SUMMARY FOR THE MONTH OF SEPTEMBER

List of updates in the month of September ‘15

1^st of Sep

2015-VIL-365-UTR

RECKITT BENCKISER (INDIA) LIMITED Vs STATE OF UTTARAKHAND

Uttarakhand Value Added Tax Act, 2005 - Section 32 - Period of Limitation for making Assessment or Reassessment – power under sub-section (12) of Section 32 - Validity of notification extending the period of limitation for completing assessments – subordinate legislation - Existence of ‘extraordinary circumstances’ which enables the State to extend the period of limitation – HELD – It would be clearly opposed to public interest, if for reasons which are extraordinary assessments become barred and the recovery of public revenue also consequently become impermissible - It is in the context of this situation that we must appreciate the import of the words ‘extraordinary circumstances’ under sub-section (12) of Section 32 of the Act. That is to say that on the one hand there is the supreme public interest in ensuring the recovery of amounts lawfully due and on the other hand the interest of the individual to stand guarded against assessment beyond the period fixed - ‘extraordinary’ would be something which is not usual, but it need not be something which is completely unheard of or beyond the scope of the previous experience of society - in the conspectus of the number of officers, the pending assessments, the assessments which were to be completed in regard to the earlier year if the power is exercised; we would refrain from sitting in judgment over the same and holding that there were no extraordinary circumstances - We notice the fairly staggering amount of cases, as also the shortage of staff, strike and, therefore, on a realistic and combined consideration of the circumstances, it cannot be said that there were no extraordinary circumstances, a view taken by the competent authority. It is not for this Court to substitute its view for that of the authority. It is not a case that there were no materials at all for forming the opinion that there were extraordinary circumstances - in the context of the State of Uttarakhand having been born on 09.11.2000, with the obvious teething problems a new State would be confronted with which includes shortage of staff, number of cases to be dealt with, we cannot hold that it was normal circumstance and that there were no extraordinary circumstances – There is public interest involved in extending the period of limitation - In such circumstances, Court sees no merit in the appeals

2015-VIL-366-ALH

M/s RAJIV METALS Vs ADDL. COMMISSIONER TRADE TAX

Uttar Pradesh Trade Tax Act - Section 21(2) – Reassessment proceedings – Term ‘Reason to believe’ for proposing reassessment – Assessee manufacturing brass ingots - reassessment proposal indicating that as per the general norms, the production should be 94% from the brass scrap however less production was shown by the petitioner to the tune of 54% and, therefore, there was a huge melting loss leading to escapement of tax – HELD - The expression "reasons to believe" is not a subjective satisfaction on the part of the assessing officer. The belief has to be in good faith and must have a rational connection with the issue involved – In this case the belief of the assessing authority is patently perverse and against the figures shown in the assessment order and/or the balance sheet. As per the balance sheet only 4550.40 kgs was shown as melting loss - Consequently, the figures shown by the assessing authority in its proposal that there was a melting loss of 58,363 kgs of brass scrap is erroneous and against the material evidence on the record - the assessing authority has wrongly included the production of brass slag, steel and iron brass mix as melting loss. These are not melting loss but are finished goods shown by the petitioner and which has been considered in the assessment proceedings, inasmuch as these goods known as brass slag, steel and iron brass mix have been sold and such sale has been assessed in the assessment order - the very basis for making ground for a reassessment and for having a reason to believe that some turnover had escaped assessment is lacking and is not existing in the instant case - the impugned notice issued by the assessing authority under Section 21(2) of the Act for initiating reassessment proceedings and the permission so granted by the Additional Commissioner are wholly without jurisdiction and are quashed – Assessee writ petitions are allowed

2015-VIL-463-CESTAT-AHM-CE

ULTRA TECH CEMENT LTD Vs C.C.E. & S.T.-AHMEDABAD-III

Central excise – Eligibility of Cenvat credit on Nitrogen Cylinders and Welding Electrodes used in factory – Capital goods - HELD – The said cylinders are used for filling Nitrogen gas which is used in the analytical laboratory as well as in the process plant and these cylinders are used for the storage of Nitrogen gas which is utilized for in or in relation to manufacture of finished excisable goods - Capital goods are defined to mean ‘storage tank used in the factory of the manufacturer of the final products’ - From the usage of the subject Nitrogen Cylinder, it is clear that they are used for storing the Nitrogen Cylinder and therefore serves the purpose of storage tank – Appellant is eligible for Cenvat credit on Nitrogen Cylinder and on welding electrodes – Assessee appeal allowed

2015-VIL-461-CESTAT-BLR-CE

ITI LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX CALICUT

Central Excise - The appellant is engaged in the manufacture of telephone exchanges and other items - Purchase orders contained price escalation/de-escalation clauses – Provisional assessments - upon escalation in the price appellants were raising supplementary bills and were immediately paying duty on the basis of the said supplementary bills - Demand of interest prior to finalization of the assessment – HELD – The Hon’ble Bombay High Court in the case of CEAT Ltd. vs. CCE&C, Nasik held that liability to pay interest arises on any amount payable consequent to final assessment under Rule 7(3) of the Central Excise Rules – Accordingly, following the Bombay High Court’s decision, the impugned order is set aside and assessee appeal is allowed with consequential relief

2015-VIL-365-MAD-ST

THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II Vs M/s BORG WARNER MORSE TEC MURUGAPPA PVT LTD

Service Tax – Input Tax - Benefit of Cenvat credit - Outdoor catering services - services provided in the factory for employees of the factory and outward freight services - whether the assessee can utilise the cenvat credit facilities in respect of outdoor catering services, provided in the factory for its employees and outward freight service as input service – HELD – Issue settled in favour of the assessee by following the decision of the Bombay High Court in the case of CCE Vs Ultratech Cement Ltd. wherein all the contentions raised by the Revenue has been considered in extenso including the definition of 'input service' - The Bombay High Court came to the conclusion that the decision of the Larger Bench of the CESTAT in the case of CCE V. GTC Industries Ltd is a correct law, however, with a rider that where the cost of the food is borne by the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer - Cenvat Credit has been properly availed in respect of outdoor catering services - Outward freight charges – HELD - Karnataka High Court in the case of CCE V. ABB Ltd., Bangalore which was rendered on the appeal filed by the Department as against the decision of the full Bench of the Tribunal, while answering the issue whether the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2 (1) (ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax on the value of such services – Revenue appeal dismissed

2015-VIL-460-CESTAT-CHE-ST

M/s CHEMPLAST SANMAR LTD Vs COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX (LTU), CHENNAI

Service Tax - Cenvat credit - Denial of credit on (i) outward transportation (ii) mobile phone services; and (iii) the documents showing the payment of tax addressed to Head Office – HELD - Claim of Cenvat credit in respect of service tax paid on the Outward Transport Services is concerned, law is well settled by Madras High Court in the case of Commissioner of Central Excise, Chennai Vs M/s. Borg Warner Morse Tec. Murugappa Pvt. Ltd - Claim on availing of mobile phone services is concerned, there is no material on record to suggest that the mobile phones were no way related to the manufacture or in relation to manufacture or for the activities permitted by Rule 2 (l) of Cenvat Credit Rules, 2004. Therefore, assessee succeeds on this count - So far as denial of Cenvat credit on the services used with the documents addressed to Head Office is concerned, there appears no material to suggest that particular services was not used for the purpose stated in Rule 2 (l) of the CCR, 2004. Therefore, the claim thereon is allowed – Assessee appeal allowed and revenue appeal dismissed

2015-VIL-462-CESTAT-AHM-ST

COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, AHMEDABAD-II Vs M/s CADILA HEALTHCARE LTD

Service Tax – Cenvat Credit – Refund on Customs House Agent (CHA) charges and Courier / Freight charges – HELD – The main contention of the Revenue is that the service tax paid by the service provider under some different services (i.e. other than CHA), cannot be considered to be paid under CHA service - service provider wrongly paid the Service Tax under CHA, which would be covered under the category BAS - it is well settled that the jurisdictional Central Excise officer of the recipient of the service, cannot question the classification of the service of the service provider – conditions stipulated in Notification No.41/2007-ST - Revenue had not mentioned any specific irregularity to the extent of non-fulfillment of condition of notification in their grounds of appeal - Revenue contentions are unacceptable - Refund on Courier service - It is stated that by the Revenue that invoices submitted by the assessee does not specify the Import Export Code (IEC), number of exporters, export invoice number, nature of courier - The schedule to the exemption notification provides that ‘the receipt issued by the courier agency specify the importer-exporter (IEC) code number of the exporter, export invoice number, nature of courier, destination of courier including name and address of the recipient of the courier’ - the copies of receipts received from the courier would show all the required details. Hence, there is no force in the submissions of the Revenue - if the Assessee is eligible for refund of service tax paid on courier service, the denial of refund for failure to mention export invoice number and IEC are merely procedural infirmity when the payment of service tax and export of the goods are undisputed – Revenue appeal dismissed

Guest Article

Service Tax - Place of Provision of Services Rules, 2012

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Gujarat: Regarding exemption on narrow woven fabric at serial no. 100, 102, 103 & 107 of Notification No. (GHN-35)VAT-2006-S.5(2)(1)-TH, dated 31st March, 2006

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Rajasthan: Regarding exemption from tax on purchase of goods by BSF Canteen for sale to BSF/ITBPF

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Rajasthan: Regarding exemption from tax on sale to BSF/ITBPF

2^nd of Sep

2015-VIL-367-MAD

PVC LEATHERS, PAPER MILLS (P) LTD Vs THE STATE OF TAMIL NADU

Central Sales Tax Act, 1956 – Section 5(3) – Form H - movement of goods in the course of export - sale of goods by the assessee to the Branch Office of exporter at Chennai for being exported to a foreign buyer through its Head Office at Bombay – sale to Branch office for export by Head Office - Issue of Form-H by Head Office at Bombay – Denial of benefit under Section 5 (3) of the CST Act – Assessee in appeal - HELD – In pursuance of the export contract entered with the foreign buyer by the Head Office (of exporter), orders were placed with the assessee by the Branch Office for supply of goods. The goods were supplied through the Branch Office at Chennai for being forwarded to the Head Office at Bombay for export to the foreign buyer. The Head Office at Bombay made the export and issued Form-H for the purpose of enabling the assessee to seek the benefit under Section 5 (3) of the CST Act - The revisional authority is incorrect in reasoning that the Branch Office is independent of the Head Office and, therefore, Form-H issued by the registered Office at Bombay on behalf of the Chennai Branch Office is not correct - there is no specific bar for the Branch Office to collect and forward the goods to the Head Office, for exporting the same in furtherance to a contract of export - Form-H issued by the Head Office on behalf of the Branch Office is in order. It does not matter whether Form-H is issued by the Branch Office or the Head Office so long as the sale has occasioned the export - The movement of goods through the Branch Office does not take it outside the purview of export sale - the transaction made by the appellant-assessee and the subsequent export is inextricably connected because the sale by the assessee has occasioned the export of the goods, therefore, benefit under Section 5 (3) will necessarily follow – Assessee appeal allowed

2015-VIL-368-MAD-CE

M/s THIRU AROORAN SUGARS Vs CCE&ST, TIRUCHIRAPALLI

Central Excise - Assessee is a manufacturer of sugar, molasses, rectified spirit etc. The assessee availed Cenvat Credit on capital goods used in the erection of various capital goods, viz., M.S.Plates, M.S.Angles, M.S.Channels and H.R. Plates, which were purchased and utilized in the construction/erection of plant - Show cause notice stating that these are not capital goods and a demand was made - The Tribunal following the decision in the case of Vandana Global Ltd allowed the appeal filed by the Revenue – Assessee in appeal - HELD - Earlier decision on similar issue in favor of assessee - We find no distinguishable fact or issue contrary to the earlier decision of this Court – Following the principles laid down in the decision of Commissioner of Central Excise Jaipur v. Rajasthan Spinning & Weaving Mills Ltd and the earlier decision of this Court in India Cements revenue appeal is dismissed

2015-VIL-464-CESTAT-BLR-CE

M/s NASH INDUSTRIES Vs CCE&ST, BANGALORE-III

Cenvat Credit - Refund of unutilized Cenvat credit – Notification No. 05/06-CE NT dated 14.3.2006 - Denial of refund for the reason availment of credit prior to the actual payment of service tax and supplies made to another EOU and not a direct export – HELD - The lower authorities have disallowed the refund on the sole ground that the credit was availed before service tax was actually paid. However, it is not clear as to when the credit was availed and when the service tax was paid. If the service tax stands paid prior to the claim of refund, the said fact of availing the credit before actual payment will not make much of difference, inasmuch as the credit availed during the period prior to actual payment of service tax would have remained in their Cenvat credit account only. However, in the absence of any clarity the impugned order is set aside and matter remanded verification of the above fact

2015-VIL-466-CESTAT-DEL-ST

ELTEL ENGINEERS Vs C.C.E., BHOPAL

Service Tax - Demand on the rendition of Erection, Commissioning or Installation service by the appellant by way of supply and installation of cables and lines (connectors) for distribution and transmission of electricity for the Madhya Pradesh State Electricity Board (MPSEB) through its instrumentality M/s Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Ltd. (MPKVVCL) – HELD – Vide Notification No.45/2010-ST dated 20.7.2010 taxable services relating to transmission and distribution of electricity provided by a service provider to a service receiver for the period upto 21.6.2010 was exempted from service tax - the appellant is not liable to collection of service tax in terms of said Notification – Assessee appeal allowed

Guest Article

Cash discounts deductible while determining Transaction value of excisable goods

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Chhattisgarh: Imposition of Entry Tax on Cloth and Sugar

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Chhattisgarh: Exemption from VAT to Cloth and Sugar

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Delhi: Extension in date for online submission of Form DP-1

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Delhi: Input Tax Credit - Annexure 2A & 2B - Regarding editing of records

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Delhi: Objection Hearing Authority -Regarding pre-condition for hearing

Chandigarh Notification

chndNotiGSR594: Punjab Value Added Tax (Third Amendment) Act, 2011 - As applicable in Union territory of Chandigarh

chndNotiGSR595: Punjab Value Added Tax (Fourth Amendment) Act, 2011 - As applicable in Union territory of Chandigarh

chndNotiGSR596: Punjab Value Added Tax (Amendment) Act, 2013 - As applicable in Union territory of Chandigarh

Guest Article

Relevance of IDT to Marketing function

3^rd of Sep

2015-VIL-92-SC

M/s OCL INDIA LTD Vs STATE OF ORISSA & ORS
Orissa Entry Tax Act, 1999 - Section 2(f) - Entry 52 of the List-II of the Seventh Schedule of the Constitution - Term ‘local area’ - The appellant is declared as industrial township under Section 4 of the Orissa Municipal Act, 1950 - once it is declared as Industrial Township whether it is liable to pay Entry Tax under the Act - HELD – As per Supreme Court decision in Diamond Sugar Mills Ltd v. The State of Uttar Pradesh the words "local area" in the said Entry would be the area which is administered by a local body like municipality, a district board, a local board, a union board, a Panchayat or the like and the factory premises therefore, would not be covered by the aforesaid expression - In view of the fact that Diamond Sugar Mills Ltd is a decision of the Constitution Bench, the matter needs to be considered by a larger Bench as it also raises substantial question of law pertaining to the interpretation that is to be given to Entry 52 of the List-II of the Seventh Schedule of the Constitution - Registry is directed to place the matter before Hon'ble Chief Justice for constitution of appropriate Bench

2015-VIL-93-SC

STATE OF CHHATTISGARH Vs M/s CIGARETTE AGENCIES

Madhya Pradesh Entry Tax Act – Levy of tax on entry of title deeds into the local area – HELD - The admitted facts are that the goods in question never entered the municipal limits of Bilaspur local area and therefore, there was no question of levying entry tax. This is clear from the language of Section 3 of the Entry Tax Act - Revenue appeal is dismissed

2015-VIL-370-BOM

THE ADDL COMMISSIONER OF SALES TAX, VAT-II, MUMBAI Vs M/s AGARWAL CONTAINERS PVT LTD

Bombay Sales Tax Act, 1959 - Sections 57 – Power of revision - credit note - merger of revisional order - taxable turnover - Whether principle of merger can be invoked in case of a revisional order containing withdrawal of sales tax exemption which has gained finality and Whether principle of merger in respect of revision of taxable turnover & disallowance of credit notes can be invoked after expiry of three years of limitation period – HELD - The revisional exercise which was carried out by the Joint Commissioner of revising the taxable turnover was on account of disallowance of the amount of credit notes. That has gained finality and this revisional order does not speak of any impropriety nor it made any reference to the issue of sale against G-1 form. While scrutinizing this order of revisional Authority, the Additional Commissioner thought that the same failed to notice the alleged impropriety in allowing G-1 form. This was altogether a new aspect and for that to be taken into account the principle of merger will not save the bar of limitation. That notice was barred because the order of assessment was sought to be revised and that was made prior to more than three years from issuance of notice. On such a factual finding, we do not see how the questions of law would arise. We do not see any perversity on the part of the Tribunal nor the order passed can be termed as erroneous in law. With the aid of the principle of merger, the bar of limitation was sought to be saved and that exercise was held to be faulty - Revenue's appeal dismissed

2015-VIL-369-AP

STATE OF ANDHRA PRADESH Vs HAJIMIYAN SAHEB & COMPANY

Andhra Pradesh General Sales Tax Act, 1957 – re-assessment - Refund under Rule 27-A – Limitation – HELD - the Government itself had taken a decision not to upset the concluded transactions prior to the date of the judgment of the Apex Court in K.A.K. Anwars case - there is no dispute that the show cause notices proposing to revise the orders of refund granted in 1992 came to be issued in the year 1999. The very notices are beyond doubt and outside the limitation prescribed under Section 20(3) of the Act. We are not impressed by the Revenue contention that Section 20(3) applies only to assessment orders and not with regard to the refund orders granted under Rule 27-A of the APGST Rules - the word assessment is not defined under the A.P.G.S.T. Act or under the Rules made thereunder - The order passed by the Deputy Commissioner revising the refund order is barred by limitation, as such, the finding of the Tribunal cannot be found fault with as the same is in conformity with the provisions of the Act – Revenue appeal dismissed

2015-VIL-467-CESTAT-DEL-CE

M/s INOX AIR PRODUCTS LTD Vs C.C.E. GHAZIABAD

Central Excise – Appellant entered in lease agreement with M/s. Rathi Ispat Ltd (RIL) for maintenance and operation of plant and equipments at the site of M/s. RIL – Due to dispute between M/s. RIL and appellant, the appellant suspended the maintenance activity and sought permission from the Department for removal of plant and machinery – Since the plant and machinery of RIL have been confiscated and their ownership rests with Government of India, the appellant request was declined – Hence this appeal – HELD - As per the impugned order the adjudicating authority has confiscated land, building, plant and machinery, material, etc of M/s. RIL - From the order, nowhere the properties of the appellant have been confiscated. Only the properties which are owned by M/s. RIL have been confiscated. By filing this appeal, the appellant is claiming to be the owner of plant and machinery confiscated in the impugned order on the basis of the litigation between RIL and the appellant which was decided in arbitration, consequent to the arbitration proceedings, the appellant claims to be owner of the plant and machinery. The respondent are also claiming that said plant and machinery has been confiscated and there ownership rest with Government of India. Although this Tribunal has powers to entertain the appeals against the order passed by Commissioner of Central Excise / Commissioner (A) under Central Excise Act but this Tribunal has no jurisdiction to decide the ownership of the goods. Moreover, in the impugned order only plant and machinery owned by M/s. RIL has been confiscated. If appellant is claiming to be the owner of said plant and machinery it is a dispute of civil in nature and this Tribunal is not the proper forum to seek remedy for that - the appellant has written to the respondent to seek permission on 30.09.11 why the appellant had not brought this fact in the knowledge of the Arbitrator. This act of the appellant creates doubts on the bonafides of the appellant. Therefore, the appellant has not come with clear hands - The Ld. AR has produced the letter to show that the dispute of ownership is pending before the Hon’ble Apex Court as the issue of ownership is seized with the Hon’ble Apex Court, therefore, this Tribunal have no jurisdiction to decide the ownership of the impugned goods - In these terms appeal is dismissed

2015-VIL-465-CESTAT-DEL-CE

M/s PEPSICO INDIA HOLDINGS PVT LTD Vs CCE&ST, CHANDIGARH-II

Central Excise - Classification - Assessee engaged in manufacture of various namkeens and potato chips with different flavours - In order to give various flavours to these products, assessee procures various spices from market and make spice mixes as per their specifications - Whether classification of such mixtures of spices falls under Chapter 9 of CETA as claimed by assessee or under Chapter 21 as stated by Department - Such mixtures will have an essential character not necessarily that of single ingredient spice but of combination of such spices as per their proportion - Even if additional materials are added what is required is that these mixtures retain their essential character of various ingredients of spices - Further, essential character of spices are basically relating to aroma, taste and flavour - Further, Original Authority's finding that apart from spices, certain chemical ingredients, dilutants and additives and salts are used in different proportion in spice mix. Hence, the classification cannot be under Chapter 9 - Conclusion of Original Authority is not substantiated to the effect that how such addition of certain chemicals or additives has taken away the essential character of spice mix - Spice Board clearly indicates the garlic and tamarind as Indian spices, hence, addition of these items if at all cannot be a consideration for excluding classification for spice mixtures under Chapter 9 - Having closely examined the scope of entry under Heading No.2103 and scope of Chapter 9, it is concluded that spice mixtures produced by assessee are to be classified under Chapter 9 and not under Heading No. 21 – Assessee appeal allowed

2015-VIL-470-CESTAT-CHE-CE

M/s SAKTHI SUGARS LTD Vs CCE, SALEM

Central Excise - CENVAT credit – Common input – Utilisation of power used in manufacture and elsewhere - Penalty under Rule 15(2) of CCR, 2004 – HELD - common input used for generation of power utilized elsewhere and used in manufacture without demarcation to indicate the quantum of power used in manufacture and quantum thereof used elsewhere. No penalty can be imposed arbitrarily – Penalty waived and appeal is allowed

2015-VIL-471-CESTAT-DEL-ST

M/s PHOENIX INTERNATIONAL LTD Vs CCE&ST, NOIDA

Service Tax - Renting of Immovable Property Service - Valuation of taxable service – As per agreement lessee to pay to the appellant a sum of Rs. Twenty Crores as interest free security deposit and monthly rental of Rupees Five Thousand only – case of Revenue that the rent is not the sole consideration and the rent fixed has been influenced by the interest free security deposit - Show cause notice proposing demand of service tax by loading notional interest @ of 15% upon the amount of security deposit – HELD - Considering the facts of the case, it has to be said that the security deposit of Rs. 20 crores received by the appellant is not in the nature intended for the purpose of securing default in rent, or utility charge or damages. It is something more - there is some force in the arguments of revenue that the appellants have obtained a huge capital which they would otherwise have to borrow from bank and pay interest thereon and that it is apparent that the monthly rent agreed is not the sole consideration for the lease - the appellants have not been able to make out a case for full waiver of pre-deposit - Appellants to deposit 50% of the demand with proportionate interest – Stay appeal dismissed

2015-VIL-469-CESTAT-DEL-ST

GUPTA ACADEMICS PVT LTD Vs C.C.E., KANPUR

Service Tax - Levy and collection of service tax proportionate to the period when the Commercial Coaching or Training service became taxable out of the advance collected prior to 1.7.2003 – service tax on admission fee – HELD - The principle is well established and is constitutionally enshrined, that levy and collection of tax requires legislative authority (Article 265). The legislation should clearly express and identify the taxable event, the rate of tax and the person on whom the liability falls - Commercial Coaching or Training was enacted to be a taxable service with effect from 1.7.2003. Therefore, rendition of this service, on and after 1.7.2003, is the taxable event - The consideration that is alleged to have escaped tax in this case is the admission fees collected by the appellant prior to 1.7.2003 - Admission fee, remitted prior to the date of introduction of the taxable service cannot be considered as receipt of a consideration for rendition of Commercial Coaching or Training – Assessee appeal allowed

2015-VIL-468-CESTAT-CHE-ST

S.N.I. INDUSTRIES Vs COMMISSIONER OF CENTRAL EXCISE & ST, SALEM

Service Tax – GTA Service – Service received from individual truck operators - Denial of abatement of 75% availed under Notification 32/2004-ST dt. 3.12.2004 and demand of differential duty on the ground that the assessee not fulfilled the condition of the notification – HELD - In this case, transport operators are not registered with central excise or service tax. Therefore, once the service provider is not registered with service tax, the fulfilment of condition of notification No.32/2004 does not arise - However, we do not agree with appellant’s contention that they are not liable to pay service tax as the Hon’ble High Court in the case of CCE Salem Vs Suibramania Siva Co-op Sugar Mills Ltd. clearly held that any person who avails GTA Service from any person including individual truck operators are liable to pay service tax under section 65 (105) of the Finance Tax. Therefore, the appellant is eligible to pay service tax as a recipient and they are eligible for abatement and the appellants have rightly paid 25% service tax on the freight paid – Further, w.e.f 1.1.2010 both the conditions (i) & (ii) stipulated under the proviso to the said notification were deleted and the abatement is applicable without any conditions - appellants are eligible for the benefit of exemption notification No.32/2004 - question of demanding differential service tax and imposition of penalty does not arise - The impugned orders in respect of assesses appeals are set aside and the appeals are allowed - having held that the appellants are eligible for 75% abatement the question of payment of penalty does not arise and the Revenue's appeals are liable to be rejected - Assessee appeals are allowed and Revenue appeals are rejected

jkNotiSRO295, jkNotiSRO295, jkNotiSRO295

Jammu & Kashmir: Amendment in Schedule 'B' of J&K General Sales Tax Act, 1962 - Commercial Helicopter services, Services provided by ropeway/cable car & DTH Operators

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

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Haryana: Extension in the period for filing online quarterly returns for the quarter ending 30.06.2015, upto 15.09.2015

upNoti1309

Uttar Pradesh: Amendment in Schedule II & V - Regarding levy of Additional Tax on certain items

4^th of Sep

2015-VIL-94-SC

LLOYD ELECTRIC AND ENGINEERING LTD Vs STATE OF HIMACHAL PRADESH

Central Sales Tax Act, 1956 - Himachal Pradesh Industrial Policy, 2004 - concessional rate of Central Sales Tax – Denial of concessional rate of CST for the interim period of date given in Department of Industries notification and date of issue of notification by the E&T department – HELD - Once the Cabinet takes a policy decision to extend its 2004 Industrial Policy in the matter of CST concession and the Notification, accordingly, having been issued by the Department of Industries, thereafter, the Excise and Taxation Department cannot take a different stand - The departments are to implement the Government policy and not their own policy. Once the Council of Ministers has taken a decision to extend the 2004 Industrial Policy and extend tax concession beyond 31.03.2009, merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification - No doubt, the statutory notification issued by the E&T Department under Section 8(5)(b) of the Act on 18.06.2009 has stated that the eligible units will be entitled to the concession with immediate effect. Merely because such an expression has been used, it cannot be held that the State Government can levy the tax against its own policy - Once the Council of Ministers takes a policy decision, the implementing Department cannot issue a notification contrary to the policy decision taken by the Government - The High Court has gone wrong in not appreciating the background of the case - the impugned judgment is set aside and assessee appeal is allowed

2015-VIL-371-DEL

COMMISSIONER, VAT Vs GENERAL MACHINERY MERCHANTS ASSOCIATION (REGD.)

Delhi Value Added Tax Act, 2004 – Classification - Electric Motors & Switch Gears / Starters - whether switch gears, starters and electric motors which are used as parts of a machinery could properly be classified under sub-entry (xxviii) of Entry 86 of the Third Schedule to the DVAT Act exigible to tax @ 5% or under residuary clause attracting VAT @ 12.5% - Limitation – HELD – The legislative intent appears to be that for various kinds of capital goods in the form of different kinds of machineries over a range of industries not only the entire machinery but even the components and spare parts thereof should be exigible to tax at the concessional rate of 5% in terms of Section 4 (1) (b) of the DVAT Act - While it is possible that the spare parts, accessories and components can also be sold independently as electrical goods across the counter, that does not remove from the ambit of sub-entry (xxviii) of Entry 86 such machineries as electric goods, switch gears, starters and so on and so forth. If the legislative intent was to exclude them from the ambit of the Third Schedule then that should have been made expressly clear by a provision or Explanation to Entry 86 - there is nothing in the sub-entries to Entry 86 which indicates a legislative intent to exclude spare parts, accessories and components out of the ambit of the Third Schedule in the event they are sold as separate electrical goods – Revenue appeal dismissed both on the ground of delay as well as on merits

2015-VIL-475-CESTAT-DEL-CE

ANIL BIOPLUS LIMITED Vs CCE, AHMEDABAD-II

Central Excise - whether appellant is required to pay amounts at a particular rate on the value of exempted goods (Bio Feed) cleared under provisions of Rule 6 of the CCR, 2004 - duty paid inputs are used in the manufacture of Calcium Gluconate, Enzymes, Flavours etc. – Waste during the manufacturing are used for making Bio Feed – HELD - Bio Feed is made from the waste generated in the manufacturing of products like Calcium Gluconate, Enzymes, Flavours, which are cleared on payment of duty. No evidence has been produced by the Revenue that duty paid inputs are directly used in the manufacture of exempted byproduct Bio Feed. In the absence of any such corroborative evidence, duty paid inputs used by the appellant will be deemed to have been used in the manufacture of dutiable goods manufactured by the appellant and cleared on payment of duty – assessee appeal allowed

2015-VIL-474-CESTAT-AHM-CE

SKAPS INDUSTRIES PVT LTD Vs CCE, AHMEDABAD-II

Central Excise – Cenvat Credit – EOU unit – DTA clearance of waste and scrap - Accumulated credit - Refund under Rule 5 of the CCR, 2004 – Denial of refund – HELD - The only grounds taken by Revenue is that unutilized credit could have been utilized for DTA clearances. However, there is no such restriction under Rule-5 of CCR and the refund notification issued thereunder - It is apparent that certain waste/rejects of the Yarn and Fabrics are only cleared in DTA which cannot be exported. If the stand of the department is accepted then no refund will be admissible to an exporter because every manufacture will result into generation of some waste and scrap which has to be cleared in DTA – Assessee appeal allowed

2015-VIL-472-CESTAT-DEL-ST

LARSEN AND TOUBRO LTD Vs COMMISSIONER OF CENTRAL EXCISE, BHOPAL

Service Tax – Demand under erection, commissioning or installation service and consulting engineer service – Purchase order for design, engineering, supply and supervision of erection and commissioning of limestone crushing plant - The appellant contended that transaction is essentially a supply order for the stone crushing plant and it did not provide erection, commissioning or installation service and only provided supervision of erection and commissioning – HELD - Even if it is held that there was a service component in the form of supervision of erection and commissioning of the plant supplied, the said service was manifestly rendered free of cost and thus no service tax liability can arise in this case as the value of the goods supplied cannot be included in the assessable value even as per Notification No. 12/2003-ST as no Cenvat credit has been taken by the appellant in respect of such goods – supervision of erection and commissioning has to be treated as part of sale and such supervision is only incidental to the sale, additionally in the present case there has been no charge for such supervision - the impugned service tax demand is set aside and appeal allowed

2015-VIL-473-CESTAT-BLR-ST

M/s KEMWELL BIOPHARMA PVT LTD Vs COMMISSIONER OF SERVICE TAX, LTU

Service Tax – export of service - appellants have received the consideration of the services in Indian rupees instead of receiving in convertible foreign exchange – Revenue contention activities cannot be held to be export of service – HELD - In the case of Sun-Area Real Estate Pvt. Ltd. Vs. CST, Mumbai wherein an identical issue based upon the noting made in the Foreign Inward Remittance Certificate (FIRC) issued by Deutsche Bank was the subject of consideration - The present facts and the facts available in the decision in the case of Sun-Area Real Estate Pvt. Ltd are more or less identical. Inasmuch as the said decision of the Tribunal stands delivered subsequent to passing of the impugned order by the Commissioner, both sides pray for remand of the matter to the adjudicating authority for fresh decision in the light of the said judgment of the Tribunal – Matter remanded - Appeal disposed

bihNotiSO205, bihNotiSO207 & bihNotiSO209

Bihar: Amendment rate of tax/surcharge - 'Potable spirit, wine or liquor whether imported from other countries or manufactured in India'

Guest Article

GST Knowledge Series #5 - TAXES TO BE SUBSUMED IN GST

7^th of Sep

2015-VIL-372-MAD

HDFC BANK LIMITED Vs THE STATE OF TAMIL NADU

Tamil Nadu Value Added Tax Act - Section 2(15) – Dealer – Bank & Financial Institution - Auction sale of hypothecated goods - whether a bank, which holds hypothecation of vehicles in their favour, would be a dealer within the definition of the expression under Section 2(15) of the Act, merely because the bank seizes and repossesses the hypothecated vehicle and brings it to sale through public auction – HELD - Sales whether by way of auction or otherwise, directly or through an agent, either for cash or for deferred payment or for any other valuable consideration, are covered by Explanation III - Under Clause (ix) of Explanation III, the insurance and financial corporations as well as the banks are deemed to be dealers, whenever they dispose of goods under certain contingencies - The contention that the bank does not become the owner of the property and that but for the forms TM 29 and TM30 handed over by the owners, the banks cannot even sell the property, may be technically right. But, Explanation III includes even the disposal of goods that are unclaimed. In respect of unclaimed goods, the seller does not claim ownership. But, he exercises a right to dispose of the goods. If Explanation III covers the sale of even unclaimed goods, the contention that the seller must be in a position to pass on title, may not stand - If sale of unclaimed goods can be included within the purview of Explanation III, the distinction sought to be drawn between a statutory right of sale and a contractual right of sale, cannot stand - revision petitions are dismissed

2015-VIL-374-MAD

M/s GIANT CEMENT TRADING PVT LTD Vs THE ASSISTANT COMMISSIONER (CT)

Tamil Nadu Value Added Tax Act, 2006 - Section 19(20) – Input Tax Credit - orders of assessment - reversal the input tax credit on the trade discounts and other discounts received by the appellants - statutory remedies – Writ petition – HELD – The Commissioner has directed in his circular that the provisions of Section 19(20) have nothing to do with the levy of tax on the discount, which has to be dealt with independently as per the provisions of the Act – Further, Assistant Commissioner (CT) in Surapattu Assessment Circle had granted the benefit of the circular to one of the sister concerns - the only contention raised by the appellants is that two different assessing officers cannot take two different views in respect of companies, which form part of the same group companies. This contention entitles the appellants to by-pass the alternative remedy of appeal - in cases of this nature where the assessees claim the benefit of a circular and also claim that in respect of one of the companies forming part of the very same group, a different view has been taken by another assessing officer, it is not worth driving the parties to avail the alternative remedy - Accordingly, the writ appeals are allowed and the orders of the learned Judge are set aside. The writ petitions are allowed and the impugned assessment orders passed by the respondent are set aside - matter is remitted back to the respondent for a fresh consideration

2015-VIL-373-MAD-CE

M/s RUPA & CO. LIMITED Vs THE COMMISSIONER OF CENTRAL EXCISE, COIMBATORE

CENVAT Credit Rules, 2002 - Rule 9A - Transitional provisions for textile and textile articles - SCN on the ground that the appellant had wrongly availed CENVAT credit on the stock declared on 1.4.2003 and utilized the same for payment of duty towards clearance of knitted garments manufactured by them – Assessee claim is that about 5% of the quantity and value of yarn is lost while making it into a fabric and that therefore, they are entitled to take credit for the entire quantity and value of input that had actually produced the fabric that was lying in store - HELD - To say that what is contained in finished product is only a quantity of all the inputs of the same weight as that of the finished product would presuppose that all manufacturing processes would never have an inherent loss in the process of manufacture. The expression 'inputs of such finished product' contained in finished products' cannot be looked at theoretically with its semantics. It has to be understood in the context of what a manufacturing process is - If there is no dispute about the fact that every manufacturing process would automatically result in some kind of a loss such as evaporation, creation of by-products, etc., the total quantity of inputs that went into the making of the finished product represents the inputs of such products in entirety - If the purport of Rule 9A is not understood in this manner, every manufacturer will have to pay excise duty on the quantity and value of inputs, which go to the making of a finished product, whose weight will never be equivalent to the sum total of the weight of all the inputs. Therefore, this is not the way to understand Rule 9A - The appellant was right in making a claim for CENVAT credit, with reference to the total quantity and the value of the inputs that went into the making of the fabric – Assessee appeal allowed

2015-VIL-476-CESTAT-CHE-CE

M/s M.M. FORGINGS LTD Vs CCE, TIRUCHIRAPPALLI

Central Excise – Recovery of erroneous refund – Limitation – Whether limitation specified under notification No. 35/2000 or general limitation for extended period is covered under section 11A of CEA, 1944 – HELD - it is clear that the demand of erroneous refund made under this notification shall be within six months from the date of refund. We also find that the adjudicating authority has sanctioned the refund but there is nothing on record to show that the said order has been reviewed whereas we find that the adjudicating authority again issued show-cause notices for recovery of erroneous refund on his own under section 11A - By the Hon’ble Supreme Court in the case of CCE Vs. Raghuvar (India) Ltd wherein it categorically held that when there is a limitation provided under the notification, the period mentioned under section 11A is not applicable - Therefore, when such notification clearly stipulates time limit for recovery of erroneous refund the adjudicating authority ought to have demanded erroneous refund within six months, instead the notices were issued beyond six months by invoking section 11A – Assessee appeal dismissed

2015-VIL-375-MAD-ST

CCE, TIRUCHIRAPPALLI Vs M/s THE INDIAN HUME PIPES CO. LTD

Service Tax - Assessee was manufacturing pre-stressed concrete pipes and was supplying the same to Tamil Nadu Water Supply and Drainage Board for use in water supply projects – Whether laying, jointing, testing and commissioning of PSC Pipes, construction of pumps, civil structures, supply, delivery and commissioning of submersible pump set and turbine pump sets, maintenance etc., is chargeable to Service Tax and whether the activity carried on by the Assessee was a construction activity or an activity of erection, installation and commissioning – Demand under category "Commissioning or installation" during the period from 1.7.2003 to 9.9.2004 and under the category "erection, commissioning and installation" during the period from 10.9.2004 to 30.9.2006 - HELD – The activity carried on by the assessee would not come within the meaning of the expression "erection, commissioning or installation" - the Assessee was merely laying a pipeline after digging the earth and closing the same thereafter - the activity of laying a long distance pipeline to enable the Tamil Nadu Water Supply and Drainage Board to supply water is an activity in public interest, to take care of the civic amenities liable to be provided by the State. The activity is part of the "construction activity", which is not commercial in nature and hence, exempted – Revenue appeal dismissed

2015-VIL-478-CESTAT-BLR-ST

M/s SB LOGISTICS Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX BELGAUM

Service Tax – GTA services – Denial of exemption under Notification No.41/2007-ST which provides exemption to the taxable services specified therein which stands received by an importer and used for export of goods – Reverse charge - HELD - if the exporter, who is also required to pay the service tax is the same person, then the exemption can be claimed by the said person himself. First paying service tax and immediately thereafter claiming refund of the same by the same person, i.e., exporter apart from creating a revenue-neutral situation, does not seem to be legislative intent. If the interpretation as given by the adjudicating authority is accepted, then the said proviso would become redundant and otiose inasmuch as the Revenue’s stand would be covered by the main clause of the Sl. No. 2(a) and there was no requirement to add the proviso. It is well settled law of interpretation that the interpretation which renders the provision of law otiose or redundant has to be avoided. Inasmuch as the Commissioner has simpliciter rejected the appellant’s contention by referring to Para 2(a) without expressing any opinion on the proviso of the said clause to the Notification, we deem it fit to remand the matter for his consideration of the said proviso - Appeal allowed by remand

2015-VIL-477-CESTAT-BLR-ST

NUANCE TRANSCRIPTION SERVICES INDIA PVT LTD Vs COMMISSIONER OF SERVICE TAX, BANGALORE

Service Tax – Input service - Admissibility of Cenvat credit in case of the inputs used for various branches of the appellants, when those branches were not registered with the Service Tax Department – HELD - the appellant is entitled to cenvat credit for all these input services as well as for the facility of cenvat credit in case of the branches of the appellants which were earlier not found registered with the Service Tax Department. Non-registration, though the appellant pleads that they had made application and department did not do registration, may be by mistake, will not make them disentitled to the facility of cenvat credit for the input services which they have used for their output service - Assessee appeal is allowed

Guest Column

Service Tax Return Scrutiny: How to combat

apNotiGO315

Andhra Pradesh: Grant of refund of tax paid by the Solar Power Developers in the State on the purchases of inputs used in setting up of Solar Power Projects and commissioned by June, 2014

utrNoti381

Uttarakhand: Amendment in UVAT Schedule-I - Regarding Entry 44 i.e. Phosphatic and potash components of all chemical fertilizers

Odisha Industrial Policy, 2015 [Download Link | File size 1.30Mb]

harNoti22

Haryana: Amendment in Schedcule E - Extent of admissibility of input tax

8^th of Sep

2015-VIL-378-BOM

M/s VADILAL DAIRY INTERNATIONAL LTD Vs THE STATE OF MAHARASHTRA

Bombay Sales Tax Act, 1959 – interpretation of Schedule entry C-II-35(1) - Whether product 'Ice cream' is covered by the term ‘Sweet and Sweetmeats’ and eligible for reduced rate of tax of 4% - Government Notification dated 8th April, 1994 Entry No.374 - HELD – Assessee are not correct in contending that the words “sweet and sweetmeats” would include ice-cream. The submission militates against a plain reading of entry C-II-35 (1). Moreover, inclusion of clause (2) under entry C-II-35(1), namely toffees, chocolates would fortify and adds credence to our observation that the legislature has found it appropriate to include certain more items however, in a separate entry – As per the norms of interpretation as laid down by the Apex Court in the context of the present case, we may observe that in ordinary parlance as also considering the object of the notification entry 374, the contention on behalf of the applicant that 'Ice-cream' can be included within the words “sweet and sweetmeats” as contained in notification entry 374 cannot be accepted – Assessee reference dismissed

2015-VIL-376-DEL

AERO CLUB Vs COMMISSIONER, TRADE & TAXES, DELHI

Delhi Value Added Tax Act - Section 86 (19) – impounding of goods on the ground of absence of requisite Bill – Valid document - Goods without Bill - Whether the majority decision of Tribunal was right in holding that the bill of entry was not a valid document or invoice and, therefore, the penalty under Section 86 (19) of the Act has been correctly imposed – HELD - the “Mal Roko Aadesh” cited only one reason for the impounding of the goods, viz., namely, “goods without bill” - at the first available opportunity the assessee replied explaining the circumstances under which the tempo that was intercepted did not contain the relevant documents. Enclosed with the letter were copies of the relevant documents, i.e., documents of import, registration certificate etc - there is no mention of the absence of GRs - In the facts and circumstances, there was no legal justification for issuance of the impugned penalty order under Section 86 (19) of the Act – Tribunal majority order set aside – Assessee appeal allowed

2015-VIL-377-BOM

ZAMIL STEEL BUILDINGS INDIA PVT LTD Vs THE STATE OF MAHARASHTRA

Maharashtra Value Added Tax Act, 2002 – Section 35 - Provisional attachment to protect revenue – misclassified its product and sale at an incorrect tax rate –HELD - There is no basis for holding that the dealers' credentials are doubtful and if coercive action is not initiated immediately, then, the dealer may not discharge the said liability to the exchequer - If the Joint Commissioner was of the opinion that revenue involved is to the tune of more than Rs.45 crores, and that is required to be secured, then, he could have ensured security of the same by appropriate proceedings including by an Application in the pending Appeal. That Authority could have obtained an undertaking and thereby ensuring that the assets and properties are not frittered away or disposed of - we are of the opinion that the statements made by the Senior Counsel, are enough to protect the interest of the revenue at this stage. There is no need of continuing the provisional attachment ordered by the Joint Commissioner - By accepting the statement made by the Senior Counsel as an undertaking given to the Court and directing that movable and immovable Assets and properties of the Petitioner shall not be disposed of, transferred and no third party interest of any nature created therein nor their possession shall be parted with during the pendency of the proceedings under MVAT Act, 2002, we set aside the impugned order - Writ Petition is accordingly allowed

2015-VIL-482-CESTAT-DEL-CE

M/s GINNI NON WOVEN PVT LTD Vs CCE & ST, NOIDA

Central Excise Rules – Rule 12B, 19 - Job work - clearances for export made by the appellant from the job worker's premises - Whether in terms of sub-rule (2) of Rule 12 B, the appellant company was liable to pay duty in respect of these goods – HELD - Person whether a manufacturer or a trader can export the goods under bond under Rule 19 from the factory where the same have been manufactured. Since in the present case, there is no dispute that the necessary conditions for export under bond without payment of duty under Rule 19 have been satisfied and the prescribed procedure had been followed, the Department's stand that the duty would be chargeable on the clearance made by the appellant for export from job worker's premises is not correct. In view of this, the impugned order upholding the duty demand along with interest and imposing penalty of equal amount on the appellant is not sustainable and has to be set aside - Confiscation of goods - Imposition of redemption fine and penalty under Rule 26 – HELD - while at the time of officers' visit to the factory on 24.11.2004, the RG-I register was not there but the same was produced on 29.11.2004 - imposition of fine of Rs. 50,000/- is on a much higher side - the redemption fine is reduced - penalty under Rule 26 is not sustainable - Appeal partly allowed

2015-VIL-481-CESTAT-AHM-CE

COMMISSIONER OF CENTRAL EXCISE, CUSTOMS (APPEALS), VADODARA – II Vs GUJARAT ALKALIES & CHEMICALS LTD

Central Excise – Valuation - whether the amortized value of Tonner/Cylinder supplied to the respondent free of charge by the customer for filling the Liquid Chlorine manufactured by the respondent, is to be included in assessable value of goods Liquid Chorine cleared by the respondent to the customers – HELD - The Commissioner (Appeals), in the impugned order had observed that the respondent while clearing Liquid chlorine manufactured by them to their customers in the tonners/cylinders supplied by the later and there is no allegations/findings that the conditions laid down under Section 4(1)(a) of the CEA, 1944 had not been satisfied - In the case of TCP Ltd the issue involved is the inclusion of the packing charges in the assessable value of the cylinder supplied by the buyers, which is similar to in the present appeal - In view this, there is no reason to interfere the orders of the Commissioner (Appeals). Accordingly, all these appeals filed by the Revenue are rejected

2015-VIL-483-CESTAT-MUM-CE

RAJARAMBAPU PATIL SSK LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR

Central Excise – Manufacture of Sugar and Molasses – Appellant also generates electricity which is supplied/sold to M/s. Maharashtra State Electricity Board (MSEB) without payment of duty in accordance with the Central Excise Tarrif Act, 1985 - The adjudicating authority has confirmed the demand towards 10% / 5% as the case may be of value of exempted electricity generated and supplied in term of Rules 6(3) CCR, 2004 - HELD - The undisputed fact is that the appellant is sugar/molasses manufacturing unit, electricity so generated and supplied to M/s. MSEB is manufactured out of bagasse. The identical issue has been decided by the Hon’ble High Court in the case of Gularia Chini Mills Vs Union of India - electrical energy generated from bagasse is not covered under Chapter 27. Therefore, electrical energy is not an excisable goods nor is it exempted as defined in Section 2(d) of the Act - Issue that 10%/5% value of electricity generated from use of bagasse and sold to M/s. MSEB is applicable in terms of Rule 6(3) of Cenvat Credit Rule is settled in favour of assessee and accordingly the impugned order is not sustainable – Assessee appeal allowed

2015-VIL-480-CESTAT-MUM-ST

TATA CONSULTANCY SERVICES LTD Vs CCE&ST, (LTU) MUMBAI

Service Tax - Export of services - Rebate claim - Notification No. 11/2005, dated 19-4-2005 - rejection of refund on the ground description details in the export invoices do not match description of services under Section 65(105) - applicability of Rule 4A – Export invoice – HELD - Once, having declared to the department the specific classification under Section 65(105) of each of the services provided as mentioned in the invoices, we fail to understand how the adjudicating authority has come to the conclusion that the description of services is not given in the invoices. Once a particular description is explained by the appellant to be covered under a specific service classified under Section 65(105), the onus is on the department to prove that it is not covered by that service under Section 65(105) - omitting to mention amount of service tax on the invoices when there is documentary evidence showing payment of service tax in the books of accounts maintained by the appellant, cannot debar them from the claim of rebate under Notification No. 11/2005. We do appreciate the ld. AR’s contention that all taxable services to be provided must be accompanied by an invoice showing the particulars required under Rule 4A. But this omission, in the face of documentary evidence shown to us, is no reason to deny the substantial benefit of the notification - Revenue authorities should have co-related the huge volume of documents submitted by the appellant, no matter how voluminous, before arriving at a judicious decision. In view of the documents placed on record and. their co-relation, we hold that the rebate is admissible to the appellants on merits

2015-VIL-479-CESTAT-MUM-ST

MAHARASHTRA SEAMLESS LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Service Tax – Cenvat Credit Rules – Rule 2(l) – Input service - Whether the service of procuring sales orders of cement through commission agents i.e. business auxiliary services being received by them is covered by definition of input service – Sales or Sales promotion – HELD - expression "activities relating to business" in the definition of "input service" in Rule 2(l) covers all the activities which are integrally connected with the business of the manufacture of final product - The "business of manufacture of final product", without any doubt, would include the sales of final product and hence, procuring of sales through commission agents would be covered by the expression "activities related to business" – In the Board Circular No. 943/4/2011-CX., dated 29-4-2011 the service of commission agents (Business Auxiliary Service) is covered by the term "advertisement or sales promotion" - there is nothing in this circular which is contrary to the provisions of law and hence the same would be binding on the Departmental officers. Thus, in view of this circular also, though it is in respect of definition of "input service" during period w.e.f. 1-4-2011, commission agents service would be cenvatable as the term "advertisement and sales promotion" was there in the definition of input service even during period prior to 1-4-2011 – Assessee appeal allowed

jharNoti83

Jharkhand Industries Facilitation and Single Window Clearance Ordinance, 2015

8^th of Sep

2015-VIL-378-BOM

M/s VADILAL DAIRY INTERNATIONAL LTD Vs THE STATE OF MAHARASHTRA

2015-VIL-376-DEL

AERO CLUB Vs COMMISSIONER, TRADE & TAXES, DELHI

2015-VIL-377-BOM

ZAMIL STEEL BUILDINGS INDIA PVT LTD Vs THE STATE OF MAHARASHTRA

2015-VIL-482-CESTAT-DEL-CE

M/s GINNI NON WOVEN PVT LTD Vs CCE & ST, NOIDA

2015-VIL-481-CESTAT-AHM-CE

COMMISSIONER OF CENTRAL EXCISE, CUSTOMS (APPEALS), VADODARA – II Vs GUJARAT ALKALIES & CHEMICALS LTD

2015-VIL-483-CESTAT-MUM-CE

RAJARAMBAPU PATIL SSK LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR

2015-VIL-480-CESTAT-MUM-ST

TATA CONSULTANCY SERVICES LTD Vs CCE&ST, (LTU) MUMBAI

2015-VIL-479-CESTAT-MUM-ST

MAHARASHTRA SEAMLESS LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

jharNoti83

Jharkhand Industries Facilitation and Single Window Clearance Ordinance, 2015

9^th of Sep

2015-VIL-381-ORI

M/s GAYATRI BRICK INDUSTRIES Vs STATE OF ODISHA

Orissa Sales Tax Act, 1947 - suppression of tax – Revision by High Court – HELD - Petitioner-dealer got notice of enhancement of demand through cross appeal filed by the State before the Tribunal. When there is already notice of enhancement of demand, the question of not giving reasonable opportunity of being heard on enhancement of demand is non est - Any question of dispute with regard to the fact unconnected with question of law, cannot be gone into by the Court - Therefore, Court is not inclined to interfere with the findings of the learned Tribunal in this revision – Assessee revision dismissed

2015-VIL-487-CESTAT-AHM-CE-LB

M/s GREEN BRILLIANCE ENERGY PVT LTD Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-I

Central Excise – Larger Bench Order – Conflicting decision in Synergies-Dooray Automative Ltd & Indira Printers Vs CCE Delhi-II - EOU – Exemption – Solar Panels - Whether a 100% EOU is entitled to exemption on inputs used in the manufacture of finished goods, which are either non-excisable or if imported, are chargeable to ‘Nil’ or ‘exempted’ rates, in view of second Proviso to Clause 6 of Notification No.22/2003-CE, dt.31.03.2003 or Proviso to Clause 3 of Notification No.52/2003-Cus, dt.31.03.2003 – HELD - words ‘non-excisable’ used in second proviso to Clause 6 of Notification No.22/2003-CE, dt.31.03.2003 and Proviso to Clause 3 of Notification No.52/2003-Cus, dt.31.03.2003 will include all those categories of finished goods where the end rate applicable is ‘Zero’ as the definition of ‘excisable goods’ under Section 2(d) of the Central Excise Act, 1944 has not been invoked in these exemption notifications - the plain reading and interpretation behind issue of Notification No.22/2003-CE and No.52/2003-Cus are required to be interpreted without going into the definition of Section 2(d) of the Central Excise Act, 1944. If this strict interpretation is not followed, then the provisos under consideration can never be made applicable for the recovery of input duty where finished goods are cleared at ‘Nil’, ‘Exempted’ or ‘free rates’ because all of them will be excisable as per the definition of ‘excisable goods’ under Section 2(d) of the Central Excise Act, 1944. Such an interpretation will be discriminating to DTA units as all such inputs could be routed through 100% EOU to claim full exemption when similar clearances by DTA units will affect duty at intermediate stage - ‘non-excisable’ words used in second proviso to Clause 6 of Notification No.22/2003-CE, dt.31.03.2003 and Proviso to Clause 3 of Notification No. 52/2003-Cus, dt.31.03.2003 will embrace in its expression all ‘zero’ rated finished goods where on account of full exemption, or ‘Nil’ / ‘Free’ rates, or where no rate is specified under the relevant tariffs - answered in favour of the Revenue and against the assessee

2015-VIL-486-CESTAT-DEL-CE

M/s DABUR INDIA LIMITED Vs CCE, JAMMU

Central Excise – Classification - appellant are manufacturers of hair oils, shampoo, toilet water and Ayurvedic medicaments – Classification of Gulabari, Keora Water and Shilajit Capsules – process involved in making Gulabari and Keora Water amounts to manufacture – exemption per Notification No. 56/2002-CE – Exemption to unit in Jammu - HELD - In the absence of specification or definition as to what constitutes a Rose Water or a Keora Water, commercially accepted parlance has to be considered - the products labels clearly carry the name as Rose Water and Keora Water and the lower authorities conclusion for not considering them under the specific heading is not legal and tenable. These products cannot be considered as aqueous solutions of essential oils under heading 3301 - Further, as per the Rules of interpretation when there is a specific heading by the very same name of the product these products cannot be put under generic heading of aqueous solution. As such, we find that these products which are emerging as manufactured items are rightly classifiable under heading 33030020 and 33030030 - the Department cannot take two different views in respect of same product manufactured by the same person in two different units - Whether Shilajit Capsules is generic Ayurvedic Medicaments or PP medicines - though the Department claimed that Shilajit Capsules are generic Ayurvedic medicine as per the formula/ingredients mentioned in Authoritative Ayurvedic text, no documentary support to the effect that the product cleared by the appellant is as per any such text has been put forth before us. The appellant produced registration of this Shilajit Capsules with the Drug Controller and in absence of any contrary evidence by the Department, it is clear that the Ayurvedic medicine cleared by the appellant is manufactured PP medicine and not of generic nature - Assessee appeal appealed

2015-VIL-485-CESTAT-DEL-ST

M/s NIIT LTD Vs C.S.T., DELHI

Service Tax – Commercial Training or Coaching Service – Services rendered by computer institute - Demand & penalty – Limitation - Commercial Training or Coaching Service – Bona fide belief – HELD - the issue is no longer res integra having been decided by the Supreme Court in the case of CCE Vs. Sunwin Technosolution, the appellant has no case on merit. However, the appellant has taken a plea that it was under a belief that it was not liable to pay tax prior to 16.06.2005 as it provided vocational computer training. The fact that even CESTAT held the same view and the same view was held by Uttarakhand High Court in the case of Doon Institute of Information Technology shows that the view held by the appellant was not unreasonable or hallucinatory. In these circumstances, the contention of the appellant that it was actually under a bona fide belief that the impugned service tax was exempted during the period prior to the insertion of the proviso in Notification No.24/2004-ST vide Notification No.19/2005-ST, with effect from 16.06.2005 cannot be discarded as baseless or untenable - Delay in providing data leading to delay issuing SCN - Although there was delay on the part of the appellant in providing information which may have led to delay in issuance of Show Cause Notice, there is nothing to even suggest that the appellant was deliberately causing delay to take advantage of time-bar - Benefit of Section 80 - reasonable cause for failure to remit service tax - As regards demand of Rs.33,38,829/-, the entire demand pertains to the normal period of one year and hence is sustainable - even after the demand was confirmed and the issue no longer remained res integra, the appellant did not remit the said demand. It clearly shows that failure to remit of service tax was not because of any reasonable cause - Therefore, the appellant is not eligible or qualified for the benefit of Section 80 ibid - Assessee appeal partly allowed

2015-VIL-488-CESTAT-DEL-ST

BHARTI INFRATEL LTD Vs COMMISSIONER OF SERVICE TAX, DELHI

Service Tax - CENVAT Credit on Telecom Towers – HELD - issue involved in these cases is admissibility of Cenvat credit on telecom towers and on this very issue, there has been a difference of opinion between two ld. Members of a Division Bench in the case of Idea Mobile in the wake of which Division Bench has put up the matter to the Hon'ble President for reference to a third Member - it will be more efficient if the difference of opinion is heard by a three Member Larger Bench - Matter referred to Larger Bench

goaNoti7

Goa Value Added Tax (Eighth Amendment) Act, 2015 - Amendment in Section 29 & section 1 of Act 12 of 2013

FCP0909

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

10^th of Sep

2015-VIL-384-MAD

ROYAL CHICKENS Vs UNION OF INDIA

Puducherry Value Added Tax Act – Constitutional Validity of Puducherry VAT (Amendment) Act, 2012 - Discretion of State to levy tax only in certain region of the State - Article 14 of the Constitution of India - levying tax at the rate of 5% on the sale of live chicken only in Mahe region – HELD - It is well settled legal principle that the State does not have to tax everything in order to tax something; it enjoys a wide discretion in the matters of taxation - State can validly pick and choose one commodity for taxation and the same is not open to attack under Article 14 - the burden is on the petitioners to show that the impugned amendment is discriminatory and offends Article 14 of the Constitution - The argument of the petitioners is that the live chicken sold in Mahe region alone cannot be subjected to payment of tax and it amounts to a class legislation as the same product is exempted from tax in other regions in the Union Territory of Puducherry. For the petitioners to succeed, it is not sufficient for the petitioners to state that it is a class legislation. What is required to be established is that such legislation makes an improper discrimination - The Puducherry VAT Act grants exemption to sale of live chicken to its dealers, who trade in the areas in the region Karaikal and Yanam. The only distinction is for Mahe region for which tax has been imposed at the rate of 5%. The justification being, Mahe is adjoining the State of Kerala in which the sale of live chicken is taxable at 14.5% under the Kerala VAT Act - the dealers like the petitioners, in Mahe region were selling their products at the same rates as sold in Kerala State (border state), which is subjected to tax at 14.5% in that State. Thus, it was established that the dealers have availed the exemption and the benefit of the exemption was not passed on to the consumers - Therefore, the distinction sought to be made for making the transaction taxable for Mahe region alone cannot be termed to be an improper exercise nor arbitrary or an artificial classification, but a reasonable one with a substantial distinction between two classes - the basis for bringing about the impugned amendment is based on valid and reasonable classification and does not offend Article 14 of the Constitution of India – Petition dismissed

2015-VIL-383-RAJ

M/s ANIL PRAKASH SONI Vs COMMERCIAL TAXES OFFICER, WORKS TAX

Rajasthan Sales Tax – Work Contract - imposition of tax on the sale/purchase of Bitumen purchased by the assessee for execution of works contract - purchase was covered by the exemption certificate - HELD – the authorities below have fallen into apparent error for holding that purchase of Bitumen by the assessee was not for the execution of works contract in question awarded by RIICO. The revenue authorities have erred in fastening the burden of proof on the assessee while holding that the commodity Bitumen was purchased by the assessee for execution of any other works contract, other than the works order in question awarded by RIICO and AVVNL to the assessee - Unless the Revenue could establish that purchase of Bitumen was for some other works contract, not covered by the relevant exemption certificate, no tax liability in respect of the same works contract in question could be imposed on the assessee - the contention of assessee that said Bitumen was purchased for the execution of the same works contract in question for which such exemption certificate was issued by the respondent Sales Tax Department, is well founded and the imposition of tax liability upon the assessee separately from the exemption certificate cannot be sustained - the revision petition deserves to be allowed

2015-VIL-385-MAD

M/s VEDANTA LIMITED Vs THE ASSISTANT COMMISSIONER, CIRCLE-III, TUTICORIN

Tamil Nadu Value Added Tax – Personal hearing – Submission of Audit Report – HELD – The order passed earlier, is so clear that the direction to the appellant/petitioner was to appear before the fourth respondent, who has also statutory power to audit the accounts. Based on the said audit report only, the first respondent is going to pass the assessment order. Therefore, it is not proper for the fourth respondent to say that he won't give personal hearing to the appellant, since the records have been transmitted to the first respondent – appellant shall be given full hearing and the fourth respondent shall examine all the documents and then submit a report to the first respondent – Appeal disposed

2015-VIL-382-MAD-CE

SHARDLOW INDIA LTD Vs COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II

Central Excise & Service Tax – Appeal for condonation of delay – Dismissed by Tribunal – delay due to resignation of employee who was handling the proceeding – HELD – Resignation of employee is valid reason for condonation of delay - Tribunal did not disbelieve the stand taken by the appellant in total. But, the Tribunal proceeded on the footing that the resignation of employee no relevance. This approach appears to be completely vitiated - There is no reason to suspect the explanation given by the appellant - Assessee appeal deserves to be allowed

2015-VIL-491-CESTAT-DEL-CE

M/s AJMER FOOD PRODUCTS PVT LTD Vs CCE, JAIPUR

Central Excise - The appellant engaged in the manufacture of Parle brand Cream Biscuits on job work basis. For use in the manufacture of Cream biscuits, they make cream within their factory - taxability of such cream made by them and used captively in the manufacture of Cream Biscuits – HELD - In respect of the impugned goods it is necessary for the Department to establish the marketability - except for the reliance on test of marketability no additional factors or evidence have been adduced - The reasoning of the learned Commissioner (Appeals) that the job charges for manufacture of cream of mass production and ultimately for biscuits has been separately fixed by the principal manufacturer itself proves that sugar cream is different goods and separately available at the price fixed is mis-leading. The fact that the job charges are fixed separately for cream/biscuits by itself does not establish the marketability of the product which are wholly consumed in the manufacture of cream biscuits - to charge excise levy on the cream captively consumed it is necessary to support the contention of the marketability of the product with evidence – Matter remanded for detail examination of these issues and to pass fresh orders – Appeal allowed by remand

2015-VIL-490-CESTAT-BLR-CE

SPRAYING SYSTEMS INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX AND CUSTOMS BANGALORE-II

Central Excise - Cenvat Credit – Denial of CENVAT credit of duty paid on the inputs on the ground that bills of entries and invoices were in the old factory address of the appellant whereas the said inputs have been received and used in the new factory address – HELD - there is no dispute about the fact that the inputs were actually received by the assessee - As the purchase orders were placed from the old address, the invoice carried the old address - denial of credit on the above technical ground is neither warranted nor justified - no justification for denial of the credit on the inputs, which admittedly stand received by the appellant in the new factory – Denial of credit on the ground that the invoices of input service provider were in the name of project site address of the appellant and such services cannot be held to be input services used in the factory for manufacture of the final product – HELD - Many cases have held that the activities carried at site are relatable to the appellant’s business and have to be held as cenvatable input services – Assessee appeal allowed for other input services as well – In favour of assessee

2015-VIL-492-CESTAT-MUM-ST

M/s CITI BANK Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI

Service Tax – Banking and Financial Services – Custodial Services - Rebate Export of Service Rules, 2005 - denial of rebate claim of service tax paid under Notification No.11/2005-ST on the custodial services provided to Foreign Institutional Clients (FII’s) located outside India - Refund of the amounts claimed by the appellant on the ground that they had export of custodial services rendered by them to the clients situated outside India – HELD - The lower authorities have rejected the refund claim only on the ground that the requirement of maintenance of accounts whch are in respect of Indian Companies and in India hence there was no export of service – We do not agree with the findings recorded by both the lower - Firstly, the services rendered by the appellant are to Foreign Institutional Clients in respect of investments made by them in India. Secondly, the services are for the companies situated abroad hence they are rendered or delivered outside India for the Companies situated abroad - Rule 3(1)(iii) clearly indicates that if the services are in relation to business or commerce to a recipient located outside India, it has to be considered as ‘export of service’. It is nobody’s case that the services rendered by the appellant to the FII’s are not in relation to Business or Commerce of the said FII which are situated abroad – for the period May 2006 to February 2007 the impugned order is set aside and the appeals are allowed with consequential relief

2015-VIL-489-CESTAT-BLR-ST

SRINIVASA REDDY CONSTRUCTIONS Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX

Service Tax - Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 – Initiation of demand with a view that with the introduction of the works contract service w.e.f. 01/06/2007, the appellant should have discharged their tax liability under the said category – Appellant paid under commercial or industrial construction services – HELD - is seen from the said Rule that the option has to be exercised by the assessee who wants to discharge the service tax liability under the said category. In the present case, it was never the appellant who opted to pay under works contract but the Revenue required them to pay the tax under the works contract. In such a scenario, the question of assessee exercising any option before discharging the tax under the category of works contract does not arise at all. Such an view adopted by the adjudicating authority is neither appropriate nor legal inasmuch as the same cannot be adopted as a bar to the Revenue’s own stand of requiring the appellant to pay tax under the category of works contract - we set aside the impugned order and remand the matter to the adjudicating authority for de novo decision – Appeal allowed by remand

kerNotiSRO545

Kerala Value Added Tax (Amendment) Rules, 2015 - Amendment in Rule 17

FCP1009

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

11^th of Sep

2015-VIL-386-BOM-CE

VODAFONE INDIA LTD Vs THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II

Central Excise – Rule 2(k) - CENVAT Credit Rules, 2004 - 'all goods' 'used' for providing any output service – CENVAT credit of duty paid on towers (in CKD/SKD form), parts of towers, shelters / prefabricated buildings used for providing telecom services – HELD – Appellant is not entitled to take CENVAT credit of the duty paid on the said goods on the ground that it is immovable property and hence, do not qualify as 'capital goods' or 'inputs' - As far as this Court is concerned the issue is already settled in Bharti Airtel case – this Court has considered all aspects of the matter and then come to the conclusions that it did - It is now quite well settled that an interpretation of a statutory provision, and equally a misinterpretation, by one Bench of the High Court would be binding on a coordinate Bench of that very High Court. The subsequent Bench cannot come to the opinion that a particular provision was misinterpreted and under that pretext seek to reinterpret it again - In the present case, we see no reason to refer the matter to a larger Bench - We are in full agreement with the reasoning given in Bharti Airtel's case and therefore, are unable to accept the submissions that the aforesaid decision requires a relook. If for any reason, the Appellant is of the opinion that the decision in Bharti Airtel’s case does not lay down the correct law, then the remedy to correct the same lies before a Superior Court – No merit in appeal and same is dismissed

2015-VIL-387-DEL

BHUMIKA ENTERPRISES Vs COMMISSIONER VALUE ADDED TAX

Delhi Value Added Tax Act, 2004 - Section 59(2) – Issuance of Reassessment in respect of system generated default assessment notices and notices for default assessment of tax and interest and penalty on the same day - principles of natural justice - HELD - since both the notices under Section 59(2) and the default assessment notices were system generated, both the notices have to go. Consequently, the notices under Section 59(2) of the said Act issued on 19.06.2015 in all these matters stand quashed. The letters issued on 17.07.2015 are also quashed - The department’s circular dated 29.07.2015 is also quashed

delNoti712

Delhi: Introduction of new Form Delhi Sugam-2 (DS-2) in place of Form T-2

delCir23

Delhi: Input Tax Credit - Security of dealers

delCir24

Delhi: Reassessment in respect of system generated default assessment notices

Guest Articles

Disputed Inputs Service Credits

No Special Session on GST as the Parliament prorogue Monsoon Session

apCir2

Andhra Pradesh: Field Visits of Additional Commissioners and Joint Commissioners

apOrder357

Andhra Pradesh: Issue and Receipt of - Transit Passes at the Exit Check Posts-Assessment authorization to Administrative Officers

2015-VIL-389-GUJ

MODIPON FIBER CO. Vs STATE OF GUJARAT

Gujarat Sales Tax Act – Whether interest is payable under clause (a) of Section 47(4A) of the Gujarat Sales Tax Act, 1969 on ad-hoc payment of tax made prior to assessment even though such tax liability was not due as per the returns filed by the appellant – Delayed payment - HELD – The assesses would not be liable to pay any interest as assessed by the Sales Tax Officer under section 47(4A) of the Gujarat Sales Tax Act, 1969 for the assessment year 1/7/1985 to 30/6/1986 – following the ratio laid down by the Division Bench of this Court in case of Brook Bond India Ltd - Interest was not to be levied upon appellants under section 47(4A)(A) of amended Act – Assessee appeals allowed

2015-VIL-390-MAD

M/s TECHNO DRIVES AND CONTROLS Vs THE ASSISTANT COMMISSIONER (CT)

Central Sales Tax Act - Rule 12(6) of the Central Sales Tax (Registration and Turnover) Rules, 1957 – Rejection of C-Form obtained from local dealer – HELD – Rule 12(6) makes it clear that if the "C" Form is obtained from the local dealer, who has got registration and there is no registration in the State, for which the goods are meant for, the petitioner can very well produce the said "C" Form for passing appropriate orders by the assessing authority. Without considering the said provision and explanation provided thereunder, without affording an opportunity to the petitioner, the assessing authority has passed the impugned order - the impugned order is set aside and matter remanded - Appeal allowed by remand

2015-VIL-388-GUJ-CE

GARDEN SILK MILLS LTD (PFY DIVISION) Vs UNION OF INDIA

Central Excise – Disallowance of Cenvat Credits - availment of CENVAT Credit intra-division - Tribunal remanded the matter on the basis of it’s own decision with regard to other group of appeals – Assessee in appeal - HELD - If the impugned judgment and order is perused, it emerges that the Tribunal has relied upon its own decision dated 27.10.2014. It is equally true that the petitioners had no opportunity to plead their case before the Tribunal whether his case is covered as per the Tribunal’s decision dated 27.7.2014 or not. Therefore, the Appellate Tribunal ought to have given an opportunity of hearing to the petitioner before deciding the matter when the Tribunal has relied on its subsequent decision - The impugned order is hereby quashed and set aside and the appeal is revived – Assessee appeal allowed

2015-VIL-495-CESTAT-AHM-CE

KRYFS POWER COMPONENTS LTD Vs C.C.E. & S.T.- VAPI

Central Excise – Export of goods - Procedures for export of goods to Nepal prescribed under Notification No. 20/2004-CE(NT) on payment of duty or as prescribed under Notification No. 45/2001-CE(NT) under Bond without payment of duty - Appellant opted to pay duty under Notification No. 20/2004-CE(NT) and wanted to avail the benefit of Notification No. 45/2001-CE(NT) by arguing that duty was not required to be paid – Denial of refund – HELD - Respectfully differing with the views expressed by CESTAT Delhi, in the case of CCE Ludhiana Vs. Vardhman Spinning and General Mills (Supra), I hold that there are only two procedures during export of goods to Nepal under Notification No. 20/2004-CE(NT) and Notification No. 45/2001-CE(NT). Option was available with the appellant to opt for either of these at the time of export. There is no provision for normal rebate of duty paid on excisable goods under Section 11B of the Central Excise Act, when goods are exported to Nepal in view of Notification No. 20/2004-CE(NT) and accordingly there is no scope for a third alternative with the appellant seeking refund under Section 11B of the CEA, 1994 by fitting the shipping bills filed and assessments completed - appellant that it was prevented from opting benefit under Nofification No. 45/2001-CE(NT) - order passed by the first appellate authority is legally correct and there is no reason to interfere – appeal rejected

2015-VIL-493-CESTAT-BLR-ST

NATIONAL COUNCIL FOR CEMENT AND BUILDING MATERIALS Vs COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX HYDERABAD-IV

Service Tax - Appellant is a R&D organization and promotes research and other scientific work connected with cement and building materials and also impart training to skilled and unskilled labour in construction field – Demand under commercial training or coaching service as appearing in Section 65(105)(zzc) pursuant to retrospectively amendment – Limitation – HELD - there is no doubt that with the retrospective amendment to the definition of the service tax category, the liability would arise against the assessees. However such liability would be in accordance with the provisions of limitation - the demands in case of retrospective amendments has to be made within a period of 6 months from the date of the amendments and extended limitation of 5 years would be inapplicable. Otherwise also, there was no mala fide suppression on the part of the assessee, the invocation of longer period of limitation cannot be held justifiable inasmuch as the criteria for invocation of longer period is also mala fide misstatement or suppression of facts. As such, we find no justification for invocation of the longer period of limitation - Inasmuch as a part of the demand may fall within the limitation period, we set aside the impugned order and remand the matter to the original adjudicating authority for examining the facts – Appeal allowed by remand

2015-VIL-494-CESTAT-BLR-ST

CST BANGALORE Vs M/s NEW ENTERPRISE ASSOCIATES (I) PVT LTD & VICE VERSA

Service Tax – Export of service – Cenvat Credit – HELD - the disputed services are Air Travel Agents service, Business Support service, Chartered Accountant service, Manpower Recruitment service. The Hon’ble Bombay High Court in the case of Coca Cola India Pvt. Ltd. vs. CCE, Pune and CCE vs. Ultratech Cement has held that the definition of ‘input services’ is very wide and would take into its ambit the services used directly or indirectly for rendering of output services. There are various decisions which hold that Air Travel Agents services procured in connection with the business trips of the employees of the company have to be treated as essential input services - Similarly in respect of Chartered Accountant services, the said services is cenvatable services. Similarly Manpower Recruitment services have been held to be cenvatable. As such, we find no justifiable reason to deny the refund of the credit of service tax paid on the said disputed service. Accordingly, the assessee’s appeal is allowed

delCir25

Delhi: Date of effect and procedures/instructions for filing of online Form Delhi Sugam-2

12^th of Sep

2015-VIL-95-SC-CE

COMMISSIONER OF CENTRAL EXCISE, TIRUCHIRAPALLI Vs M/s DALMIA CEMENT (BHARAT) LTD

Supreme Court: Central Excise – Section 11B - Claim for refund of duty - Order of refund passed before principle of 'unjust enrichment' which was introduced by way of amendment of Section 11B in the year 1991 - Whether Section 11B of the Central Excise Act, as amended, applies to cases where though an order has been passed directing refund, implementation of the order is pending – High Court holding that merely because implementation of the refund order was pending, the authority could not go into the question of unjust enrichment by invoking the proviso to sub-section (1) of Section 11B of the Act that had been introduced by that time by way of amendment in Section 11B of the Act. Therefore, it was not open to the concerned officer, who was only supposed to carry out the implementation of the order, to go into the question as to whether there was any unjust enrichment on the part of the assessee or not – Revenue in appeal – Application of Mafatlal Industries case - refund of the excise duty paid in 1970-1978 - HELD – In the instant case, the order on the refund application of the respondent had been passed on 06.06.1989, which was much before the amended provision came into operation. In fact, even after the order of refund was passed, the appellant had not refunded the amount and it is in these circumstances that writ petition was filed in the High Court - the High Court observed that the Assistant Commissioner would go into the question if the respondent should be granted the refund in spite of Section 11B of the Act. However, merely because of such observations, it cannot be said that the Assistant Commissioner was entitled to look into the issue of unjust enrichment when if, otherwise, he was otherwise had no jurisdiction to do so - Such observations were given in view of the statement of the counsel for the Government who brought to the notice of the Court the amended provisions contained in sub-section (3) of Section 11B of the Act. The High Court did not go into the issue as to whether such a course of action was permissible or not - the law on this issue came to be settled in the year 1997 only when the judgment in Mafatlal Industries Ltd was pronounced by this Court - Thus, when the order of the Assistant Commissioner was challenged and the matter came before the Tribunal, the Tribunal was duty bound to apply the law laid down in Mafatlal Industries Ltd which it did. Similar exercise is done by the High Court in the impugned judgment. We find that the view taken by the High Court is in consonance with the law laid down by this Court in the Mafatlal case - there is no scope to interfere with the impugned decision of the High Court and, accordingly, appeal is dismissed

2015-VIL-391-ALH

UNITED CHEMICALS INDUSTRIES Vs STATE OF U.P.

U.P. Trade Tax Act, 1948 – Reassessment - Petitioner is manufacturer of zinc oxide. It used zinc ingots, zinc dross and zinc scrap as raw material to manufacture zinc oxide - authorisation for reassessment proceedings under the proviso to Section 21(2) of the Act on the ground that as per scientific formula petitioner would have produced more zinc oxide but, lesser production has been shown and thus, some quantity of zinc oxide has escaped assessment to tax – HELD - the earlier and subsequent Assessment Years, after due discussion on the issues, which is foundation of the impugned authorisation order and the notices; the Assessing Authority, the Additional Commissioner and the Tribunal have themselves accepted the explanation of the petitioners and held that the chemical formula in question cannot be applied as a matter of rule, but, production of zinc oxide would depend upon the quality of raw material. In view of these facts, the very foundation for initiation of proceedings under Section 21 of the Act by the Assessing Authority for the Assessment Years in question becomes non-existent - there was no relevant material before the Assessing Authority giving rise to prima facie inference that some turnover of the petitioners has escaped assessment to tax - the impugned authorisation orders as well as notices under Section 21 of the Act are without jurisdiction and, therefore, deserve to be quashed - writ petitions succeed and are hereby allowed

2015-VIL-496-CESTAT-BLR-ST

IBM INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, BANGALORE-LTU

Service Tax - service tax liability in respect of services maintenance or repair of computer software – Demand on the basis of withdrawal of Notification No.20/2003-ST dt. 21/08/2003 by Notification No.7/2004-ST and Supreme Court’s decision in the case of Tata Consultancy Services - HELD – In the Hon’ble Madras High Court’s decision in case of Kasturi & Sons Ltd., wherein it stands held that the service tax liability in respect of services relatable to maintenance and repair of computer software would be effective from 01/06/2007, when the definition of maintenance and repair service was expanded by including an explanation laying down that goods includes computer software – The Court has struck down the Board’s Circular No.81/2005-ST, as not applicable and has held that it is only with the expansion of definition of maintenance and repair service w.e.f. 01/06/2007, including the computer software as goods, that the said service would become liable to service tax. While holding so, the Hon’ble Madras High Court has taken note of the Hon’ble Supreme Court’s decision in the case of Tata Consultancy Services, which was the basis for issuance of Circular No.81/2/2005 - Though the issue stands decided by the Hon’ble High Court in the above decision, the demand is barred by limitation having been raised beyond the normal period of limitation - the impugned order is set aside and the appeal is allowed on merits also on limitation

upNoti1291

Uttar Pradesh: amendment in Schedule-I - Motor/battery operated e-rickshaw

megNoti107

Meghalaya Clinker Cess Rules, 2015

triMemo16715

Tripura: Regarding registration of transporters under the TVAT Act, 2004 and amendment of registration certificates

FCP1109

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

14^th of Sep

2015-VIL-394-KAR

INFOSYS LIMITED Vs THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES

Karnataka Value Added Tax Act, 2003 – Section 2(15) - ‘Goods’ - Sale of Banking software – Taxability of software implementation service rendered to clients-bank – enhancements, upgrades, maintenance service - In the absence of transfer of a right to use a software under a contract, can it be said that the activity of implementation of software/customised software involves a deemed transfer of goods as contemplated under Article 366 (29A)(d) of the Constitution of India - After supply of packaged and customized software, if any service is required to integrate the software into the system to make the software functional or usable, does it amount to pre-sale activity which is chargeable to VAT or is it a post sale activity, which is in the nature of service simplicitor - Work Contract - Demand on software implementation - HELD - in both packaged and customized software, where copyright is held by the developer of software and the copyrighted article alone is handed over to the customer as a transfer of right to use goods, the software is goods and liable to VAT alone - However, in the case of customized software, it is possible for an entity to work on a hired contract basis rendering pure service and get delivered fully developed software for a specified customer with future contracts for upgradation and enhancement. In such a situation too, the software emerges. However, the copyright in such software belongs to the customer, as it is developed, and the developer of the software does not retain any copyright in such software. In such a situation, since there is no transfer of property in goods and what is provided is only a pure service, there can be no liability to VAT. The consideration in such cases is liable only to service tax - implementation of customized software, where the copyright of the customized software is with the software developer, the implementation process is a pure service rendition and does not involve any transfer of property. The ownership vests at all point of time with the employer who had issued the assignment. In those circumstances, since there is no transfer of ownership or the licence to use the software (deemed sale), it is a pure service contract. There is no sale of goods. It is a case of rendering service and is liable to service tax only - In the case of Annual Technical Support (ATS), if the agreement of the contract includes the annual maintenance involving both service and issuing upgraded or enhanced software, then such a contract is a combination of both goods and service. The contract is in the nature of works contract. VAT is liable to be paid on the goods part and service tax is to be paid on the labour aspect. In upgradation and enhancement, the copyright is owned by the developer of software and what is transferred to the customer is the right to use – Therefore, it is clear, in substance implementation means the customized software is integrated into several other systems so that the bank can start using the licensed software. In the process, there is no transfer of any goods or right to use any goods, what is rendered is service and therefore, the said consideration paid as service charges is not subjected to VAT but subjected to service tax - The impugned order in so far as levying of VAT on the assumption that the implementation is nothing but customization of the software is hereby set aside - As the assessee has already paid VAT for customized software, it is not liable to pay any VAT for implementation which happens after the installation of the customized software in the premises of the assessee - Assessee writ petitions are allowed

2015-VIL-393-AP-CE

THE COMMISSIONER CUSTOMS & CENTRAL EXCISE, TIRUPATI Vs M/s PANYAM CEMENTS & MINERALS INDUSTRIES LTD

Central Excise Act – Refund - recovery of the amount erroneously refunded – Sections 3, 4 of the Act and r/w Rule 173B of the Rules - Section 11A – Limitation - Whether resort to Section 11A of the Act is mandatory for recovering the refund granted pursuant to the adjudication order passed under Section 11B of the Act which adjudication order subsequently came to be declared as unsustainable – HELD - the refund which has been made to the assessee was in the process of adjudicating his claim under Section 11B of the Act - analysis of the Sections 11A and 11B of the Act would leave no manner of doubt that there is an adjudication process involved in the processing of the applications made under Sections 11A and 11B of the Act and further the orders passed under Sections 11A and 11B of the Act are appealable. The determination of an application made under Section 11B of the Act would result in the entitlement of an applicant for refund of any excise duty paid. If a very determination does not result in declaration of entitlement of refund any money paid in obedience to an order by an authority in the process of adjudication of such claims cannot be termed as granting of erroneous refund. Such payment would fall in the category of implementation of an order, subject to finality of such order. In other words, such refund would be outside the scope of the erroneous refunds contemplated under Section 11A of the Act - Sections 11A and 11B are two independent provisions and parameters which are required to be considered in the process of application under Sections 11A and 11B of the Act being totally different and independent there is no interconnection between the same. The orders passed under both the Sections 11A and 11B of the Act are amenable for appeal and further appeal to the higher forums. There is no warrant for one to conclude for implementing the orders passed under Section 11A of the Act recourse is to be taken to the provisions of Section 11A of the Act - the appeal is allowed by answering all the questions in favour of the revenue and against the assessee

2015-VIL-392-KER-CE

THE COMMISSIONER OF CENTRAL EXCISE CUSTOMS AND SERVICE TAX, CALICUT Vs M/s APOLLO TYRES LTD

Central Excise – Show cause notice for wrong restoration of AED credit in the CENVAT Credit Account and also its wrong utilization for payment of AED on Dipped Nylon Tyre Cord Fabric - utilization of accumulated credit on AED for payment of AED – HELD – Following the Goodyear India case the Tribunal rules in favour of Assessee - credit of AED paid on or after 01.04.2000, is permitted to be utilized towards payment of duty of excise leviable under the first schedule or the second schedule to the Excise Tariff Act. In other words, the restriction introduced by the explanation was only in the utilization of the accumulated credit of AED towards payment of duty under the schedules of Excise Tariff Act. This means that this restriction applied only in the payment of BED and SED, which alone is payable under the Excise Tariff Act and not to AED payable under Section 3 of Act 58 of 1957. Therefore, this contention raised by the Revenue cannot be accepted – in Goodyear Case when dismissing the SLP, if the question of law raised is kept open by the Apex Court, that does not mean that the conclusion of the Tribunal or the principles laid down by the High Court, are set at naught. Instead, it only means that it is open to the appellant to raise the same issue before the Apex Court, without being constrained by the earlier order dismissing the SLP. Therefore, we cannot accept the contention that the Order of the High Court of Punjab & Haryana or the order of the Tribunal could not have been of any value - Revenue appeal dismissed

2015-VIL-497-CESTAT-MUM-ST

COMMISSIONER OF SERVICE TAX, MUMBAI Vs MS KATRINA R. TURCOTTE

Service Tax – Business Auxiliary Service - Demand of service tax from Katrina Turcotte alias Katrina Kaif - promoting/marketing or sales of the product – ‘Commercial concern’ – HELD - service tax liability has been discharged by Matrix on the above said activity cannot be denied merely on the ground that it has paid under advertisement agency service. As M.s. Matrix has paid the service tax under the category of advertisement Agency service that does not mean that M/s. Matrix has not paid service tax on behalf of the appellant. By mere paying the service tax liability under wrong head does not mean that service tax liability has not been discharged. The allegation of the revenue that service has been rendered by appellant but has not discharged the service tax liability is not sustainable as per Section 65(7) of the Finance Act – Following the earlier order of very same respondent revenue appeal dismissed

Guest Article

DELHI SUGAM-2 (DS-2) - A Step Towards Simplification

15^th of Sep

2015-VIL-396-ALH

M/s SHREE BHAWANI PAPER MILLS LTD Vs STATE OF U.P.

Uttar Pradesh Trade Tax Act, 1948 - interpretation of the provision of Section 4-B(2) - phrase "for use in the manufacture of notified goods' – Diesel, used as ‘fuel’, to run the plant and machinery in the factory - Whether use of diesel oil in generator sets to run plant and machinery to manufacture the final products as mentioned in the Recognition Certificate would qualify the essential requirement "for use in the manufacture of notified goods" under Section 4-B(2) of the Act – Maintainability of writ petitions – alternative remedy - HELD - there is no dispute that in order to run plant and machinery, the generators are essential, and for that purpose, diesel oil has been used in the generators - Thus the generation of power by generators by use of diesel oil so as to run plant and machinery is integrally connected with the manufacture of the notified goods i.e. the final product of the petitioners. Thus the manufacture of the notified goods itself is dependent upon the use of diesel oils in the generator sets directly – The only ground of Revenue in the impugned orders to delete the entry of "diesel oil" from the RC is that diesel oil is not a raw material for manufacture of the notified final products of the petitioners rather it is raw material to produce electricity. While doing so, the assessing authority completely lost sight of the Explanation (a) to Section 4-B(2) of the Act which defines the expression "goods required for use in the manufacture" to mean not only raw materials but also processing materials, machinery, plant, equipment, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants. Thus the goods which qualify for concessional rate of tax on purchases under Section 4-B(2) of the Act are not only raw material but also other classes of goods including Fuels which includes diesel oil - the impugned orders passed by the Assessing Authorities deserve to be set aside - writ petitions are allowed

2015-VIL-397-MAD

ZAITOON MULTI CUISINE FAMILY RESTAURANT Vs THE ASSISTANT COMMISSIONER (CT)

Tamil Nadu Value Added Tax Act, 2006 – Section 2(9) - Brand name – Branded item - Trade Mark – House Mark – Revenue seeking to levy tax @14.5% instead of 25 as paid by the appellant - trade mark registration of the name of the restaurant and the goods manufactured and sold by the appellant – HELD – It is rightly contended by the learned counsel for the revenue that the trade mark registration is meant for the restaurant as well as the products manufactured by it and when the activity of service for providing food and drink is considered as a trade mark under the Act, the food items also are to be considered as ‘branded items’ and therefore, levy of tax on such branded food and drink items would be at 14.5% as prescribed under Section 7(1)(a) of the Act, 2006 and the respondent has rightly passed the impugned assessment order - it is not in dispute that the petitioner restaurant is a registered under the provisions of the Trade Marks Act, 1999 and whatever food prepared and served would certainly fall under the definition ‘branded’ as per Section 2(9) of the Act and hence, this Court is unable to accept the contention of the petitioner that they got only registration towards restaurant and it has to be construed as ‘House Mark’ and not as a ‘Product Mark’ - the Writ Petition fails and it is dismissed

2015-VIL-398-ALH

M/s DOMINOS PIZZA OVERSEAS FRANCHISING B.V. Vs STATE OF U.P.

U.P. Value Added Tax Act – franchisees agreement M/s Jubilant Food Works Ltd and appellant-M/s Dominos Pizza Overseas Franchising B.V. - Agreement executed in Netherland – Notice seeking to levy tax on payment of royalty for right to use the trademarks “Dominos Pizza” treating is as ‘deemed sale’ – HELD - Having heard the learned counsel for the parties, prima facie, we find that the assessing authority has over exceeded its jurisdiction. We, therefore, entertain this petition inspite of the fact that the petitioner has an alternative remedy of filing an appeal - prima faice, the assessment order appears to be without jurisdiction. Consequently, till the next date of listing no recovery shall be made from the petitioner pursuant to the assessment order

2015-VIL-503-CESTAT-MUM-CE

M/s HINDUSTAN LEVER LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I

Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 – Rule 11 – Determination of assessable value of multi-piece pack – Show cause notice seeking to levy duty at the higher MRP - Applicability of Circular No. 673/64/2002.CX dated 28.10.2002 – HELD - the declared assessable value at the end of the appellant is a derived based on a comparable assessable value of similar goods cleared from the premises of the job-worker except for the adjustment to the cost of carton - Revenue has not challenged the principal by which value has been arrived, they have only challenged the adjustment on account of the cost of carton - Thought, rule 4 is not strictly applicable to the situation as it only factors in the time of clearance but no difference on account of packing. It is seen that none of the Rules 4 to 10 are applicable to this situation and resort to Rule 11 is to be made, which is determination using reasonable means - The Revenue has already accepted the valuation of the goods on the basis of assessable value of similar goods (except for the packing material) cleared from the job-worker's premises. Therefore, it is only just to say that difference between the values of the two clearances is only the cost of packing material. Under Rule, 11 it would appear reasonable to allow the adjustment on account of cost of packing material as claimed by the appellant - the assessee appeal is allowed

2015-VIL-500-CESTAT-BLR-CE

PIRAMAL ENTERPRISES LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX HYDERABAD-I

Central Excise – Appellant manufacturer of anesthetic drugs, active pharmaceutical ingredients and vitamins etc. and is a 100% EOU – clearance of goods to own units in DTA as stock transfer - The Revenue entertained a view that inasmuch as no VAT or Sales Tax was being paid by the appellant in respect of such stock transfers, appellant is liable to include SAD – HELD - in case of inter-unit stock transfers of the final product, the demand of SAD cannot be held sustainable even though no VAT or Sales Tax was paid on such transactions - issue is fully settled in favour of the assessee by decisions of the Tribunal in the case of STI Industries & Micro Inks - the impugned order is asset aside and assessee appeal is allowed

2015-VIL-499-CESTAT-MUM-ST

AGM INDIA ADVISORS PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I

Service Tax – Refund - Demand under Management of Business Consultants Services – Rendering of Investment Advisory services – Refund inadmissible on the ground that the services provided to M/s. Apollo Management, US were used in India and, therefore, the same does not qualify as export of service – HELD - The services, though related to the analysis carried out in India, but the services are provided to US based firm. Since the services are provided to US based firm it is that firm, M/s. Apollo Management VII L.P. who is the sole recipient of the services and on the basis of these services, M/s. Apollo Management is further providing services to their clients, i.e., other foreign based companies. That shows, the services provided by the appellant is consumed by M/s. Apollo Management, US for providing his output services to US based companies - services provided by the appellant are indeed used and consumed outside India - the services provided by Indian entity deemed to be used by the person located outside India and, therefore, it satisfies the terms used ‘outside India’ as provided under the Export of Service Rules - Accordingly the activity is qualifies as export of services and refund is admissible - The impugned order passed by the Commissioner (Appeals) is not sustainable and the same is set aside. The appeal of the appellant is allowed

2015-VIL-501-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, NASIK Vs DEORAM VISHRAMBHAI PATEL

Service Tax - Renting of Immovable Property – Respondent and his brothers are co-owners of the property having no legal partition or division - Composite contract for renting out the entire property to various Banks and it is in use for commonly for business - Whether the respondent and his brothers are to be treated as association of persons or otherwise and service tax liability on it arises, should be confined without the benefit of the notification No. 6/2005-ST – Demand - HELD – co-owners of the property cannot be considered as liable for a service tax jointly or severely - Since the rent was distributed equally among each of the appellants, it is evident that each of them received an amount below the exemption limit of eight lakhs and ten lakhs during the relevant period. The appellants were, therefore, not liable to pay service tax on the amounts received by them during these two years by virtue of Notification No. 6/2005-ST dated 01.03.2005 - However, in the FY 2009-10 and 2010-22, the receipt exceeded the statutory exemption limit of Rs 10 lakhs and the appellants have paid service tax along with interest on their own before receipt of SCN - The conclusion arrived at by the first appellate authority is correct as he has confirmed the demand raised on the respondents by extending the benefit of notification no. 6/2005-ST – Revenue appeal dismissed

2015-VIL-502-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, PUNE-III Vs M/s NIHILENT TECHNOLOGIES PVT LTD

Service Tax – export of Information Technology Software Services - Refund – Determination of Total Turnover and Export turnover of services – Rule 5 of Cenvat Credit Rules, 2000 – HELD - in clause (B) of Clause (E) of Sub rule(1), it is provided that while taking total turnover of export, turnover of service determined and clause (B) of Sub rule (1) as to be considered - Commissioner (Appeals) has deducted value of refund claim which is hit by limitation correctly in accordance with the export turnover as well as total turnover provided under Notification No. 27/12-CE(NT) dated 18/6/2012 - impugned order is upheld and Revenue appeal is dismissed

Guest Article

Service Tax – Analysis of Point of Taxation Rules, 2011

DIPP Report on Assessment of State Implementation of Business Reforms [Download full report - External Link - File Size 3.3Mb]

FCP1509

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

16^th of Sep

dnhReg1of2015

Dadra and Nagar Haveli Value Added Tax (Amendment) Regulation, 2015 - Enhancement in Rate of Tax from 4% to 5% in rescpect ot goods specified in Third Schedule

utrNoti714

Uttarakhand: Change in rate of tax on Motor Spirit & Diesel

2015-VIL-96-SC

COMMERCIAL MOTORS LTD Vs COMMISSIONER OF TRADE TAX U.P.

Supreme Court: U.P. Trade Tax Act - Section 21(2) - reopening of completed assessment - Reopening of completed assessment on the basis of retrospective amendment to Section 21(2) proviso – HELD - vide said amendment, limitation of 8 years reduced to 6 years, thus benefiting the assessee but at the same time, interest of Revenue safeguarded by insertion of words “or March 31, 2002 whichever is later” - The intention of the latter part of the proviso is to save such pending assessments and that is why a specific date, that is, March 31, 2002 has been incorporated. While reducing the period from eight years to six years, time has been specified to complete the assessment or reassessment by 31.3.2002 - The legislative intent was not to enhance and increase the limitation period, regardless and notwithstanding the financial or assessment year. If the stand of the revenue is to be accepted, then the effect of 2001 amendment would empower and authorise reopening of cases without reference to the financial year, provided the assessment order was made on or before 31.3.2002. Such an interpretation would be contrary to the legislative intendment - appeals are allowed and the judgment and order passed by the High Court are set aside

2015-VIL-399-UTR

M/s HIRA SINGH SOBTI CONTRACTS LTD Vs COMMISSIONER, COMMERCIAL TAX

U.P. Trade Tax Act – retrospective effect of amendment in section 7D - Works contract - composition fee scheme – inter-state purchase of raw material - Whether interest can be demanded on remaining tax of 2% out of 3% of tax for the period before 28.10.2003, when the provision of 3% tax came into existence on 28.10.2003 and the revisionist has deposited 1% tax as per the earlier Samadhan Yojna – HELD - in the form of an amendment, which provided for composition fee being paid and, as per the said provision, which came out on 28.10.2003, with retrospective effect, if three per cent is paid in place of one per cent, the regular provision of the assessment would not be applicable, if the inter-state purchase exceeded more than five per cent of the contract amount. Therefore, even if the inter-state purchase of the raw material made by the revisionist exceeded five per cent, if the revisionist exercised the option to pay three per cent composition fee, then, that would put an end his tax liability for the period. Without there being tax liability, there cannot be a question of levying interest. Therefore, in place of the tax, which he would have had to pay under the earlier scheme, in view of his inter-state purchase having exceeded five per cent, as he had opted to pay three per cent and which he could possibly do only after 28.10.2003, it cannot be mulcted with interest for the period prior to 28.10.2003 - It is also relevant to mention here that the Circular dated 28.10.2003 does not provide for payment of interest for the period prior to its date - The order of the Tribunal will stand set aside – Assessee revision allowed

2015-VIL-505-CESTAT-BLR-CE

VST INDUSTRIES LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX HYDERABAD-III

Central Excise – Appellant is engaged in the manufacture of cigarettes – Demand of duty on the ground that the appellants are also manufacturing printed gay wrappers, which are being used by them in the packaging of cigarette packs – Classification of printed gay wrappers used for packaging of cigarettes - under heading 4823.90 or under heading 4901.90 attracting Nil rate of duty – HELD – Tribunal decision in the case of Sri Kumar Agencies holding the goods to be products of printing industries and thus attracting ‘NIL’ rate of duty has almost reached finality, even though the same stands appealed against by the Revenue before the Hon’ble Supreme Court but there is no stay of operation of the same. Learned AR also agrees that the above referred order passed subsequent to the remand orders of the Hon’ble Supreme Court has held in favour of the assessee. As such by following the same, we hold that the goods in question are properly classified under heading 4901.90 which attracts ‘NIL’ rate of duty and no demands of duty can survive against the assessee. If that be so, no penalties can be imposed - Accordingly, the impugned order is set aside and all the appeals are allowed

2015-VIL-509-CESTAT-KOL-CE

M/s NOKIA SIEMENS NETWORK PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, KOLKATA-III

Central Excise – Input service - Cenvat Credit - software downloaded by appellant is used directly in the taxable activity i.e. for configuration of manufactured equipment and supply of software on which service tax is charged – HELD - Revenue has proceeded on the premise that the appellant are engaged in trading of the goods and they have wrongly availed CENVAT Credit on input services used in carrying out the trading activities. The claim of the appellant on the other hand is that the software downloaded from the overseas supplier have been used in or in relation to the manufacture of the dutiable goods – Matter remanded to Commissioner to decide the issue afresh taking into consideration all evidences and the issues raised by the appellant - Appeal is allowed by way of remand

2015-VIL-504-CESTAT-AHM-CE

M/s PET METAL PVT LTD Vs COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-II

Central Excise - Section 11BB - Interest on delayed refunds – Apportion of refund amount against certain dues which was set aside later by Tribunal – Assessee claim of interest against delayed refund – HELD - In the present case, a refund amount of Rs.1,91,250.00 was appropriated with respect to some confirmed dues which was later on set aside. For this amount of Rs.1,91,250.00 refund claim earlier filed was appropriated which was not held proper. In the present factual matrix, interest on the amount of Rs.1,91,250.00 will become due from completion of 3 months from the date of refund claim originally filed under Section 11BB of the Central Excise Act, 1944. There is no scope for postponement of payment of interest after completion of 3 months from the date of filing the refund claim. Appellant’s claim regarding interest from completion of 3 months from filing of first refund claim is allowed - Interest on amount deposited during investigation - interest accrues from 3 months after the disposal of dispute in favour of assessee – Appeal allowed

2015-VIL-507-CESTAT-MUM-ST

VODAFONE CELLULAR LTD Vs COMMISSIONER OF CENTRAL EXCISE, PUNE

Service Tax – Valuation - Telecom Service – Appellant provides prepaid recharge vouchers, free of charge to the dealers as commission for the sale effected - whether distribution of free of recharge voucher attracts service tax liability or otherwise despite the fact that the recharge voucher are given free of cost to the dealers as consideration for commission – Demand – HELD – the recharge voucher are distributed free of cost, appellant has not received any amount towards the recharge voucher, though the distributors/dealers have sold the recharge vouchers. In our view distribution of recharge voucher fee of cost to the distributors/dealers would in a way amount to giving commission to the dealer for the transactions of sale of prepaid SIM Cards for the appellant. It can also be noticed that during the relevant period the Explanation as per the Section 67 of Finance Act, 1994 also do not indicate inclusion in that gross value of any cost towards free distribution made by the service provider - the provisions of Service Tax (Determination of Value) Rules, 2006, that came into effect from 19.04.2006; Rule 6 discusses about the inclusion/exclusion of commission, for determining the correct value of the services rendered. We perused the said provisions of Rule 6(1) of Service Tax (Determination of Value) Rules, 2006 and note does not include the "Telephone Services" by any stretch of imagination – Assessee own case followed - impugned order is unsustainable and is liable to be set aside – Assessee appeal allowed

2015-VIL-506-CESTAT-MUM-ST

RELIANCE INDUSTRIES LTD Vs CCC & ST (LTU) MUMBAI

Service tax – Denial of cenvat credit availed on the amount of insurance premium paid on the stocks which were lying in warehouses in foreign countries - HELD - the lower authorities have mis-directed their findings, without considering the fact that the said services would get cover under the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - there is no dispute as to the fact that the insurance cover was taken for the stocks which were lying in warehouses in a foreign country and the service tax liability is fastened upon the appellant under the provisions of Section 66A of the Finance Act, 1994 – services were used in relation to business or commerce – Cenvat credit admissible

2015-VIL-508-CESTAT-MUM-ST

KAYTEE CORPORATION PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI-I

Service Tax - commission agent service - Whether the lower authorities are correct in holding that the commission agent service received by the appellant is covered under Section 66A for discharging the service tax liability by the recipient on reverse charge basis. The service involved is a commission agent service which is provided by an overseas agent located outside India for promotion of export business – HELD - From the Rule 3(iii)(c), it is clear that the service of overseas agent received by the appellant has been provided from outside India and received by appellant-recipient located in India and the service is used in relation to business or commerce i.e. export business. Therefore, in view of this undisputed position. Section 66A is clearly applicable and according to which the appellant was legally liable for payment of service tax for the period from 19.4.2006 - the lower authorities have correctly held that the service tax was payable after 19.4.2006 and rightly rejected the refund claim in respect of service tax paid for the period on or after 19.4.2006 – assessee appeal dismissed

17^th of Sep

2015-VIL-403-ORI

STATE OF ODISHA Vs M/s SUVADRA ENTERPRISES

Odisha Sales Tax Act, 1947 - Section 12(8) – Reassessment on the basis of Audit Assessment Report – Section 12(5) - reasonable opportunity of being heard – HELD - the prerequisite under section 12(8) is compliance of section 12(5) of the Act. In the instant case the Assessing Authority has taken view from the report that a prima facie case under section 12(8) culled out. This observation of the Assessing Authority smacks the provision of law inasmuch as without giving any short of opportunity, the Assessing Authority has accepted the Audit Assessment Report and found that there is a prima facie case under section 12(8) of the Act against the assessee - Moreover, neither the written statement nor any short of oral statement of the opposite party find place in the re-assessment order passed by the learned Assessing Authority. The reasons given in the escaped assessment order, does not disclose how much tax turnover has been suppressed by the petitioner - the Assessing Authority who is vested with power to exercise but does not execute according to statute, the procedure followed by the concerned authority is contrary to principle of natural justice - no reasonable opportunity has been given to the assessee to pass order under section 12(8) of the Act - the impugned order passed by the Tribunal is valid and there is no reason to interfere – Revenue appeal dismissed

2015-VIL-511-CESTAT-CHE-CE

THE INDIA CEMENTS LTD Vs COMMISSIONER OF CENTRAL EXCISE, TRICHY

Central Excise – Cenvat Credit - Denial of credit on parts of surface miners used in the mines, availment of credit on CCTV Cameras used in the Kiln - Whether percentage of eligibility of credit is 75% or 100% on the goods cleared under project imports prior to 1.3.1997 – HELD - Appellants are eligible for credit on parts of surface miners, CCTV Cameras installed in the Kiln and they are also eligible for 100% credit on the CVD paid on the goods imported under project imports - admissibility of 100% of credit on the project import goods - goods were imported in March 1996 - the date of receipt of capital goods in the appellant's unit is relevant - As per amended rule 57Q (3) which stipulates that credit is eligible only to the extent of 75% effective from 1.3.97 whereas in the present case the date of receipt of capital goods is 22.3.96. Therefore, the appellants are eligible for 100% credit – assessee appeal allowed

2015-VIL-402-MAD-CE

COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV Vs M/s CELEBRITY DESIGNS INDIA PVT LTD
Central Excise - Rule 5 of the CENVAT Credit Rules, 2002 - Refund of unutilized CENVAT Credit - Rule 5 of the CCR, 2002 r/w Notification No 11/2002 CE(NT) dated 01.03.2002 - Relevant date for fling the claim – HELD - refund application under the said Rule should be filed before the expiry of the period specified in Section 11B - In view of the specific provision, Section 11B, which prescribes the limitation date and the Notification 11 of 2002 dated 1.3.2002, it is clear that refund application should be filed before the expiry of the period specified in Section 11B of the Central Excise Act - Since the claim for refund is filed after a period of one year and hence, the same is clearly hit limitation – Revenue appeal allowed

2015-VIL-512-CESTAT-MUM-ST

INTERJEWEL PVT LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI

Service Tax - liability to discharge service tax on amounts which have been remitted by the appellants to foreign entities for the commission on the import of rough diamonds - liability to pay service tax under reverse charge mechanism – HELD - the issue of liability to pay service tax under reverse charge mechanism, as per the provisions of Section 66A of the Finance Act, 1994, is now settled by the Apex Court, holding that the service tax liability would arise under the reverse charge mechanism w.e.f 18.4.2006. Accordingly, in view of the law being settled we hold that on merits, the appellants appeal do not succeed – Bona fide belief - appellants could have entertained a bona fide belief that the constitutional validity having been challenged by them in writ petition and the same being pending before the Hon'ble High Court, they need not pay any service tax on the amount that is remitted to the brokers. This can be bona fide belief of the appellants, accordingly, the demand which has been confirmed against all the appellants by invoking the extended period of limitation are liable to be set aside and we do so to that extent the appeals are allowed. At the same time, the demands which are within the period of limitation from the date of issuance to the show cause notice needs to be upheld with interest and we do so, to that extent appeals are rejected - Invoking the said provisions of Section 80 of the Act, penalty is set aside - appeals are partly allowed

2015-VIL-510-CESTAT-HYD-ST

D.S. NARAYANA & COMPANY PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX VISAKHAPATNAM-I

Service Tax – CHA Service - The appellant is a service provider in the category of Customs House Agent (CHA) and steamer agent (SA) – Tax liability on amount received for various services such as obtaining space certificate, getting Port Health Officer report, getting warehousing licence, getting extension of warehousing licence, attending warehouse clearances, miscellaneous expenses, supervision expenses, miscellaneous DEPB expense etc – HELD - the appellant do not have bills and he also could not specifically confirm that these were in the nature of reimbursement of actual expenses incurred by the appellant as a CHA so that the same can be considered as expenses incurred by a pure agent. In the absence of any evidence to show that these were reimbursable expenses and covered by bills and evidences to show that this was actual reimbursement of expenses, service tax is leviable - Demand under C&F Service - services of documentation, weighment, repacking, transportation charges, loading/unloading charges can be considered as part of CHA service. These activities are undertaken after the goods are cleared and therefore confirmation of demand is not sustainable - Penalty - penalties under Sections 76 and 78 both cannot be imposed - Penalty under Section 78 equal to the service tax demand upheld meet ends of justice and penalty under Section 76 need not be imposed – Appeal partly allowed

upNoti1371

Uttar Pradesh: Exemption to NTPC Limited Dadri and NTPC Limited Auraiya from the payment of tax, on entry of the natural gas into the local area

hpNoti71609

Himachal Pradesh: All dealers, except dealers paying lump-sum tax by way of composition, shall compulsorily pay tax electronically

hpNoti101609

Himachal Pradesh: Amendment in Notification No. EXN-F(9)2/99, dated 23rd July, 1999 - Regarding CST concession

18^th of Sep

2015-VIL-404-PAT

M/s MAPRA LABORATORIES PVT LTD Vs THE COMMERCIAL TAXES OFFICER

Bihar Value Added Tax, 2005 – Maximum retail price – Trade discount to wholesaler – Validity of sub-section (5) of Section 15 of the Act – Denial of exemption in respect of supply of medicine free of cost to dealer under a Scheme which was in the nature of quantitative or trade discount – Free supply of medicines as trade discount – Levy of tax under of provisions of Section 15(5)(b) of the Act on supply of medicines free of costs – Validity to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value – legislative competence under entry 54 of List II of the Seventh Schedule - HELD - The notification to the extent it intends to levy tax on first point sale with reference to price which could be charged in respect of a subsequent sale which has not come into existence at the time liability of tax arises and is determined ex hypothesi is unsustainable - the State Legislature not being competent to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned. The matter goes to the root of the competence of the State Legislature under the Constitution to frame any such enactment and if it is not competent to enact such a measure then it is equally not competent to do the same by way of providing option for levy of tax upon the dealer in such matter - Sub-section (5) of Section 15 of the Act is declared ultra vires - the impugned orders passed by the Commissioner in the revision application as also by the Assessing authority in accordance with the same cannot be sustained and are quashed – Assessee petitions are allowed

2015-VIL-405-ALH-CE

COMMISSIONER OF CENTRAL EXCISE, AGRA Vs M/s OKAY GLASS INDUSTRIES

Central Excise – Cenvat Credit – Availability of benefit of Section 73 of the Finance Act, 2010 for the period from April, 2008 to March, 2010 – Revenue appeal against Tribunal order – Judicial discipline – HELD - When this issue had been decided by the Tribunal in the remand order and Tribunal had directed for determination of the amount payable under Rule 6(3) in proportion to the use of inputs/input services in or in relation to manufacture of exempted final products, the Commissioner in de novo proceedings could not go into this question again. The impugned order thus, besides being in contumacious disregard of the Tribunal's order also appears to be the outcome of a dishonest exercise of adjudication function - The Tribunal being the last fact finding authority, its findings of fact cannot be interfered unless it is alleged and established that the findings are perverse. Thus, no substantial questions of law as framed by the appellant arise for consideration - Cost imposed by Tribunal on Commissioner for judicial indiscipline is upheld - Revenue appeal dismissed

2015-VIL-514-CESTAT-DEL-CE

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, INDORE Vs M/s BRIDGESTONE INDIA PVT LTD

Central Excise – Valuation - Appellant giving cash discounts and quantity discounts/turnover discounts to their dealers - the request for provisional assessment under Rule 7 of CER, 2002 was refused by revenue, appellant paid duty on the value without deducting the discounts - during the period of dispute, assessee paid duty on the value without deducting the discounts - Subsequently when the appellant were able to quantify the cash discounts and quantity discounts they filed the refund claim – vide impugned order the Commissioner (Appeals) while allowing deduction of cash discounts ordered for refund holding that there is no unjust enrichment, disallowed the deduction of quantity discounts/turnover discounts - appellant in appeal against disallowing the deduction of the quantity discount/turnover discount and revenue in appeal against finding that there is no unjust enrichment – whether the quantity/turnover discount is includible in the assessable value or not – HELD - Since in the present case, the discount policy of the assessee is known prior to the clearance as the rate of discount is mentioned in the assessee's agreements with their dealers and also from the Circular No.354/81/2000-TRU dated 30.06.2000, it is clear that the deduction of quantity discount cannot be disallowed - we do not accept the Revenue's contention that the quantity/turnover discount being offered is compensation by the assesee to the dealers for incurring the expenses on maintaining certain infrastructure and facilities at their showrooms - The impugned order disallowing the deduction of the quantity/turnover discount is not correct - As regards the question of unjust enrichment, there is no dispute that the discounts have been passed on by the issue of credit notes. Once the credit notes are issued by the assessees to his dealers, the invoice price mentioned in the invoices issued earlier would stand reduced to that extent and in such a situation, the burden of proof would shift to the Department and it would be for the Department to establish that the credit notes issued are bogus - there is no unjust enrichment and that the incidence of higher duty paid by the assessee and whose refund is being claimed has been borne by them and has not been passed on by them to their customers

2015-VIL-02-ARA

M/s K. RAM MOHAN & CCEC&ST, MYSORE

Advance Ruling Authority - Whether activity of street light maintenance is exempted from service tax to meet the intention of legislature as reflected in Sl. No. 12 or 13 of Notification No. 25/2012 dated 20.06.2012 of Service Tax – HELD – The service that is proposed to be provided by the applicant is street light maintenance - paragraph 13(a) of the exemption Notification No. 25/2012-ST would be wholly irrelevant as the service is not being provided for the maintenance of road, bridge, tunnel etc. It is tried to point out that the word ‘road’ is a wider term and include street light supporting structure. We do not think so. As a matter of fact, the word ‘road’ is clear and it can not be substituted by the term street light support structure. The reliance on para 13 (a) by the applicant is, therefore, of no consequence - the claim made in the application is without any legs to stand, the application is rejected

2015-VIL-513-CESTAT-MUM-ST

M/s B.M. CHAPALKAR AND COMPANY Vs COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, NASHIK

Service Tax - Appellant was awarded with a contract for Cleaning Services by Nashik Thermal Power Station - Revenue appeal against impugned order not upholding demand under ‘Business Support Services’ and ‘Cargo Handling Services’ while the appellant-assessee is aggrieved by confirming demand of service tax under ‘Cleaning Agency Services’ – Demand under Cleaning Agency Services is upheld - the contract which is awarded to the appellant also has elements of loading and unloading of Coal – the value in respect of such loading and other activities may not be covered under the category of Cleaning Agency Services. While upholding the demand raised under the category of cleaning services, matter remanded for limited question of requantification of the demand, interest and penalties by reduction of the value indicated for loading and unloading of coal, movement of coal etc - Business Support Services’ and ‘Cargo Handling Services’ - In the instant case, the coal is handled/moved from fairway wagons to the site of Thermal Power Station with the aid of wagon tippling system to be fed in the boiler bunkers through conveyor system. It is evident that handling of the coal is done through wagon tippling system or conveyor system, they are mechanical devices and no motor vehicle is involved in the said handling - It clearly appears that the Service tax has been levied under the ‘Cargo Handling’, on such services which undertakes the activities of packing, unpacking, loading, unloading of goods to be transported by any means of transportation namely truck, rail, ship or aircraft - the service provided by the assessee under the contract is distinct i.e. transporting coal from wagons to Thermal Power Station by conveyor belt and not by any means of transportation - Thus, the service rendered under the subject contract does not fall under the ambit of Cargo Handling Services and as such it is not liable to pay the service tax - Revenue has not contested the above factual findings as recorded by the first appellate authority by any contrary evidence - the first appellate authority was correct in coming to the conclusion that the services rendered by the appellant will not get covered under Business Support Services and Cargo Handling Services - the impugned order to that extent is correct and legal – Partly in favor of assessee

ceNoti41

Central Excise: Amendment in Notification No. 12/2012-CE - Regarding Bunker fuels for use in ships/vessels which fly the Indian flag

21^st of Sep

2015-VIL-408-AP

THE STATE OF ANDHRA PRADESH Vs M/s K.C.P LTD

Central Sales Tax Act, 1956 – Section 10 - Purchase of diesel against 'C' forms – Whether diesel purchased against C forms can be used in vehicles for transporting workmen to mines and back – Manufacture - levy of penalty on the ground that diesel purchased against C forms was misused – HELD - In view of Form No. 12 of the Act of 1956, diesel is not included as raw-material for cement industry. In the present case, diesel oil was purchased from neighbouring State against C form declarations. The total purchase of diesel was 16,20,546 liters, consumed 11,03,508 liters in captive generation and the remaining diesel oil was used for various purposes like as fuel for quarry lorries, industry vehicles own or factory, hydel project, jeeps and other vehicles - consumption of diesel other than captive generation is against the purpose mentioned in C forms - Using diesel in factory or own vehicles, jeeps and other vehicles for transportation of workers is not an integral part of manufacturing process - utilization of diesel for own and factory vehicles so also for jeeps and other vehicles for transportation of workers from mines to factory etc., is a clear violation of terms and conditions of C forms - Appellate authority rightly concluded that the assessee violated the terms and conditions of C forms and the order was interfered by the tribunal on misconception that carrying workmen and using factory vehicles and own vehicles is an integral part of manufacturing process which is against the principles laid down - Tribunal order is set aside and Revenue revision allowed

2015-VIL-409-P&H

ORCHID INFRASTRUCTURE DEVELOPERS PVT LTD Vs THE STATE OF HARYANA

Haryana Value Added Tax Act, 2003 – Work contract – Writ petition challenging the validity of Rule 25(2) and 25(7) of HVAT Rules, 2003 – violation of the principles enunciated by this Court in CHD Developer's case - Notice for Assessment – HELD - the present writ petitions are disposed of by directing the petitioners to produce the relevant record and to file a detailed and comprehensive representation(s) whereupon the assessing authority shall take a decision in accordance with law by passing a speaking order and after affording an opportunity of hearing to each petitioner or its authorized representative. It is, however, clarified that the question of vires is not being adjudicated upon at this stage and it shall be open to the petitioners to approach this Court again laying challenge to the vires in accordance with law, after the decision by the concerned authority, if need so arises

2015-VIL-516-CESTAT-MUM-CE

OIL AND NATURAL GAS CORPORATION LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Central Excise – Larger Bench order - Valuation – Transaction value - Whether a manufacturer of LPG selling the product in bulk, post 1.7.2000, to an Oil Marketing Company (OMC) for further sale in packed form to dealers/domestic consumers and recovering ex-refinery price from the OMC as sale consideration is entitled to adopt ex-storage price (APM price) as the assessable value of the said product in bulk by ignoring the provisions of Section 4 of the Central Excise Act as amended w.e.f 1.7.2000 – HELD - In the present case, there is no dispute that the value recovered by the appellant is as per the commercial invoice and therefore the commercial invoices represent the transaction value, the duty will required to be paid by the appellant on the said transaction value. The APM price recovered by the appellant's customer from the general public or their customer is not relevant for determining the assessable value of the goods sold by appellant to OMCs under Section 4 of the Central Excise Act - the appellant was required to discharge its duty liability on the basis of 'transaction value' which it collected from the OMCs by issuing commercial invoices during the disputed period in terms of provisions of Section 4 of the Central Excise Act as amended w.e.f. 01/07/2000. In other words, post 01/07/2000, the provisions of new Section 4 cannot be ignored for determination of assessable value of LPG sold in bulk to OMCs for further sale in packed form to dealers/domestic consumers – Majority order

2015-VIL-406-P&H-CE

COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Vs M/s NEXO PRODUCTS (INDIA)

Central Excise – Clandestine removal of nuts and bolts - HELD - No effort had been made to segregate the nuts and bolts into various sizes and to find the shortage by comparing the same with the recorded balance - it was impossible for the Department to come to a conclusive factual finding that there was shortage of 14,25,900 pieces of particular size - The onus would lie upon the Department to undertake the said exercise which was not possible in such a short period due to the large number of inventory - Nothing was brought on record, in any manner, to show that to manufacture such a large amount of 14,25,900 pieces, there was material which had been consumed since neither any relevant record had been shown to show that electricity had been consumed or labour had been utilized to manufacture the said quantity. Neither the fact of purchase of raw material from the vendors or the sale to the consumers was brought on record. In the absence of any corroborative evidence, demand is totally arbitrary and has been rightly set aside by the tribunal – Revenue appeal dismissed

2015-VIL-407-GUJ-CE

COMMISSIONER OF CENTRAL EXCISE - AHMEDABAD – I Vs RAJESH MALLEABLES LTD

Central Excise – Cenvat Credit - Rule 8(3A) of the CER, 2002 - Whether the ratio of Indsur Global can be applied to other cases while the matter has not attained finality and that the department is contemplating to challenge the judgement in the Hon'ble Apex Court – Dismissal of revenue appeal by the Tribunal following the ratio of Indsur Global – HELD – There is no force in the argument of the Revenue. It is apposite to note that the judgement in case of Indsur Global is decided on 26-27/11/2014 i.e. almost around nine months ago. So far the department has not preferred any appeal to challenge the said decision in the Hon’ble Apex Court, hence, the ratio expounded in the Indsur still holds the field - Tribunal has not committed any error or irregularities in rejecting the appeal of the Revenue - Appeal dismissed

2015-VIL-515-CESTAT-DEL-ST

M/s ACE CALDERYS LTD Vs CST, BHOPAL

Service Tax - Franchise service - Appellant is engaged in manufacture of branded alumina firebricks and other refractory material - the appellant, it is alleged, granted franchise for manufacture of firebricks other manufacturing units - difference between the amount realised on account of sales and the purchase price actually paid by the appellant to manufacturing units – Demand on the ground that this difference reflected the value of the franchise service – franchisee agreement – whether the service, if any, rendered by the appellant to the manufacturers fell under the scope of franchise service - HELD - the manufacturers did not have any representational right to manufacture goods identified with the appellant. Indeed the appellant did not provide any service to these manufacturers nor did the manufacturers make any payment to the appellant for any service. The flow of payment was from the appellant to the manufacturer which would not have been the case had the appellant provided any service to the manufacturers. Merely because the words ‘franchise’ and ‘franchisee’ have been used in the agreement does not ipso facto mean that as per that agreement franchise service was rendered - whether franchise service has been rendered agreement has to be ascertained from the actual context, intent and content of the agreement, no part of the agreement support the contention that it gave representational right to the manufacturers to manufacture goods identified with the appellant - As a consequence notwithstanding the presence of words, ‘franchise’/ ‘franchisee’, therein, the said agreement fails to qualify as franchise agreement - The difference between the amount charged by the manufacturers from the appellant in respect of the goods manufactured by them and the value at which the goods are finally sold by the appellant to its customers was nothing but trading profit of the appellant and does not represent franchise fee – Assessee appeal allowed

2015-VIL-405-AP-ST

M/s CHANDRIKA ENVIRON Vs THE ADDL. COMMISSIONER, CENTRAL EXCISE, CUSTOMS AND SERVICE TAX

Service Tax – Cleaning service – Restoration work of waste pits – Assessee appeal against Tribunal order for pre-deposit – Financial hardship – HELD - when a statutory appeal is pending on the file of the Tribunal and any opinion that is expressed by the Tribunal granting interim relief pending disposal of the appeal, is only a prima facie view and not a conclusive one - The very fact that the Tribunal directed for pre-deposit as a condition precedent in exercise of the power under Section 35-E of the Act would indicate that the Tribunals view expressed on merits is only a prima facie view and the Tribunal would be considering the case on merits at the time of hearing the appeal - we are not inclined to go into the details of financial hardship as primarily the appellant ought to have placed financial statements and the income-tax returns before the Tribunal – Appeal disposed

Guest Article

Working of DVAT Department - Recent order by Delhi HC in case of M/s Bhumika Enterprises

FCP2109

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

22^nd of Sep

utrNoti809

Uttarakhand: Amendment in Schedule III - Change in rate of tax on Motor Spirit & Diesel

apCir3571509

Andhra Pradesh: Issue and receipt of transit passes (TPs) at the Check Posts - Procedure to be adopted in case of un-surrendered Transit Passes

odiNoti25338

Odisha: Amendment in Notification No.40563/2006/F, dated the 26th September, 2006 - Restrictions and conditions governing deferred payment of tax

Tamil Nadu ACAAR Orders

ACAAR 04: Authority for Clarification and Advance Ruling - Rate of Tax on Scientific Equipments and Instrument sold to ISRO under CST Act

ACAAR 50: Authority for Clarification and Advance Ruling - Rate of Tax on 'Ground Granulated Blast Furnace Slag'

ACAAR 09: Authority for Clarification and Advance Ruling - Rate of tax on 'Readymade Underwear Garments made of Nylon and Elastane'

ACAAR 21: Authority for Clarification and Advance Ruling - Rate of tax on 'POWER BANK' (Used for charging Mobile Phone)

2015-VIL-411-AP

M/s LARSEN AND TOUBRO LTD Vs STATE OF ANDHRA PRADESH

Central Sales Tax Act – Section 6(2) - Claim for exemption under Section 6(2) of the CST Act and import sales under Section 5(2) of the CST Act - Inter-state supply of goods under lumpsum turnkey projects – Works Contract - indivisible works contract – execution of turnkey projects - claim of exemption towards sale in transit – subsequent sale – Section 4(7)(g) of the APVAT Act – transfer of goods in the execution of a works contract – High Sea sale - ‘cross-fall breach’ clause - HELD - While the submissions of the petitioners, that the supply and erection contracts are divisible and independent contracts, and they are entitled to claim exemption under Section 6(2) of the CST Act, necessitate rejection, their contention that the subject sales/deemed sales fall within the ambit of Section 3(a) and 5(2) of the CST Act must be upheld - Existence of ‘cross-fall breach’ clause or clause which enables owner to terminate supply contract for breach of erection contract and vice-versa, would mean that while in form there are two separate contracts, in substance, there is one single indivisible contract - For a sale to be exempt u/s 6(2), sale contract should come into existence and title to goods should be transferred during movement - Parties intended that title to goods would be transferred from contractor to owner only post erection and commissioning, so title transferred only after goods incorporated in works in State of AP and therefore, Revenue justified in rejecting assessee’s claim of ‘subsequent sale’ - Assessee plea merits acceptance that supplies in turnkey contracts were inter-state sales falling u/s 3(a), mere fact that goods delivered within State and appropriation took place is inconsequential, if parties envisaged movement of goods from one State to another and such movement is an incident of contract of sale - Fact that goods moved inter-state for incorporation in works would not make deemed inter-state sale an ‘intra-State sale’ within Telangana and AP – Writ petition partly allowed

[This 63 pages landmark judgement has 227 different citations - Please let us know if you require any of these judgment on indirect tax matter]

2015-VIL-517-CESTAT-DEL-ST

M/s HCL TECHNOLOGIES LTD Vs COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE AND SERVICE TAX, NOIDA

Service Tax - Business Auxiliary Service - Refund - Input Service - Rule 2(l) of CCR, 2004 - Rent-a-Cab Services, Courier Services, Management, Maintenance & Repair Service, Manpower Recruitment Service, Security Services, Cleaning Services, BSS Services (Summit), Legal Consultancy Services, Chartered Accountancy Services, are allowed. The refund claim on improper/defect invoices pertaining to services other than Telecommunication Services and Renting of immovable property are allowed - Legal consultancy services are indispensable for any business to satisfy proper compliance of legal requirements and hence are input services - Design services for getting Coffee mugs printed with logo of appellant cannot be input service; credit on service tax paid for stay in hotel as renting of hotel/renting of immovable property is not Input service - Appeal partly allowed

2015-VIL-518-CESTAT-MUM-CE

STERLITE OPTICAL TECHNOLOGIES LTD Vs COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, AURANGABAD

Central Excise Act - Section 4 - Rule 5 of Valuation Rules, 2000 – Denial of deduction on account of freight from the assessable value – HELD - Goods were delivered at customer place, therefore, goods were sold for delivery not at the place of removal but at other place i.e. customer doorstep and it is seen that the freight shown in the invoices is in addition to basic price of the goods - the criterion that cost of transportation should be in addition to the basic price of the goods stands fulfilled - Since Revenue could not bring any material on record that the freight is equated, there is no option except to agree that the amount of transportation shown in the invoices is actual - Moreover, even if freight is equalized, deduction is permissible - Appellant is entitled for deduction of cost of transportation from value of goods, therefore, order confirming duty demand is not sustainable – Assessee appeal allowed

apNotiGO356

Andhra Pradesh: Amendment to APVAT Schedule-I and Schedule-IV - Regarding 'Sugar including Khandasari Sugar'

mizoNoti11020

Mizoram: Increase in rate of tax from 20% to 30% on Tobacco Products including Cigarettes, Cigars, Cigarillos and Vaihlo

23^rd of Sep

triNoti43

Tripura Value Added Tax (Fifth Amendment) Rules, 2015 - Amendment in Rule 8 & 11

Guest Article

GST on Real Estate in India– A Broad Application Perspective

2015-VIL-412-MAD

HSI AUTOMOTIVES LIMITED Vs THE STATE OF TAMIL NADU

Tamil Nadu General Sales Tax Act, 1959 –Interpretation of expression ‘taxable turnover’ for the purposes of TNGST Act, 1959 and Tamil Nadu Additional Sales Tax Act, 1970 - Total Turnover and Taxable Turnover - Historical perspective of 1970 Act – Whether exempted sales under TNGST Act can be made taxable under Act of 1970 on the basis expression ‘taxable turnover’ – parasitical legislation - HELD – the effect of Section 2(1)(b) of the 1970 Act is that the provisions of the TNGST Tax Act would apply in entirety, including the definitions, in relation to the additional sales tax payable under the 1970 Act, as they apply in relation to the tax payable under the 1959 Act – Once it is seen that the Tamil Nadu Additional Sales Tax Act, 1970 does not contain a provision for definitions and under Section 2(1)(b) of the Tamil Nadu Additional Sales Tax Act, 1970, the provisions of the 1959 Act are made applicable to the additional sales tax payable under the 1970 Act and also that for the purposes of assessment, levy of penalty, appeals and revisions, the assessees as well as the Department may have to take recourse only to the 1959 Act, it follows as a corollary that the Tamil Nadu Additional Sales Tax Act, 1970 does not have independent legs to stand on its own and, in a way, it is a parasitical piece of legislation, that would have to depend upon the provisions of the TNGST Act, 1959, (i) for the purposes of definitions of words and expressions (ii) for the purposes of assessment and levy (iii) for the purposes of collection and (iv) for the purposes of statutory remedies such as appeals, revisions, etc. - Therefore, in the absence of a definition of the expression 'taxable turnover' in the Act of 1970, there is no other alternative except to rely upon the definition of the same expression available in Section 2(p) of the TNGST Act, 1959. This is permissible both on account of Section 2(1)(b) of the 1970 Act and also on fundamental principles of statutory interpretation - the Tribunal committed an error of law in treating the exempted sales effected by the petitioners to M/s.Hyundai Motors India Limited, as part of the 'taxable turnover' of the petitioner for the purposes of Tamil Nadu Additional Sales Tax Act, 1970 and consequently, the levy of penalty was also wrong – Assessee appeal allowed

2015-VIL-414-DEL

EMELSON AGENCIES Vs COMMISSIONER OF TRADE & TAXES, DELHI

Delhi Value Added Tax Act, 2004 – Assessment – Sale commission - Enhancement of turnover on the basis of excess stock – Trading account – Best judgment method – HELD - two challans amounting to Rs. 1,250/- cannot be the basis for rejecting the Assessee’s books and increasing the taxable turnover by Rs. 2.5 crores – In absence of any purchases by Assessee, it was doubtful whether Trading Account could be prepared – AO enhanced turnover principally on basis that Assessee had failed to produce Trading Account – Also turnover was increased on basis of excess stock allegedly found at premises of Assessee, AO has not indicated as to how excess stock would affect declared turnover – While making best judgment assessment, AO did not examine records pertaining to commission received/receivable by Assessee – Assessment Order does not indicate any basis for AO to enhance turnover by 10% – Matter remanded – Assessee appeal allowed by remand

2015-VIL-413-DEL-CE

FLEVEL INTERNATIONAL Vs COMMISSIONER OF CENTRAL EXCISE

Central Excise – Tribunal majority order reversed - Clandestine Removal of Air-Conditioners / Compressors - cross-examination of the witnesses - HELD - despite a specific request made by the Appellant for cross-examination of the witnesses whose statements were recorded and were being relied upon by the Department, no serious attempts were made to secure their presence in the adjudication proceedings - The Department failed to show the existence of any of the extraordinary circumstances under Section 9D of the Act to justify the denial of right to cross-examine of ex-employee - In the considered view of the Court, this was a serious infraction which vitiated the adjudication order - As regards the request for cross-examination of the other witnesses, the adjudication order again dealt with this perfunctorily. It simply that “such a large number of persons was granted it would have take the case to a non-ending process.” This cannot be a justified reason within the meaning of Section 9D of the Act to deny that opportunity to the Appellant - the Court set asides the impugned majority order of the Tribunal on the issue of alleged clandestine removal of the 606 ACs by the Appellant and hereby quashes the corresponding demand – Revenue plea for sending the case back to the CESTAT for a fresh determination is also rejected – Assessee appeal allowed

2015-VIL-519-CESTAT-MUM-CE

COMMISSIONER OF CENTRAL EXCISE, NAGPUR Vs M/s CANDICO INDIA LTD

Central Excise – Valuation – Assessable value – Assessee sold confectionary items to bottlers of Coca Cola India Ltd at a price 35% to 55% of the normal wholesale price – advertising agreement with Coca Cola India – Revenue seeks to assessee at the normal price of the goods at which these items are being sold to other customers – industrial consumer - HELD - agreement with Coca Cola mandated that it advertise and promote the respondent's products in all its advertising – This advertising of the respondent along with their own product is an additional consideration - In the facts and circumstances of the case, the assessable value of the goods will be the normal wholesale price – Revenue appeal allowed

2015-VIL-521-CESTAT-BLR-CE

GODAVARI FERTILISERS & CHEMICALS LTD Vs CCE&C, VISAKHAPATNAM-II

Central Excise - Clearances of the old returned stock of pesticides without payment of duty – Absence of documentary proof – HELD - except for making statement that the said clearances were out of the old returned stock of pesticides, the appellants have not been able to correlate the returned goods with the earlier duty paid clearances. There is a specific procedure required to be followed in case the duty paid cleared goods are subsequently returned to their factory. No such records stand maintained by the appellant - It is not a case of technical lapse or procedural irregularity. The appellants are required to substantiate their claim that the goods were originally cleared during the preceding period and were subsequently brought back to their factory and are re-cleared - In the absence of any evidence to that effect, there is no infirmity in the view taken by the authorities below - Assessee appeal dismissed

2015-VIL-522-CESTAT-DEL-ST

M/s MY CAR PVT LTD Vs C.C.E., KANPUR

Service Tax - Business Auxiliary Services – Incentive in nature of trade discount – HELD – HELD - i. Commission on Extended Variety - Appellant is providing after sales services to the customers on behalf of MUL for which appellant is getting a commission from MUL and the same is accounted in their books of accounts as commission on extended warranty. Such an activity will have to be considered as a service provided on behalf of MUL and has to be considered as BAS under – Demand upheld - ii. Maruti Online Services - Appellant is maintaining mobile vehicles to attend to the complaints of the customers - Such a facility made available to the customers by the appellant is on behalf of MUL and such expenditures are reimbursed by MUL and not from dealers margin. Such an activity will be covered within the definition of BAS under Section 65 (19) (iii) of the Finance Act, 1994 – Demand upheld - iii. Free Services Charges - Since no separate charges are claimed from MUL for providing free services and the expenses for providing free services are met from dealer’s margin - Accordingly it is held that no service tax is payable on the free service provided by the appellant - iv. Incentive on sale of spare parts - All the vehicles/spares are purchased by the appellant and then sold - The incentives given by MUL has to be considered performance based trade discounts and will not be in the nature of BAS commissions - payments received on these accounts cannot be held to be classifiable as provision of taxable services of BAS - v. Exchange Charges for True Value (TV) and non-True Value (non-TV) used/pre-owned cars - no consideration on this issue is received by appellant from MUL for carrying out such buying and selling of used/pre-owned cars. It is thus held that activities regarding exchange charge ‘True Value’ and ‘non-True Value’ cannot be considered as provision of BAS under Section 65 (19) of the Finance Act, 1994 - Assessee appeal partly allowed

2015-VIL-520-CESTAT-AHM-ST

SHRI JAY AJIT CHARIA Vs COMMISSIONER OF CENTRAL EXCISE & S.T., SURAT - I

Service Tax – Evasion of tax - suppression of facts – Clubbing of income – Commercial Training or Coaching Service - HELD - It is noticed that the taxable value was determined on the basis of three sources and the highest amount among all these three sources in each year had taken on year-wise taxable value for determining demand of tax - there is no definite stand taken by department for a particular source and documents for determining taxable value - service tax cannot be levied in such manner, on the basis of pick and choose method of the documents, which is totally inconsistent, misconceived and irrational - Appellant had not disclosed to the department tax liability and it is a clear case of suppression of facts with intent to evade payment of tax and extended period of limitation and penal provisions under Finance Act, 1994 would be invoked. The appellant had disclosed the tax liability during investigation and voluntarily paid the tax with interest and therefore penalty imposed under Section 78 of the Act is sufficient - impugned order is modified to the extent the demand of service tax alongwith interest by clubbing the income of Appellant and HUF and imposition of penalty under Section 78 are upheld and the balance amount of demand of tax alongwith interest and penalties are set-aside – Appeal partly allowed

ceCir1006

Central Excise: Clarification regarding binding nature of circular and instructions

ceNoti19

Central Excise: Rank of the Central Excise Officer whose powers is to be exercised

stNoti18

Service Tax: Rank of the Central Excise Officer whose powers is to be exercised

jharNotiSO67

Jharkhand: Amendments in the Schedule – II Part-E - Change in rate of tax on Petrol & Diesel

mahaNotiCR100

Maharashtra: Credit of refund to the registered dealer to bank account by way of the National Electronic Funds Transfer (NEFT)

24^th of Sep

2015-VIL-415-RAJ

ASSISTANT COMMERCIAL TAXES OFFICER Vs M/s L.G. ELECTRONICS INDIA PVT LIMITED

Rajasthan Sales Tax Act - Section 78(5) – Penalty - Movement of goods – Stock transfer – Blank Form ST-18-A - violation of Section 78(5) r/w Rule 53 – HELD - Rule 53 clearly postulates that a declaration form is required to be carried by an assessee duly filled in, signed and sealed despite all the other documents being available with the incharge of the vehicle - if there is requirement of carrying declaration form and the form is left blank for any reason whatsoever, then it is a clear cut case of non carrying requisite document. It is apparent that the assessee was aware that the declaration form is required to be carried, which in the instant case was duly signed by the authorized signatories of the respondent but all other particulars were admittedly left blank. The mandate of law and requirement is to be fulfilled - the order of the Tax Board is required to be reversed and is accordingly reversed, quashed and set aside. The question of law is answered in favour of the Revenue and against the assessee

2015-VIL-417-MAD

M/s SRI KRISHNA OIL STORES Vs THE COMMERCIAL TAX OFFICER

Tamil Nadu Value Added Tax Act, 2006 – Denial of exemption on the sale of Refined Soyabean oil on the ground that soyabean oil and refined soyabean oil are liable to tax at 4% as per the entry under item 145 of Part B of I Schedule to the Act upto 31.03.2008 – HELD – Department contention is soya oil was included under Entry 65 of Part B of IV Schedule w.e.f. 01.04.2008 and therefore, exemption is not eligible on the sale of soya oil before 01.04.2008 - However, a perusal of item 65 of Part B of IV Schedule reveals that all refined oils came into force with effect from 01.01.2007 and Soya Oil was added with effect from 01.04.2008. The intention of the legislature to grant exemption for all refined oils with effect from 01.01.2007 is apparent to the naked eye on perusing Entry No.8 of item 65 of the IV Schedule of the Act - Therefore, the contention of the department that the refined soya bean oil has been substituted under Item 65 of Part B of IV Schedule w.e.f 01.04.2008 only is not sustainable for the reason that all refined oils includes Refined Soya Bean Oil, which was included for exemption with effect from 01.01.2007 - the impugned order is set aside and the respondent is directed to pass appropriate orders afresh, bearing in mind that item 65 of Part B of IV Schedule, relates to all Refined Oils, which includes Refined Soya Bean Oil also – Assessee petition allowed

2015-VIL-416-P&H

ABW SUNCITY Vs STATE OF HARYANA

Haryana Value Added Tax Act, 2003 - inclusion of value of land in taxable turnover - lumpsum scheme – HELD - It was submitted by the Revenue that the assessment orders have been passed in all the cases as these cases are relating to lump sum tax payment - It is not disputed by learned counsel for the petitioner(s) that the appeal lies against the assessment orders passed by respondent - Accordingly, we do not consider it appropriate to entertain the writ petitions at this stage - writ petitions are disposed of by permitting the petitioner(s) to file the appeals within a period of 30 days from the date of receipt of certified copy of the order

2015-VIL-410-MAD-CE

M/s MOHAN BREWERIES & DISTILLERIES LTD Vs CCE, PONDICHERRY

Central Excise – Disallowance of Cenvat Credit on the additional duty of customs paid by adjusting the DEPB scrip - Whether the Tribunal was justified in holding that the appellant was disentitled to Cenvat Credit merely on the strength of the Exim policy as in force – HELD – Though the appellant claimed to have availed the benefit of exemption under Notification No.34/97, and cleared the goods by debiting DEPB, it is claimed by the Revenue that under the relevant Bill of Entry assessee availed the benefit of exemption Notification No. 45/2002 dated 22.4.2002 - when the Bill of Entry dated 25.1.2003, which is the relevant document specified in Rule 7 of the CCR, 2002, did not indicate payment of any duty, no Cenvat Credit can be availed - Under the Exemption Notifications, if the importers produced DEPB scrip and availed the exemption for clearance of goods, the goods become non-duty paid goods. The value of DEPB scrip, once used, gets extinguished and hence there would be no question of seeking Cenvat Credit thereafter - after a specific prohibition was introduced under the Scheme from 1.4.2000 onwards, it is not possible for the appellant to claim the benefit in respect of the Bill of Entry of the year 2003 - The decision in Spic Limited, even if it is taken to water down the decision of the Larger Bench in Essar Steel Limited, does so only in respect of the period prior to 2000 – Assessee appeal dismissed

2015-VIL-400-MAD-CE

M/s DELPHI-TVS DIESEL SYSTEMS LTD Vs CCE (APPEALS), CHENNAI

Central Excise – Section 11B – Limitation - Refund of duty on returned goods - Rule 173L(1) of CER, 1944 – Rejection of refund on the basis of Rule 173L contending that the return of goods did not take place within a period of one year from the date of payment of duty – conflict of prescription contained in Section 11B and Rule 173L – HELD – Once the statutory enactment prescribes something, the rules being a subordinate legislation cannot prescribe anything different from what is prescribed in the Act - Once the statute stipulates only one test for determining the date of commencement of the period of limitation, the rules cannot prescribe a different date for the purpose to come and argue that both dates can co-exist together. That is not the manner in which a subordinate legislation can be understood - There is no dispute on fact that at least within two years, which happens to be the extended period as per proviso (i) of sub-rule (1) of Rule 173L, the appellant has made a claim. As every assessee would like, the appellant is not interested in resolving the conflict between the rules and the statute, but interested only in getting their money back. Therefore, whatever way the department understands, they are liable to refund the money to the appellant - Under the proviso (i) to Rule 173L, the Commissioner is given the discretion to extend the period of one year stipulated therein by a further period not exceeding one more year - the Commissioner has the power and discretion under proviso (i) to Rule 173L to entertain an application within a total period of two years. This is a case where the Commissioner should have at least exercised the said discretion in favour of the assessee – Assessee appeal is allowed

2015-VIL-525-CESTAT-DEL-CE

M/s ICEBERG GOODS LTD Vs CCE, ROHTAK

Central Excise - SSI exemption – Demand on ground that assessee having been paying duty in two of their units cannot avail SSI exemption for their third unit – Benefit of Notification No. 8/2003-CE - HELD – It appears that the Department proceeded on the basis of the condition that clearance of all the factories of the same manufacturer should be considered for exemption and as such option of duty payment also should be for all factories of the manufacturer. We find that if the SSI exemption is to be denied to the assessee then the combined turnover of all the units of the manufacturer are to be taken and based on the aggregate value of the clearance. The proceedings are not on these lines, but on the ground that option of payment of duty is to be exercised for all factories of the same manufacturer. We find no support for such obligation from the wordings of the condition (i) of para 2 of the said Notification – assessee appeal allowed

2015-VIL-523-CESTAT-DEL-ST

M/s BRINDCO SALES LTD Vs CST, DELHI

Service Tax - Business Auxiliary Services - Appellant was engaged in sale and retail redistribution of IMFL/beer/other drinks for its clients – Denial of benefit of Notification NO.13/2003-ST on the ground that appellant was much more than a mere commission agent and its main/primary function was not that of a commission agent – HELD – It is evident from the provisions of the agreement that the appellant was causing sale or purchase of goods on behalf of its clients. It is also evident that the consideration received by the appellant was based on the quantum of the goods sold. Therefore it satisfied the requirements of being categorised as commission agent as per the definition given in the said Notification - so long as the appellant provided business auxiliary services (even if such services did not strictly fall within the purview of the role of a commission agents) it was eligible for the benefit of the said notification - The definition of commission agent in Notification No. 13/2003-ST nowhere stipulates that a commission agent should primarily cause sale - There is nothing in the said Notification to imply that a commission agent to be eligible for the benefit should not render business auxiliary services which are beyond the scope of function of commission agent - the wording of Notification No. 13/2003-ST does not suffer from any ambiguity and readily lends itself to plain and straight forward interpretation rendering recourse to interpretational discourse unnecessary - impugned demand set aside and assessee appeal allowed

2015-VIL-526-CESTAT-MUM-ST

AQUAPHARMA CHEMICAIS PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAIGAD

Service Tax – Rule to 3 (4) of the Cenvat Credit Rules 2004 - Utilization of credit balance in Cenvat Account for discharging the service tax liability which is cast on the appellant as per provisions of Section 66A of the Finance Act 1994 – department contention that appellant should have paid the service tax liability in cash and could not have utilized the Cenvat Credit – Period of dispute October 2006 to March 2008 - reverse charge mechanism - HELD - if the appellant is required to discharge the service tax under reverse charge mechanism, then it has to be concluded that he is provider of taxable service who provides output service. In our view, the lower authorities were incorrect in interpretation of the provisions and holding that appellant could not have utilised Cenvat Credit for discharge of service tax - The impugned order is set aside and the appeal is allowed

rajNoti88

Rajasthan: Exemption from payment of tax in respect of transfer of property in goods involved in the execution of works contracts executed within the territory of SEZ

FCP2309

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

harNoti23

Haryana Value Added Tax (Third Amendment) Rules, 2015 - Amendment in Rule 49-A - Lumpsum Scheme in respect of Developers

ceNoti20NT

Central Excise: DTA Clearance - EOU - Conditions, safeguards and procedures for supply of items like tags, labels, printed bags, stickers, belts, buttons and hangers for the purpose of their exportation

25^th of Sep

2015-VIL-418-UTR

HINDUSTAN UNILEVER LIMITED Vs STATE OF UTTARAKHAND

Uttarakhand Value Added Tax Act, 2005 – Interpretation of Section 6 - Input Tax Credit – Denial of input tax credit on packaging material of goods dispatched by way of stock transfer - Circular dated 23.01.2013 – Legislative intent - HELD – Dispatching of the goods by way of stock transfer is not to be confused with or treated as an inter-State sale. The Legislature has clearly not intended to given benefit of ITC in regard to packing materials used for packing of manufactured goods when they are dispatched outside the State by way of stock transfer. This effect is undeniable and flows clearly from the language used in Section 6(3)(d) of the Act – stock transfer being one of the transactions, which would be covered by way of dispatch outside the State other than by way of sale, the only conclusion possible is that a limited relief of ITC is available in respect of stock transfer of finished goods - We see no merit in the contention that all the other States have provided for the benefit of ITC in respect of packing materials even on stock transferred products, or that the Committee of Ministers have provided for ITC on such transactions. We would think that none of these factors will detract from the width of the power of a sovereign Legislature exercising plenary legislative powers - Appellant is not entitled to the benefit of ITC in respect of packing materials used for its finished goods, which were stock transferred. Even the Circular of 2008, does not as such clearly provide for the grant of such benefit. Lack of clarity and place for doubt in a stray sentence in a Circular cannot be seized upon by the appellant to claim that, contrary to the clear mandate of the Legislature - judgment of the learned single Judge and appeals are dismissed

2015-VIL-528-CESTAT-KOL-CE

M/s TATA CUMMINS LTD Vs CCE, JSR

Central Excise – Cenvat Credit - inputs which were found to be defective or got damaged during the course of manufacture – Denial of credit on the ground that the inputs are known to be defective on receipt and cannot be taken to have been used in the manufacture – HELD - when inputs are defective on account of supplier’s fault then the same are rejected and sent back to the supplier by reversing the CENVAT Credit. The remaining inputs have to be treated as inputs cleared for manufacture of the finished goods a negligible part of which become damaged during the course of assembly of finished goods. Percentage of such loss is only 0.28 to 0.49% of the total value of the inputs/parts utilized by the appellant. The same is also converted into scrap by the appellant and sold on payment of duty - CENVAT Credit on the inputs rejected on line, in the manufacturing process, cannot be denied – In favour of assessee

2015-VIL-524-CESTAT-DEL-ST

M/s SRF LTD Vs C.C.E., JAIPUR-I

Service Tax - Refund claim in respect of services such as Terminal Handling Charges, Bill of Lading charges etc, availed for export of goods - Notification No. 41/2007-ST - Port Service – Denial of refund as appellant failed to prove services are provided by port or persons authorized by port and that debit notes issued by service providers are not proper documents in terms of Rule 4A of Service Tax Rules, 1994 – service provider classifying or paying tax under category of service which is not be covered under refund clause - HELD - The objection raised by Revenue is that only if the service provider pays the service tax in respect of services rendered to the appellant under the head ‘port services’ coming under section 65 (105) (zn), the refund can be allowed. In the present case the service provider has paid the tax under BAS - this means that refund is admissible only if the documents evidence payment of service tax for specified service i.e. for port services. That the appellant therefore has to establish that the services for which refund is claimed was provided by a port or a person authorized by the port as contained in the definition of section 65 (105) (zn) - The implication of clarifications along with the amendment brought forth in the definition of port services, is that the exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services – In favour of assessee

2015-VIL-527-CESTAT-MUM-ST

GENERAL MOTORS (I) PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE PUNE-I

Service Tax Rules, 1994 – Rule 6 - Intellectual property service - Taxable event - associated enterprise - payment of royalty for technical know-how service for manufacturing of Motor Vehicle – tax liability under reverse charge mechanism – payment of tax upon ‘receipt’ - HELD - This is not a dispute about taxability. Tax liability has been discharged by the appellant, albeit in a schedule of their own choosing, relying on the principle of "receipt" of consideration by the service provider. As this happens to be at variance with the provisions of Rule 6 of Service Tax Rule, 1994 and Rule 7 of Point of Taxation Rules, 2011, the tax liability needs to be computed for each month on the amount booked in the "royalty accrued" account with the reversal being taken into account whenever that has occurred - As the taxes have been discharged during the period under dispute, the appellant's liability is limited to interest for the first two months of each quarter to the extent of amount not paid or short-paid. This should have been effected in the impugned order but, not having been done, needs to be remedied - there is no justification to invoke the extended period and consequent penal provisions under section 78 of Finance Act, 1994. Penalty under section 77 of Finance Act, 1994 is also set aside. The penalty under section 76 of Finance Act, 1994 is set aside as there is no tax due on the date of notice – Assessee appeal partly allowed

Guest Article

Restrictions on Input Tax Credit under Haryana VAT only to the extent of Output Tax in case of Inter-State Sale

State Governments not competent to levy VAT on MRP - High Court

28^th of Sep

2015-VIL-420-KAR

M/s CIFTECH SOLUTIONS PVT LTD Vs STATE OF KARNATAKA

Karnataka Value Added Tax Act, 2003 – Section 40 - Constitutional validity of first and second provisos to sub-section (1) of Section 40 of the Act – Re-opening of time barred and completed assessment – Validity of enhancement in period of limitation from five years to eight years for assessment - retrospective effect of amendment – Limitation – HELD - The law of limitation being a procedural law, is retrospective in operation in the sense that it will also apply to proceedings pending at the time of enactment as also to proceedings commenced thereafter - the two provisos to sub-section (1) of Section 40 introduced by Act No.17/2012 would indicate that any assessment or re-assessment relating to any tax period up to the period ending 31.03.2007 shall be made within a period of eight years after the end of the prescribed tax period. In other words, any assessment or re-assessment proceedings relating to the period 31st March, 2007 if commenced, shall be concluded within a period of eight years after the end of prescribed tax period - the provisos to sub-section (1) of Section 40 having been amended with effect from 01.04.2012 by Act No.17/2012 and subsequently, by Act No.54/2013 sub-sections (1) and (2) of Section 40 having been held as deemed to have come into effect from 01.04.2005 itself, it has to be necessarily held that assessment/reassessment proceedings initiated cannot be held as initiated within time prescribed under Section 40 - the re-assessment order is well within time limit - Writ petitions are dismissed

2015-VIL-422-GUJ

PSL LIMITED Vs STATE OF GUJARAT

Gujarat Sales Tax Act, 1969 - Section 52 – refund of excess payment - Adjustment of refund against tax demand – Adjustment of non-crystallized refund - Levy of interest under section 47(4A)(b) – HELD - under the provisions of section 52 of the Act, a person is entitled to refund of the amount paid by him in excess of the amount due from him. However, for the purpose of being entitled to such refund, the precondition would be that there should be a determination by an authority under the Act, that the person has paid amount in excess of the amount due from him - on the date when the appellant exercised the option under section 52 of the Act for adjustment of refund for the year 1999-2000 against the tax dues of the year 2000-2001, his entitlement to refund for the year 1999-2000 was not yet adjudicated, therefore, there was no question of exercising option under section 52 of the Act at that stage - The amount due by way of refund order dated 8.11.2004 could not have been adjusted against the tax liability of the year 2000-2001. It may be that for the period the Department retained the moneys of the appellant, it may be entitled to interest thereon from the date on which such amount had been paid, however, the claim for adjustment of such amount towards the tax dues of the year 2000-2001 at the relevant time was wholly without any basis - the impugned order passed by the Tribunal suffers from no legal infirmity – Assessee appeal dismissed

2015-VIL-423-ALH-CE

CC&CE, MEERUT Vs M/s BARNALA STEEL INDUSTRIES LTD

Central Excise Rules, 1944 - Rule 96ZP (3) – Penalty – intention to evade payment of duty – Payment of duty after due date – Revenue seeks to impose penalty equal to the amount of the duty – HELD - From perusal of the show cause notices there is no allegation of intention to evade payment of duty by the respondent. The only allegation is of late payment of central excise duty - The adjudicating authority has itself recorded a finding of fact that there was no intention to evade the payment of central excise duty on the part of the respondent-assessee. No material has been placed on record by the appellant to establish that the stand taken by the respondent-assessee regarding the financial constraints or no intention to evade payment of duty are incorrect - Under the circumstances, penalty under Rule 96ZP(3) of the Rules was not imposable on the assessee - So far as the submissions of learned counsel for the respondent that Rule 96ZP (3) has been omitted in the year 2001 and as such no penalty order could have been passed by the adjudicating authority, is concerned we find no substance in it - no merit in Revenue appeal, hence, dismissed

2015-VIL-419-MAD-CE

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, LTU Vs M/s MRF

Central Excise – Eligibility to avail credit of service tax on the basis of TR-6 Challans prior to 16-06-2005 - TR-6 challans included as a specified document vide Notification No. 28/2005-CE (NT) dated 07.06.2005 with effect from 16-06-2005 - Rule 3 and Rule 9 of Cenvat Credit Rules, 2004 – prescribed document - HELD – Issue is settled by Bombay High Court in Commissioner of Central Excise v. Essel Propack Ltd – Assessee is entitled to avail credit of service tax on the basis of TR-6 Challan – Revenue appeal dismissed

2015-VIL-531-CESTAT-DEL-CE

M/s PARAG ENTERPRISES Vs C.C.E., KANPUR

Central Excise – SSI Exemption – Brand name - whether brand name registered in the name of the appellant in India, is not sufficient to claim exemption of Notification No. 8/2003-CE dated 01/3/2003 when the same belongs to a German company – HELD – Since the appellant is the registered owner of the Trade Mark ‘TEGU’ in India exemption under Notification No. 8/2003-CE is allowable - On the issue of admissibility of Small Scale exemption to registered owner of a brand name in India it is observed that the same is no more res-integra and settled in favour of assessee by Hon’ble Calcutta High Court order in the case of ESBI Transmission Private Ltd. vs. CCE – Assessee appeal allowed

2015-VIL-421-MAD-ST

SUPRASESH GENERAL INSURANCE SERVICES & BROKERS PVT LTD Vs THE CST, CHENNAI

Service Tax – Export of Services Rules, 2005 – Rule 3 - Export of taxable service - Commission received as reinsurance broker between New Indian Assurance Co. Ltd and Foreign Insurance Company - Whether the services of the re-insurance broker remunerated by the re-insurers situate outside India for securing re-insurance business for them is outside the Finance Act, 1994 for the period prior to the amendment by the Finance Act, 2006 and the re-insurance business procured for and remunerated by foreign re-insurers abroad is export of service and hence outside the Act being destined and consume abroad – HELD – the re-insurance broker has rendered service outside India and does not fall within Rule 3(3) and that fact is not disputed. Therefore, for this period on and from 15.3.2005, any taxable services which are provided and used, other than in or in relation to commerce or industry and the recipient of the taxable service is located outside India in terms of Rule 4, there is no requirement of payment of service tax - the role of the assessee as an insurance broker is not merely receiving and transmitting the amount, the assessee serves the foreign company in the course of the business - Since the insurer in the present case does not fall within the ambit of proviso and as we have held that in the nature of transaction in question it is an export of service, the Department was clearly in error in calling upon the assessee to pay service tax on commission/brokerage received by the assessee from the foreign re-insurer for the period in issue in the show cause notice – Assessee appeal allowed

2015-VIL-529-CESTAT-DEL-ST

CST, DELHI Vs GENPACT INDIA

Service Tax - Business Auxiliary Service – Refund - Rule 5 of CCR, 2004 r/w Notification No.5/2006-CE (NT) – Revenue in appeal against order of refund of unutilised cenvat credit on the services used in output services exported even prior to the date of amendment of the Rule 5 i.e. 14.3.2006 – HELD - the refund claims were filed after the amendment, and satisfies every requirement of Rule 5 and the notification issued thereunder, the refund, cannot be rejected as there was no condition in the notification or rules that such refund would apply only in respect of the exports made after 14.3.2006. Once the refunds are under the amended rules and the notification issued thereunder, as already held, the same cannot be denied merely because they relate to the exports made prior to the date of amendment – Following the case of WNS Global Service (P) Ltd the Revenue appeal is dismissed

Guest Article

Haryana VAT Amends 1% Composition Scheme for Developers (Rule 49A)

utrNoti846

Uttarakhand: Regarding date of effect of Notification No. 714/2015/146(120)/XXVII(8)/08 dated 14 September, 2015

FCP2809

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

29^th of Sep

2015-VIL-101-SC-CE

M/s OTIS ELEVATOR CO. (INDIA) LTD Vs COMMISSIONER OF CENTRAL EXCISE

Central Excise – Classification of Lift/Escalator – Tribunal order holding the said products are classifiable under Chapter 8431 – Assessee seeks classification under 8428.00 – HELD - this is an important question that needs to be determined having reasonably wide ramifications, we would allow the assessees to raise these points on a remand made to the Tribunal - This we do also having regard to the fact that the new pleas raised before us are questions of law which need to be answered on the same set of facts, and no new/ additional facts need to be pleaded in order that the assessee make out their case - Tribunal order set aside and matter remanded

2015-VIL-100-SC-CE

COMMISSIONER OF CENTRAL EXCISE, VAPI Vs M/s THE PAPER PRODUCTS LTD

Central Excise - Classification of shrink sleeves - classifiable under Sub-heading 3020.19 as contended by the assessee or Sub-heading 4901.90 as contended by Revenue - whether the product in question can be treated as that of printing industry or it is covered by plastic industry – HELD - the main purpose of the product is to provide tamper protection to the product to make shatter resistance, enhance puncture resistance and tamper proof packing that the printing was only incidental – Revenue relied upon the decision of Holostick India Ltd. Vs. Commissioner of Central Excise, Noida, but this case is also helps the assessee and not the Revenue – Appeal of Revenue is dismissed

2015-VIL-99-SC-CE

COMMISSIONER OF CENTRAL EXCISE Vs M/s AMRIT CORPORATION LTD

Central Excise - Classification - milk shake mix and soft serve mix - Classification under Chapter sub-Heading 0404.90 or under Chapter sub-Heading 1901.19 – HELD - The Commissioner has himself noted that no chemical name of the stabilizer is used and the role played by the aforesaid ingredients of the stabilizer is to maintain a uniform emulsion of oil in water, throughout the shelf life and to improve the body and texture and to impart smoothness to the products. Thus, as far as the basic product is concerned, it demonstrates the same and the purpose is only to impart smoothness to the product and to maintain the product consistency during storage and transportation and throughout its shelf life - Merely because it improves the body and texture of the product and adds some smoothness thereto, that would not change the basic character of the produce - the additives which can be added while making the product are illustrative only and merely because stabilizer is not mentioned therein would not mean that after adding the stabilizer the product in question ceases to be dairy produce - view taken by the Tribunal that products fall under Chapter sub-Heading 0404.90 is perfectly in tune with legal position – Revenue appeal dismissed

2015-VIL-98-SC-CE

COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III Vs M/s R.D.C. CONCRETE (INDIA) LTD

Central Excise – Classification – Whether the product manufactured out of stone aggregates, cement, water, sand is 'dry mixture' or 'ready mix concrete' and the classification thereof is under Heading 3823 (now 3824) – HELD – The issue has been decided by the Tribunal in favour of the respondent-assessee in the case Associated Cement Co. Ltd. vs CCE, Mumbai - the aforesaid view of the CESTAT was affirmed by this Court holding that the classification of ready mix concrete was under Chapter Heading 68 for the period prior to 01.03.1997. After the affirmation of the view of the CESTAT by this Court as aforesaid, the Department not only accepted the said view but Board issued Circular No. 601/38/2001-CX affirming the aforesaid classification - We fail to understand as to what was the necessity in preferring the present appeal which was filed in the year 2006, i.e., much after the clarification issued by the even the CBEC, New Delhi. It was, thus, a total mindless exercise on the part of the Revenue in filing such an appeal which is misuse and abuse of the process of law – Appeal is dismissed

2015-VIL-97-SC-CE

COMMISSIONER OF CENTRAL EXCISE, BANGALORE Vs M/s HIMALAYA DRUG COMPANY

Central Excise Act - Section 4A - Valuation - retail sale price - Face Wash Gel bundled with Dandruff Shampoo and sold together – MRP of both the items sold were mentioned and the assessee had been clearing the goods by paying excise duty at the said MRP - The Revenue was of the view that since the face wash gel is sold free along with dandruff shampoo, the value of face wash gel should also be included and raised demand applying the provisions of Section 4A of the Act – Tribunal order in favour of assessee - HELD - It is clear from the reading of sub-section (2) of Section 4 along with Explanation thereto that the MRP mentioned is to be the sole consideration in arriving at the transaction value at which the excise duty is payable - CESTAT has rightly decided the issue – Revenue appeal dismissed

2015-VIL-532-CESTAT-AHM-CE

M/s TORRENT PHARMACEUTICALS LTD Vs C.C.E. & S.T.-VADODARA-I

Central Excise - Rebate claim - first appellate authority has rejected the refund claim of the appellant as time barred treating the same as refund of Rule 173 L of Central Excise Rules 1944, r/w Section 11 B of the Central Excise Act, 1944 – HELD - Appellant in the present proceedings is a merchant exporter and not a person who undertook first manufacture and subsequent processing of the returned goods - Appellant will be interested to get rebate claim of the duty paid on 20.09.1997 before the returned goods were allowed to be cleared under Rule 173 H of the erstwhile CER 1944, on the documents relating to export of goods. Rule 173 L of the erstwhile CER, 1944 can be followed only by the manufacture/re-manufacture of the goods and not by the merchant exporter - Under the present factual matrix appellant’s claim cannot be considered to be a refund claim of Rule 173 L. As the main dispute agitated by the appellant is that their claim is one of rebate and not refund under Rule 173L, this Bench agree with the contention that it is a case of rebate and CESTAT does not have the jurisdiction to entertain this appeal - Appellant is at liberty to file appeal with the appropriate authority

2015-VIL-533-CESTAT-CHE-ST

CHANDRA LUBRICARE Vs COMMISSIONER OF CENTRAL EXCISE, MADURAI

Service Tax- Valuation – Demand - appellants claiming VSAT Allowances and Delivery Charges from CIL which are not in nature of reimbursable – HELD - The appellants have claimed deductions towards reimbursable charges under the head ‘VSAT Allowances & Delivery Charges’ - appellants have entered into a contract agreement with Castrol India Ltd. which covers entire functions of clearing and forwarding of the appellant. Therefore, service tax is demandable on the gross amount and the same cannot be vivisected – The primary objection of the contract would determine the issue and the same cannot be vivisected and part of it be subjected to tax - LAA has rightly upheld the demand – Assessee appeal is dismissed

2015-VIL-530-CESTAT-DEL-ST

M/s OMAR AGENCIES (HUTCH) Vs CCE, ALLAHABAD

Service Tax - Business Auxiliary Service – Sales commission - Input service – Assessee, service provider to M/s Aircel Digilink India Ltd, availed cenvat credit in respect of service tax paid by M/s Aircel Digilink India Ltd. Co. – Credit denied by the AA as assessee was not receiving any service from M/s Aircel Digilink India Ltd. Co., and therefore, the service tax paid service recipient was not admissible to the assessee – HELD - M/s Aircel Digilink India Ltd. Co. did not provide any service to the appellant-assessee nor did the assessee make any payment to M/s Aircel Digilink -Service tax was paid by M/s Aircel Digilink India Ltd. Co. on its output services (telephone services) which were not provided to the appellant/assessee. Thus, the service tax paid by M/s Aircel Digilink India Ltd. Co. was on services which were clearly neither provided to the appellant/assessee nor were eligible to be called input service in appellant respect – Cenvat credit taken by the assessee was in violation of the CCR, 2004 - the impugned Cenvat credit is inadmissible not only because the services on which it was taken were not input services for the assessee but also because the output ‘service’ of the appellant was not taxable including under Business Auxiliary Service – Assessee appeal dismissed

30^th of Sep

2015-VIL-424-KAR

STATE OF KARNATAKA Vs M/s TECHNOCON BUILDERS

Karnataka Value Added Tax Act, 2003 - Section 63-A(3) - suo motu revisional power of Joint Commissioner of Commercial Taxes – Commencement of date of Limitation - whether the period of limitation of one year would commence from the date on which the record was sent by the AA or from the date of show cause notice – HELD - what would be relevant is the date when the records had reached the office of the Joint Commissioner, because it was only on perusal of such records, that the show cause notice was issued, which was after gap of may be 16 months. The period of limitation of one year under sub-Section (3) of Section 63-A of the Act would begin from when the record was sent to the Joint Commissioner, on the basis of which the proceedings were initiated. If that is not to be accepted then the Joint Commissioner would possibly be allowed to initiate proceedings under Section 63 of the KVAT Act even after several years

2015-VIL-426-DEL

GROUPE SEB INDIA PRIVATE LIMITED Vs COMMERCIAL TAXES DEPARTMENT

Sales Tax Arrear - Petition challenging the attachment effected by the Commercial Taxes Department, Chennai, Tamil Nadu towards the arrears of sales tax owed by M/s Maharaja Appliances Limited, which was taken over by Petitioner-company - territorial jurisdiction of Delhi High Court – HELD - since the petitioner-Company has an office at Chennai and is admittedly carrying on business at Chennai, it would not cause any inconvenience to the petitioner to contest the matter at Chennai. On the contrary, this Court would not be the forum conveniens for the respondent to contest the proceedings. It cannot also be forgotten that the adjudication sought by the petitioner also entails interpretation and appreciation of the local law of Chennai and with which also the High Court of Madras must be dealing on a daily basis - The petitioner prior to filing this petition has pursued its remedies departmentally with the respondent at Chennai and cannot now chose to, against the decision thereon, invoke the territorial jurisdiction of this Court - This Court therefore refuses to entertain this petition. The petitioner Company of course shall have liberty to approach the appropriate High Court/forum

2015-VIL-425-MAD

M/s GLOBAL CALCIUM P. LTD Vs THE ASSISTANT COMMISSIONER (COMMERCIAL TAXES)

Tamil Nadu Value Added Tax Act, 2006 - Section 19 - Input Tax Credit - payment of VAT on the invisible loss of yarn pursuant to manufacturing activity – HELD – Matter decided by this Court in the case of Interfit Techno Products Ltd Vs. The Principal Secretary – Petition disposed

2015-VIL-103-SC-CE

C.C.E., BELAPUR Vs M/s I.G. PETROCHEMICAL LTD
Central Excise - benefit of Notification No. 8/97-CE and Notification No. 23/03-CE – Whether catalyst could be treated as raw material to deny benefit of concession notification – HELD - It is not in dispute that Vanadium Pentoxide, while influencing and accelerating the chemical reactions, itself remains uninfluenced and unaltered and retains its independent character. It is also not in dispute that it remains outside the product and does not form part of the product - the catalyst which retains its character, remains outside the end product, remains uninfluenced and unaltered cannot be treated as raw material – There is no violation with the approach of the Tribunal in granting the benefit to the assessee – Revenue appeal dismissed

2015-VIL-104-SC-CE

COMMISSIONER OF CENTRAL EXCISE, NAGPUR Vs M/s HYUNDAI UNITECH ELECTRICAL TRANSMISSION LIMITED

Central Excise - Benefit of exemption Notification No. 06/2002-CE dated 01.03.2002 - Whether windmill doors and electrical boxes are components and/or parts of wind operated electricity generators – HELD – It is not in dispute that as far as windmill doors or tower doors are concerned, it is a safety device which is used as security for high voltage equipments fitted inside the tower, preventing unauthorised access - This, according to us, would be sufficient to make it part of the electricity generator - since the tower is held as part of the generator, door thereof has to be necessarily a part of the generator – Revenue appeal dismissed

2015-VIL-105-SC-CE

M/s LAKHANPAL LTD Vs COMMISSIONER CENTRAL EXCISE & CUSTOMS, VADODARA

Central Excise (Valuation) Rules, 1975 - Rule 5 - Valuation - transaction value - Inclusion of royalty amount – HELD - Rule 5 will have no application on the facts of the present case - the royalty, which is treated as additional consideration is paid by the seller to the buyer - the very basis of the show cause notice is untenable and when the assessee is paying the royalty to LNL (buyer) and that too for using the brand name ‘Novino' which belongs to the buyer, the question of treating the same as "additional consideration" within the meaning of Rule 5 and adding to the price charged from the LNL for sale of the product could not arise - The impugned orders are set aside and assessee appeal allowed

2015-VIL-106-SC-CE

COMMISSIONER OF CENTRAL EXCISE, VADODARA Vs M/s VIACOM ELECTRONICS P. LTD

Central Excise - MRP based valuation for television accessories – HELD - woofer is not a part of Television set and that they are being cleared and sold separately. This was the case, prior to introduction of assessment under Section 4A (MRP). The MRP based assessment is for television set and not for its accessories – Revenue appeal dismissed

2015-VIL-102-SC-CE

M/s ANDAMAN TIMBER INDUSTRIES Vs COMMR.OF CENTRAL EXCISE, KOLKATA-II

Central Excise – Valuation – Price difference between the goods sold at ex-factory and delivery basis in comparison with the goods from depots – Assessee plea that the normal ex-factory sale price should be treated as normal price by virtue of the provisions of Section 4 of the Central Excise Act – Cross-examination of witness – HELD - not allowing the assessee to cross-examine the witnesses by the AA though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice - The Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the AA to presuppose as to what could be the subject matter of the cross-examination - the impugned order as passed by the Tribunal is set aside and assessee appeal is allowed

2015-VIL-534-CESTAT-BLR-CE

BEML LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX BANGALORE-I

Central Excise – Cenvat Credit Rule, 2004 - Rule 14 - liability of the interest on the CENVAT credit taken for the inputs which had been sent for job work and were not returned within 180 days as per Rule 4(5)(a) of the CER, 2004 - The appellant reversed the CENVAT credit when the goods had not come back from the job work manufacturers within the period of 180 days – HELD - Hon’ble Karnataka High Court as well as Hon’ble Madras High Court have considered the decision of Hon’ble Supreme Court made in the case of UOI Vs. Ind-Swift Laboratories Ltd. and have come to the conclusion that wherever CENVAT credit has wrongly been taken but not utilised, the interest is not payable – Assessee appeal allowed

2015-VIL-535-CESTAT-MUM-ST

TATA STEEL LTD Vs COMMISSIONER OF SERVICE TAX

Service tax - Banking and other Financial services - taxability of 'Arrangement fees’ - arrangement services provided beyond the Indian Territory - Invocation of extended period of limitation - Difference of opinion - (i) whether the services have been received by the appellant-assessee beyond the Indian Territory and hence, not liable to Service Tax as held by Member (Judicial) or Whether the services have been received within Indian Territory and hence liable to Service Tax as held by Member (Technical) (ii) Whether the benefit of section 80 is available to the assessee and no penalties are imposable as held by Member (Judicial) or Such benefit is not available and penalties are imposable under Section 76 and 78 of the Finance Act, 1994 as held by Member (Technical) - matter referred to Third Member

2015-VIL-536-CESTAT-MUM-ST

COMMISSIONER OF CENTRAL EXCISE, PUNE-I Vs M/s BIOPHARMAX INDIA PVT LTD

Service Tax - Erection, commissioning and installation service – Amendment in contract - Turnkey project - Works contract – self-procurement of the equipments and material – Demand and Penalty - HELD - Only because supplier of components is authorized in advance by the consultant does not mean that purchases were made by the consultant – There is nothing wrong in modifying and amending an agreement to suit both parties. What needs to be examined is actual service provided by the appellant - Revenue has filed this appeal on the ground that the Commissioner accepted that assessee claim that only they received Rs. 4,67,29,817/- for the provision of the service under the category of ‘Erection, Commission and Installation' service without causing any verification of official records of the company - such verification is not necessary in the present case, the issue is the amount actually received from their client for the service provided by the appellant. At the material time service tax was levied on receipt basis. And appellant have paid service tax on the amount received by them from their client - Therefore service tax has been correctly paid by the appellant - Appellant were under a genuine misconception that turnkey projects, i.e. Works Contract projects were not leviable to the service tax as Works Contract came into the fold of service tax on 1/6/2007. Keeping the entire circumstances of the case in view, we find that Commissioner has quite appropriately exercised his discretion under Section 80 on the basis of "reasonable cause” for waving penalties under Section 76, 77 and 78 – Revenue appeal dismissed

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hpNoti22809

Himachal Pradesh Taxation (on Certain Goods Carried by Road) Amendment Rules, 2015

MAHARASHTRA NOTIFICATION

mahaNoti128A: Amendment in MVAT Schedule B & D - Change in rate of tax on Precious metal, Precious stones, Liquor, High Speed Diesel, Motor Spirit, Aerated and Carbonated non-alcoholic beverages and Cigar & Cigarettes

mahaNoti128B: Amendment in MVAT Schedule - Change in rate of tax on sales of liquor