the records that the appellants have paid the service tax under protest, the question of time bar does not arise. Accordingly, the appellants are eligible for refund arising out of the order-in-original dated 22.12.2010. The impugned order is set aside and appeal allowed
FCP2705
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
ceNoti16NT
Central Excise: Addition of Mundra Port in para (vii) of Notification No. 44/2001-CE (NT) dated 26.06.2001
28th of May
2015-VIL-211-TRI
RECKITT BENCKISER (INDIA) LTD Vs THE STATE OF TRIPURA
Tripura Value Added Tax Act, 2004 – Stock transfer - Seizure of goods due to alleged mis-declaration with regard to the entry under which Dettol Antiseptic Liquid falls – HELD - According to the Assessing Officer there is mis-declaration only with regard to the entry under which Dettol Antiseptic Liquid falls. He has totally lost sight of the fact that as per the invoice it was a stock transfer and if it is a stock transfer then it would not be amenable to tax and there would be no question of assessing tax at that stage - The Officer-in-Charge of the check post did not have the authority to seize the goods since the documents were produced and he has not even prima facie come to the conclusion that the documents are false or forged - In this modern age, where multinationals have proliferated, there are certain brand names which are applicable to different categories of goods. As far as the present case is concerned, soaps are also sold under the brand name Dettol and antiseptic liquid is also sold under the brand name Dettol. This does not mean that only because the brand name Dettol is used both the goods are to be classified under one entry for the purpose of assessing the tax. If this reasoning of the officer was to be accepted, tomorrow if the petitioner company starts manufacturing cars and starts selling them under the name of Dettol then would the same duty be charged on the cars also? Obviously, the answer is no. What tax has to be charged on an item depends on the classification of the item and on the entry in which that item or good falls, regardless of the brand name which it may have - In view of the above discussion, we are clearly of the view that the seizure was totally illegal. Accordingly, the impugned order is set aside and the State is directed to refund the amount recovered from the petitioner – Appeal allowed
2015-VIL-249-CESTAT-MUM-ST
SUN-AREA REAL ESTATE PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I
Service Tax - Export of Service Rules, 2005 - Denial of refund claim on the ground that the appellant have not received the payment in convertible foreign exchange as the same was received in Indian rupees - Payment received in export of service in Indian rupees – HELD – Foreign Inward Remittance Certificate (FIRC) is issued only in respect of foreign exchange. In the present case, FIRCs were issued and there is a specific certification that the payment has not been received in non-convertible rupees, which establishes that the payment received and mentioned in the FIRCs are other than non-convertible foreign exchange, in other words, the payment is in convertible foreign exchange - When a foreign bank is maintaining Indian rupees in their account obviously, such Indian rupees was obtained in lieu of foreign exchange - Under the Foreign Exchange Management Act also it provided that if the payment in India rupees is received in India through banking channel it is deemed to be convertible foreign exchange - Issue of admissibility as input service credit in respect of security services was not raised in the show cause notice. Therefore, denial of refund of Rs. 7,747/- and Rs. 1,051/-respectively is not correct - Impugned order deserves to be modified inasmuch as the impugned order in respect of Rs. 1,64,081/- is upheld and the order rejecting refund of an amount of Rs. 10,98,077/- is set aside - Decided in favour of assessee – Appeal partly allowed
Guest Column: Export condition fulfilled even if payment is received in Indian Rupees - Analysis of SUN-AREA REAL ESTATE PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I
2015-VIL-250-CESTAT-AHM-CE
M/s BELGIUM GLASS & CERAMICS PVT LIMITED Vs COMMISSIONER OF CENTRAL EXCISE & S.T., AHMEDABAD
Central Excise - Valuation and clandestine removal of frit by frit manufacturers and cleared to the Ceramic Tiles - principles of Preponderance of Probability - HELD – Estimation of quantity of goods manufactured and clandestine removal of goods by the appellants can not be slapped on the basis of averages arrived and calculated based on norms of gas consumption in manufacture of 1 MT of frit. It is rightly contested by the appellants that frit manufactured is not covered by any notification issued under Section 3A of the Central Excise Act, 1944 where Compounded Levy has been prescribed and capacity of the unit is required to be fixed on gas consumption basis, as done by the Revenue. It is observed that Revenue has attempted to adopt an estimation method for demanding duty and proving clandestine removal which is not prescribed by law - methodology adopted by the Adjudicating authorities in estimating and demanding duty from the appellants; based on consumption of natural gas, electricity consumed and packing time taken; is not acceptable and is required to be rejected - As mentioned in the definition of Transaction Value in Para 11.1, only actual price paid or payable has to be added to the transaction value and not a hypothetical value based on averaging of prices or standardizing of frit grades. As already mentioned under the realm of transaction value as per Section 4 even the same product could be sold at different prices depending upon several market factors and all these prices will be acceptable as permissible transaction value. Present Section 4 does not go by the concept of Normal Price of the old Section 4 of the Central Excise Act, 1944. In the absence of exact quantification of cash received by individual frit manufacturer, transaction value can not be enhanced even if there are half cooked circumstantial evidences to the proceedings indicating suspected undervaluation. It is now well understood that suspicion howsoever grave can not take the place of an evidence. Therefore, it may not be correct to hold that preponderance of probability should always be given to the Revenue, as Hon'ble Apex Court in a particular held it to be so. Each case has to be decided in view of the facts of that case. In view of the above observation and the law laid down by the Apex Court in the case of A. Tajudeen vs. UOI preponderance of probability can not always be allowed in favour of the Revenue when there is no independent corroboration of the facts and the case is made only on the basis of statements which were not allowed to be tested under cross-examination as per Section 9D (1)(b) of the Central Excise Act, 1944 – Appeal allowed
punNotiLeg1
Punjab Development of Trade, Commerce and Industries Ordinance, 2015
wbCir09
West Bengal: Changes made in the West Bengal Sales Tax Act. 1994 and the West Bengal Value Added Tax Act, 2003, and the relevant rules
wbCir08
West Bengal: Introduction of automatic allotment of yearly Waybill quota
dnhCir896
Dadra & Nagar Haveli: Dealers are required to file mandatory of DVAT-30/30A/31/31A before online filing DVAT-16 (Return)
FCP2805
FROM THE CORRIDOR OF POWER - Updates from various Union Ministries, PMO & Cabinet
29th of May
2015-VIL-212-J&K
NATIONAL COOPERATIVE DAIRY FEDERATION OF INDIA LTD Vs STATE OF J&K AND OTHERS
Jammu and Kashmir Value Added Tax Act – Central Sales Tax Act – Section 3 - Inter-state sale of goods - Whether the sale/supply of the Tetra Pack Milk by the petitioner to the Northern Command of the Army in the State of J&K is a sale in the course of inter-state trade - Whether the members of petitioner-Federation are liable to pay VAT and should register themselves as dealers under the Act for the said sale/supply – HELD - The sale/supply of goods viz. the Tetra Pack Milk by petitioner from their manufacturing units in the States of Gujarat and Rajasthan to Army locations of the Northern Command in the State of Jammu and Kashmir is a sale in the course of inter-state trade and, therefore, not subject to levy and collection of VAT under the Act in the State of J&K - Stand taken by the respondents that the petitioners are making the supplies on FOR basis has no substance in relation to their liability to pay VAT. Supply on FOR basis rather would show that the transportation / movement of the sold goods is a covenant of and pursuant to the contracts of the sale between the Army and petitioner and the contracts shall not be said to have been executed until supply of goods at specified delivery points in the State of J&K is made by the petitioners. Stand taken by the respondent is without any basis and repugnant to constitutional scheme. We therefore, reject the stand taken by the respondents - Sale/supply of the goods viz. Tetra Pack Milk by petitioner to the Northern Command of the Indian Army in the State of Jammu and Kashmir pursuant to supply orders fulfills all the ingredients of a sale is in the course of inter-state trade and, therefore, is not liable to levy and collection of VAT under the Act on entry of the goods in the State of Jammu and Kashmir. We also hold that petitioners are not required to get registered as dealers under the Act for aforementioned sales - Respondents are restrained from detaining trucks/vehicles carrying Tetra Pack Milk being transported by petitioner – Appeal allowed
2015-VIL-252-CESTAT-DEL-ST
T T LTD Vs CST, DELHI
Service Tax – Re-examination of sanctioned refund on new ground – Admissibility of refund claim of the services availed prior to amendment in the notified services in the Notification No.41/2007-ST – HELD - The main contention of the Revenue is that the order passed by the Commissioner (Appeals) has open order for re-examination by the adjudication authority with certain directions to verify certain documents. Therefore, the adjudicating authority is having every right to examine the refund claim afresh. This argument is not acceptable when the Committee of Commissioners has accepted the OIA - However, on examination of the said order, Commissioner (Appeals) has directed to verify certain documents. In that case, if those documents were not produced by the appellant or found deficient then the refund claim can be rejected to that extent. But the refund claim cannot be examined afresh - In the Notification No.41/2007, there is no condition that if the services availed prior to the date of notification, the appellant are not entitled to refund claim - The condition of the notification was that refund claim is to be filed within the prescribed time but there is no condition in the notification that if the services availed prior to insertion of services as notified services in the notification No.41/2007, refund is not admissible – Assessee appeal allowed
2015-VIL-251-CESTAT-CHE-CE
CCE, CHENNAI-I Vs HINDUSTAN PETROLEUM CORPORATION LTD
Central Excise - Whether CENVAT credit not reversed by the principal manufacturer in respect of the inputs sent to the job worker and the latter not taken credit thereof shall entitle the principal manufacturer to the refund of any amount paid at a subsequent date without reversing the CENVAT credit on the date of dispatch of the input to the job worker – HELD – The law having prescribed that reversal of CENVAT credit by principal manufacturer is requirement when the goods are sent to job worker failing to do so, the appellant is required to deposit the penalty - Without reversal when the appellant has enjoyed the CENVAT credit it is liable to interest thereon till payment by challan what that is averred. It appears that due to confusion of the position of law, there was no reversal and subsequent payment was made. Therefore, neither appellant will ask any interest nor the respondent shall ask any interest from Revenue. Respondent is entitled to the refund of the amount deposited by it without interest in the peculiar facts and circumstances of the case - This order shall not be a precedent since this has been passed on the given facts and circumstances of the case
2015-VIL-53-SC-CE
UNION OF INDIA AND ORS Vs UTTAM STEEL LTD
Central Excise – Export of steel products - Denial of Rebate claim filed beyond the period of six months under Section 11B of the CEA, 1944 - Limitation – HELD - The effect of the amendment of Section 11B on 12th May, 2000 is that all claims for rebate pending on this date would be governed by a period of one year from the date of shipment and not six months. This, however, is subject to the rider that the claim for rebate should not be made beyond the original period of six months. On the facts of the present case, since the claims for rebate were made beyond the original period of six months, the respondents cannot avail of the extended period of one year on the subsequent amendment to Section 11B - The argument that on a bond being provided under Rule 13, the goods would have been exported without any problem of limitation rejected, as the exporter in the present case chose the route under Rule 12 which, as has been stated above, is something that can only be done if the application for rebate had been made within six months - Revenue appeal allowed
2015-VIL-52-SC-CE
CROMPTON GREAVES LTD Vs COMMISSIONER OF CENTRAL EXCISE, AURANGABAD
Central Excise - Valuation - Related party - Clearance to own unit - Comparable price correct method – HELD - Highest price to other buyer of a single unit cannot be the basis for assessable value, more so, when the sale to a particular party which shows the highest price was one off sale of a singular unit - Appeal partly allowed
2015-VIL-51-SC-CE
THE UNION OF INDIA & ORS Vs M/s ASAHI INDIA SAFETY GLASS LTD
Central Excise - Settlement Commission – Power of High Court to decide the principle of law on the admitted facts - Modvat Credit – HELD - The High Court has simply stated the correct legal position where the Settlement Commission had gone wrong in law. Thus, the High Court has simply applied the correct principle of law on the admitted facts. This was well within the powers of the High Court while exercising its jurisdiction under Art.226 of the Constitution - Defective inputs - Once the inputs have gone into the manufacturing process, Modvat credit is to be allowed - Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to, manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture or processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture - Revenue appeal dismissed
harMemo1092
Haryana: Criteria regarding selection of cases for scrutiny assessment under the HVAT Act, 2003 and the CST Act, 1956 for the assessment year 2013-14
Gujarat: Extension of Amnesty Scheme for Civil Works Contracts [in Gujarati]
ceNoti31
Central Excise - Amendment in Notification No. 12/2012-Central Excise, dated the 17th March, 2012 - Regarding Talcher STPP Stage-III, Orissa - 2x660=1320 MW (NTPC)