Notification No. 25/2006-Service Tax , Dated-13th July, 2006.
Representing before statutory authorities by CA/CS/Cost Accountant exempted from service tax
Notification No. 25/2006-Service Tax , Dated-13th July, 2006.
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services falling under sub-clauses (s), (t) and (u) of clause (105) of section 65 of the Finance Act, provided or to be provided by a practicing chartered accountant, a practicing cost accountant and a practicing company secretary respectively, in his professional capacity, to a client, relating to representing the client before any statutory authority in the course of proceedings initiated under any law for the time being in force, by way of issue of notice, from the whole of service tax leviable thereon under section 66 of the said Finance Act.
F. No. 356/37/2006-TRU
Assessee not prohibited from paying tax on services exempted under a notification
Under Service Tax law, the Assessee is not prohibited from paying tax on services exempted under a notification – there is no provision akin to Section 5A(1A) of the Central Excise Act, 1944
M/s Deloitte Haskins And Sells Vs. Commissioner of Central Excise, Thane [2015-TIOL-366-CESTAT-MUM]
M/s Deloitte Haskins and Sells (the Appellant) is a firm providing services of practising Chartered Accountant and Management Consultancy services to clients in India and abroad. The Appellants were operating from the different locations, each with a separate Service tax registration number and the accounting operations were carried out from Worli address (registered unit).
The Department alleged that the services rendered by the Appellant during the period under dispute were exempted under Notification No. 04/2004-ST dated March 31, 2004 (which provides exemption to services provided to SEZ units) [Notification 4/2004] and Notification No. 25/2006 dated July 13, 2006 (which provides exemption to services relating to representation before the statutory authorities) [Notification 25/2006].
Accordingly, the Appellant has wrongly availed Cenvat credit while providing exempted services as well as taxable services in violation of the Cenvat Credit Rules, 2004 (the Credit Rules) as the Appellant did not maintain separate records for the exempted and taxable services in terms of Rule 6(1) of the Credit Rules. Therefore, as per Rule 6(3)(c) of the Credit Rules (as was prevalent during the period under dispute), the Appellant could utilize Cenvat credit only to the extent of 20% of the amount of Service tax payable on their output services. Hence, the Appellant was required to pay Rs. 2,78,23,485/- in terms of Rule 6(3)(c) of the Credit Rules.
It was further alleged that the Appellant has also irregularly availed Cenvat credit of Rs. 5,65,000/- and Rs. 31,25,737/-on the strength of invoices raised on the registered unit at Worli whereas the Cenvat credit was taken in another registered unit at Mafatlal House, Mumbai.
Being aggrieved, the Appellant filed an appeal before the Hon'ble CESTAT, Mumbai submitting as under:
- Notification 25/2006 provides exemption to services relating to representation before the statutory authorities, whereas the Appellant had charged consolidated amount for entire work i.e. drafting, compliance, appearance and sometimes their contract is for entire taxation related issues. Therefore, they chose to pay tax on the entire amount and not to avail exemption;
- Notification No. 4/2004 which grants conditional exemption to services provided to SEZ units was not availed because it is beyond control to ensure that the service receiver follows the conditions of the Notification such as maintenance of proper records;
- Unlike Section 5(A)(1A) of the Central Excise Act, 1944 (the Excise Act) there is no provision in the Finance Act, 1994 (the Finance Act) requiring that unconditional exemption has to be necessarily availed;
- Cenvat credit cannot be denied on procedural grounds.
The Hon'ble CESTAT, Mumbai held as under:
- Cenvat credit cannot be denied for the procedural infraction that the addressee in the invoices was another office of the Appellant and relied upon following judgments: Commissioner Vs. DNH Spinners [2009 (16) STR 418 (Tri.-Ahmd.)], Modern Petrofils Vs. CCE[2010 (20) STR 627 (Tri.Ahmd)].
Thus, the matter was remitted back to the Commissioner for verifying that the Inputs services in respect of such invoices were actually used in the Mafatlal House office and not in the Worli office.;
- Revenue has not examined the records in detail to see the nature of actual activities undertaken by the Appellant. Issue of Show Cause Notice without examining and analysing of all the documents does not serve any purpose;
- Unlike Section 5(A)(1A) of the Excise Act, there is no provision in the Finance Act requiring that unconditional exemption has to be necessarily availed and relied upon following judgments: – Crown Products Pvt. Ltd. Vs. CCE, Nashik [2012 (28) STR 406 (Tri.-Mum)] and MPS Ltd. Vs. Commissioner of Service Tax, Bangalore [Appeal No. ST/763/2011];
- Everyone has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with without infringing any public right or public policy. Thus it is clear that under Service tax laws, the Assessee is not prohibited from paying tax on services exempted under a notification.
Thus, the Hon'ble Tribunal decided the matter in favour of the Appellant by holding that the Appellant had not provided exempted and taxable services in terms of Rule 6(2) of the Credit Rules and therefore the restriction of availment of Cenvat credit up to 20% of the value of taxable output services would not apply.
Composite Show cause Notice – Apportionment of liability based upon past figures?
In case of composite Show cause Notice in respect of two Assessees, There is no rule or principle that authorizes the apportionment of liability based upon past figures
Commissioner of Central Excise Vs. Modern Industrial Enterprises [2015 (2) TMI 609 – DELHI HIGH COURT]
Modern Industrial Enterprises (MIE) and Florida Electrical Industries Ltd. (FIEL) (collectively referred to as 'the Assessees' were subject to independent search operations by the Central Excise Authorities on September 22, 2001, wherein Clandestine removal of excisable goods was ascertained and some material was seized. Therefore, the Revenue vide Show Cause Notice (the SCN) dated March 25, 2003 sought duty on such clandestine removal and also imposed penalty.
The Assessees contended that the SCN issued by the Ld. Commissioner lacked the jurisdiction. Further, without attributing
the extent of clandestine removal alleged in respect of each unit specifically, duty liability could not be imposed. However, the Ld. Commissioner vide Order dated June 30, 2004 confirmed the demand raised in the SCN.
Being aggrieved, the Assessees preferred an appeal before the Hon'ble Tribunal. The Hon'ble Tribunal upheld the contentions of the Assessees and set aside the demand raised in the Order of the Ld. Commissioner. It was held by the Hon'ble Tribunal that the Commissioner of Central Excise, Delhi-I could not issue the SCN against FEIL as FEIL falls within the jurisdiction of the Central Excise Commissioner, Delhi-II. Further, without attributing the actual removals and working out the duty liability on the basis of the past production of goods is untenable. In other words, since it was not possible to arrive at the value of clearances separately between MIE and FEIL, duty demanded could not be confirmed.
Being aggrieved, the Revenue preferred an appeal before Hon'ble High Court of Delhi. The Hon'ble High Court allowed the appeal in favour of the Respondents in regard to the duty demanded on clandestine removal by remanding the same on merits and decided the jurisdiction issue involved in favour of the Revenue along with the following observations:
- Issuing of the SCN in a composite manner to two parties ipso facto did not vitiate the proceedings. However, if at the stage of determination of liability or at the final stage, it was open to the Commissioner to ascribe one figure or the other, to each of the parties, that course ought to have been adopted;
- There is no rule or principle that authorizes the apportionment of liability based upon the past figures;
- As regards the issue of jurisdiction, the Assessees' submission that upon the issuance of Notification No. 14/2002-CE(NT) dated March 8, 2002, legality of investigations stood protected but upon the ceasing of such proceedings, the appropriate Commissioner necessarily had to exercise jurisdiction is textual and narrow. In tax proceedings, such as the present one, there is certain seamlessness to the entire process, and splitting up that into different stages, i.e., investigation, adjudication, etc., and the spelling up of the process would defeat the underlying object of Section 38A of the Central Excise Act, 1944 ("Where any rule, notification or order made or issued under this Act or any notification or order issued under such rule, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not—(a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect, and lead to startling as well as anomalous results…") and would lead to startling as well as anomalous results.
Accordingly, the Hon'ble High Court held that the matter requires to be re-examined on the merits of the clandestine removal and directed that the Tribunal may, depending upon the submissions made and the extent of materials available with it, take such course, as is available in law, for this purpose, after giving due opportunity to both the parties.
Subsequent reversal of Cenvat credit initially availed but not utilized, tantamount to non-availment of Cenvat credit
JCT Limited Vs. CCE, Jallandhar and Ludhiana and vice-versa [2015 (2) TMI 600 – CESTAT NEW DELHI]
JCT Limited (the Assessee), in their composite mill, manufactured cotton yarn from cotton and used the same within the factory for weaving of fabrics. In respect of captive clearances of cotton yarn, the Assessee was availing full duty exemption under Notification No. 30/04-CE dated July 9, 2004 (the Exemption Notification). The goods covered by the Exemption Notification are fully exempt from Excise duty, if no Cenvat credit in respect of Inputs has been taken. In the instant case, the Assessee took Cenvat credit in respect of packing material during November, 2005 and December 2005 of Rs. 1,622/- and during January to March 2006 of Rs. 2,753/-. However, subsequently on being pointed out by the Department, the Assessee reversed the said Cenvat credit. Further, there was no dispute that aforesaid Cenvat Credit of Rs. 4375/- was utilized by the Assessee for payment of duty on any of their final product.
But, the Department contended that the Assessee is not eligible for availing the benefit of the Exemption Notification even if the availed Cenvat credit is subsequently reversed. Therefore, the Adjudicating Authority confirmed the demand along with interest and penalty, by denying the exemption under the Exemption Notification and also allowed the cum duty benefit i.e., treating the sale price of the yarn as including the Excise duty. Thereafter, the Order of the Adjudicating Authority was upheld by the Ld. Commissioner (Appeals). Being aggrieved both the Assessee and the Department preferred an appeal before the Hon'ble CESTAT, Delhi in respect of duty demanded and allowing of the cum duty benefit respectively.
The Hon'ble CESTAT, Delhi relying upon the judgment of Hon'ble Allahabad High Court in the case Hello Minerals Water (P) Ltd. Vs. Union of India [(2004 (7) TMI 98] which was based on the Hon'ble Apex Court judgment in the case of Chandrapur Magnet Wire (P) Ltd. Vs. CC, Nagpur [1996 (81) E.L.T. 3 (S.C.)], held that since the Cenvat credit initially taken was reversed without being utilised by the Assessee, it is to be treated as if the Assessee has not taken the Cenvat credit and hence, would be eligible for the exemption benefit under the Exemption Notification.
It was further held by the Hon'ble Tribunal that since the duty demand itself has been set aside, the Revenue's appeal would not survive and is accordingly dismissed.
Time limit prescribed for filing refund U/s. 27 of Customs Act, 1962 cannot be made applicable to duty paid by mistakeby CA Sandeep Kanoi |
Parimal Ray & Another Vs. the Commissioner of Customs (Port), Customs House & Others [2015 (2) TMI 826 - CALCUTTA HIGH COURT] In the present case, a Thailand based Company, Italian Thai Development Public Company Limited and an Indian Public Company, ITD Cementation India Limited having its place of business in Salt Lake City, Kolkata […]
Time limit prescribed for filing refund U/s. 27 of Customs Act, 1962 cannot be made applicable to duty paid by mistake
Parimal Ray & Another Vs. the Commissioner of Customs (Port), Customs House & Others [2015 (2) TMI 826 – CALCUTTA HIGH COURT]
In the present case, a Thailand based Company, Italian Thai Development Public Company Limited and an Indian Public Company, ITD Cementation India Limited having its place of business in Salt Lake City, Kolkata decided to establish a Joint Venture Organisation – ITD-ITD CEM JV. This Joint Venture was unincorporated, represented by Parimal Ray and Another ("collectively along with Joint Venture Company referred to as 'the Petitioner').
The Kolkata Municipal Corporation invited tenders, in or about 2008 for its Drinking Water Supply Project. The Petitioner was successful in tendering and the Contract for the same was awarded to them. For the Contract awarded, the Petitioner imported the tunnel boring machines ("impugned goods") vide Bills of Entry were dated December 15, 2009, December 21, 2009, May 31, 2010 and paid Custom duty of Rs. 3,60,45,561/-. Later on during September, 2012, the Petitioner came to know that they made their classification erroneously and as per the correct classification the impugned goods enjoyed 100% duty exemption as per the Exemption Notification issued under Section 25 of the Customs Act, 1962 ("the Customs Act").
Accordingly, the Petitioner vide Application dated June 4, 2013 applied for refund of the entire amount of Rs. 3,60,45,561/- mistakenly paid by them. However, the Revenue denied refund to the Petitioner on the ground that refund had to be made within time limit prescribed under Section 27 of the Customs Act. Further, the Application made by the Petitioner cannot be taken as a proper Application for refund under Section 27 of the Customs Act. Being aggrieved, the Petitioner filed Writ Petition before the Hon'ble High Court of Calcutta contending that the time limit prescribed under Section 27 of the Customs Act cannot be made applicable to the amount of duty paid by mistake.
The Hon'ble High Court of Calcutta held as under:
- Section 27 of the Customs Act only applies when there is over payment of duty or interest under the Customs Act. Therefore, the duty or interest must be leviable under the Customs Act and paid under it. However, in the instant case, the impugned goods were not exigible to any duty, hence any sum paid into the exchequer by the Petitioner was not duty or excess duty but simply money paid into the Government account;
- The money received by the Government, could more appropriately called money paid by mistake by one person to another which the other person has an obligation to repay under Section 72 of the Contract Act, 1962;
- A person to whom money has been paid by mistake by another person, becomes at common law a trustee for that other person with an obligation to repay the sum received – Shiv Shankar Dal Mills Vs. State of Haryana [AIR 1980 Supreme Court 1037];
- As per Section 17 of the Limitation Act, 1963, money paid by mistake can be recovered up to three years from the time the plaintiff discovers the mistake or could have discovered the same with reasonable diligence.
Therefore, the Hon'ble High Court directed the Department to refund the said sum of Rs. 3,60,45,561/- to the Petitioner within 12 weeks of the communication of this Order.
Govt. notifies new list of agricultural commodities which aren't "taxable commodities transactions"
COMMODITIES TRANSACTION TAX (FIRST AMENDMENT) RULES, 2015 - AMENDMENT IN RULE 3
NOTIFICATION NO.13/2015 [F.NO. 142/09/2013-TPL]/SO 424(E), DATED 10-2-2015
In exercise of the powers conferred by sub-sections (1) and (2) of section 133 of the Finance Act, 2013 (17 of 2013) (herein after referred to as the Act), the Central Government hereby makes the following rules to amend the Commodities Transaction Tax Rules, 2013, namely:—
1. (l) These rules may be called the Commodities Transaction Tax (First Amendment) Rules, 2015.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Commodities Transaction Tax Rules, 2013, for rule 3, the following rule shall be substituted, namely:—
"3. Agricultural commodities.— For the purposes of clause (7) of section 116 of the Act, the agricultural commodities shall be the following, namely:—
(i) | Almond | |
(ii) | Barley | |
(iii) | Cardamom | |
(iv) | Castor Seed | |
(v) | Channa/Gram | |
(vi) | Copra | |
(vii) | Coriander/Dhaniya | |
(viii) | Cotton | |
(ix) | Guar Seed | |
(x) | Isabgul Seed | |
(xi) | Jeera (Cumin Seed) | |
(xii) | Kapas | |
(xiii) | Maize Feed/Maize | |
(xiv) | Pepper | |
(xv) | Potato | |
(xvi) | Rapeseed/Mustard Seed | |
(xvii) | Raw Jute | |
(xviii) | Red Chilli/Chillies | |
(xix) | Soya bean/seed | |
(xx) | Soymeal | |
(xxi) | Turmeric | |
(xxii) | Wheat | |
(xxiii) | Aniseed | |
(xxiv) | Arhar Chuni | |
(xxv) | Bajra | |
(xxvi) | Betelnuts | |
(xxvii) | Celeryseed | |
(xxviii) | Chara or Berseem (Including Chara seed or Berseem seed) | |
(xxix) | Cinnamon | |
(xxx) | Cloves | |
(xxxi) | Cotton pods | |
(xxxii) | Cotton seed | |
(xxxiii) | Ginger | |
(xxxiv) | Gram Dal | |
(xxxv) | Gram Husk (Gram Chilka) | |
(xxxvi) | Groundnut | |
(xxxvii) | Jowar | |
(xxxviii) | Kulthi | |
(xxxix) | Lakh (Khesari) | |
(xl) | Linseed | |
(xli) | Masur | |
(xlii) | Methi | |
(xliii) | Moth | |
(xliv) | Mung | |
(xlv) | Mung Chuni | |
(xlvi) | Mung Dal | |
(xlvii) | Nutmeg | |
(xlviii) | Onion | |
(xlix) | Peas | |
(l) | Ragi | |
(li) | Rice Bran | |
(lii) | Rice or Paddy | |
(liii) | Safflower | |
(liv) | Seedlac | |
(lv) | Sesamum (Til or Jiljilli) | |
(lvi) | Small Millets (KodanKulti, Kodra, Korra, Vargu, Sawan, Rala, Kakun, Samai, Vari and Banti) | |
(lvii) | Sunflower seed | |
(lviii) | Tur (Arhar) | |
(lix) | Tur Dal (Arhar dal) | |
(lx) | Urad (Mash) | |
(lxi) | Urad Dal.". |
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FAQ on Budget-Must Read every CA
-PFA
Form CRA-2- Form of Intimation of appointment of cost auditor by the company to Central Government) Part I – Law(s) Governing the eForm CRA-2 eForm CRA-2 is required to be filed pursuant to section 148(3) of Companies Act, 2013 and rule 6(2) of the Companies (cost records and audit) Rules, 2014 which are reproduced for […] |
- Feb
- 27
- 2015
All about form CRA-2
Form CRA-2- Form of Intimation of appointment of cost auditor by the company to Central Government)
Part I – Law(s) Governing the eForm CRA-2
eForm CRA-2 is required to be filed pursuant to section 148(3) of Companies Act, 2013 and rule 6(2) of the Companies (cost records and audit) Rules, 2014 which are reproduced for your reference.
Section 148(3):
The audit under sub-section (2) shall be conducted by a Cost Accountant in practice who shall be appointed by the Board on such remuneration as may be determined by the members in such manner as may be prescribed:
Provided that no person appointed under section 139 as an auditor of the company shall be appointed for conducting the audit of cost records:
Provided further that the auditor conducting the cost audit shall comply with the cost auditing standards.
Explanation.For the purposes of this sub-section, the expression "cost auditing standards" mean such standards as are issued by the Institute of Cost and Works Accountants of India, constituted under the Cost and Works Accountants Act, 1959, with the approval of the Central Government.
Rule 6 (2):
Every company referred to in sub-rule (1) shall inform the cost auditor concerned of his or its appointment as such and file a notice of such appointment with the Central Government within a
period of thirty days of the Board meeting in which such appointment is made or within a period of one hundred and eighty days of the commencement of the financial year, whichever is earlier, through electronic mode, in form CRA-2, along with the fee as specified in Companies (Registration Offices and Fees) Rules, 2014.
Purpose of the eForm
Every company covered under the Cost (record and audit) Rules, 2014 including all units and branches shall, in respect of each of its financial year commencing on or after the 1st day of April, 2014, maintain cost records in eform CRA- 1. Further company covered under class of company require to appoint cost auditor shall appoint such cost auditor within one hundred and eighty days from the commencement of the financial year. It shall also inform the Central government about appointment of cost auditor within thirty days of the board meeting appointing cost auditor or within one hundred and eighty days of commencement of the financial year, whichever is earlier.
eForm Number as per Companies Act, 1956
eform 23C.
Fee Rules
| S. No | Purpose of the form | Normal Fee | Additional Fee (Delay Fee) | Logic for Additional Fees | Remarks for Due Date | |
| Event Date | Time limit(days) for filing | |||||
| 1. | Form of Intimation of appointment of cost auditor by the company to Central Government | The Companies (Registration offices and Fees) Rules, 2014 – Annexure B | Within 30 days from the date of board meeting or 180 days of the start of the financial year, whichever is earlier | |||
Fees payable is subject to changes in pursuance of the Act or any rule or regulation made or notification issued thereunder.
Processing Type
The eForm will be auto approved under straight through processing mode.
Email
When an eForm is registered by the authority concerned, an acknowledgement of the same is sent to the user in the form of an email at the end of the day to the email id of the company
- See more at: All about form CRA-2
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