The Hon'ble CESTAT, Mumbai after considering the provisions of the Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 and relying upon the decision in the case of Geoffery Manners & Co. Ltd. Vs. CCE [2006 (204) ELT 403] held that since the toothpaste were supplied as 'free sample' and were not meant for retail sale, the provisions of Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 would not apply at all and, therefore, the provisions of Section 4A of the Excise Act would also not apply.
If goods not intended for retail sale than provision of valuation U/s, 4A not applicable
Where the goods were not intended for retail sale, the provision of valuation under Section 4A of the Central Excise Act, 1944 would not be applied at all
Wyeth Ltd. Vs. CCE, Nasik [2014 -TIOL-2530-CESTAT-MUM]
Wyeth Ltd.(the Appellant) was engaged in manufacturing of toothpaste which is notified under Section 4A of the Central Excise Act, 1944 (Excise Act).
The Appellant manufactured Aquafresh brand of toothpaste on job-work basis for Glaxo Smith Kline Asia Pvt. Ltd. (Smith Kline). The Appellant cleared a consignment of toothpaste which was intended for resale under Section 4A of the Excise Act. However another consignment of toothpaste which were given as free samples by Smith Kline along with the Horlicks manufactured and sold by them were cleared on Cost Construction basis in terms of the Hon'ble Apex Court judgment in the case of Ujagar Print case.
The Department contended that since the toothpaste is notified under Section 4A of the Excise Act, it should have been cleared as such.
Accordingly, Show Cause Notice was issued and demands were confirmed by the Department.Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Mumbai.
The Hon'ble CESTAT, Mumbai after considering the provisions of the Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 and relying upon the decision in the case of Geoffery Manners & Co. Ltd. Vs. CCE [2006 (204) ELT 403] held that since the toothpaste were supplied as 'free sample' and were not meant for retail sale, the provisions of Standards of Weights and Measures Act, 1976 and Packaged Commodity Rules, 1977 would not apply at all and, therefore, the provisions of Section 4A of the Excise Act would also not apply.
Corrigendum is issued for the correction of error or omissions in the original document, which relates back to the date of initial authoring for the reason that correction means whatever written was not correct or there was some mistake which need be corrected.
Corrigendum amending conditions for claiming exemption would apply from date of original Exemption Notification
Polyplex Corp. N Ltd. Vs. Union of India [(2014) 51 taxmann.com 262 (Allahabad)]
Polyplex Corporation Ltd.(the Petitioner) was engaged in manufacturing and export of polyester film. The polyester films were exported to various countries in terms of Rule 18 of Central Excise Rules, 2002 (the Excise Rules) for the period December 2004 to March 2005. The Petitioner did not claim any rebate on Inputs under Rule 18 of Excise Rules.
The Petitioner availed benefit of exemption in respect of 'imported raw materials' under Advance License in terms of Notification No. 93/2004-Customs (Tariff) dated September 10, 2004 ("the Exemption Notification").
The Department denied said exemption on the ground that as per condition in Para (v) of the Exemption Notification, exemption is not available if rebate under Rule 18 of the Excise Rules is taken.
The Petitioner argued that as per M.F. (D.R.) Corrigendum F. No. 605/50/2005-DBK, dated May 17, 2005, ("the Corrigendum") the condition (v) was modified and exemption was available if rebate under Rule 18 of the Excise Rules 'in respect of raw materials/ inputs' was not claimed, which was satisfied by the Petitioner.
On the contrary, the Department argued that the Corrigendum have prospective effect. The same was upheld by the Commissioner (Appeals). Being aggrieved, the Petitioner preferred Revision application to the Central Government which was also rejected vide order dated August 24, 2009.
Being aggrieved, the Petitioner filed a petition before the Hon'ble High Court of Allahabad. The Hon'ble High Court of Allahabad relied upon the following case laws:
- Commissioner, Sales Tax Dunlop India Ltd. [(1994) 92 STC 571 (AR)]
- State of Rajasthan J.K. Udaipur Udyog Ltd. [(2004) 7 SCC 673]
- Jugilant Organosys Ltd.Vs. CCE [2012(276) ELT 335 (Kar.)]
- Tata Iron & Steel Co. State of Jharkhand [(2005) 4 SCC 272]
- CCE Mahaan Dairies [(2004) 11 SCC 798]
and held that the Corrigendum is issued for the correction of error or omissions in the original document, which relates back to the date of initial authoring for the reason that correction means whatever written was not correct or there was some mistake which need be corrected. The Authorities have committed a manifest error of law. Accordingly, the Rebate claims were allowed to the Petitioner.
The Revenue alleged that the exemption availed was wrong as the impugned goods were not classifiable under Chapter heading specified in the Exemption Notification. Therefore, proceedings were initiated against the Appellant demanding differential Customs duty of Rs. 1,48,92,523/-.
Classification of goods precedes over the determination of rate of duty or any exemption applicable to the goods
LM Wind Power Blades (India) Private Ltd. Vs. Commissioner of Customs, Tuticorin [2014 (12) TMI 576 – CESTAT CHENNAI]
LM Wind Power Blades (India) Private Ltd (the Appellant) is a manufacturer of Rotor Blades and had filed Bills of Entry for import of goods used for manufacture of Rotor Blades (impugned goods). The Appellant imported impugned goods and claimed exemption from Countervailing duty (CVD) under Sl. No. 237A of Notification No. 6/2002-Central Excise dated March 1, 2002 as amended by Notification No. 29/2005-Central Excise dated May 31, 2005 (the Exemption Notification).
The Revenue alleged that the exemption availed was wrong as the impugned goods were not classifiable under Chapter heading specified in the Exemption Notification. Therefore, proceedings were initiated against the Appellant demanding differential Customs duty of Rs. 1,48,92,523/-. The Adjudicating Authority as well as the Commissioner (Appeals) confirmed the demand reclassifying the impugned goods and denied the CVD exemption. Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Chennai.
The Hon'ble CESTAT, Chennai held as under:
- As per the rules of interpretation, first imported goods are to be correctly classified as per the description provided in the Schedule to the Customs Tariff Act, 1975 (the Customs Tariff Act);
- The classification of goods precedes over the determination of rate of duty or any exemption applicable to the said goods. Only after classifying the goods into correct chapter headings, under respective chapter of Customs Tariff Act or Central Excise Tariff Act, 1985 (CETA), the question of extending of Notification benefit or rate of duty to be finalised and not vice versa;
- The Hon'ble Supreme Court in case of Appraiser Madras Customs Vs. Tamil Nadu Newsprint Papers Ltd.has held that while interpreting Notification it has to be strictly interpreted in the language in which it was described;
- In terms of the Exemption Notification, the exemption benefit is extended to the Excisable goods of the description
specified in table read with concerned list appended and falling within chapter, heading number or sub heading number of the First Schedule to the CETA. Hence, both the criteria, impugned goods confirm description and fall under heading or sub heading of the first Schedule of the CETA are to satisfied to avail exemption.
Hence, the Hon'ble Tribunal held that the Adjudicating Authority has rightly classified the impugned goods and denied CVD exemption to the Appellant.
State of Tamil Nadu Vs. A. Vairavel [(2014) 52 taxmann.com 148 (Madras)] In the instant case, A. Vairavel (the Assessee) used dyes and chemicals in execution of works contract of dyeing. The Department argued thatthe said transaction involvestransfer of property involved in the use of dyes and chemicals used in works contract of dyeing and […]
Dyes and chemicals used in execution of works contract of dyeing involves transfer of property and are exigible to Sale tax
State of Tamil Nadu Vs. A. Vairavel [(2014) 52 taxmann.com 148 (Madras)]
In the instant case, A. Vairavel (the Assessee) used dyes and chemicals in execution of works contract of dyeing. The Department argued thatthe said transaction involvestransfer of property involved in the use of dyes and chemicals used in works contract of dyeing and hence assessable under Section 3B of the of the Tamil Nadu General Sales Tax Act, 1959 (the Sales Tax Act).
Later on, the Hon'ble Tamil Nadu Sales Tax Appellate Tribunal held that there is no transfer of property involved in the use of dyes and chemicals used in works contract of dyeing and hence not assessable under Section 3B of the Sales Tax Act. It was further held that the activity in which the transfer of property in goods is too insignificant will not attract the provisions of the Sales Tax Act.
Being aggrieved, the Department filed an Appeal before the Hon'ble High Court of Madras against the order of the Hon'ble Tamil Nadu Sales Tax Appellate Tribunal.
The Hon'ble High Court of Madras relied on the decision of the Hon'ble Supreme Court in case of Rainbow Colour Lab Vs. State of Madhya Pradesh [(2000) 118 STC 9 (SC)], wherein it was held that the transfer of goods involved in works contract, viz., the purchase of dyes and chemicals outside the State would amount to 'sale' and is assessable under Section 3B of the Sales Tax Act.
Accordingly, the matter was decided in favour of the Revenue.
When goods are fully exempted from Customs duty or are cleared without payment of Customs duty under specified procedure, Education cess under the Customs would not be levied Commissioner of Customs, Tuticorin Vs. DCW Limited [2014 (12) TMI 728 - Madras High Court]
Education cess on clearing of goods fully exempt from Customs duty
When goods are fully exempted from Customs duty or are cleared without payment of Customs duty under specified procedure, Education cess under the Customs would not be levied
Commissioner of Customs, Tuticorin Vs. DCW Limited [2014 (12) TMI 728 – Madras High Court]
DCW Limited("the Assessee")was covered by Notification No. 96/2004-Customs dated September 17,2004passed in exercise of powers under Section 25(1) of the Customs Act, 1962 granting exemption of Basic Customs Duty subject to debit of the DEPB Licence. The Department sought to collect Education Cess on Basic Customs Duty which was debited in the DEPB Licence.
Later on, the Hon'ble Tribunal relying on the decision in case of Commissioner of Customs, Mumbai Vs. Reliance Industries Limited [2005 (188) E.L.T. 449], upheld the contention of the Assesseethat
Education Cess under Section 84 of the Finance Act, 2004 was not to be levied on the exempted items. Hence, the question of levy of Education Cess as per the Finance Act, 2004 does not arise. Being aggrieved by the order of the Hon'ble Tribunal, the Department preferred an appeal before the Hon'ble High Court of Madras.
The Hon'ble High Court of Madras relying on clarification made by the Ministry of Finance in D.O.F. No. 334/3/2004-TRU dated July 8,2004 and subsequent Circular No. 5/2005-Customs dated January 31, 2005,held that since Education Cess has to be calculated at the percentage on the duty liability, when the goods are fully exempted from Customs duty or are chargeable to Nil duty or are cleared without payment of duty under specified procedure such as clearance under bond, the question of Education Cess to be levied does not arise.
FM: Immediate Challenges Before the Government is to Increase the Growth Rate as it Will Boost Both the Economic Activities and the Revenue Collections The Union Finance Minister Shri Arun Jaitley said that immediate challenges before the Government is to increase the growth rate as it will boost both the economic activities and the revenue […]
FM Holds Pre Budget Consultation Meeting with Finance Ministers of States and Union Territories
FM: Immediate Challenges Before the Government is to Increase the Growth Rate as it Will Boost Both the Economic Activities and the Revenue Collections
The Union Finance Minister Shri Arun Jaitley said that immediate challenges before the Government is to increase the growth rate as it will boost both the economic activities and the revenue collections. The Finance Minister said that as per different estimates, the growth rate is expected to be in the range of 6 to 6.5% during 2015-16 even though Indian economy has a potential to grow at much higher rate. The Finance Minister Shri Jaitley was making the Opening Remarks during his Pre-Budget Meeting with the Finance Ministers of all the States and Union Territories here today. The Finance Minister Shri Jaitley said the growth in service sector is quite good while growth in agriculture is reasonable. He referred to the patchy growth in the manufacturing sector and stated that this was one of the biggest challenge for the Centre. He urged the States to work with Centre for putting India back on the path of higher growth rate. The Finance Minister referred to the Prime Minister's formulation that in the federal structure, Centre and State together constitute "Team India". The Finance Minister Shri Jaitley stated that the "India grows when the States grow". He told the forum that active reform steps have been taken and some more steps would be taken in the coming months.The Finance Minister Shri Jaitley informed the State CMs/FMs that the Fourteenth Finance Commission (FFC) has submitted its report which is under the consideration of the Central Government.
The participating in the discussion, the Finance Ministers of different States and Union Territories gave their suggestions and requested the Union Finance Minister to consider the same while formulating the budgetary proposals for the Union Budget 2015-16. State Governments made suggestions related to Goods and Services Tax (GST), streamlining and decentralisation of Centrally Sponsored Schemes(CSS), fiscal transfers to States, State specific economic issues, infrastructure related issues, inter linking of rivers and financial inclusion etc.
Other suggestions include more allocations of funds directly to the States. Some states asked for tax holiday in order to increase investment in their States. Mining States called for removal of export duty on iron ore among others. Some States asked for increasing the limits of borrowing keeping in view FRBM requirements and the decrease in rate of market borrowing etc. Some states called for more funds under JNNURM for urban renewal mission and encouragement to the SME sector. Some asked for declaration of water as a national asset, restructuring of MGNAREGA and provision of remunerative price mechanism for agriculture produce in lieu of Minimum Support Price (MSP) among others.
In his concluding remarks, the Finance Minister Shri Arun Jaitley assured the States that the suggestions made by the State representatives in the meeting and the memorandum submitted by them would be duly examined in the Ministry and would be used as valuable inputs to the Budget 2015-2016. He emphasised the need to address regional disparities through eveness of growth between states. While maintaing the imperative of growth fiscal discipline can not be compromised, the Finance Minister indicated that cooperative federalism has been the underlying theme of the financial management by this Government. The Finance Minister Shri Jaitley reiterated that economic spin-off of implementation of GST will be hugely beneficial to both Centre and the States. Shri Jaitley said that we have to jointly ensure its implementation. Most of the States supported and welcomed the initiative of the Central Government regarding the implementation of GST and provision of Rs. 11,000 crore in the current fiscal for CST compensation to the States and assurance of the Central Government that any State suffering any loss due to GST implementation would be fully compensation among others.
In the end, the Finance Minister assured the States and the UTs that the issues raised and suggestions made by them will be looked into in detail and all efforts would be made to address them.
The meeting was attended by among other by the three (3) Chief Ministers holding Finance portfolio, 13 Finance Ministers/ Ministers representing their Finance Ministers of States, Lt.Governor of NCT-Delhi, and Senior Officials of the different States and Union Territories.
The meeting was also attended by the Minister of State for Finance Shri Jayant Sinha, Finance Secretary Sh. Rajeev Mehrishi, Revenue Secretary Shri Shakti Kanta Das, Expenditure Secretary Shri Ratan P. Watal, Secretary Financial Services Dr. Hasmukh Adhia, Chief Economic Adviser (CEA) Dr. Arvind Subramanian and other senior officials of the Ministry of Finance among others. (Source- PIB)
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