Latest Uploads: Sikkim: Extension in date of filing return for the fourth quarter of FY 2014-15 | Punjab & Haryana HC - Major relief to Developer & Builders see analysis in 'Notes & News' | Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2015 | West Bengal: Amendments in the WBVAT Rules, 2005 | Gujarat: Electronically generated Form 402, 403 and 405 for all taxable goods | Punjab Value Added Tax (Incentives for expansion projects) Rules, 2015 | Chandigarh: Amendment in VAT Schedule | Rajasthan Finance Act, 2015 | Jharkhand: Amendments in JVAT Schedule-II | Uttarakhand Value Added Tax (Amendment) Act, 2015 | Kerala Finance Bill, 2015 | Rajasthan: New Voluntary Amnesty Scheme For Entry Tax, 2015 | Karnataka Value Added Tax (Amendment) Act, 2015 | Summary for the month of March [see 'Notes & News'] | State Budget 2015 [see 'Notes & News'] |

Recent Updates

2015-VIL-205-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 27.04.2015

... products from refineries. Thereafter, they are selling goods on the price fixed by the Government of India. Revenue is of the view that as the price at which goods are sold from the depot are higher than the goods cleared from the refineries and goods are duty paid. Therefore, excess duty collected by the appellant at depots is required to be paid to the department under CEA, 1944 – Duty demand from IOCL, show cause notice to depots - HELD - The contention of the Ld. AR is baseless and not acceptable. We further find that as held by larger bench of this Tribunal in the case of HPCL, duty is payable by manufacturer or prod... [Read more]

... products from refineries. Thereafter, they are selling goods on the price fixed by the Government of India. Revenue is of the view that as the price at which goods are sold from the depot are higher than the goods cleared from the refineries and goods are duty paid. Therefore, excess duty collected by the appellant at depots is required to be paid to the department under CEA, 1944 – Duty demand from IOCL, show cause notice to depots - HELD - The contention of the Ld. AR is baseless and not acceptable. We further find that as held by larger bench of this Tribunal in the case of HPCL, duty is payable by manufacturer or producer of the goods and being appellant before is not a manufacturer or producer of the goods, therefore not liable to pay duty under section 11(D) of the Act – Appeal allowed [Read less]

2015-VIL-206-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 27.04.2015

... by Revenue to be modified Starch is to be classified under heading 11.03 as Maize Starch Powder following Tribunal’s earlier decision OR Whether modified Starch (claimed as Maize Starch Powder falling under chapter 11.03 by appellants) are to be classified under heading 3505.20 Member (Technical) – HELD - there is no chemical test report on record, on the basis of which, it can be said that the goods, in question, are Modified Starch. Moreover, as observed by the Tribunal in para 7.5 of its judgment dated 5.4.2011, the appellant have produced the test reports in respect of the samples of Starch Powder tested by South Indi... [Read more]

... by Revenue to be modified Starch is to be classified under heading 11.03 as Maize Starch Powder following Tribunal’s earlier decision OR Whether modified Starch (claimed as Maize Starch Powder falling under chapter 11.03 by appellants) are to be classified under heading 3505.20 Member (Technical) – HELD - there is no chemical test report on record, on the basis of which, it can be said that the goods, in question, are Modified Starch. Moreover, as observed by the Tribunal in para 7.5 of its judgment dated 5.4.2011, the appellant have produced the test reports in respect of the samples of Starch Powder tested by South India Textile Research Association and on the basis of the characteristics like moisture content, ash content, pH, free acidity, cold water solubility, viscosity and starch content, the goods, in question, have to be treated as Native Starch and not the Modified Starch - In view of the Majority Order, the classification of the Maize Starch Powder is upheld under Chapter 11 of the Central Excise Tariff Act, as contended by the appellant – Appeal allowed by Majority [Read less]

2015-VIL-176-KAR|VAT |High Court Cases | 27.04.2015

... of the assessee for payment of tax when Commissioner had itself given a clarification on 03.06.2006 and held item to be exempted from tax. Liability to pay tax till the second clarification dated 20.01.2010, whereby the processed Oats which was the commodity sold by the assessee, were clarified to be subject to tax – Issuance of notice – HELD – It is evident that it was only after the second clarification dated 20.01.2010 was issued, that for the first time the matter was sought to be reopened under Section 39(1) of the Act by way of issuance of notice. Such being the position, imposition of tax for the sale of the commod... [Read more]

... of the assessee for payment of tax when Commissioner had itself given a clarification on 03.06.2006 and held item to be exempted from tax. Liability to pay tax till the second clarification dated 20.01.2010, whereby the processed Oats which was the commodity sold by the assessee, were clarified to be subject to tax – Issuance of notice – HELD – It is evident that it was only after the second clarification dated 20.01.2010 was issued, that for the first time the matter was sought to be reopened under Section 39(1) of the Act by way of issuance of notice. Such being the position, imposition of tax for the sale of the commodity in question prior to the issuance of the clarification dated 20.01.2010 cannot be justified in law - Clarification issued under Section 59 is different from the clarification or advanced ruling given under Section 60. In the latter case, the ruling of the authority would be binding only on the applicant which seeks such clarification, whereas in the former case, it would be applicable to all registered dealers liable to pay tax. As such, the said argument of the learned Addl. Government Advocate does not have any force – Revision allowed and order of Tribunal as well as the orders passed by the authorities below are set aside [Read less]

2015-VIL-175-GUJ|VAT |High Court Cases | 27.04.2015

... stment of Input Tax Credit towards output tax liability in the assessment year, though in the return submitted by the assessee such Input Tax Credit was carried forward to the return of the next tax period of the subsequent year – HELD - On assessment only the amount of Input Tax Credit is assessed and determined - the claim made by the assessee/dealer towards the Input Tax Credit made while submitting Form No.108 is always subject to the assessment or in a given case reassessment. Therefore, when on assessment the assessee is held to be entitled to a particular Input Tax Credit, in that case, the assessee/dealer is entitl... [Read more]

... stment of Input Tax Credit towards output tax liability in the assessment year, though in the return submitted by the assessee such Input Tax Credit was carried forward to the return of the next tax period of the subsequent year – HELD - On assessment only the amount of Input Tax Credit is assessed and determined - the claim made by the assessee/dealer towards the Input Tax Credit made while submitting Form No.108 is always subject to the assessment or in a given case reassessment. Therefore, when on assessment the assessee is held to be entitled to a particular Input Tax Credit, in that case, the assessee/dealer is entitled to the benefit of Rule 18 of the Rules, 2006 and is entitled to adjust such Input Tax Credit against its output tax liability under the VAT Act of the current year under consideration. Merely because while submitting the Form No.108 the assessee submitted the claim of Input Tax Credit more than which is held to be admissible on assessment may be original assessment or even audit assessment or even reassessment, by that itself is no ground to deny the assessee to adjust the admissible Input Tax Credit against its output tax liability of VAT Act of the current year under consideration - We agree that the view taken by the learned Tribunal declaring and holding that the assessee/dealer is entitled to adjust the Input Tax Credit against its output tax liability of the VAT Act of the current year under consideration and after adjusting the same the liability of interest on the balance amount due is required to be considered [Read less]

2015-VIL-203-CESTAT-AHM-ST|SERVICE TAX |CESTAT Cases | 27.04.2015

... ability of Admission Fees and Annual subscription Charges – HELD - The definition of Commodity Exchange Services does not specifically mention Admission Fees or Annual Subscription Fees and appellant harbored a view that service tax on these amounts is not payable under Section 65 (105) (zzzzg). Appellant, therefore, had reasonable case for not paying Service Tax. However the entire amount along with interest was paid by the appellant before the issue of show case notice. Penalties imposed against the appellant are, therefore, required to be waived as per the provisions of Section 80 of the Finance Act, 1994 – Appeal allow... [Read more]

... ability of Admission Fees and Annual subscription Charges – HELD - The definition of Commodity Exchange Services does not specifically mention Admission Fees or Annual Subscription Fees and appellant harbored a view that service tax on these amounts is not payable under Section 65 (105) (zzzzg). Appellant, therefore, had reasonable case for not paying Service Tax. However the entire amount along with interest was paid by the appellant before the issue of show case notice. Penalties imposed against the appellant are, therefore, required to be waived as per the provisions of Section 80 of the Finance Act, 1994 – Appeal allowed [Read less]

2015-VIL-207-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 27.04.2015

... rcial or Industrial Construction Services – Work undertaken by the Appellants related to Hydro Power Project consisting of various activities – HELD - The definition of 'Commercial or Industrial Construction Service' excluded services provided in respect of Dams, Roads, Tunnels. In such a situation, the provisions of section 65A of Finance Act, 1994 requires identification of the services which gives the essential character when different services are provided. What comes out is the fact that all items of work are related to a Dam and a Power Project, Roads, Tunnel etc. and the Dam constitutes the main activity and the Pow... [Read more]

... rcial or Industrial Construction Services – Work undertaken by the Appellants related to Hydro Power Project consisting of various activities – HELD - The definition of 'Commercial or Industrial Construction Service' excluded services provided in respect of Dams, Roads, Tunnels. In such a situation, the provisions of section 65A of Finance Act, 1994 requires identification of the services which gives the essential character when different services are provided. What comes out is the fact that all items of work are related to a Dam and a Power Project, Roads, Tunnel etc. and the Dam constitutes the main activity and the Power Project can be entirely different or may not be different. It is difficult to imagine a hydro power project without a dam. Once again, this is also arguable and prima facie view is in favour of appellant since appellant is not treating the contract as a composite contract - Requirement of pre-deposit has to be waived and stay has to be granted against the recovery of the dues during the pendency of appeal - Stay granted [Read less]

2015-VIL-173-P&H|VAT |High Court Cases | 24.04.2015

... AT on developers - Article 246 of the Constitution of India read with Schedule VII, List II, Entry 54 – Development and sale of apartments/flats/units - Work Contracts – Validity of circulars dated 4.6.2013 and 10.2.2014 – HELD - The value of immovable property and any other thing done prior to the date of entering of the agreement of sale is to be excluded from the agreement value. The value of goods in a works contract in the case of a developer etc. on the basis of which VAT is levied would be the value of the goods at the time of incorporation in the works even where property in goods passes later. Further, VAT is to b... [Read more]

... AT on developers - Article 246 of the Constitution of India read with Schedule VII, List II, Entry 54 – Development and sale of apartments/flats/units - Work Contracts – Validity of circulars dated 4.6.2013 and 10.2.2014 – HELD - The value of immovable property and any other thing done prior to the date of entering of the agreement of sale is to be excluded from the agreement value. The value of goods in a works contract in the case of a developer etc. on the basis of which VAT is levied would be the value of the goods at the time of incorporation in the works even where property in goods passes later. Further, VAT is to be directed on the value of the goods at the time of incorporation and it should not purport to tax the transfer of immovable property. Consequently, Rule 25(2) of the Rules is held to be valid by reading it down to the extent indicated hereinbefore and subject to the State Government remaining bound by its affidavit dated 24.4.2014 The State Government shall bring necessary changes in the Rules in consonance with the above observations - As issue of challenge to Section 42 of the Act is concerned, according to the learned counsel for the petitioners the assessing VAT liability on the developer when the goods have been transferred by the sub-contractor was in clear contravention of States's power vide Entry 54 List II of Seventh Schedule. Therefore, the provision wherein the tax was to be assessed in the hands of the developers even where the property was transferred by the sub-contractor was clearly untenable in law and was liable to be quashed - Under sub-section (1) of Section 42 of the Act, where the works contractor gets the construction work executed through a subcontractor, whether in whole or in part, it shall be the joint and several liability of the contractor and the sub-contractor. Sub-section (2) of Section 42 thereof clarifies that a contractor shall not be under any liability to pay tax in respect of a “works contract”, if the same has been paid by a sub-contractor and that his assessment has become final. This provision only safeguards the interest of the revenue in the event of failure on the part of the sub contractor to discharge his liability of tax in respect of transaction entered by the sub contractor with the contractor. The provision, thus, cannot be said to be arbitrary, discriminatory or unreasonable in any manner. The contention of the learned counsel for the petitioners in this behalf is, thus, repelled – Validity of circular dated 10.2.2014 regarding determination of the tax under composition scheme is upheld - Assessment orders and revisional orders passed by the concerned authorities are liable to be set aside with liberty to the appropriate authority to pass fresh orders – Petition partly allowed [Read less]

2015-VIL-40-SC-LB|VAT |Supreme Court Cases | 24.04.2015

... r under the Act and liable to pay sales tax under the Act on account of certain activities in the nature of sale transactions carried on by it besides its statutory functions – Sale of scrap items - HELD - Activities of the assessee in respect of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether in course of business or not, would fall within the purview of Section... [Read more]

... r under the Act and liable to pay sales tax under the Act on account of certain activities in the nature of sale transactions carried on by it besides its statutory functions – Sale of scrap items - HELD - Activities of the assessee in respect of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether in course of business or not, would fall within the purview of Section 2(viii) of the Act. Hence, the assessee-Port Trust would fall within the meaning of "dealer" under Section 2(viii) of the Act and is consequently assessable to tax under the Act – Appeal dismissed [Read less]

2015-VIL-174-KAR-ST|SERVICE TAX |High Court Cases | 24.04.2015

... ervices - Whether the CENVAT credit availed and utilized by the assessee on the Service Tax paid for imported “Reinsurance Services” is an “input service’ within the meaning of Rule 2 (l)(i) of the CCR, 2004 for the output services, i.e., Service of insurance – HELD – The re-insurance is taken by the Insurer immediately after the insurance policy is issued, as is required under Section 101A of the Insurance Act, 1938. Since re-insurance is a statutory obligation, and the same is co-terminus with the Insurance policy issued by the respondent, we are of the opinion that the stand taken by the Tribunal is correct that the tra... [Read more]

... ervices - Whether the CENVAT credit availed and utilized by the assessee on the Service Tax paid for imported “Reinsurance Services” is an “input service’ within the meaning of Rule 2 (l)(i) of the CCR, 2004 for the output services, i.e., Service of insurance – HELD – The re-insurance is taken by the Insurer immediately after the insurance policy is issued, as is required under Section 101A of the Insurance Act, 1938. Since re-insurance is a statutory obligation, and the same is co-terminus with the Insurance policy issued by the respondent, we are of the opinion that the stand taken by the Tribunal is correct that the transfer of a portion of the risk of the re-insurance has to be considered as having nexus with the output service, since the re-insurance is a statutory obligation and the same is co-terminus with the Insurance Policy - The issuance of insurance policy by insurer, and then taking of re-insurance by it, is a continuous process, and in the facts of the present case, it cannot be said that the same would not be an ‘input service’ eligible for CENVAT credit within the meaning of Rule 2 (l) of the CENVAT Credit Rules 2004 - In the present case, if the entire Service Tax which is collected by the Insurer, while selling its insurance policies, has to be deposited without being given the credit of the tax which is paid by it while procuring a policy of reinsurance as (mandatorily required in law), the same would be against the ethos of CENVAT credit policy, as the same would amount to double taxation, which is not permissible in law – Tribunal order upheld, revenue appeal dismissed [Read less]

2015-VIL-172-DEL-ST|SERVICE TAX |High Court Cases | 24.04.2015

... default – HELD - We agree with the observations of CESTAT that the plea of “bona fide belief” is devoid of substance. The appellant is a public sector undertaking and should have been more vigilant in compliance with its statutory obligations. It cannot take cover under the plea that contractors engaged by it having agreed to bear the burden of taxation, there was no need for any further action on its part. For purposes of the taxing statute, the appellant is an assessee, and statutorily bound to not only get itself registered but also submit the requisite returns as per the prescription of law and rules framed thereunder ... [Read more]

... default – HELD - We agree with the observations of CESTAT that the plea of “bona fide belief” is devoid of substance. The appellant is a public sector undertaking and should have been more vigilant in compliance with its statutory obligations. It cannot take cover under the plea that contractors engaged by it having agreed to bear the burden of taxation, there was no need for any further action on its part. For purposes of the taxing statute, the appellant is an assessee, and statutorily bound to not only get itself registered but also submit the requisite returns as per the prescription of law and rules framed thereunder - The imposition of the service tax liability under Section 73 read with Sections 68 and 95 of Finance Act, 1994 and the levy of interest thereupon in terms of Section 75 of the Finance Act, 1994 cannot be faulted. For the same reasons, the penalties imposed under Sections 76 and 77 of the Finance Act, 1994 also must be upheld – Court set aside penalty of over 7Crores levied under Section 78 – Partly allowed [Read less]

2015-VIL-39-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 24.04.2015

... – Manufacture of duplicate CDs from a master tape/CD issued to appellant by a distributor who had copyright in the contents of the CD – Demand of differential duty on royalty payable to the distributor / copyright holder – Distributor is also owner of the copyright - HELD - The assumption that the music/picture embedded in the master tape is inextricably bound with the copyright thereof, the copyright is not 'used' by the appellant while selling the duplicate CDs to the distributor. The distributor having paid a lump sum royalty to the producer of the music, then sells, after the job work done by the appellant, the duplic... [Read more]

... – Manufacture of duplicate CDs from a master tape/CD issued to appellant by a distributor who had copyright in the contents of the CD – Demand of differential duty on royalty payable to the distributor / copyright holder – Distributor is also owner of the copyright - HELD - The assumption that the music/picture embedded in the master tape is inextricably bound with the copyright thereof, the copyright is not 'used' by the appellant while selling the duplicate CDs to the distributor. The distributor having paid a lump sum royalty to the producer of the music, then sells, after the job work done by the appellant, the duplicate CDs in the market with the cost of the royalty loaded thereon - Clause (iv) of the explanation also makes it clear that the value of art work or design work on goods which is undertaken elsewhere than in the factory of the production and necessary for the production on such goods alone must be taken into account. On the assumption that the music/picture component is the art work in the master CD, that alone is to be taken into account as it is necessary for the production of the duplicate CDs. Royalty payable for such music/picture cannot extend to art work that is necessary for the production of duplicate CDs, as no part of it is in fact taken into account by either the distributor who is the copyright holder or the appellant in the job work done by the appellant - Given the fact that no part of the royalty can be loaded on to the duplicate CDs produced by the appellant, the circular dated 19.2.2002 which deals with apportionment of royalty would have no application to the facts of the present case. In the circumstances, the impugned judgment is set aside – Appeal allowed [Read less]

2015-VIL-38-SC-CE|CENTRAL EXCISE |Supreme Court Cases | 24.04.2015

... ion of freight, insurance and unloading charges in assessable value – Delivery of goods till buyer’s premises – Section 4 of CEA Act and Section 39 of the Sale of Goods Act - HELD - The principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected namely, whether it is on factory gate or at a later point of time i.e. when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is tra... [Read more]

... ion of freight, insurance and unloading charges in assessable value – Delivery of goods till buyer’s premises – Section 4 of CEA Act and Section 39 of the Sale of Goods Act - HELD - The principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected namely, whether it is on factory gate or at a later point of time i.e. when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer – There was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question - The clear intent of the aforesaid purchase order was to transfer the property in goods to the buyer at the premises of the buyer and by virtue of Section 19 of Sale of Goods Act, the property in goods was transferred at that time only – The ratio in the case of Escorts JCB Ltd not followed correctly - As a result, order of the CESTAT is set aside and revenue appeal is allowed [Read less]