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Latest Updates: Odisha + Gujarat Notification | Kerala & Andhra Pradesh Circular | Service tax & Central Excise Notification | PPT presentation on GST + Summary for the month of December, 2014 [see ‘Notes & News’]

Recent Updates

2015-VIL-46-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 28.01.2015

THE MYSORE SUGAR COMPANY LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, MYSORE: 07.01.2015 - Service tax for renting of immovable property to various State Government offices – Premises not used for business purposes - HELD – Relied on the order passed by the Commissioner (Appeals) - Prima facie it appeared that renting out to District Treasury and Lift Inspectorate do not fall within the scope of ‘renting of immovable property’ since both these offices are not using the premises for furtherance of any business. It is seen that District Treasury and Electrical Inspectorate informed that they are State Govt. authorities and they use the building for their office use and not f... [Read more]

THE MYSORE SUGAR COMPANY LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, MYSORE: 07.01.2015 - Service tax for renting of immovable property to various State Government offices – Premises not used for business purposes - HELD – Relied on the order passed by the Commissioner (Appeals) - Prima facie it appeared that renting out to District Treasury and Lift Inspectorate do not fall within the scope of ‘renting of immovable property’ since both these offices are not using the premises for furtherance of any business. It is seen that District Treasury and Electrical Inspectorate informed that they are State Govt. authorities and they use the building for their office use and not for business purposes and hence they are not liable to pay service tax - Learned AR has not been able to show us that the earlier order of Commissioner (Appeals) was appealed against by the Revenue or the same was accepted - We deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority for fresh decision after considering the definition of ‘renting of immovable property’ as also the observance made by the Commissioner (Appeals) in referred decision – Matter remanded [Read less]

2015-VIL-45-CESTAT-AHM-ST|SERVICE TAX |CESTAT Cases | 28.01.2015

COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, RAJKOT Vs RELIANCE PORTS & TERMINALS LTD: 17.12.2015 - Service Tax – Port Services - Cenvat Credit – Denial of cenvat credit on the ground credit utilised before actual installation of the capital goods – Credit of service tax paid under section 66A – Raising of new ground by revenue in the Tribunal - HELD - The condition of installation for availing Cenvat Credit on capital goods was effective till 09.09.2004 and not thereafter. In the present case the capital goods have been procured after this date, in the year 2007-08, hence credit is admissible – Adjudicating Authority correct to hold that in view of retrospective amendment made ... [Read more]

COMMISSIONERS OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, RAJKOT Vs RELIANCE PORTS & TERMINALS LTD: 17.12.2015 - Service Tax – Port Services - Cenvat Credit – Denial of cenvat credit on the ground credit utilised before actual installation of the capital goods – Credit of service tax paid under section 66A – Raising of new ground by revenue in the Tribunal - HELD - The condition of installation for availing Cenvat Credit on capital goods was effective till 09.09.2004 and not thereafter. In the present case the capital goods have been procured after this date, in the year 2007-08, hence credit is admissible – Adjudicating Authority correct to hold that in view of retrospective amendment made to sub-rule (1) of Rule 3 of CCR, 2004 by inserting clause (ixa) with effect from 18.4.2006, assessee is eligible to take CENVAT credit of the Service Tax paid under Section 66A of the Finance Act, 1994 - There is no dispute of the eligibility of the cenvat credit in the entire proceedings. For first time, Revenue has taken grounds before the Tribunal on the eligibility of the cenvat credit on capital goods and inputs, which is not permissible under the law – Supreme Court ruling in the case of Carrier Aircon followed - Revenue appeal dismissed [Read less]

2015-VIL-47-CESTAT-CHE-CE|CENTRAL EXCISE |CESTAT Cases | 28.01.2015

M/s M.M. FORGINGS LTD Vs CCE, TRICHY: 21.01.2015 - Central Excise - Refund of unutilized input credit attributable to the exported goods under Rule 5 of CCR, 2002 – Exclusion of the input credit on inputs lying in stock and contained in the finished goods in stock – HELD - The Rule 5 of CCR, stipulates that where the exporter can claim refund only when not able to utilize the accumulated cenvat credit for payment of domestic clearance - Rule 5 r/w Notification No. 11/2002, the input credit attributable to the goods exported has been correctly worked out - What is excluded is the input credit involved in the physical stock of inputs and finished goods lying in stock on 31.03.2003. Therefore, ... [Read more]

M/s M.M. FORGINGS LTD Vs CCE, TRICHY: 21.01.2015 - Central Excise - Refund of unutilized input credit attributable to the exported goods under Rule 5 of CCR, 2002 – Exclusion of the input credit on inputs lying in stock and contained in the finished goods in stock – HELD - The Rule 5 of CCR, stipulates that where the exporter can claim refund only when not able to utilize the accumulated cenvat credit for payment of domestic clearance - Rule 5 r/w Notification No. 11/2002, the input credit attributable to the goods exported has been correctly worked out - What is excluded is the input credit involved in the physical stock of inputs and finished goods lying in stock on 31.03.2003. Therefore, the adjudicating authority has correctly sanction the refund amount - The case laws relied upon by the Ld. Advocate are not related to the facts of the present case. Accordingly, the impugned order is upheld and the appeal is dismissed [Read less]

2015-VIL-44-CESTAT-AHM-CE|CENTRAL EXCISE |CESTAT Cases | 28.01.2015

M/s HINGORA INDUSTRIES PVT LTD Vs CCE, DAMAN: 01.12.2015 - Central Excise - Clandestine removal of goods - Search at the alleged secret office of the assessee - presumption regarding documents/computer recovered - department rejected the request for cross examination on the ground that the said persons being employee of assessee could have been compromising parties. – HELD - The veracity of the statements needs to be always checked and cross checked before relying upon such statement. Petitioner were well within their rights to ask for cross examination of these employees to bring on record that the statements tendered by these employees could not be relied upon for making allegation against... [Read more]

M/s HINGORA INDUSTRIES PVT LTD Vs CCE, DAMAN: 01.12.2015 - Central Excise - Clandestine removal of goods - Search at the alleged secret office of the assessee - presumption regarding documents/computer recovered - department rejected the request for cross examination on the ground that the said persons being employee of assessee could have been compromising parties. – HELD - The veracity of the statements needs to be always checked and cross checked before relying upon such statement. Petitioner were well within their rights to ask for cross examination of these employees to bring on record that the statements tendered by these employees could not be relied upon for making allegation against the Appellants. In our considered opinion, due to non-granting of the cross examination of above said persons, no reliance can be placed upon these statements and thus the statement of these persons cannot stand test of the law - In all clandestine removals, it has been now well laid that the crux of the issue in respect of clandestine removal is that Revenue cannot proceed solely on the basis of a seized private notebook maintained by a worker unless the entries are corroborated by various other pieces of evidences - It was the duty of the investigating officers to have sought explanation from the Accountant with regard to the entries made therein. Non-examination of the Accountant has rendered the document inadmissible in evidence - Each link in the aspect of production and clandestine removal is required to be proved and since this has not been done, the demands are required to be set aside for lack of evidence in the matter - In absence of any tangible evidence which would indicate that there was clandestine manufacture and clearance of the goods by M/s Hingora Industries we hold that the charges of clandestine removal are not sustainable. Thus, in the peculiar facts and circumstances of this case, we hold that the impugned order which confirms the demand and penalty is not sustainable and is liable to be set aside and we do so. There is no sustainable demand, consequential penalties on various other appellants, who are in appeal before us, would also automatically be set aside – Assessee appeal allowed [Read less]

2015-VIL-40-MAD|VAT |High Court Cases | 28.01.2015

THE STATE OF TAMIL NADU Vs PERAMBALUR CO-OPERATIVE MARKETING SOCIETY: 04.12.2015 - Tamil Nadu General Sales Tax Act - Turnover relating to auction sale of agricultural produce by the assessee who had acted as agents of agriculturists with complete dominion over the goods – Interpretation of ‘dealer’ - Whether the a co-operative marketing society, is a dealer falling within the definition of Section 2(g) of the TNGST Act and liable to pay tax under the provisions of the Act – HELD - In the case on hand, we find that the respondent/society acted as an intermediary, bringing together the agriculturists-principals and the buyer, and they have no authority to sell the goods and, therefore, the re... [Read more]

THE STATE OF TAMIL NADU Vs PERAMBALUR CO-OPERATIVE MARKETING SOCIETY: 04.12.2015 - Tamil Nadu General Sales Tax Act - Turnover relating to auction sale of agricultural produce by the assessee who had acted as agents of agriculturists with complete dominion over the goods – Interpretation of ‘dealer’ - Whether the a co-operative marketing society, is a dealer falling within the definition of Section 2(g) of the TNGST Act and liable to pay tax under the provisions of the Act – HELD - In the case on hand, we find that the respondent/society acted as an intermediary, bringing together the agriculturists-principals and the buyer, and they have no authority to sell the goods and, therefore, the respondent/ society is not a 'dealer' as defined under Section 2(g) of the TNGST Act. As the respondent/society has not effected any sale, they have not acquired any turnover liable to sales tax – Revenue appeal dismissed [Read less]

2015-VIL-41-ALH|VAT |High Court Cases | 28.01.2015

M/s SUPER CASSETTE INDUSTRIES LTD Vs COMMISSIONER OF TRADE TAX, LUCKNOW: 17.01.2015 - U.P. Trade Tax Act, 1948 – Amendment in exemption notification - Exemption or reduction of tax was admissible to the assessee revisionist at the percentage of the rate normally applicable to it under the Act - Whether the amendment made by the notification dated 05.05.1997 is applicable from the said date itself or it would operate retrospectively from the date of the issuance of the original notification amended i.e. notification 781 dated 31.05.1995 – HELD - There is nothing on record to suggest that the amendment by substitution has been given retrospective step rather the notification dated 05.05.1997 i... [Read more]

M/s SUPER CASSETTE INDUSTRIES LTD Vs COMMISSIONER OF TRADE TAX, LUCKNOW: 17.01.2015 - U.P. Trade Tax Act, 1948 – Amendment in exemption notification - Exemption or reduction of tax was admissible to the assessee revisionist at the percentage of the rate normally applicable to it under the Act - Whether the amendment made by the notification dated 05.05.1997 is applicable from the said date itself or it would operate retrospectively from the date of the issuance of the original notification amended i.e. notification 781 dated 31.05.1995 – HELD - There is nothing on record to suggest that the amendment by substitution has been given retrospective step rather the notification dated 05.05.1997 in specific and unequivocally terms recites that the amendment which is being made in the notification dated 31.03.1995 shall come into effect from the date of publication of the notification in the gazette. The said notification in the gazette was admittedly published on 05.05.1997. Therefore, when the notification itself provides for the date of applicability of the aforesaid notification no retrospectivity to it can be attributed so as to apply it from the effective date of notification No.781 dated 31.03.1995 - The tribunal as such is not justified in holding that the amendment would be operative from 01.04.1995. Even if it is assumed that there was some mistake in the notification dated 31.03.1995, the said mistake cannot be taken note of. The mistake if any as suggested by the tribunal was corrected by the notification dated 05.05.1997 and the said mistake would stand rectified from the date of publication of the subsequent notification and would not relate back to the notification dated 31.03.1995 – Assessee revision allowed [Read less]

2015-VIL-38-MP-ST|SERVICE TAX |High Court Cases | 27.01.2015

COMMISSIONER, CUSTOMS & CENTRAL EXCISE Vs STATE OF MADHYA PRADESH: 20.01.2015 - Service Tax - Storage & Warehouse Services - Service tax on supervision charges collected from Contractor – State Government employing the staff for inspecting and ensuring that storage of liquor in the ware house is undertaken in a proper manner and as the same is subjected to payment of 5% by the Contractor - According to the Revenue the collection of this 5% by the Government is nothing but a service provided by the State Government for the purpose of storage and ware housing services and, therefore, taxable – HELD – The supervisory staff appointed by the State Government or the Excise Department does not prov... [Read more]

COMMISSIONER, CUSTOMS & CENTRAL EXCISE Vs STATE OF MADHYA PRADESH: 20.01.2015 - Service Tax - Storage & Warehouse Services - Service tax on supervision charges collected from Contractor – State Government employing the staff for inspecting and ensuring that storage of liquor in the ware house is undertaken in a proper manner and as the same is subjected to payment of 5% by the Contractor - According to the Revenue the collection of this 5% by the Government is nothing but a service provided by the State Government for the purpose of storage and ware housing services and, therefore, taxable – HELD – The supervisory staff appointed by the State Government or the Excise Department does not provide any service on behalf of the Government to the Liquor Contractor or the person who is storing the liquor in the warehouse or the storage. On the contrary, the supervisor only keeps a watch on the material stored in the warehouse and ensures that the person manufacturing, exporting, importing or storing the material in the warehouse carries out the activities strictly in accordance to the MP Excise Act, 1950; all the requirements with regard to preparation of inventory, transportation, movement, storage and even insurance of the property is undertaken as per the statutory provision and the excise policy. What is done by the supervisor/supervisory staff so appointed by the State Government is not to provide any service on behalf of the State Government to the Liquor Contractor, but to ensure that all the activities in the warehouse where the liquor is stored is carried out in a proper manner without there being any contravention to the rules or regulation governing distribution, manufacturing of liquor, no evasion of duty etc. - That being so, the activities of the staff appointed to supervise the work of the warehouse and the act of the State Government in appointing the supervisor does not fall within the purview of providing service by a service provider to a client - No error in the order passed by the Tribunal holding that the supervision in the warehouse undertaken by the State Government does not amount to ‘service’ and is not taxable under the head ‘Storage and Warehouse Services’ – Revenue appeal dismissed [Read less]

2015-VIL-37-BOM-CE|CENTRAL EXCISE |High Court Cases | 27.01.2015

CEAT LIMITED Vs UNION OF INDIA: 23.12.2014 - Central Excise - Petitioners seek a declaration that classification made by section 88 of the Finance (No.2) Act, 2004 disallowing utilization of the credit of Additional Excise Duty (GSI) on goods of special importance paid after 1 April 1996, but prior to 1 April 2000 for payment of duty for First and Second Schedule to Central Excise Tariff Act, 1985, but at the same time allowing utilization of credit of Additional Excise Duty on the same goods paid on or after 1st April 2000 is violative of Article 14 of the Constitution of India and hence invalid – HELD - The Petitioners have been availing of Cenvat Credit of Basic Excise Duty, namely Cenvat... [Read more]

CEAT LIMITED Vs UNION OF INDIA: 23.12.2014 - Central Excise - Petitioners seek a declaration that classification made by section 88 of the Finance (No.2) Act, 2004 disallowing utilization of the credit of Additional Excise Duty (GSI) on goods of special importance paid after 1 April 1996, but prior to 1 April 2000 for payment of duty for First and Second Schedule to Central Excise Tariff Act, 1985, but at the same time allowing utilization of credit of Additional Excise Duty on the same goods paid on or after 1st April 2000 is violative of Article 14 of the Constitution of India and hence invalid – HELD - The Petitioners have been availing of Cenvat Credit of Basic Excise Duty, namely Cenvat Duty payable under section 3 of the Act as well the AED (GSI) payable under the 1957 Act paid on their inputs received on or after 16 March 1995. Availment of and utilization of Cenvat credit as in force at the material time from 16 March 1995 to 28 February 2003 enabled the credit of AED being utilized for payment of AED on the finished goods. The said credit was not allowed to be utilized for payment of any other duties, including the Excise duty under section 3 of the Act. The Rule was amended namely Rule 3(6)(b) with effect from 1 March 2003 and thereby the utilization of AED for payment of cenvat duty on the finished goods was allowed. The amended Rule with effect from 1 March 2003 has permitted utilization of the cenvat credit in respect of Act of 1957 for payment of duty of excise leviable under the First or the Second Schedule of the Tariff Act, 1985. Thus, as per the amended Rule, credit of Additional Excise Duty leviable under section 3 of the 1957 Act may be utilized towards the payment of duty of excise leviable under the First or Second Schedule of the Tariff Act - There is substance in the contention of the Revenue that in the Amendment Act no date was prescribed for availing and utilization of the Cenvat credit of the additional duty of excise paid. With the result that number of manufacturers had utilized cenvat credit lying with them as on 1 March 2003, for payment of cenvat credit duty payable on finished products/goods under section 3 of the 1957 Act. On realizing this, the Government amended the provision of the Cenvat Credit Rules 2000 retrospectively with section 88 of the Finance Act allowing utilization of Cenvat Credit of AED paid on or after 1 April 2000. That is how the explanation was substituted. We do not see how we can uphold the argument of the Petitioners that the restrictions placed by the Explanation should be interfered with any other stipulation as desired by them so as to make the provision operational from 1 April 1996. We have amply clarified as to how the issue of Cenvat Credit has been dealt with and in terms of the law made by the Parliament and which enables the availment. We find that the explanation which is set out in the affidavit of the Revenue justifies giving retrospective effect to the Rules from 1 April 2000. Apart therefrom, we find that the Petitioners have raised the issue of Constitutional validity only after they were served with the demand and which eventually was adjudicated, but being still under consideration in the pending Appeal. The issue of legality and validity of the demand and the order in relation thereto can be gone into in the Appeal. The contentions based on that and the merits of the said order challenged in the Appeal is not required to be gone into in this Writ Petition - In the present case, once the co-relation could not be established, then the Petitioners derive no benefit of the Constitutional provisions and selection of the date, namely, 1st April 1996 for they being brought into effect [Read less]

2015-VIL-42-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 27.01.2015

PORTLAND CEMENT (I) LTD Vs C.C.E. LUCKNOW: 14.01.2015 - Central Excise – Imposition of demand and penalty for Clandestine manufacture and removal of goods on basis of meter readings or power consumption – Lack of conclusively prove - HELD - Department has not been able to conclusively prove the clandestine manufacture and clearance. Once clandestine manufacture and removal is not conclusively proved, even though there are indications in this regard, no case for demand of duty is made - Once demand deserves to be dropped, there could be no reason for imposition of penalty on the appellants and directors/partners. Deeper investigations into the movements of trucks which were used for clearance... [Read more]

PORTLAND CEMENT (I) LTD Vs C.C.E. LUCKNOW: 14.01.2015 - Central Excise – Imposition of demand and penalty for Clandestine manufacture and removal of goods on basis of meter readings or power consumption – Lack of conclusively prove - HELD - Department has not been able to conclusively prove the clandestine manufacture and clearance. Once clandestine manufacture and removal is not conclusively proved, even though there are indications in this regard, no case for demand of duty is made - Once demand deserves to be dropped, there could be no reason for imposition of penalty on the appellants and directors/partners. Deeper investigations into the movements of trucks which were used for clearance of so call unaccounted Cement, could have lead to irrefutable, evidence affecting outcome of the case - Seizure of bags of cement which had attained RG1 stage - Appellants plea that entries in RG1 could not be made due to absence of dealing clerk cannot be accepted as it is the duty of the management to make an alternative arrangement and entries in RG1 cannot be postponed just because one of the employees was on leave - Imposition of redemption fine upheld – Appeal partly allowed [Read less]

2015-VIL-39-GUJ|VAT |High Court Cases | 27.01.2015

STATE OF GUJARAT Vs JAY STEEL & TUBES TRADERS: 25.11.2014 - Gujarat Value Added Tax Act – Additional demand - Penalty – Adjustment of input tax credit - Whether the Tribunal erred in deleting levy of interest and penalty merely because assessee had excess input credit adjustable against tax demand – HELD - From the observation of the Tribunal, it appears that though the assessing officer had raised additional tax demand and imposed interest and penalty on such basis, the Tribunal was of the opinion that the assessee had sufficient Input Tax Credit and those tax credits could have been adjusted against the assessee’s additional assessed tax liability. That being the position, the Tribunal cor... [Read more]

STATE OF GUJARAT Vs JAY STEEL & TUBES TRADERS: 25.11.2014 - Gujarat Value Added Tax Act – Additional demand - Penalty – Adjustment of input tax credit - Whether the Tribunal erred in deleting levy of interest and penalty merely because assessee had excess input credit adjustable against tax demand – HELD - From the observation of the Tribunal, it appears that though the assessing officer had raised additional tax demand and imposed interest and penalty on such basis, the Tribunal was of the opinion that the assessee had sufficient Input Tax Credit and those tax credits could have been adjusted against the assessee’s additional assessed tax liability. That being the position, the Tribunal correctly held that the interest could not be charged. Since there was no intention on part of the assessee to avoid payment of taxes, no penalty imposable – Revenue appeal dismissed [Read less]

2015-VIL-36-P&H|VAT |High Court Cases | 27.01.2015

AYAPPA INFRA PROJECTS PVT LTD Vs THE STATE OF PUNJAB: 12.12.2014 - Punjab VAT Act, 2005 - Exemption from advance tax - Provisions relating to advance tax by the works contractor doing work in Punjab – State admitted before the High Court that works contractors whose TDS is being deducted, is not liable to pay advance tax – Thus making it clear that works contractors are also eligible for exemption from advance VAT u/s 6(7) of Act - High Court directed State of Punjab to issue clarification to the effect that works contractors are also eligible for exemption from advance VAT levied u/s 6(7) of Act

2015-VIL-43-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 27.01.2015

ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BANGALORE-LTU: 02.01.2015 - Service Tax – Denial of credit on the ground that service provider had taken the registration subsequently and the credit of tax paid to the service provider prior to obtaining the registration would not be available – HELD - An assessee who has paid the service tax to the service provider, is entitled to avail the credit of the same, without finding whether such service tax paid by him to the service provider stands further deposited by him to the exchequer. It is neither possible nor practicable for any service recipient to verify the fact of payment of service ta... [Read more]

ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD Vs COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, BANGALORE-LTU: 02.01.2015 - Service Tax – Denial of credit on the ground that service provider had taken the registration subsequently and the credit of tax paid to the service provider prior to obtaining the registration would not be available – HELD - An assessee who has paid the service tax to the service provider, is entitled to avail the credit of the same, without finding whether such service tax paid by him to the service provider stands further deposited by him to the exchequer. It is neither possible nor practicable for any service recipient to verify the fact of payment of service tax by the service provider. If the Revenue is of the view that the service provider has not deposited the service tax collected by him from his customers, the remedy lies at the end of the service provider and not at the end of the service recipient. Apart from that, the Revenue has not made any verifications at the end of the service provider to find out as to whether the service tax has actually been deposited by them or not. There is neither any allegation much less any evidence to that effect – There is no justifiable reason to deny the credit of the service tax to the appellant – Appeal allowed [Read less]