Latest Updates: Madhya Pradesh Ordinance - Amendment in MPVAT Act & Schedule | Service Tax & Central Excise Notification | Rajasthan & Maharashtra Notification | Proposed Draft Amendments in Chhattisgarh VAT Rules [See 'Notes & News'] | Madhya Pradesh : Amendments in the MP VAT Rules | Karnataka: Amendment regarding IT Product | Punjab: Amendment in PVAT Schedule A, B & E [See Notification section] | Delhi Circular: Regarding reversal of Input Tax Credit | Supreme Court upholds HC order in Hindustan Zinc Ltd case [2014-VIL-18-SC] | Service Tax - Greater Noida Industrial Development Authority is liable to pay Service Tax on allotment of vacant land on license, rent or lease for construction of structure at a later stage: CESTAT [2014-VIL-182-CESTAT-DEL-ST] | Summary for the month of August [See 'Notes & News'] |

Recent Updates

2014-VIL-265-UTR|VAT |High Court Cases | 18.09.2014

COMMISSIONER, COMMERCIAL TAX Vs M/s AMBICA TRADERS: 25.08.2014 - U.P. Trade Tax Act – Float glass – Rate of tax – HELD - Learned Trade Tax Tribunal and Joint Commissioner (Appeals) were justified to include float glass in the definition of plain glass panes – Item is liable to tax at 10 percent instead of 15 percent – Revenue appeal dismissed

2014-VIL-264-UTR-CE|CENTRAL EXCISE |High Court Cases | 18.09.2014

CCE Vs M/S BAZPUR COOPERATIVE SUGAR FACTORY LTD: 26.08.2014 - Cenvat Credit - Exempted final product - Wastage / storage loss – Reversal of credit – HELD - Final product in respect of which CENVAT credit is claimed must be itself dutiable. Rectified spirit is not dutiable being assessable at NIL rate, which, by the CENVAT Credit Rules, is exempted. Being exempt the final product, respondent could not possibly have claimed CENVAT credit in respect of the same - Particular quantity of duty paid molasses is used for the manufacture of the final product, which, because it is not dutiable, respondent becomes disentitled to claim CENVAT credit on the same. In such circumstances, the direction, whi... [Read more]

CCE Vs M/S BAZPUR COOPERATIVE SUGAR FACTORY LTD: 26.08.2014 - Cenvat Credit - Exempted final product - Wastage / storage loss – Reversal of credit – HELD - Final product in respect of which CENVAT credit is claimed must be itself dutiable. Rectified spirit is not dutiable being assessable at NIL rate, which, by the CENVAT Credit Rules, is exempted. Being exempt the final product, respondent could not possibly have claimed CENVAT credit in respect of the same - Particular quantity of duty paid molasses is used for the manufacture of the final product, which, because it is not dutiable, respondent becomes disentitled to claim CENVAT credit on the same. In such circumstances, the direction, which is impugned by the respondent, namely, to reverse the credit and imposition of the penalty and the interest for the failure to do so, cannot be complained of. Merely because it is not cleared for the reason that it cannot be cleared does not mean that the manufacture did not take place. The credit standing to the account of duty paid molasses used for the purpose of producing the non-dutiable final product necessarily must be proportionately reduced. The danger of the party using it for other purposes as highlighted by the Commissioner cannot be overlooked by us – Revenue appeal allowed

2014-VIL-195-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 17.09.2014

CCE & ST, MANGALORE Vs SUZLON WIND INTERNATIONAL LTD: 25.08.2014 - Service Tax - Refund claim – HELD - In our opinion, it is not necessary for the appellant to file separate request for extension of time for filing the refund claim and if the refund claim is being filed late, in the claim itself they can seek extension of time also and this can be considered by the original adjudicating authority – Matter remanded

2014-VIL-197-CESTAT-MUM-ST|SERVICE TAX |CESTAT Cases | 17.09.2014

GTL INFRASTRUCTURE LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI: 22.08.2014 - Service Tax – Business Auxiliary Service - Passive Telecom Infrastructure - Appellant is engaged in various types of activities such as creating telecom infrastructure and providing 'Output Service' to his client/customers. As the only dispute which arises before us is whether the stated service provided by the appellant is covered under Business Auxiliary Service – HELD - In this case nowhere it is disputed by any of the parties that the tower/BTS cabins were not used by the appellant for providing service namely 'Business Auxiliary Service'. Therefore, the Cenvat Credit cannot be denied - CENVAT credit is admissibl... [Read more]

GTL INFRASTRUCTURE LTD Vs COMMISSIONER OF SERVICE TAX, MUMBAI: 22.08.2014 - Service Tax – Business Auxiliary Service - Passive Telecom Infrastructure - Appellant is engaged in various types of activities such as creating telecom infrastructure and providing 'Output Service' to his client/customers. As the only dispute which arises before us is whether the stated service provided by the appellant is covered under Business Auxiliary Service – HELD - In this case nowhere it is disputed by any of the parties that the tower/BTS cabins were not used by the appellant for providing service namely 'Business Auxiliary Service'. Therefore, the Cenvat Credit cannot be denied - CENVAT credit is admissible on towers and the cabins used by the appellant as Passive Telecom Infrastructure for providing output service – Assessee appeal allowed – Limitation - As nothing has been suppressed by the appellant and they sought clarification about the liability before providing said service, therefore, demand of extended period of limitation is also not sustainable. In the 3 rd show cause notice Cenvat Credit has been denied to the appellant on the capital goods used in the State of Jammu & Kashmir. The appellant made an entry in their books for availment of Cenvat Credit on the goods used in Jammu & Kashmir, but on pointing out they immediately reversed the said credit without utilizing the same - Assessee not entitled to pay interest – Appeal allowed

2014-VIL-196-CESTAT-MUM-LB|CENTRAL EXCISE |CESTAT Cases | 17.09.2014

HINDALCO INDUSTRIES LTD Vs CCE, BELAPUR, MUMBAI – III & NAGPUR: 19.08.2014 - Central Excise – Larger Bench - Manufactured goods - Explanation added to Section 2(d) – HELD - Aluminium dross and skimmings and similar non-ferrous metal dross and skimmings which arise as a by-product in the process of manufacture of aluminium/non-ferrous metal products are manufactured goods and hence excisable w.e.f. 10/05/2008 in view of the explanation added to Section 2(d) of the Central Excise Act, 1944

2014-VIL-263-MAD|VAT |High Court Cases | 17.09.2014

SRI BHAVANI TEXTILE PROCESSORS (P) LTD Vs THE STATE OF TAMIL NADU: 26.08.2014 - Tamil Nadu General Sales Tax Act, 1959 – Work Contract - Transfer of property involved in the use of dyes in works contract of dyeing - Levy tax on the estimated value of chemicals and dyes on the ground that the above two products were transferred in the dyeing works contract – HELD - Tribunal fell into error in holding that the value of dyes and chemicals involved in the execution of works contract has to be assessed without any allowance in terms of Section 3-B of the Act – Assessee appeal allowed

2014-VIL-261-MAD-ST|SERVICE TAX |High Court Cases | 16.09.2014

CCE, PUDUCHERRY Vs HINDUSTAN MOTORS LTD: 04.09.2014 - Service Tax - Whether or not the show cause notice issued under the amended Section 73 by the Finance Act, 2004 removing the clause 'the persons liable to file returns under Section 70' is maintainable in law, especially such an amendment read with Section 71-A has been confirmed by the Supreme Court vis-a-vis the legislative competence in terms of Section 68 of the Finance Act – HELD - issue raised in this appeal is no longer res integra - Revenue has necessary jurisdiction under Section 73 of the Finance Act, particularly with reference to the limitation prescribed thereunder and the show cause notice issued on the assessee is valid. Ho... [Read more]

CCE, PUDUCHERRY Vs HINDUSTAN MOTORS LTD: 04.09.2014 - Service Tax - Whether or not the show cause notice issued under the amended Section 73 by the Finance Act, 2004 removing the clause 'the persons liable to file returns under Section 70' is maintainable in law, especially such an amendment read with Section 71-A has been confirmed by the Supreme Court vis-a-vis the legislative competence in terms of Section 68 of the Finance Act – HELD - issue raised in this appeal is no longer res integra - Revenue has necessary jurisdiction under Section 73 of the Finance Act, particularly with reference to the limitation prescribed thereunder and the show cause notice issued on the assessee is valid. However, the penalty imposed on the assessee stands deleted and the prayer for cancelling the levy of interest stands rejected – Revenue appeal partly allowed

2014-VIL-194-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 16.09.2014

M/s HINDUSTAN LEVER LTD Vs CCE & ST, KANPUR: 22.08.2014 - Central Excise - Classification of the product was decided by accepting the Revenue’s stand. Consequently, the appellant became liable to pay the differential duty – Demand of differential duty alongwith interest – HELD - The Tribunal, while remanding the matter has already held that there is no suppression or any malafide on the part of the assessee and has extended the benefit of limitation as also penalty to the assessee. In such a scenario the provision of Section 11AB, as were in existence during the relevant period, would not get attracted inasmuch as the same related to payment of interest only in case of non payment of duty by... [Read more]

M/s HINDUSTAN LEVER LTD Vs CCE & ST, KANPUR: 22.08.2014 - Central Excise - Classification of the product was decided by accepting the Revenue’s stand. Consequently, the appellant became liable to pay the differential duty – Demand of differential duty alongwith interest – HELD - The Tribunal, while remanding the matter has already held that there is no suppression or any malafide on the part of the assessee and has extended the benefit of limitation as also penalty to the assessee. In such a scenario the provision of Section 11AB, as were in existence during the relevant period, would not get attracted inasmuch as the same related to payment of interest only in case of non payment of duty by reason of fraud, collusion or wilful mis-statement etc. Accordingly, while upholding the confirmation of duty, as not being contested by the appellant, in the present case, we set aside the confirmation of demand of interest – Assessee appeal allowed

2014-VIL-262-GUJ|VAT |High Court Cases | 16.09.2014

INDUS STEEL INDUSTRIES Vs STATE OF GUJARAT: 19.08.2014 - Capital Investment Incentive (Central) Scheme - Capital investment subsidy and sales tax incentives – Sales tax incentive – Non-fulfillment of requirement for benefit of exemption – HELD - It cannot be disputed that the benefit under the scheme was provided on fulfilling the conditions by the eligible industrial unit as provided under the said scheme. One of the condition was that the Industrial unit shall have to remain in production continuously at least till expiry of eligible period of incentives. In the present case, the eligible period of incentives was upto 30.1.2004. The scheme also provide that in case the production is discon... [Read more]

INDUS STEEL INDUSTRIES Vs STATE OF GUJARAT: 19.08.2014 - Capital Investment Incentive (Central) Scheme - Capital investment subsidy and sales tax incentives – Sales tax incentive – Non-fulfillment of requirement for benefit of exemption – HELD - It cannot be disputed that the benefit under the scheme was provided on fulfilling the conditions by the eligible industrial unit as provided under the said scheme. One of the condition was that the Industrial unit shall have to remain in production continuously at least till expiry of eligible period of incentives. In the present case, the eligible period of incentives was upto 30.1.2004. The scheme also provide that in case the production is discontinued due to reasons beyond the control of the management of the of the unit, the State Level Committee may consider representation in cases and condone the period of discontinuation of production. Under the scheme, all matters of interpretation / dispute or contention under the scheme will have to be referred to State Level Committee and decision of Committee shall be final and binding on the applicant unit. In the present case vide communication dated 28.6.2006 the petitioner has been communicated the decision of the State Level Committee rejecting the prayer of the petitioner to condone the break in production. It is required to be noted that in the case of the petitioner and prior to 30.1.2004 the production was stopped for 13 months. It appears that while considering the application for condonation of break in production the Committee uniformly applied the following policy decision - Even the reasons / grounds on which the application of the petitioner for condonation of break in production is rejected, cannot be said to be arbitrary or perverse, which calls for the interference of this Court under Article 226 of the Constitution of India. When it has been found by the State Level Committee that by condoning the break in production to the petitioner, the purpose and object of the scheme is not likely to be achieved i.e. generating employment in the backward area and thereafter when the application of the petitioner for condonation of break in production has been rejected, the same is not required to be interfered with in exercise of power under Article 226 of the Constitution of India – Assessee appeal dismissed

2014-VIL-190-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 15.09.2014

DAICEL CHIRAL TECHNOLOGIES INDIA PVT LTD Vs CCCE & ST - HYDERABAD-IV: 02.09.2014 - Service Tax - Management, Maintenance or Repair - Appellant is a subsidiary of Daicel Chemical Industries Ltd, Japan - There is an agreement between Daicel and the appellant which provides for provision of technical service, sales promotion, management of orders, product compliant handling and product marketing services by the appellant to Daicel. Taking a view that the appellant is providing Management, Maintenance or Repair Service, demand for service tax has been confirmed with interest and penalties under various Sections of Finance Act, 1994 have been imposed – HELD – It was agreed that the fact that it c... [Read more]

DAICEL CHIRAL TECHNOLOGIES INDIA PVT LTD Vs CCCE & ST - HYDERABAD-IV: 02.09.2014 - Service Tax - Management, Maintenance or Repair - Appellant is a subsidiary of Daicel Chemical Industries Ltd, Japan - There is an agreement between Daicel and the appellant which provides for provision of technical service, sales promotion, management of orders, product compliant handling and product marketing services by the appellant to Daicel. Taking a view that the appellant is providing Management, Maintenance or Repair Service, demand for service tax has been confirmed with interest and penalties under various Sections of Finance Act, 1994 have been imposed – HELD – It was agreed that the fact that it cannot be repaired at all has not been considered or verified in sufficient details. Thus most important aspect which has a bearing on the classification of service has not been considered in depth. Therefore instead of granting stay and keeping the matter pending, we consider it appropriate that the matter should be remanded

2014-VIL-192-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 15.09.2014

M/s BHARAT RE-INSURANCE BROKERS PVT LTD Vs CCE & ST, HYDERABAD-I: 26.08.2014 - Service Tax - Insurance Auxiliary Service in respect of brokerage received from primary insurers in India – Export of service – Pre-deposit - HELD - The appellant identifies reinsurer located abroad for the Indian companies and negotiates the terms and contracts between them. For this service the appellant receives commission called reinsurance brokerage. By and large, the appellant provides service to the Indian Insurance Companies. It appeared that the service rendered by the appellant was not in the nature of export of service inasmuch as it was essentially performed in India and there was no physical receipt o... [Read more]

M/s BHARAT RE-INSURANCE BROKERS PVT LTD Vs CCE & ST, HYDERABAD-I: 26.08.2014 - Service Tax - Insurance Auxiliary Service in respect of brokerage received from primary insurers in India – Export of service – Pre-deposit - HELD - The appellant identifies reinsurer located abroad for the Indian companies and negotiates the terms and contracts between them. For this service the appellant receives commission called reinsurance brokerage. By and large, the appellant provides service to the Indian Insurance Companies. It appeared that the service rendered by the appellant was not in the nature of export of service inasmuch as it was essentially performed in India and there was no physical receipt of payment in convertible foreign exchange and hence, the same cannot be quantified as export – Pre-deposit ordered

2014-VIL-191-CESTAT-DEL-CE|CENTRAL EXCISE |CESTAT Cases | 15.09.2014

CCE, ALLAHABAD Vs M/s PETRO CARBON INDUSTRIES LTD: 02.09.2014 - Central Excise - Demand of duty on alleged clandestine clearances of Calcined Petroleum Coke - Difference between the weight mentioned in the invoices and the weight mentioned in the weighment slips - Modvat credit availed RPC cleared – HELD - Impugned order in respect of dropping of the duty demand on clearance of 145.1 M.T. of RPC as such is upheld, the same dropping the duty demand on (a) 27.527 M.T. of CPC alleged to have been cleared clandestinely without payment of duty and which is based on the difference between the quantity mentioned in the GR-1s/invoices vis-ΰ-vis the quantity mentioned in the corresponding weighment s... [Read more]

CCE, ALLAHABAD Vs M/s PETRO CARBON INDUSTRIES LTD: 02.09.2014 - Central Excise - Demand of duty on alleged clandestine clearances of Calcined Petroleum Coke - Difference between the weight mentioned in the invoices and the weight mentioned in the weighment slips - Modvat credit availed RPC cleared – HELD - Impugned order in respect of dropping of the duty demand on clearance of 145.1 M.T. of RPC as such is upheld, the same dropping the duty demand on (a) 27.527 M.T. of CPC alleged to have been cleared clandestinely without payment of duty and which is based on the difference between the quantity mentioned in the GR-1s/invoices vis-ΰ-vis the quantity mentioned in the corresponding weighment slips; (b) the duty demand on 715.016 M.T. of CPC alleged to have been cleared clandestinely without payment of duty and which is based on the discrepancies in the consumption of the packing bags account: (c) dropping of the penalty under Rule 209A of Central Excise Rules, 1944 on Director and General Manager of the respondent company, is set aside and the matter is remanded to the Commissioner for denovo adjudication in respect of the above three points – Revenue appeal partly allowed

2014-VIL-193-CESTAT-DEL-CE-LB|CENTRAL EXCISE |CESTAT Cases | 15.09.2014

M/s FLAKES-N-FLAVOURZ Vs COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH: 28.08.2014 - Central Excise – Majority Order – Classification – Chewing Tobacco - (i) Whether Gopal Zarda claimed as flavoured one would be classifiable under T.H. 24039910 as chewing tobacco and it would not be considered as scented chewing tobacco and thus will not eligible for assessment under Section 4 as held by Member (Judicial); OR (ii) Gopal Zarda claimed as flavoured one but found to be scented will be classifiable under T.H. 24039930 and to be classified as scented chewing tobacco and to be assessed under Section 4 during the relevant period as held by Member (Technical) - HELD - In the Tariff the expression chewi... [Read more]

M/s FLAKES-N-FLAVOURZ Vs COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH: 28.08.2014 - Central Excise – Majority Order – Classification – Chewing Tobacco - (i) Whether Gopal Zarda claimed as flavoured one would be classifiable under T.H. 24039910 as chewing tobacco and it would not be considered as scented chewing tobacco and thus will not eligible for assessment under Section 4 as held by Member (Judicial); OR (ii) Gopal Zarda claimed as flavoured one but found to be scented will be classifiable under T.H. 24039930 and to be classified as scented chewing tobacco and to be assessed under Section 4 during the relevant period as held by Member (Technical) - HELD - In the Tariff the expression chewing tobacco and zarda scented tobacco are no defined as the product has to be classified based upon the description of the product given by the manufacturer on the pouch as well as on the basis of common parlance and established practice. In the present case, as the product in question as per the description of the product is flavour chewing tobacco and it is bought and sold in the market as chewing tobacco. Further the appellant from the beginning classifying the same as chewing tobacco and after the period in dispute also classified the same as chewing tobacco. Hence I find merit in the contention of the appellant that the product in question is chewing tobacco and classifiable under Heading 24039910 of the Tariff. Further the Notification No. 2/2006-CE (NT) dated 1.3.2006 is further amended by Notification No. 16/2006-CE(NT) dated 11.7.2006 whereby the chewing scented tobacco classifiable under Heading 24039910 also notified as assessable under Section 4A of the Central Excise Act, 1944. Prior to the period in dispute 1.3.2006 to 10.7.006 the appellants were clearing the product as flavoured chewing tobacco and thereafter also clearing the same by classifying the product under Heading 24039910 of the Tariff and the product in question is marketed as Chewing Tobacco. In these circumstances I find merit in the contention of the appellant - I therefore agree with the view taken by the learned Member (Judicial). The impugned order is set aside and the appeal is allowed with consequential relief, if any, in accordance with law - Assessee appeal allowed

2014-VIL-259-KAR|VAT |High Court Cases | 15.09.2014

STATE OF KARNATAKA Vs M/s C.R.GUJAR: 07.08.2014 - Karnataka Value Added Tax Act – Work Contract - Running Account Bills - CST Act - Declared goods - Whether the Karnataka Appellate Tribunal is justified in law in holding that the iron and steel used by the respondent for the execution of works contract being used in the form should be taxed at 4% and not 12.5% - HELD - It was for the Prescribed Authority 'PA', the Revisional Authority and the Tribunal, to have applied their minds to the said facts and clamp the liability on the assessee to pay the correct tax under the KVAT Act. We must notice that the said authorities misdirected themselves to the provisions of the statute inserted w.e.f. 0... [Read more]

STATE OF KARNATAKA Vs M/s C.R.GUJAR: 07.08.2014 - Karnataka Value Added Tax Act – Work Contract - Running Account Bills - CST Act - Declared goods - Whether the Karnataka Appellate Tribunal is justified in law in holding that the iron and steel used by the respondent for the execution of works contract being used in the form should be taxed at 4% and not 12.5% - HELD - It was for the Prescribed Authority 'PA', the Revisional Authority and the Tribunal, to have applied their minds to the said facts and clamp the liability on the assessee to pay the correct tax under the KVAT Act. We must notice that the said authorities misdirected themselves to the provisions of the statute inserted w.e.f. 01.04.2007 though those provisions were not applicable to the respondent's return for the assessment year 2005-06, more appropriately the Sixth Schedule to the KVAT Act, 2003, brought into force w.e.f. 01.04.2006, whence, for the first time, tax was imposed on 'works contract'. It was too far-fetched for the State and its authorities to have fastened the respondent with the liability to pay tax on the 'works contract' for the assessment year 2005-06 - Thus, for the first time, 'works contract' was imposed with tax at 12.5% w.e.f. 01.04.2006 and not for the assessment year 2005-06 – Revenue appeal dismissed

2014-VIL-260-ALH|VAT |High Court Cases | 15.09.2014

M/s MARICO LTD Vs THE COMMISSIONER, COMMERCIAL TAXES U.P LUCKNOW: 12.08.2014 - Uttar Pradesh Value Added Tax Act - Whether Revive Instant Starch, which is also manufactured by the revisionist and which contains 90% tapioca starch and about 3% of other additives is liable to be charged to tax under Entry 118 of Schedule II Part A of VAT Act, 2008 or was liable to be treated as an unclassified item chargeable to tax at 12.5% - HELD - That word Starch as used in Entry 118 of Schedule II Part A of the U.P. VAT Act, 2008 has neither been referred to as edible or inedible and therefore Revive Starch must be held to be falling within the meaning of word Starch as used in Entry 118. If it had been t... [Read more]

M/s MARICO LTD Vs THE COMMISSIONER, COMMERCIAL TAXES U.P LUCKNOW: 12.08.2014 - Uttar Pradesh Value Added Tax Act - Whether Revive Instant Starch, which is also manufactured by the revisionist and which contains 90% tapioca starch and about 3% of other additives is liable to be charged to tax under Entry 118 of Schedule II Part A of VAT Act, 2008 or was liable to be treated as an unclassified item chargeable to tax at 12.5% - HELD - That word Starch as used in Entry 118 of Schedule II Part A of the U.P. VAT Act, 2008 has neither been referred to as edible or inedible and therefore Revive Starch must be held to be falling within the meaning of word Starch as used in Entry 118. If it had been the intention of the Legislature to distinguish between edible and inedible Starch, the Entry 118 itself would have explicitly said so and therefore when the Legislature itself is silent a meaning or interpretation to a word used in the statute must not be given which the Legislature itself did not intend and did not say in so many words – Assessee appeal allowed