Delhi & Himachal Pradesh: Amendment in Schedule | Nagaland: Change in rate of tax | Punjab: Extension in last date of e-filing of VAT-15 for the 1st quarter | Karnataka: Extension of revision option under e-UPaSS module | Himachal Pradesh: Amendment in HPVAT Schedule A & B | West Bengal: Extension in due date for submission of return for quarter ending June '15 | Haryana VAT (Amendment) Rules, 2015 | Uttarakhand: Amendment in VAT Schedule | Delhi: Extension in date for filing of online return for 1st quarter of 2015-16 | Guest Column: Confusion towards measure of VAT on Builders and Developers & Highlights of Report on the GST Bill by Select Panel of Rajya Sabha [see 'Notes & News'] | Madhya Pradesh VAT (Amendment) Bill, 2015 | Uttar Pradesh: Change in rate of tax on Petrol & Diesel | Goa: Extension in date for filing of returns for first quarter of 2015-16 | Report of The Select Committee on GST Bill [see 'Notes & News'] | Bihar Tax on Entry of goods into Local Areas (Amendment) Rules

Recent Updates

2015-VIL-393-CESTAT-MUM-ST|SERVICE TAX |CESTAT Cases | 30.07.2015

... ONGC by way of charter hire - Demand for Service tax for the payment made by the appellant during July 2007 to September 2007 to the foreign parties – HELD - the service tax liability on the appellant for hiring of rigs to ONGC by making payment to foreign entities is liable to be tax from 16.5.2008 as of supply of tangible goods service – The said activity would not fall under the category of 'Mining of mineral oil and gas service’, it in itself enough to set aside the liability of interest and penalties imposed, in as much as that when there can be no service tax liability, the question of interest and penalty does not ... [Read more]

... ONGC by way of charter hire - Demand for Service tax for the payment made by the appellant during July 2007 to September 2007 to the foreign parties – HELD - the service tax liability on the appellant for hiring of rigs to ONGC by making payment to foreign entities is liable to be tax from 16.5.2008 as of supply of tangible goods service – The said activity would not fall under the category of 'Mining of mineral oil and gas service’, it in itself enough to set aside the liability of interest and penalties imposed, in as much as that when there can be no service tax liability, the question of interest and penalty does not arise – Assessee appeal allowed [Read less]

2015-VIL-392-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 30.07.2015

... g expenses is incurred by appellant when dealers request the appellant to organize the advertisement of the products in their area and about 40% of the expenses incurred on advertisement are recovered by appellant from dealers – Whether such advertisement expenses incurred by the appellant would be includible in the assessable value to the extent the same have been recovered from dealers – HELD - When it is not disputed that the advertisement of the appellant's products in the areas of the respective dealers also mention the dealers' name and address and those advertisements have also benefitted the dealers, the amount bei... [Read more]

... g expenses is incurred by appellant when dealers request the appellant to organize the advertisement of the products in their area and about 40% of the expenses incurred on advertisement are recovered by appellant from dealers – Whether such advertisement expenses incurred by the appellant would be includible in the assessable value to the extent the same have been recovered from dealers – HELD - When it is not disputed that the advertisement of the appellant's products in the areas of the respective dealers also mention the dealers' name and address and those advertisements have also benefitted the dealers, the amount being recovered by the appellant from the dealers cannot be said to be for the reason of or in connection with the sale of goods, as this amount would be for the advertisement and publicity effort of the appellant which has benefitted the dealer - The clauses of requiring the dealers to vigorously promote, develop and maintain sales of the product and parts to the satisfaction of and in the manner required by the appellant cannot be treated as the clause which gives an enforceable legal right to the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers. For this reason also, the advertisement expenses recovered from the dealers would not be includible in the assessable value – Limitation - Advertisement expenses incurred by the assessee from their dealers was the subject matter of the earlier order in the appellant's own case, therefore, the department cannot allege that the appellant had kept the department in dark about the recovery of a part of the advertisement expenses by them from certain dealers - Therefore, the limitation period of 5 years under proviso to section 11A(1)is not invokable and the duty demand is time barred – Assessee appeal allowed [Read less]

2015-VIL-71-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 30.07.2015

... ole of the duty of excise was exempted in respect of iron and steel scrap obtained by breaking the ship - exemption of payment of excise duty only to those who had paid customs duty at Rs.1400/- per LDT - another class of persons who also paid custom duty under Section 3 of the Customs Tariff Act, 1975, albeit at a lesser rate, was excluded - Violation of Article 14 of the Constitution - right to equal treatment in similar circumstances – HELD – These two Notifications both dated 27.03.1987 pertain to same goods namely those falling under Heading 72.15 and 73.09 of the second Schedule to the Act. Customs duty is leviable o... [Read more]

... ole of the duty of excise was exempted in respect of iron and steel scrap obtained by breaking the ship - exemption of payment of excise duty only to those who had paid customs duty at Rs.1400/- per LDT - another class of persons who also paid custom duty under Section 3 of the Customs Tariff Act, 1975, albeit at a lesser rate, was excluded - Violation of Article 14 of the Constitution - right to equal treatment in similar circumstances – HELD – These two Notifications both dated 27.03.1987 pertain to same goods namely those falling under Heading 72.15 and 73.09 of the second Schedule to the Act. Customs duty is leviable on these goods under Section 3 of the Customs Tariff Act. The said duty can be paid under any of the two methods. When two methods are permissible under the statutory scheme itself, obviously option is that of the assessee to choose in all those methods to pay the custom duty. Duty, thus, paid is to be naturally treated as validly paid. Merely because with the adoption of one particular method the duty that becomes payable is lesser would not mean that two such persons belong to different categories. The important factors for the purposes of parity are same in the instant case, viz. the goods are same; they fall under the same Heading and the custom duty is leviable as per the Act which has been paid - The only option to bring parity was to demand duty on differential amount. That provision should have been incorporated to save the impugned Notification from the vice of arbitrariness. In fact, that would bring both the sub-categories completely at par. Thus, while upholding the view taken by the High Court, we modify the same only to the extent that the respondent herein shall also be entitled to the benefit of the exemption Notification subject to the condition that the duty already paid by the respondent herein on LDT, would be taken into account and only the balance out of it would be subject to excise duty – Appeal disposed [Read less]

2015-VIL-72-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 30.07.2015

... f Water Purification and Filteration System (WPFS) on a base frame amounts to manufacture – assemble of the components resulting into a new product - HELD - The appellants undertake the job of assembling all the items received from M/s. Perfect Drug Ltd on a base plate and thus brings into existence a new and commercially different commodity known as Water Purification & Filteration System - It is on this basis, a finding of fact is arrived at by all the three Authorities that the activity undertaken by the appellant amounts to “manufacture” within the meaning of Section 2(f) of the Central Excise Act, 1944, since the end ... [Read more]

... f Water Purification and Filteration System (WPFS) on a base frame amounts to manufacture – assemble of the components resulting into a new product - HELD - The appellants undertake the job of assembling all the items received from M/s. Perfect Drug Ltd on a base plate and thus brings into existence a new and commercially different commodity known as Water Purification & Filteration System - It is on this basis, a finding of fact is arrived at by all the three Authorities that the activity undertaken by the appellant amounts to “manufacture” within the meaning of Section 2(f) of the Central Excise Act, 1944, since the end result of the process or activity resulted in new and different commercial product - The activity undertaken by the appellant amounts to 'manufacture' – Assessee appeal dismissed [Read less]

2015-VIL-306-ALH|VAT |High Court Cases | 30.07.2015

... ioner was granted a contract by the Agra Development Authority for construction of the road – Acceptance of assessee’s application directing Agra Development Authority not to deduct tax at source since the petitioner is paying the tax in its monthly return – Deputy Commissioner Commercial Tax, Agra Zone vide impugned order directing the Agra Development Authority to deduct 4% of tax on the bills raised by the petitioner - HELD - Once the assessing authority of the petitioner allowed the petitioner the benefit under Section 34 of the Act, no amount could be deducted by the deductor under section 34 of the Act on the bills r... [Read more]

... ioner was granted a contract by the Agra Development Authority for construction of the road – Acceptance of assessee’s application directing Agra Development Authority not to deduct tax at source since the petitioner is paying the tax in its monthly return – Deputy Commissioner Commercial Tax, Agra Zone vide impugned order directing the Agra Development Authority to deduct 4% of tax on the bills raised by the petitioner - HELD - Once the assessing authority of the petitioner allowed the petitioner the benefit under Section 34 of the Act, no amount could be deducted by the deductor under section 34 of the Act on the bills raised by the petitioner and, therefore, the assessing authority of ADA, could not, in law, issue such an order. On this short point, the impugned order being without any authority of law are quashed – Petition allowed [Read less]

2015-VIL-307-AP|VAT |High Court Cases | 30.07.2015

... Revision of assessment by Commissioner to levy tax on packing material – Power of revision - Whether Commissioner erred in levying tax on HDPE bags at the rate on which tax is leviable on cement – Tax on turnover relating to sale of HDPE bags – HELD - After an elaborate analysis of the purposes for which the HDPE bags were used and its utility, the Commissioner has concluded that both the seller and the buyer did not intend to sell HDPE bags; and their intention was only to sell and buy the cement contained in those HDPE bags. While the submission of the appellant, that the Commissioner could not have placed any reliance o... [Read more]

... Revision of assessment by Commissioner to levy tax on packing material – Power of revision - Whether Commissioner erred in levying tax on HDPE bags at the rate on which tax is leviable on cement – Tax on turnover relating to sale of HDPE bags – HELD - After an elaborate analysis of the purposes for which the HDPE bags were used and its utility, the Commissioner has concluded that both the seller and the buyer did not intend to sell HDPE bags; and their intention was only to sell and buy the cement contained in those HDPE bags. While the submission of the appellant, that the Commissioner could not have placed any reliance on the A-2 returns, without referring to it in the show cause notice, has considerable force, the fact remains that, even if this finding of the Commissioner is ignored, his finding that there was an integrated sale of cement and HDPE bags, and the parties never intended to either sell or buy HDPE bags independent of its contents i.e. cement, is based on an elaborate analysis of the material on record, and the prevalent practice in the cement industry. The Commissioner, on the material on record, rightly contended that there was no intention on the part of the appellant to sell, or on the part of the consignee to buy, the HDPE bags; and these bags were used by the appellant as a convenient and cheap mode of transport - HDPE bags along with cement, and the sale of HDPE bags was rightly subjected to tax at the same tax rate as was applicable to the sale of cement – Sett-off – There is no reason to examine contentions regarding the extent of sale of packing material during different periods in 1994-95, or the turnover covered by G forms under Section 5(b), or the validity of the appellant’s claim for set off in terms of G.O.Ms. No.374 dated 25.04.1987, in this appeal as these are all matters which the Commissioner should have dealt with while exercising his power of revision under Section 20(1) of the APGST Act - To this limited extent, the matter is remanded to the Commissioner, Commercial Taxes – Decided in favour of revenue on merit [Read less]

2015-VIL-394-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 30.07.2015

... on service - Extended period of limitation - Penalty u/s 77 & 78 – Service rendered on ‘agricultural land’ – HELD - Mere perusal of definition of the taxable service vis-a-vis the description of work (service) done by the appellant does not leave any scope to even entertain a reasonable doubt, leave alone reasonable belief, that the service rendered may not be covered under the said definition - The appellant has tried to state that it did the work on the agricultural land as confirmed by the Patwari - Suffice to say that even if it is presumed that the land on which work was done was agricultural land, the service rendere... [Read more]

... on service - Extended period of limitation - Penalty u/s 77 & 78 – Service rendered on ‘agricultural land’ – HELD - Mere perusal of definition of the taxable service vis-a-vis the description of work (service) done by the appellant does not leave any scope to even entertain a reasonable doubt, leave alone reasonable belief, that the service rendered may not be covered under the said definition - The appellant has tried to state that it did the work on the agricultural land as confirmed by the Patwari - Suffice to say that even if it is presumed that the land on which work was done was agricultural land, the service rendered by the appellant was not in relation to agriculture. The service rendered in relation to a housing project. The appellant has only tried to obfuscate the issue by saying that the work was on agricultural land - The service rendered was not in relation to agriculture as claimed by the appellant - There was no scope for any confusion even with regard to the said exclusion. It needs to be mentioned that the bona fide belief is not a hallucinatory opinion of an uninformed person. As regards the contention that the appellant had a bona fide belief regarding the non-taxability of the said amount, it has to be said that mere utterance of the words ‘bona fide belief’ does not make it a belief, leave alone bona fide belief. Bona fide belief is a belief entertained by a reasonable person in an appropriate environment - There was no ambiguity or doubt about coverage of the service rendered by the appellant under the scope of Site Formation and Clearance, Excavation and Earthmoving and Demolition service - The extended period as well as Section 78 of the Finance Act, 1994 are invokable in the present case – Assessee appeal dismissed [Read less]

2015-VIL-390-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 29.07.2015

... ce or repair of vehicles and for providing BAS - It charged labour and service charges on refurbishment services and raised invoices reflecting the appropriate service tax component as well, but failed to remit service tax to the exchequer - appellant claimed since refurbishment was done on old cars purchased by it was a service to itself, and would not amount to service provided to another – HELD - The fact that sales tax was remitted to the State Exchequer on sale of refurbished vehicles to customers, would not by itself establish an immunity of the appellant to service tax - For the purpose of levy and collection of ser... [Read more]

... ce or repair of vehicles and for providing BAS - It charged labour and service charges on refurbishment services and raised invoices reflecting the appropriate service tax component as well, but failed to remit service tax to the exchequer - appellant claimed since refurbishment was done on old cars purchased by it was a service to itself, and would not amount to service provided to another – HELD - The fact that sales tax was remitted to the State Exchequer on sale of refurbished vehicles to customers, would not by itself establish an immunity of the appellant to service tax - For the purpose of levy and collection of service tax, appellant’s own invoices raised on RKBK True Value probablise the inference that the appellant is one entity and RKBK True Value is another entity; and that appellant had raised invoices on the other entity reflecting elements of UP Trade Tax and Service Tax. If appellant and RKBK True Value are separate entities, neither would there be an occasion in law or under any accounting practice, for invoices to be raised on oneself and reflecting elements Trade Tax or Service Tax, in such invoices. Sale of goods, as is well established is a transfer of title in goods from one party to another. If, on the appellant’s contention itself and RKBK True Value are merely units of a common legal entity, no question of raising invoices or indicating components of Trade Tax or Service Tax would arise - The plea of providing services to itself, is thus misconceived – Demand confirmed and assessee appeal dismissed [Read less]

2015-VIL-387-CESTAT-AHM-CE|CENTRAL EXCISE |CESTAT Cases | 29.07.2015

... credit of duty paid on the Trolleys used for carrying components from one part of the assembly line to another part of the assembly line – HELD - There is no dispute on the fact that the Trolleys are used by the appellant for carrying material from one part of the assembly line to another part of the assembly line or the place to and from where assembly of goods is taking place - It has been held by the Larger Bench in the case of Banco Products (India) Limited vs. CCE, Vadodara that credit of Plastic Crates used for handling of materials within the factory is admissible for credit - The nature of function attributable to... [Read more]

... credit of duty paid on the Trolleys used for carrying components from one part of the assembly line to another part of the assembly line – HELD - There is no dispute on the fact that the Trolleys are used by the appellant for carrying material from one part of the assembly line to another part of the assembly line or the place to and from where assembly of goods is taking place - It has been held by the Larger Bench in the case of Banco Products (India) Limited vs. CCE, Vadodara that credit of Plastic Crates used for handling of materials within the factory is admissible for credit - The nature of function attributable to the Plastic Crates and Trolleys used by the appellant are the same - Therefore, cenvat credit is admissible to the appellant – Assessee appeal allowed [Read less]

2015-VIL-70-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 29.07.2015

... toothpaste or not – Toothpaste or dental cleaner – Classification under Heading 3306.10 or 3306.90 - HELD – The finding arrived at by the Tribunal to the effect that Close-Up Whitening is not a toothpaste but a dental cleaner is perfectly just and proper - the ingredients and ratio of all the inputs which go into the manufacturing of a toothpaste and dental cleaner are different and varying - Even the manufacturing process of Close-Up toothpaste and Close-up Whitening is different - Classification of the same product in an earlier avtar/brand was acceptable to the Department as the same was classified under a different nam... [Read more]

... toothpaste or not – Toothpaste or dental cleaner – Classification under Heading 3306.10 or 3306.90 - HELD – The finding arrived at by the Tribunal to the effect that Close-Up Whitening is not a toothpaste but a dental cleaner is perfectly just and proper - the ingredients and ratio of all the inputs which go into the manufacturing of a toothpaste and dental cleaner are different and varying - Even the manufacturing process of Close-Up toothpaste and Close-up Whitening is different - Classification of the same product in an earlier avtar/brand was acceptable to the Department as the same was classified under a different name for all these years when the rate of duty under Heading 3306.90 were higher than that under Heading 3306.10. It, thus, observed that mere change of duty and brand name cannot be the reason to alter classification - Even FDA had not registered the product in question as 'toothpaste' but as a dental cleaner. It becomes a supporting factor along with other features of the product – Hence, ‘Close-Up Whitening’ dental cleaner is not a 'toothpaste' but other form of dental hygiene and, therefore will have to be classified under sub-heading 3306.90 as a consequence – Revenue appeal dismissed [Read less]

2015-VIL-389-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 29.07.2015

... nvat Credit on the capital goods - show cause notice consequent to Apex Court judgment in the case of Aman Marbles Industries denying cenvat credit on the capital goods on the premise that the activity undertaken by the appellant does not amount to manufacture – HELD - At the time of procurement of capital goods, the appellant was clearing their final product on payment of duty on the understanding that their final product is dutiable and activity undertaken by the appellant amounts to manufacture. Same understanding was of the department – Consequent to the decision of the Hon’ble Apex Court in the case of Aman Marble Ind... [Read more]

... nvat Credit on the capital goods - show cause notice consequent to Apex Court judgment in the case of Aman Marbles Industries denying cenvat credit on the capital goods on the premise that the activity undertaken by the appellant does not amount to manufacture – HELD - At the time of procurement of capital goods, the appellant was clearing their final product on payment of duty on the understanding that their final product is dutiable and activity undertaken by the appellant amounts to manufacture. Same understanding was of the department – Consequent to the decision of the Hon’ble Apex Court in the case of Aman Marble Industries when Revenue has accepted the duty demand on the final product, the duty paid on final product shall amount to reversal of CENVAT Credit on capital goods. Moreover, when the final product has become not liable to duty in this circumstances whatever CENVAT Credit remain in their CENVAT Credit account shall not be any use of the appellant. Therefore, we hold that at the time of procurement of capital goods, the appellant has taken CENVAT Credit correctly – The impugned order is set aside and the appeal is allowed [Read less]

2015-VIL-305-AP|VAT |High Court Cases | 29.07.2015

... order of assessment – Power of Commissioner – Turnover - HELD - Commissioner can exercise the power of revision, vested in him under Section 20(1) of the APGST Act, and revise an order passed, or proceeding recorded, by any authority, officer or person subordinate to him under the provisions of the APGST Act, including under Section 20(2) thereof, within four years from the date of service on the dealer, the order of the subordinate officer whose order was under revision - Matter needs to be remitted to the respondent/Commissioner for fresh consideration on merits in regard to the subjection of the turnovers to tax at appl... [Read more]

... order of assessment – Power of Commissioner – Turnover - HELD - Commissioner can exercise the power of revision, vested in him under Section 20(1) of the APGST Act, and revise an order passed, or proceeding recorded, by any authority, officer or person subordinate to him under the provisions of the APGST Act, including under Section 20(2) thereof, within four years from the date of service on the dealer, the order of the subordinate officer whose order was under revision - Matter needs to be remitted to the respondent/Commissioner for fresh consideration on merits in regard to the subjection of the turnovers to tax at applicable rates under Section 6A - appeal is allowed and the order impugned insofar as it related to bringing the turnovers of fuel, coal and miscellaneous goods to tax at the applicable rates under Section 6-A of the APGST Act for the year 1992-93 is set aside and the matter is remitted to the Commissioner of Commercial Taxes concerned for fresh consideration – Appeal partly allowed by remand [Read less]

2015-VIL-388-CESTAT-CHE-CE|CENTRAL EXCISE |CESTAT Cases | 29.07.2015

... e duty on delivery charges and road freight subsidy charges collected from the customers but included in assessable value – Clearance of petroleum products from warehouse - Period when the excise duty on petroleum products paid at the time of clearance for storage depots and when the Administrative Pricing mechanism was in practice – HELD - It is not the case of the department that the petroleum products were received in COCO outlets without payment of duty and sold from the said COCO outlets only on payment of duty. Therefore, there is no justification to treat the COCO outlets as the ‘place of removal’ – Following the ra... [Read more]

... e duty on delivery charges and road freight subsidy charges collected from the customers but included in assessable value – Clearance of petroleum products from warehouse - Period when the excise duty on petroleum products paid at the time of clearance for storage depots and when the Administrative Pricing mechanism was in practice – HELD - It is not the case of the department that the petroleum products were received in COCO outlets without payment of duty and sold from the said COCO outlets only on payment of duty. Therefore, there is no justification to treat the COCO outlets as the ‘place of removal’ – Following the ratio of CCE, Vishakapatnam Vs BPCL, IOCL & HPCL revenue appeal is rejected [Read less]

2015-VIL-391-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 29.07.2015

... ders for client/company in Japan – Assessee claims that by providing such services to the Company in Japan, their services were exported and thereby exempted from service tax – Denial of refund claim on the ground that the services provided by the respondents failed to satisfy the condition of export of services – HELD - Cannot agree with the submission of the revenue that the products are finally used in India and therefore there is no export of services as per Rule 3(2)(a) of the Export Service Rules, 2005 - The respondents receive commission for procurement of purchase orders. Therefore the services of the respondents i... [Read more]

... ders for client/company in Japan – Assessee claims that by providing such services to the Company in Japan, their services were exported and thereby exempted from service tax – Denial of refund claim on the ground that the services provided by the respondents failed to satisfy the condition of export of services – HELD - Cannot agree with the submission of the revenue that the products are finally used in India and therefore there is no export of services as per Rule 3(2)(a) of the Export Service Rules, 2005 - The respondents receive commission for procurement of purchase orders. Therefore the services of the respondents in procuring purchase orders/marketing is definitely utilized/benefited by the Company in Japan. Further it is not in dispute that the respondents received the commission in convertible foreign exchange - If the respondents did not canvass the purchase orders and send it to their client Company in Japan, there would be no supply of goods or use of goods in India at all. So merely because the goods supplied were ultimately used in India, cannot be a reason to hold that there was no export of the output service - In the present case, the effective use and enjoyment of the service of procuring purchase order is by the Company in Japan and therefore the only conclusion possible is that the services were exported – Revenue appeal dismissed [Read less]

2015-VIL-69-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 28.07.2015

... ns ‘Chocolate Cream’ in between the layers of wafers – HELD - It is not in dispute that the products are waffles and wafers - the only dispute is as to whether these products contains chocolate or not – It may be noticed that out of all the products under Chapter heading 19.05 some contains cocoa, as is clear from the description contained in the main Heading and if only cocoa is added or is contained in these products, that would not make it chocolate. Thus, there has to be a difference between cocoa and the chocolate that is made out of cocoa - Tribunal has not gone at all into the aforesaid aspect, viz., as to whether t... [Read more]

... ns ‘Chocolate Cream’ in between the layers of wafers – HELD - It is not in dispute that the products are waffles and wafers - the only dispute is as to whether these products contains chocolate or not – It may be noticed that out of all the products under Chapter heading 19.05 some contains cocoa, as is clear from the description contained in the main Heading and if only cocoa is added or is contained in these products, that would not make it chocolate. Thus, there has to be a difference between cocoa and the chocolate that is made out of cocoa - Tribunal has not gone at all into the aforesaid aspect, viz., as to whether the product contains only cocoa or it contains chocolate. We may record that it is not in dispute that there is either cocoa or chocolate which is sandwiched between the two wafers. Thus, it was incumbent upon the CESTAT to see that the said ingredient is cocoa simplicitor or it is chocolate - The impugned order is set aside and the matters are remitted back to Tribunal for fresh consideration [Read less]

2015-VIL-68-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 28.07.2015

... of Chief Commissioners - Whether Tribunal can condone delay in the order passed by Committee – HELD - Tribunal has ample power to condone the delay in filing the appeal including the one filed under Section 35E(4) of the said Act. The period which can be condoned in relation to filing of the appeal under Section 35E(4) of the said Act would include the period availed by the review committee in terms of Section 35E(1) or 35E(2) of the said Act - The members deciding the lis by the impugned order should have kept themselves abreast to the Full Bench decision of the tribunal so that there would not have been two views as re... [Read more]

... of Chief Commissioners - Whether Tribunal can condone delay in the order passed by Committee – HELD - Tribunal has ample power to condone the delay in filing the appeal including the one filed under Section 35E(4) of the said Act. The period which can be condoned in relation to filing of the appeal under Section 35E(4) of the said Act would include the period availed by the review committee in terms of Section 35E(1) or 35E(2) of the said Act - The members deciding the lis by the impugned order should have kept themselves abreast to the Full Bench decision of the tribunal so that there would not have been two views as regards the same proposition - Revenue appeal allowed [Read less]

2015-VIL-386-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 28.07.2015

... earlier owned by M/s. Punjab Anand Lamp Industries Limited (PALI) - Other assessee - M/s. Philips Electronics NV Netherlands (Philips Netherlands) is holding company of PEIL - PEIL in addition to manufacturing lamps, tube lights, electronic products and electrical appliances, were also purchasing lamps from various other parties for sale under brand name-Philips - During period of dispute from 1/3/1994 to 31/5/1998, about 97 to 98 per cent of production of PALI was being sold to PIL and balance 2 to 3 per cent of sale was to M/s. Bajaj Electricals Limited - Department alleged that PALI and PIL are related persons – HELD –... [Read more]

... earlier owned by M/s. Punjab Anand Lamp Industries Limited (PALI) - Other assessee - M/s. Philips Electronics NV Netherlands (Philips Netherlands) is holding company of PEIL - PEIL in addition to manufacturing lamps, tube lights, electronic products and electrical appliances, were also purchasing lamps from various other parties for sale under brand name-Philips - During period of dispute from 1/3/1994 to 31/5/1998, about 97 to 98 per cent of production of PALI was being sold to PIL and balance 2 to 3 per cent of sale was to M/s. Bajaj Electricals Limited - Department alleged that PALI and PIL are related persons – HELD – When the assessee, in addition to sale of the goods produced by him to related person on regular basis, also sells the same goods on regular basis to independent buyers, the third proviso to section 4 (1) (a) would not apply and in that case the normal price at which the assessee was selling the goods to independent buyers which would be the assessable value even in respect of the sales to related persons - It cannot be said that PALI, in respect of their sales to PIL have not paid duty on normal price - When undisputedly 2 to 3 per cent of sales of PALI were to Bajaj Electricals Limited and neither the genuineness of these transactions is disputed by department nor the department has alleged that PALI and Bajaj Electricals Limited were related person within meaning of this term as defined in section 4 (4) (c), department cannot invoke 3rd proviso to section 4 (1) (a) and charge duty in respect of sales of PALI to PIL at sale price of PIL to its dealers - Therefore, irrespective of whether PALI and Philips India Limited were related persons or not, the impugned duty demand against PALI and imposition of penalty on them and Philips India Limited and Philips, Netherlands is not sustainable – Assessee appeal allowed [Read less]

2015-VIL-385-CESTAT-MUM-CE|CENTRAL EXCISE |CESTAT Cases | 28.07.2015

... tion under Rule 4(4) of CER, 2002 for extension of permission - ‘exceptional circumstances’ for storage of goods outside factory premises – Denial of permission - HELD - Department has no locus standi to insist upon the assessee for expansion of factory space - If the contention Revenue is accepted then it applies to each and every industry and the provision of Rule 4(4) of CER, 2002 will become redundant - Expansion of factory is not every time possible due to various factors, therefore the decision of expansion of the factory is the sole discretion of the assssee and department can not insist for that. For consideration ... [Read more]

... tion under Rule 4(4) of CER, 2002 for extension of permission - ‘exceptional circumstances’ for storage of goods outside factory premises – Denial of permission - HELD - Department has no locus standi to insist upon the assessee for expansion of factory space - If the contention Revenue is accepted then it applies to each and every industry and the provision of Rule 4(4) of CER, 2002 will become redundant - Expansion of factory is not every time possible due to various factors, therefore the decision of expansion of the factory is the sole discretion of the assssee and department can not insist for that. For consideration of the Assessee's request for permission under Rule 4(4), the existing circumstances have to be seen - when at earlier occasion while granting the permission, the circumstances were exceptional then how at present the same circumstances become unexceptional, particularly when at present no space is available and production and export of goods has increased multifold - Appellant has established that there is exceptional circumstances with regard to nature of goods and shortage of space therefore they deserve for extension of permission – Assessee appeal allowed [Read less]

2015-VIL-303-ALH|VAT |High Court Cases | 28.07.2015

... - Intra-state sale or inter-state sale – Appellant contention that purchases made is an inter-state sale and, therefore, a direction may be issued to the respondent to accept Form-C from the petitioner against the auction purchases of timber by it – HELD – The sale of goods is in the course of inter-State Trade if the sale and movement of goods from one State to another are integral part of the same transaction. There must exist a direct nexus between the sale and movement of goods from one State to another - Movement of goods which takes place independently of a contract of sale would not fall within the ambit of the abo... [Read more]

... - Intra-state sale or inter-state sale – Appellant contention that purchases made is an inter-state sale and, therefore, a direction may be issued to the respondent to accept Form-C from the petitioner against the auction purchases of timber by it – HELD – The sale of goods is in the course of inter-State Trade if the sale and movement of goods from one State to another are integral part of the same transaction. There must exist a direct nexus between the sale and movement of goods from one State to another - Movement of goods which takes place independently of a contract of sale would not fall within the ambit of the above clause (a) of Section 3 of the Act - Auction sale made by the forest corporation was complete the moment bid of the petitioner was accepted. Since the bid took place within the State of U.P. the sale was complete in all respect within the State of U.P. and as such the sale was an intra-state sale and not inter-state sale - The writ petition fails and is hereby dismissed [Read less]

2015-VIL-304-KER|VAT |High Court Cases | 28.07.2015

... aper cartons to various exporters in the course of export outside the State - Exemption claimed under Section 5(3) of the CST Act – Assessee contention that the contract between the exporters and foreign buyers is to export the goods in packed condition. The goods cannot be exported without the aid of packing material. Therefore, the sale of packing materials to exporters is for the purpose of complying with the export orders and it falls within Section 5(3) of the CST Act - Sale supported by Form-H declarations – Denial of exemption – HELD – What is clear from Section 5(3) of the CST Act is that the goods purchased and th... [Read more]

... aper cartons to various exporters in the course of export outside the State - Exemption claimed under Section 5(3) of the CST Act – Assessee contention that the contract between the exporters and foreign buyers is to export the goods in packed condition. The goods cannot be exported without the aid of packing material. Therefore, the sale of packing materials to exporters is for the purpose of complying with the export orders and it falls within Section 5(3) of the CST Act - Sale supported by Form-H declarations – Denial of exemption – HELD – What is clear from Section 5(3) of the CST Act is that the goods purchased and the goods exported should be the same. The argument of the appellant is that in the orders of the foreign buyers, the goods should be sent as packed goods. But evidently, the exemption under Section 5(3) is in relation to the “goods purchased”. It should precede the sale or purchase occasioning the export of those goods. It cannot be said that the purchase of packing materials get the colour of 'goods' which were “exported” - The appellant will have to establish the identity of the goods sold with the goods meant to be exported. It cannot be said that packing materials as such were meant for export but they were used only for wrapping the “goods which were exported”. The said distinction clearly goes against the contentions of the appellant. It cannot be said that the packing materials sold by the appellant and the goods exported are the same - There is a contract between the exporter and another seller from whom the goods exported were purchased. As far as packing materials are concerned, the intention on the part of both buyer and seller to export, is absent - The provisions of Section 5(3) of the CST Act will not come to the aid of the appellant for claiming exemption – Writ petition dismissed [Read less]

2015-VIL-01-ARA|SERVICE TAX |Advance Ruling Authority | 28.07.2015

... rvice in the nature of transport of gas through pipelines and it proposes to avail the benefit of Cenvat credit in respect of the 'capital goods' - Engineering, procurement and construction (EPC) model for laying of gas transmission pipelines - Capital goods being immovable property – Revenue contended that the applicants would receive constructed pipeline system which is embedded to the earth and therefore cannot be termed as ‘goods’ for availing Cenvat credit of duty, as they are neither moveable nor marketable – Secondly, the EPC Contractors who received the duty paid pipes and valves (capital goods) for laying the pipe... [Read more]

... rvice in the nature of transport of gas through pipelines and it proposes to avail the benefit of Cenvat credit in respect of the 'capital goods' - Engineering, procurement and construction (EPC) model for laying of gas transmission pipelines - Capital goods being immovable property – Revenue contended that the applicants would receive constructed pipeline system which is embedded to the earth and therefore cannot be termed as ‘goods’ for availing Cenvat credit of duty, as they are neither moveable nor marketable – Secondly, the EPC Contractors who received the duty paid pipes and valves (capital goods) for laying the pipeline, were only eligible to take Cenvat Credit on capital goods under Rule 3 of CCR, 2004 and not the applicants - Duty paying documents – HELD - In the instant case, duty paid pipes and valves are to be received by the applicant, who is service provider. Conditions mentioned in Rule 3 ibid are satisfied by the applicant, therefore he is eligible to take credit - Capital goods (pipes and valves) are to be used for providing output service and it is not relevant whether these goods provide such service by being embedded to the earth. Therefore, we agree with the applicant that the relevant date to determine whether an item qualifies to be 'capital good' is the time of its receipt and not subsequent date - Appellants are eligible to avail Cenvat Credit of excise duty that would be paid on the pipes and valves procured from the manufacturer against the applicant's output service tax liability for services in the nature of transport of gas through pipeline, provided, invoice for said Cenvat Credit of Central Excise duty on pipes & valves, is issued by "registered dealer" [Read less]

2015-VIL-384-CESTAT-AHM-ST|SERVICE TAX |CESTAT Cases | 28.07.2015

... arketing and After Sales and Services - On perusal of the findings of the Adjudicating Authorities in both the appeals, we are unable to understand the facts of the case in so far as the activities of the appellants for the purpose of determining the classification of the Service Tax. In the first appeal, the Adjudicating Authority observed that the appellants were rendering after sales service. In the second appeal, the Adjudicating Authority observed that the appellants were rendering the service as agent of the principal for warehousing the goods, clearing and forwarding and acted as C&F agent. Appellants submitted that... [Read more]

... arketing and After Sales and Services - On perusal of the findings of the Adjudicating Authorities in both the appeals, we are unable to understand the facts of the case in so far as the activities of the appellants for the purpose of determining the classification of the Service Tax. In the first appeal, the Adjudicating Authority observed that the appellants were rendering after sales service. In the second appeal, the Adjudicating Authority observed that the appellants were rendering the service as agent of the principal for warehousing the goods, clearing and forwarding and acted as C&F agent. Appellants submitted that they have not received any remuneration in respect of warehousing of the goods. It is difficult to accept the contention of the Learned Advocate that they have rendered the services to their clients without remuneration. Both sides failed to place facts of the case in proper manner for the purpose determination of the classification of the service and to extend the benefit of exemption notification. There is no clarity on the facts of the cases in the impugned orders - Both the appeals are remanded to the Adjudicating Authority to decide afresh [Read less]