Latest Updates: Amendment in Uttar Pradesh & Uttarakhand VAT Schedule | GST Bill - The Constitution (One Hundred and Twenty-second) Amendment Bill [see 'Notes & News']| Supreme Court stays Delhi High Court order on Audit by service tax authorities/CAG [2014-VIL-24-SC-ST-LB] | Madhya Pradesh & Rajasthan Notification regarding amendment in Schedule | Tamil Nadu Value Added Tax (Amendment) Act, 2014 - Amendment in Schedule | Himachal Pradesh: Draft amendment in Schedule | Bombay High Court upholds Constitutional validity of levy of Service Tax on Advocates and legal services [2014-VIL-390-BOM-ST] | Bombay High Court quashed Larger Bench order on excisability of Aluminium dross and skimmings [2014-VIL-391-BOM-CE]

Recent Updates

2014-VIL-396-RAJ|VAT |High Court Cases | 22.12.2014

M/s HARIT POLYTECH PVT LTD Vs STATE OF RAJASTHAN: 01.12.2014 - Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 - Constitutional validity – Supreme Court Order on the same matter - HELD - The Division Bench in M/s Dinesh Pouches Limited having noticed the directions of Hon'ble Supreme Court issued in the order dated 14.7.2006, exceeded the mandate of the order issued by the Hon'ble Supreme Court, in declaring the Act to be ultra vires Article 301 of the Constitution of India, and to refund the entire amount of Entry Tax levied and collected by the State of Rajasthan. The Division Bench was not required to decide the issue as the Civil Appeals against the earlier judgment in the sam... [Read more]

M/s HARIT POLYTECH PVT LTD Vs STATE OF RAJASTHAN: 01.12.2014 - Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 - Constitutional validity – Supreme Court Order on the same matter - HELD - The Division Bench in M/s Dinesh Pouches Limited having noticed the directions of Hon'ble Supreme Court issued in the order dated 14.7.2006, exceeded the mandate of the order issued by the Hon'ble Supreme Court, in declaring the Act to be ultra vires Article 301 of the Constitution of India, and to refund the entire amount of Entry Tax levied and collected by the State of Rajasthan. The Division Bench was not required to decide the issue as the Civil Appeals against the earlier judgment in the same writ petition upholding the Act were pending in the Supreme Court, alongwith other connected matters. The directions in the order of Supreme Court dated 14.7.2006, which had not set aside the Judgments of the High Court and had remitted an issue for recording the findings, were clear and did not admit any ambiguity or doubt. The Division Bench travelled beyond the authority given by the Hon'ble Supreme Court in the appeals arising out of the original orders, which are still pending. The Supreme Court had only remitted an issue to record the findings, within five months and remit it within next one month, to enable the Apex Court to decide the matter. The High Court pre-empted the final decision on its findings, which have not been considered so far by the Supreme Court - Since we have refrained ourselves from deciding the issues, which are pending in the Hon'ble Supreme Court, we do not propose to extend the interim orders, and leave the parties to seek appropriate remedies, for protecting their interests. All the Writ Petitions are accordingly dismissed, and the interim orders are discharged. The Review Petitions are also accordingly disposed of [Read less]

2014-VIL-358-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 22.12.2014

SAMSUNG ELECTRONICS INDIA PVT LTD Vs CCE, NOIDA: 18.11.2014 - Service Tax - Manpower recruitment or supply agency service - Contract with SEC Korea under which SEC Korea provided expatriates to the appellants for which the appellants paid certain amount to SEC, Korea – Demand as per the reverse charge mechanism - HELD – Issue no longer res-integra - Secondment of the staff from the parent company to the appellants would not come under the manpower recruitment or supply agency service and therefore, the demand is not sustainable – Appeal allowed

2014-VIL-357-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 22.12.2014

J K LAKSHMI CEMENT LTD Vs CCE, JAIPUR: 18.11.2014 - Service Tax - Whether service tax on GTA service can be paid by the appellants by utilizing the cenvat credit - period involved in this case is March, 2005 March, 2006 – HELD - Prior to the date of Notification No.10/2008-CE (NT) there was no restriction for utilization of cenvat credit by manufacturing unit towards payment of service tax as output service provider on GTA service received – Appeal allowed

2014-VIL-397-MAD-CE|CENTRAL EXCISE |High Court Cases | 22.12.2014

COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II Vs M/s SUNDARAM CLAYTON LTD: 05.12.2014 - Central Excise - Excisability of aluminium castings, out of which the finished goods were manufactured and cleared to the vehicles factory of the Defence Ministry – Goods not capable of being marketed – HELD - The Tribunal is correct in holding that castings were not fit for use by private motor vehicle manufacturers and there is no market for these castings and even transfer of information about the same to other persons were forbidden under the agreement between the first respondent and the Defence Ministry - Aluminium castings in question were not capable of being marketed and hence the commodity is not l... [Read more]

COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II Vs M/s SUNDARAM CLAYTON LTD: 05.12.2014 - Central Excise - Excisability of aluminium castings, out of which the finished goods were manufactured and cleared to the vehicles factory of the Defence Ministry – Goods not capable of being marketed – HELD - The Tribunal is correct in holding that castings were not fit for use by private motor vehicle manufacturers and there is no market for these castings and even transfer of information about the same to other persons were forbidden under the agreement between the first respondent and the Defence Ministry - Aluminium castings in question were not capable of being marketed and hence the commodity is not liable to excise duty - Matter remanded on the issue of claim exemption of duty on aluminium castings that are intermediate products under Notification no.217/86-CE and 67/95 CE despite the fact that the final product was cleared without payment of duty – Appeal disposed [Read less]

2014-VIL-359-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 22.12.2014

VIJAY MALLEABLE PVT LTD Vs CCE & DELHI: 21.11.2014 - Central Excise - Benefit of job work could not be extended only based on verification report of Assistant Commissioner – HELD - Benefit of job work could not be extended only based on verification report of Assistant Commissioner that goods have come back to the factory, knowingly well that private Challans have been used and no records have been maintained. In absence of maintains of records in the factory, and non-intimation to the Central Excise authorities no co-relation was possible – Goods cleared by the party during the period from 1996 to 1998 without following the procedure under modvat rules - I find force in the contention of Re... [Read more]

VIJAY MALLEABLE PVT LTD Vs CCE & DELHI: 21.11.2014 - Central Excise - Benefit of job work could not be extended only based on verification report of Assistant Commissioner – HELD - Benefit of job work could not be extended only based on verification report of Assistant Commissioner that goods have come back to the factory, knowingly well that private Challans have been used and no records have been maintained. In absence of maintains of records in the factory, and non-intimation to the Central Excise authorities no co-relation was possible – Goods cleared by the party during the period from 1996 to 1998 without following the procedure under modvat rules - I find force in the contention of Revenue that on the value of castings no credit could be allowed. Further violation relating to non-reversal of 10% of value of goods purportedly sent outside factory for job work on private challans is also manifested - Regarding demand of duty on clearance of castings without following job work procedure, I do not find force in revenues appeal as they have already accepted that all goods have came back. Once revenue itself is satisfied, no question of demanding duty arises. Of course, for violation of job work procedure and non-reversal of 10% of the value, penal provisions are attracted. However I do not agree with revenue for imposition to equal penalty considering that appellants were not aware about correct procedures. No mens-rea has been imputed manifesting their intention to defraud the revenue knowingly, thus equivalent penalty is not justifiable - Facts as has come on record clearly manifest the role of the director which requires imposition of penalty on Director [Read less]

2014-VIL-394-KAR|VAT |High Court Cases | 19.12.2014

M/s ENERCON (INDIA) INFRASTRUCTURE (P) LTD Vs ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES: 30.10.2014 - Karnataka Value Added Tax Act, 2003 - The assessee effected the purchase of capital goods like transformers, structurals, cables, cable poles and hardware items and fabricated items from the local registered dealers and disclosed the input tax on the said purchase of capital goods for the period 01.04.2006 to 31.03.2007. The electrical energy falls under Sl.No.22 of Schedule-I of the Act and is exempted from the output tax. As the assessee is not liable to pay any output tax, the claim of input tax was disallowed on the ground that input tax credit was claimed with a mala fide intention an... [Read more]

M/s ENERCON (INDIA) INFRASTRUCTURE (P) LTD Vs ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES: 30.10.2014 - Karnataka Value Added Tax Act, 2003 - The assessee effected the purchase of capital goods like transformers, structurals, cables, cable poles and hardware items and fabricated items from the local registered dealers and disclosed the input tax on the said purchase of capital goods for the period 01.04.2006 to 31.03.2007. The electrical energy falls under Sl.No.22 of Schedule-I of the Act and is exempted from the output tax. As the assessee is not liable to pay any output tax, the claim of input tax was disallowed on the ground that input tax credit was claimed with a mala fide intention and penalty was levied – HELD - In the instant case, the assessee has purchased goods and he has paid tax. In VAT 100 he has clearly set out the tax paid, which he was entitled to as input credit if he had paid any output tax. Admittedly, he has not paid any output tax. He is not claiming any credit. In the return he has mentioned the tax paid and in the column meant for input tax, he has mentioned the input tax paid. In the column for refund it is stated that he is not entitled to any refund nor can he claim any refund. Under those circumstances; it is neither a case of under stating the tax liability or over stating the entitlement of tax, which is a condition precedent for the application of Section 72 (2) of the Act. He has not claimed any tax benefit at all. In that view of the matter, the order passed by the first appellate authority was in accordance with law – Penalty set aside appeal allowed [Read less]

2014-VIL-356-CESTAT-MUM-ST|SERVICE TAX |CESTAT Cases | 19.12.2014

COMMISSIONER OF SERVICE TAX, MUMBAI Vs TRAFFIC MANAGER, MUMBAI PORT TRUST: 14.11.2014 - Service Tax - Port services – Compensation received as 'wharfage' charge - Service in relation to a vessel or goods - In consideration for allowing ONGC to lay submarine pipelines through the Port limits, Mumbai Port Trust was paid compensation by ONGC - The Revenue is of the view that the compensation received by the respondent from ONGC is taxable under the category of Port Services – HELD - Payments were made by ONGC to MPT merely for permission to use port limits to lay pipelines under the land and seabed and not for receiving any service - Agreement between the respondent and ONGC that the payment we... [Read more]

COMMISSIONER OF SERVICE TAX, MUMBAI Vs TRAFFIC MANAGER, MUMBAI PORT TRUST: 14.11.2014 - Service Tax - Port services – Compensation received as 'wharfage' charge - Service in relation to a vessel or goods - In consideration for allowing ONGC to lay submarine pipelines through the Port limits, Mumbai Port Trust was paid compensation by ONGC - The Revenue is of the view that the compensation received by the respondent from ONGC is taxable under the category of Port Services – HELD - Payments were made by ONGC to MPT merely for permission to use port limits to lay pipelines under the land and seabed and not for receiving any service - Agreement between the respondent and ONGC that the payment were made merely for permission to use port limit and not for receiving any service. The term used as 'wharfage' is merely to determine the measure of the compensation and not to determine the nature of the service rendered – Revenue appeal dismissed [Read less]

2014-VIL-24-SC-ST-LB|SERVICE TAX |Supreme Court Cases | 19.12.2014

UNION OF INDIA Vs M/s TRAVELITE (INDIA): 18.12.2014 - Service Tax Rules, 1994 - Rule 5A(2) - Audit by service tax authorities/CAG – Supreme Court stays Delhi High Court order holding Rule 5A(2) of the Service Tax Rules cannot be justified on the basis of the Service Tax Audit Manual

2014-VIL-395-MAD-CE|CENTRAL EXCISE |High Court Cases | 19.12.2014

TRACTOR AND FARM EQUIPMENT LTD Vs THE COMMISSIONER OF CENTRAL EXCISE: 28.11.2014 - Central Excise - CENVAT Credit - Reversal of credit on inputs used in final products – Whether Tribunal is right in holding that credit of the duty paid on the inputs lying in stock or contained in the finished tractors lying in stock and already utilised, is liable to be reversed or paid back following the exemption of tractors, when there is no statutory provision to do so – HELD - Once it is held that no co-relation between the raw material and the final product is required, the appellant's plea stands answered. If credit can be taken against excise duty on a final product manufactured on the very day, it m... [Read more]

TRACTOR AND FARM EQUIPMENT LTD Vs THE COMMISSIONER OF CENTRAL EXCISE: 28.11.2014 - Central Excise - CENVAT Credit - Reversal of credit on inputs used in final products – Whether Tribunal is right in holding that credit of the duty paid on the inputs lying in stock or contained in the finished tractors lying in stock and already utilised, is liable to be reversed or paid back following the exemption of tractors, when there is no statutory provision to do so – HELD - Once it is held that no co-relation between the raw material and the final product is required, the appellant's plea stands answered. If credit can be taken against excise duty on a final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken credit need not be reversed. The Central Excise Rules would come into play in the following manner, that is to say, on the date when the final goods become exempt from payment of duty, for the inputs received on and after the said date, no credit can be taken. This would be the correct method of understanding of the position of law – Assessee appeal allowed [Read less]

2014-VIL-354-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 18.12.2014

PREMIER PEST CONTROL PVT LTD Vs C.S.T., DELHI-I: 27.11.2014 - Service Tax – Classification - Pre-construction anti-termite treatment - Demand - Service was being provided to the contractors engaged in providing commercial or industrial construction service (CICS) or the construction of complex service (CCS) and the appellants being sub-contractors, their service was also classified as CICS or CCS in terms of CBEC Circular No.96/7/2007-ST dated 23/08/2007 – HELD - While reference to Board’s Circulars for the purpose of deciding classification does not have any legal sanction nor do we intend to so dignify them, it is pertinent to mention that even the said Board’s Circular also nowhere state... [Read more]

PREMIER PEST CONTROL PVT LTD Vs C.S.T., DELHI-I: 27.11.2014 - Service Tax – Classification - Pre-construction anti-termite treatment - Demand - Service was being provided to the contractors engaged in providing commercial or industrial construction service (CICS) or the construction of complex service (CCS) and the appellants being sub-contractors, their service was also classified as CICS or CCS in terms of CBEC Circular No.96/7/2007-ST dated 23/08/2007 – HELD - While reference to Board’s Circulars for the purpose of deciding classification does not have any legal sanction nor do we intend to so dignify them, it is pertinent to mention that even the said Board’s Circular also nowhere states that all the services provided by a sub-contractor to the main contractor would necessaryily fall under the same classification which is applicable to the service rendered by the main contractor. Thus the lower authorities have clearly misread the said CBEC Circular to hold that the appellants were providing CICS/CCS - Classification of service does not alter based on to whom it is rendered - This activity can by no stretch of imagination be covered under the definition of CICS or CCS – Impugned order quashed and assessee appeal allowed [Read less]

2014-VIL-355-CESTAT-BLR-CE|CENTRAL EXCISE |CESTAT Cases | 18.12.2014

AVERY DENNISON INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX & CUSTOMS, BANGALORE-II: 14.11.2014 - Cenvat Credit - Demand for CENVAT credit with interest and penalty as appellants had availed the CENVAT credit of service tax paid in another – HELD - Appellant had taken the credit attributable to another premises in their unit and this happened because of an error in accounting process and there was a mistake. It is not necessary as per law to declare each and every credit entry and submit document relating to such credit entry. That being the position, the appellant cannot be found fault with for not submitting the details to the department since in accordance with statutory p... [Read more]

AVERY DENNISON INDIA PVT LTD Vs COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX & CUSTOMS, BANGALORE-II: 14.11.2014 - Cenvat Credit - Demand for CENVAT credit with interest and penalty as appellants had availed the CENVAT credit of service tax paid in another – HELD - Appellant had taken the credit attributable to another premises in their unit and this happened because of an error in accounting process and there was a mistake. It is not necessary as per law to declare each and every credit entry and submit document relating to such credit entry. That being the position, the appellant cannot be found fault with for not submitting the details to the department since in accordance with statutory provisions it is not required to be done. However there is no doubt that a mis-declaration has taken place to the extent that when they make a credit entry it amounts to a declaration that input service has been used in respect of the activities undertaken therein and is admissible and subsequently if it is found to be unsustainable, it definitely amounts to mis-declaration. When the question of miss-declaration arises, it has to be coupled with intention to evade duty - Appellants are paying crores as revenue and have no such intention to avail excess credit and in any case the credit was admissible to the appellant in other unit - Therefore when mandatory penalty is not leviable, penalty of 25% already paid by them and not contested can be held as sufficient - The impugned order requiring the appellant to pay balance 75% of the penalty is set aside [Read less]

2014-VIL-23-SC|VAT |Supreme Court Cases | 18.12.2014

STATE OF PUNJAB Vs NOKIA INDIA PVT LTD: 17.11.2014 - Punjab Value Added Tax Act, 2005 - Rate of tax on cell phone battery charger sold as mobile/cellular phone under a single solo pack unit – Demand for differential tax - battery charger is an accessory to the main product that is mobile phone – HELD – The Assessing Authority, Appellate Authority and the Tribunal rightly held that the battery charger is not a part of the mobile/cell phone. If the charger was a part of cell phone, then cell phone could not have been operated without using the battery charger. But in reality, it is not required at the time of operation. Further, the battery in the cell phone can be charged directly from the ot... [Read more]

STATE OF PUNJAB Vs NOKIA INDIA PVT LTD: 17.11.2014 - Punjab Value Added Tax Act, 2005 - Rate of tax on cell phone battery charger sold as mobile/cellular phone under a single solo pack unit – Demand for differential tax - battery charger is an accessory to the main product that is mobile phone – HELD – The Assessing Authority, Appellate Authority and the Tribunal rightly held that the battery charger is not a part of the mobile/cell phone. If the charger was a part of cell phone, then cell phone could not have been operated without using the battery charger. But in reality, it is not required at the time of operation. Further, the battery in the cell phone can be charged directly from the other means also like laptop without employing the battery charger, implying thereby, that it is nothing but an accessory to the mobile phone - Battery charger cannot be held to be a composite part of the cell phone but is an independent product which can be sold separately, without selling the cell phone. The High Court failed to appreciate the aforesaid fact and wrongly held that the battery charger is a part of the cell phone – Revenue appeal allowed [Read less]