2015-TIOL-1644- HC-MUM-IT + Story
CIT Vs Grasim Industries Ltd
Whether the law of limitation binds everyone, including Government - YES: HC
Whether in the absence of plausible and acceptable explanation, the delay can be condoned mechanically merely because the Government or a wing of the Government is a party before the Court - NO: HC
Whether in a matter of condonation of delay, when there was no gross negligence or deliberate inaction or lack of bonafides, a liberal concession has to be adopted to advance substantial justice, the Department can take advantage of various earlier decisions - NO: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-1643- HC-MUM-IT
R W Promotions Pvt Ltd Vs ACIT
Whether any impugned order holding that it would have directed cross examination if it felt it was necessary, can be interpreted in such a way so as to come to the conclusion that no cross examination was called - NO: HC
Whether where an order has been passed without taking into consideration the affidavit of the representatives of the companies which indicates that they had received payment from the assessee for rendering of services, it is a case of no opportunity to cross-examine - YES: HC - Case remanded : BOMBAY HIGH COURT
2015-TIOL-1642- HC-MAD-IT
Bharaneedhars Refineries Pvt Ltd Vs DCIT
Whether in case of pending stay petitions, the Revenue officials can resort to any coercive proceedings against the assessees including the realization of the balance amount of pending demand - NO: HC - Assessee' s writ dismissed : MADRAS HIGH COURT
2015-TIOL-1641- HC-MP-IT
CIT Vs Ritesh Agrawal
Whether when the Revenue, during the course of the arguments, had not disputed the working of the assessee given before the CIT(A) and had not pointed out any infirmity in the findings of CIT(A) on this issue, it is possible for that authority to bring any material on record to contradict the findings of the fact before the Tribunal - NO:HC
Whether even if some loose papers are recovered during course of the search, the computation of undisclosed income should be computed for whole of the block period - NO: HC - Revenue' s appeal dismissed : MADHYA PRADESH HIGH COURT
2015-TIOL-1137- ITAT-BANG
H M Constructions Vs ACIT
Whether if the assessee has not produced his vendors, nor has filed confirmations from them even in the remand proceedings to rebut the suspicion of the AO that on-money has been paid by the assessee engaged in real estate business, disallowance in respect of such amount can be warranted - YES: ITAT - Assessee' s appeal dismissed : BANGALORE ITAT
2015-TIOL-1136- ITAT-AHM
ACIT Vs Hamilton Houseware Pvt Ltd
Whether violation of various social legislation would amount to unlawful activity as per Section 80IB(4) and can be a valid ground for rejection of deduction u/s 80IB - NO: ITAT
Whether income from exchange rate difference is includible in the profits eligible for deduction u/s.80IB - YES: ITAT
Whether income from scrap sale can be excluded from profit eligible for deduction u/s 80IB, when scarp is generated from business itself - YES: ITAT
Whether an assessee can be considered as trader in refills only, in case there is difference between the refills consumed and the pot flasks manufactured - NO: ITAT
Whether losses of preceeding year can be notionally brought forward for setting it off against eligible profits to disallow deduction u/s 80IA(5) - NO: ITAT - Revenue' s appeals dismissed : AHMEDABAD ITAT
2015-TIOL-1135- ITAT-MAD
Subbiah Ramanathan Vs ITO
Whether if assessee proves the existence of the creditor and such person owed the credits which are found in the books of accounts of the assessees, the onus stands discharged and the assessee is not further required to prove the source of income from which the creditors would have acquired the money. Yes: ITAT - Assessee' s appeal allowed : CHENNAI ITAT
2015-TIOL-1134- ITAT-MAD
DCIT Vs Sima Textile Processing Centre Ltd
Whether there was no filing of inaccurate particulars of income, when assessee has set off of interest subsidy against the expenditure incurred by the assessee before commencement of business - YES: ITAT - Revenue' s appeal dismissed : CHENNAI ITAT
SERVICE TAX SECTION
2015-TIOL-150- SC-ST-LB
CCE Vs New Era Handling Agency
Service Tax - Packaging Services - As per Fertiliser (Control) Order, 1985, packaging of fertilizers before marketing is statutory requirement - activity of packaging would, therefore, form integral part of manufacturing in terms of s.2 (f)(i) of CEA, 1944 and cannot be viewed as a service. - Revenue Appeal Dismissed : SUPREME COURT OF INDIA
2015-TIOL-1637- HC-MUM-ST + Story
Sai Wardha Power Company Ltd Vs UoI
ST -Notfn. 12/2013-ST - Once the SEZ unit secures the approval of the 'Approval Committee' and furnishes a declaration in Form A-1 verified by the Specified Officer of the SEZ, the jurisdictional DC/AC is enjoined with a duty to issue the authorization in Form A-2 -WP allowed: High Court [para 7, 8] - Petition allowed : BOMBAY HIGH COURT
2015-TIOL-1494- CESTAT-DEL
CCE Vs Duli Chand Narender Kumar Exports Pvt Ltd
ST - Revenue filed appeal against Order of Commissioner (A) remanding the respective cases back to adjudicating authority - Revenue relied on provision of CE law in which power of remand by Commissioner (A) was taken away by the amendment in section 35A(3) - While under section 85(4) of FA, 1994, language is used in wider context - It does not restrict the type of order which Commissioner (A) may pass, rather it states that Commissioner (A) may pass such order as he thinks fit - Thus, scope of remand is included in provision of law laidd down in section 85(4) - Therefore, appellate authority has power to remand a matter to lower authority - Appeals dismissed: CESTAT [Para 3, 4] - Appeals dismissed : DELHI CESTAT
2015-TIOL-1492- CESTAT-DEL
M/s Suresh Jaiswal Vs CCE
ST - Assessee, a contractor, entered into contracts with Jaipur Development Authority (JDA) and Jaipur Nagar Nigam (JNN) for management and maintenance of parks and road side plantation and maintenance - Adjudicating authority held that demand for period up to 30.4.2006 was not sustainable but demand for period with effect from 1.5.2006 onwards was upheld on ground that service rendered fell under scope of management, maintenance or repair service under Section 65(64)/65(105) (zzg) of FA, 1994 - It is noted that w.e.f. 1.5.2006, change in definition of "management, maintenance or repair" brought "maintenance or repair of properties whether immovable or not" within scope of 'management, maintenance or repair service' - Assessee did not take ST registration and did not file ST-3 returns pertaining to impugned service - Thus, assessee is clearly guilty of suppression of facts - Perusal of typical work orders which apart from requiring maintenance or repair, involve supply of goods too, like supply of different trees, for which specific rates have been mentioned - Case remanded with direction that impugned ST liability may be recomputed after extending benefit of Notfn 12/2003-ST: CESTAT - Case remanded : DELHI CESTAT
2015-TIOL-1491- CESTAT-MUM
Bny Mellon International Operations (I) Pvt Ltd Vs CCE
ST - Refund - CENVAT credit availed before Service Tax registration granted to appellant - lower authorities have allowed refund of an amount of ST paid by the service providers after the appellant were granted registration - there is no dispute as to the eligibility to avail credit and refund thereof as it is undisputed that the appellant is exporter of services - Issue is no more res integra - in the case of J.P.Morgan Services Bench has considered the very same issue and held in favour of appellant - Order set aside and appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed : MUMBAI CESTAT
CENTRAL EXCISE SECTION
TARIFF NOTIFICATIONS
etariff15_37
Notification 30/2004-CE amended - Explanation added - appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force
etariff15_38
Notification 1/2011-CE amended € ¢â' '³ in the proviso reference to "section 66€ ¢â' '½ substituted with "section 66B€ ¢â' '½; Explanation added - appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.
etariff15_39
Notification 12/2012-CE amended - Conditions 16, 20, 25, 52A refers - reference to "section 66€ ¢â' '½ substituted with "section 66B - Explanations added - appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force
CIRCULAR
excircular1005
Judgment of the Supreme Court in the case of M/s SRF Ltd. versus Commissioner of Customs. Chennai - 2015-TIOL-74- SC-CUS - Clarification relating to notifications No.30/2004-Central Excise dated 09.07.2004. No.1/2011-Central Excise dated 01.03.2011 and No.12/2012-Central Excise dated 17.03.2012. as amended - Regarding
CX Trade Notice
Amendment in Notification No. 30/2004-Central Excise dated 9th July, 2004 vide Notification No. 34/2015-Central Excise dated 17th July, 2015
CASE LAWS
2015-TIOL-151- SC-CX + Story
M/s Coastal Paper Ltd Vs CCE
Central Excise - Paper - Exemption - Paper made out of pulp from rags entitled for concessional rate: Notification provides concessional rate of duty to kraft paper made out of pulp containing not less than 75% by weight of pulp made from materials other than bamboo, hardwood, softwood, reeds or rags. It is admitted that the assessee in this case made kraft paper out of pulp of rags cut out of old gunny bags. The Revenue contends that the assessee is not entitled to the benefit of the said notification as they used pulp made out of rags in the manufacture of kraft paper. Commissioner allowed the exemption; Tribunal reversed Commissioner&# 39;s order.
Held: when the expression 'rags' is not defined in the Notification, it has to be assigned a particular meaning which defines the purpose for which such a Notification was issued giving by plain meaning, even when there is a total disconnect between the said meaning and the Notification, may lead to absurd results as it would exclude the non-conventional material in the form of waste from jute bags or gunny bags even when this very material was there in the 'Positive List' and qualified for exemption.
Almost all the books on the subject uniformly define 'rag' or 'rag pulp' as one, which is made from cotton waste or cotton textile material. On the other hand, the counsel appearing for the Revenue could not point out to a single dictionary or any technical literature which even remotely suggests that jute gunny bags come under the category of 'rags' in the context of paper technology.
The impugned decision of the Tribunal does not stand judicial scrutiny and warrants to be set aside. The appeal is allowed, the order of the Tribunal is quashed and the order passed by the Commissioner is restored. - Appeal Allowed In Favour of the Assessee : SUPREME COURT OF INDIA
2015-TIOL-1646- HC-ALL-CX
CCE & C Vs M/s Kailash Electricals
Central Excise - Revenue in appeal against order of Tribunal granting unconditional stay on the ground that the Tribunal had no such power under Section 35C(2A) of the Central Excise Act, 1944.
Held: It is seen that the stay order has been extended due to pressure of work before the Tribunal, non-availability of the member, non availability of the Benches of the Tribunal and non disposal of the appeal was not attributable to the assessee, namely, that there was no fault of the assessee in delaying the disposal of the appeal. (para 5)
The non-disposal of the appeals before the Tribunal is also on account that the Additional Benches are not being created - Notices issued to the Joint Secretary, Ministry of Finance, Department of Revenue, Central Government as well as to the Chief Commissioner of the Central Excise, Lucknow to file their personal affidavits - The Joint Secretary will file an affidavit explaining as to why a permanent Bench is not functioning at Allahabad for disposal of the appeals. The Joint Secretary will also explain as to why the Additional Members are not being appointed. The Chief Commissioner of Central Excise, Lucknow will also file an affidavit indicating as to why these appeals against the stay orders are being filed with the limited prayer that the hearing of the appeal should be expedited when the Department knows that the appeals are not being disposed of by the Tribunal on account of pressure of work. The Chief Commissioner of the Central Excise, Lucknow will justify the expenses that has been incurred in the filing of these appeals - List on 31.07.2015 (para 8) - Notices issued : ALLAHABAD HIGH COURT
2015-TIOL-1636- HC-MUM-CX
Top Security Ltd Vs CCE & ST
Whether it is open to the Tribunal to dismiss an appeal preferred by the assessees without adjudication on merits, where the Tribunal' s order granting conditional stay has been complied with by the assessee - NO: HC - Case remanded : BOMBAY HIGH COURT
2015-TIOL-1635- HC-P&H-CX
CCE Vs Elegant Enterprises
CX - Non compliance with provisions of Section 35B(2) of CEA, 1944 - As per Rohit Pulp and Paper Mills 2002-TIOL-666- SC-CX, provisions of Section 35B (2) are clearly required as a prerequisite to direction to any Central Excise Officer to file an appeal - Documents tendered across the Bar during hearing of these appeals also do not indicate compliance of provisions of Section 35B(2) of the Act - Appeals dismissed: HC - Appeals dismissed : PUNJAB AND HARYANA HIGH COURT
2015-TIOL-1495- CESTAT-DEL + Story
M/s Hero Honda Motors Ltd Vs CCE
CX - AV - s.4 of CEA, 1944 - Dealers request the appellant to organize the advertisement of the products in their area and in such cases about 40% of the expenses incurred on advertisement are recovered by appellant from dealers - no cause for adding this expense in AV - Appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
2015-TIOL-1493- CESTAT-DEL
Dewas Fabrics Ltd Vs CCE & ST
CX - Assessee' s company and its Directors, filed appeal against impugned order in November, 2005 - When factory was closed since November, 2004, Tribunal failed to understand as to why in column in Memorandum of appeal for "address for communication" , it is address of factory which was given and not any other address where assessee company had its office - Though assessee' s Counsel withdrew his appearance sometime in January, 2014, thus, since, January, 2014, other than the factory address of assessee, there was no address to which any directions to them regarding date of hearing could be communicated - If assessee were really serious in pursuing appeal they should have given some other address for communication at which they would be available and not the address of factory which was closed since one year prior to filing of appeal - Assessee has not cooperated at all with Tribunal in this regard - Appeal dismissed: CESTAT [Para 7] - Appeal dismissed : DELHI CESTAT
2015-TIOL-1490- CESTAT-MAD
Arr Sales Agency Vs CCE
Central Excise - Refund - Appellant, manufacturer of scented supari, filed a claim for refund of excise duty; rejected in adjudication but allowed by Commissioner (Appeals) - Revenue agitated the OIA before Tribunal, who set aside the OIA and allowed Revenue' s appeal; matter agitated before High Court, who dismissed the appeal - Meanwhile the original authority sanctioned refund in terms of Commissioner (Appeals) order and immediately issued demand for recovery of erroneous refund, which was adjudicated after the Tribunal order, confirming demand for recovery with interest - same upheld by Commissioner (Appeals) and agitated hereunder in the second round of litigation.
Held: The present appeal is an offshoot of refund claim which was originally rejected by the adjudicating authority in his order dt. 30.5.2001 on limitation which is upheld by Tribunal in Final order dt.29.7.2005 and Hon'ble High Court - hence the demand of recovery of erroneous refund with interest; and accordingly the impugned order is upheld [Para 5] - Appeal dismissed : CHENNAI CESTAT
2015-TIOL-1489- CESTAT-MAD
Blue Mount Textiles Vs CCE & ST
CX - Stay / dispensation of pre deposit - CENVAT credit - Transfer of credit - M/s BMT & M/s GM (100% EOU), both owned by M/s STPL - M/s GM merged with M/s STPL, and subsequently, credit pertaining to M/s GM was transferred; same disallowed in adjudication, upheld by Commissioner (Appeals) and agitated herein.
Held: Appellant at every stage intimated the department and also sought for single registration under Rule 10, with an undertaking binding themselves to all assets and liabilities of other companies - The department has not caused verification in spite of appellant submitting the documents furnished in Dec'2014 - Prima facie , appellants have made out a case for total waiver of predeposit. [Para 4] - Stay granted : CHENNAI CESTAT
2015-TIOL-1488- CESTAT-DEL
M/s Achiever International Vs CCE
CX - During course of search, goods such as CFLs of Leuci Japan brand, Hquaquiang, SKN, Hans and Jewels were found - Assessee failed to produce invoices for procurement of goods - As goods are branded therefore, both lower authorities have correctly drawn conclusion that goods are procured by assessee without payment of duty - Goods are liable for confiscation - Considering quantum and value of goods, redemption fine imposed on assessee is absolutely correct - No merit in appeal, hence, same is dismissed: CESTAT - Appeal dismissed : DELHI CESTAT
CUSTOMS SECTION
DGFT NOTIFICATION
dgft15not015
Import policy of 'Controlled Substances&# 39; under the NDPS Act, 1985
CASE LAWS
2015-TIOL-152- SC-CUS + Story
M/s HCL Ltd Vs CC
Customs - Classification - Risograph covered under sub-heading 84.43: The question is as to whether Risograph is an office machine having duplicating function and thus to be classified under sub-heading 8472.90 of the Customs Tariff Act, 1975 or is it a printing machine to fall under sub-heading 8443.50.
Risograph machine consists of an automatic digital scanner, a thermal head and a printing station. The prints of tex/images which can be taken from these Risographs can be suitably enlarged or reduced as per the user. Risograph printing process is more akin to screen printing. The screen printing process requires a stencil and a screen, with the stencil carrying the design to be printed. This stencil is mounted against the screen. The printing itself takes place when the ink is squeezed through the stencil onto the screen and ultimately onto the paper. It is difficult to equate Risograph machine with duplicating machine. Duplicating, as opposed to photocopying, requires the preparation of a master sheet which makes duplicates on a machine.
Held: Risograph machine is in the nature of a screen printing machine and not duplicating machine. It would, therefore, be covered under sub-heading 84.43 and not 84.72. - Appeal Allowed in favour of assessee : SUPREME COURT OF INDIA
2015-TIOL-1487- CESTAT-MUM
M/s Desmet Ballestra India Ltd Vs CC
Cus - Refund - Department returning refund applications filed by appellant only on the ground that against the very same Bills of entry another person has filed a refund claim, which has been rejected - It is observed that the appellant was claiming the amount as refund on the ground that they have borne the incidence of duty - this assertion seems to have been overlooked by the adjudicating authority - the least he could have done is to consider the appellant' s case on merits and passed a speaking order - since the issue involved needs to be factually verified from the records matter remanded to adjudicating authority for reconsideration of the refund application afresh: CESTAT [para 5, 6] - Matter remanded : MUMBAI CESTAT
CIT Vs Grasim Industries Ltd
Whether the law of limitation binds everyone, including Government - YES: HC
Whether in the absence of plausible and acceptable explanation, the delay can be condoned mechanically merely because the Government or a wing of the Government is a party before the Court - NO: HC
Whether in a matter of condonation of delay, when there was no gross negligence or deliberate inaction or lack of bonafides, a liberal concession has to be adopted to advance substantial justice, the Department can take advantage of various earlier decisions - NO: HC - Revenue' s appeal dismissed : BOMBAY HIGH COURT
2015-TIOL-1643- HC-MUM-IT
R W Promotions Pvt Ltd Vs ACIT
Whether any impugned order holding that it would have directed cross examination if it felt it was necessary, can be interpreted in such a way so as to come to the conclusion that no cross examination was called - NO: HC
Whether where an order has been passed without taking into consideration the affidavit of the representatives of the companies which indicates that they had received payment from the assessee for rendering of services, it is a case of no opportunity to cross-examine - YES: HC - Case remanded : BOMBAY HIGH COURT
2015-TIOL-1642- HC-MAD-IT
Bharaneedhars Refineries Pvt Ltd Vs DCIT
Whether in case of pending stay petitions, the Revenue officials can resort to any coercive proceedings against the assessees including the realization of the balance amount of pending demand - NO: HC - Assessee' s writ dismissed : MADRAS HIGH COURT
2015-TIOL-1641- HC-MP-IT
CIT Vs Ritesh Agrawal
Whether when the Revenue, during the course of the arguments, had not disputed the working of the assessee given before the CIT(A) and had not pointed out any infirmity in the findings of CIT(A) on this issue, it is possible for that authority to bring any material on record to contradict the findings of the fact before the Tribunal - NO:HC
Whether even if some loose papers are recovered during course of the search, the computation of undisclosed income should be computed for whole of the block period - NO: HC - Revenue' s appeal dismissed : MADHYA PRADESH HIGH COURT
2015-TIOL-1137- ITAT-BANG
H M Constructions Vs ACIT
Whether if the assessee has not produced his vendors, nor has filed confirmations from them even in the remand proceedings to rebut the suspicion of the AO that on-money has been paid by the assessee engaged in real estate business, disallowance in respect of such amount can be warranted - YES: ITAT - Assessee' s appeal dismissed : BANGALORE ITAT
2015-TIOL-1136- ITAT-AHM
ACIT Vs Hamilton Houseware Pvt Ltd
Whether violation of various social legislation would amount to unlawful activity as per Section 80IB(4) and can be a valid ground for rejection of deduction u/s 80IB - NO: ITAT
Whether income from exchange rate difference is includible in the profits eligible for deduction u/s.80IB - YES: ITAT
Whether income from scrap sale can be excluded from profit eligible for deduction u/s 80IB, when scarp is generated from business itself - YES: ITAT
Whether an assessee can be considered as trader in refills only, in case there is difference between the refills consumed and the pot flasks manufactured - NO: ITAT
Whether losses of preceeding year can be notionally brought forward for setting it off against eligible profits to disallow deduction u/s 80IA(5) - NO: ITAT - Revenue' s appeals dismissed : AHMEDABAD ITAT
2015-TIOL-1135- ITAT-MAD
Subbiah Ramanathan Vs ITO
Whether if assessee proves the existence of the creditor and such person owed the credits which are found in the books of accounts of the assessees, the onus stands discharged and the assessee is not further required to prove the source of income from which the creditors would have acquired the money. Yes: ITAT - Assessee' s appeal allowed : CHENNAI ITAT
2015-TIOL-1134- ITAT-MAD
DCIT Vs Sima Textile Processing Centre Ltd
Whether there was no filing of inaccurate particulars of income, when assessee has set off of interest subsidy against the expenditure incurred by the assessee before commencement of business - YES: ITAT - Revenue' s appeal dismissed : CHENNAI ITAT
SERVICE TAX SECTION
2015-TIOL-150- SC-ST-LB
CCE Vs New Era Handling Agency
Service Tax - Packaging Services - As per Fertiliser (Control) Order, 1985, packaging of fertilizers before marketing is statutory requirement - activity of packaging would, therefore, form integral part of manufacturing in terms of s.2 (f)(i) of CEA, 1944 and cannot be viewed as a service. - Revenue Appeal Dismissed : SUPREME COURT OF INDIA
2015-TIOL-1637- HC-MUM-ST + Story
Sai Wardha Power Company Ltd Vs UoI
ST -Notfn. 12/2013-ST - Once the SEZ unit secures the approval of the 'Approval Committee' and furnishes a declaration in Form A-1 verified by the Specified Officer of the SEZ, the jurisdictional DC/AC is enjoined with a duty to issue the authorization in Form A-2 -WP allowed: High Court [para 7, 8] - Petition allowed : BOMBAY HIGH COURT
2015-TIOL-1494- CESTAT-DEL
CCE Vs Duli Chand Narender Kumar Exports Pvt Ltd
ST - Revenue filed appeal against Order of Commissioner (A) remanding the respective cases back to adjudicating authority - Revenue relied on provision of CE law in which power of remand by Commissioner (A) was taken away by the amendment in section 35A(3) - While under section 85(4) of FA, 1994, language is used in wider context - It does not restrict the type of order which Commissioner (A) may pass, rather it states that Commissioner (A) may pass such order as he thinks fit - Thus, scope of remand is included in provision of law laidd down in section 85(4) - Therefore, appellate authority has power to remand a matter to lower authority - Appeals dismissed: CESTAT [Para 3, 4] - Appeals dismissed : DELHI CESTAT
2015-TIOL-1492- CESTAT-DEL
M/s Suresh Jaiswal Vs CCE
ST - Assessee, a contractor, entered into contracts with Jaipur Development Authority (JDA) and Jaipur Nagar Nigam (JNN) for management and maintenance of parks and road side plantation and maintenance - Adjudicating authority held that demand for period up to 30.4.2006 was not sustainable but demand for period with effect from 1.5.2006 onwards was upheld on ground that service rendered fell under scope of management, maintenance or repair service under Section 65(64)/65(105) (zzg) of FA, 1994 - It is noted that w.e.f. 1.5.2006, change in definition of "management, maintenance or repair" brought "maintenance or repair of properties whether immovable or not" within scope of 'management, maintenance or repair service' - Assessee did not take ST registration and did not file ST-3 returns pertaining to impugned service - Thus, assessee is clearly guilty of suppression of facts - Perusal of typical work orders which apart from requiring maintenance or repair, involve supply of goods too, like supply of different trees, for which specific rates have been mentioned - Case remanded with direction that impugned ST liability may be recomputed after extending benefit of Notfn 12/2003-ST: CESTAT - Case remanded : DELHI CESTAT
2015-TIOL-1491- CESTAT-MUM
Bny Mellon International Operations (I) Pvt Ltd Vs CCE
ST - Refund - CENVAT credit availed before Service Tax registration granted to appellant - lower authorities have allowed refund of an amount of ST paid by the service providers after the appellant were granted registration - there is no dispute as to the eligibility to avail credit and refund thereof as it is undisputed that the appellant is exporter of services - Issue is no more res integra - in the case of J.P.Morgan Services Bench has considered the very same issue and held in favour of appellant - Order set aside and appeal allowed with consequential relief: CESTAT [para 4, 5] - Appeal allowed : MUMBAI CESTAT
CENTRAL EXCISE SECTION
TARIFF NOTIFICATIONS
etariff15_37
Notification 30/2004-CE amended - Explanation added - appropriate duty or appropriate additional duty includes nil duty or concessional duty, whether or not read with any relevant exemption notification for the time being in force
etariff15_38
Notification 1/2011-CE amended € ¢â' '³ in the proviso reference to "section 66€ ¢â' '½ substituted with "section 66B€ ¢â' '½; Explanation added - appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force.
etariff15_39
Notification 12/2012-CE amended - Conditions 16, 20, 25, 52A refers - reference to "section 66€ ¢â' '½ substituted with "section 66B - Explanations added - appropriate duty or appropriate additional duty or appropriate service tax includes nil duty or nil service tax or concessional duty or concessional service tax, whether or not read with any relevant exemption notification for the time being in force
CIRCULAR
excircular1005
Judgment of the Supreme Court in the case of M/s SRF Ltd. versus Commissioner of Customs. Chennai - 2015-TIOL-74- SC-CUS - Clarification relating to notifications No.30/2004-Central Excise dated 09.07.2004. No.1/2011-Central Excise dated 01.03.2011 and No.12/2012-Central Excise dated 17.03.2012. as amended - Regarding
CX Trade Notice
Amendment in Notification No. 30/2004-Central Excise dated 9th July, 2004 vide Notification No. 34/2015-Central Excise dated 17th July, 2015
CASE LAWS
2015-TIOL-151- SC-CX + Story
M/s Coastal Paper Ltd Vs CCE
Central Excise - Paper - Exemption - Paper made out of pulp from rags entitled for concessional rate: Notification provides concessional rate of duty to kraft paper made out of pulp containing not less than 75% by weight of pulp made from materials other than bamboo, hardwood, softwood, reeds or rags. It is admitted that the assessee in this case made kraft paper out of pulp of rags cut out of old gunny bags. The Revenue contends that the assessee is not entitled to the benefit of the said notification as they used pulp made out of rags in the manufacture of kraft paper. Commissioner allowed the exemption; Tribunal reversed Commissioner&# 39;s order.
Held: when the expression 'rags' is not defined in the Notification, it has to be assigned a particular meaning which defines the purpose for which such a Notification was issued giving by plain meaning, even when there is a total disconnect between the said meaning and the Notification, may lead to absurd results as it would exclude the non-conventional material in the form of waste from jute bags or gunny bags even when this very material was there in the 'Positive List' and qualified for exemption.
Almost all the books on the subject uniformly define 'rag' or 'rag pulp' as one, which is made from cotton waste or cotton textile material. On the other hand, the counsel appearing for the Revenue could not point out to a single dictionary or any technical literature which even remotely suggests that jute gunny bags come under the category of 'rags' in the context of paper technology.
The impugned decision of the Tribunal does not stand judicial scrutiny and warrants to be set aside. The appeal is allowed, the order of the Tribunal is quashed and the order passed by the Commissioner is restored. - Appeal Allowed In Favour of the Assessee : SUPREME COURT OF INDIA
2015-TIOL-1646- HC-ALL-CX
CCE & C Vs M/s Kailash Electricals
Central Excise - Revenue in appeal against order of Tribunal granting unconditional stay on the ground that the Tribunal had no such power under Section 35C(2A) of the Central Excise Act, 1944.
Held: It is seen that the stay order has been extended due to pressure of work before the Tribunal, non-availability of the member, non availability of the Benches of the Tribunal and non disposal of the appeal was not attributable to the assessee, namely, that there was no fault of the assessee in delaying the disposal of the appeal. (para 5)
The non-disposal of the appeals before the Tribunal is also on account that the Additional Benches are not being created - Notices issued to the Joint Secretary, Ministry of Finance, Department of Revenue, Central Government as well as to the Chief Commissioner of the Central Excise, Lucknow to file their personal affidavits - The Joint Secretary will file an affidavit explaining as to why a permanent Bench is not functioning at Allahabad for disposal of the appeals. The Joint Secretary will also explain as to why the Additional Members are not being appointed. The Chief Commissioner of Central Excise, Lucknow will also file an affidavit indicating as to why these appeals against the stay orders are being filed with the limited prayer that the hearing of the appeal should be expedited when the Department knows that the appeals are not being disposed of by the Tribunal on account of pressure of work. The Chief Commissioner of the Central Excise, Lucknow will justify the expenses that has been incurred in the filing of these appeals - List on 31.07.2015 (para 8) - Notices issued : ALLAHABAD HIGH COURT
2015-TIOL-1636- HC-MUM-CX
Top Security Ltd Vs CCE & ST
Whether it is open to the Tribunal to dismiss an appeal preferred by the assessees without adjudication on merits, where the Tribunal' s order granting conditional stay has been complied with by the assessee - NO: HC - Case remanded : BOMBAY HIGH COURT
2015-TIOL-1635- HC-P&H-CX
CCE Vs Elegant Enterprises
CX - Non compliance with provisions of Section 35B(2) of CEA, 1944 - As per Rohit Pulp and Paper Mills 2002-TIOL-666- SC-CX, provisions of Section 35B (2) are clearly required as a prerequisite to direction to any Central Excise Officer to file an appeal - Documents tendered across the Bar during hearing of these appeals also do not indicate compliance of provisions of Section 35B(2) of the Act - Appeals dismissed: HC - Appeals dismissed : PUNJAB AND HARYANA HIGH COURT
2015-TIOL-1495- CESTAT-DEL + Story
M/s Hero Honda Motors Ltd Vs CCE
CX - AV - s.4 of CEA, 1944 - Dealers request the appellant to organize the advertisement of the products in their area and in such cases about 40% of the expenses incurred on advertisement are recovered by appellant from dealers - no cause for adding this expense in AV - Appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
2015-TIOL-1493- CESTAT-DEL
Dewas Fabrics Ltd Vs CCE & ST
CX - Assessee' s company and its Directors, filed appeal against impugned order in November, 2005 - When factory was closed since November, 2004, Tribunal failed to understand as to why in column in Memorandum of appeal for "address for communication" , it is address of factory which was given and not any other address where assessee company had its office - Though assessee' s Counsel withdrew his appearance sometime in January, 2014, thus, since, January, 2014, other than the factory address of assessee, there was no address to which any directions to them regarding date of hearing could be communicated - If assessee were really serious in pursuing appeal they should have given some other address for communication at which they would be available and not the address of factory which was closed since one year prior to filing of appeal - Assessee has not cooperated at all with Tribunal in this regard - Appeal dismissed: CESTAT [Para 7] - Appeal dismissed : DELHI CESTAT
2015-TIOL-1490- CESTAT-MAD
Arr Sales Agency Vs CCE
Central Excise - Refund - Appellant, manufacturer of scented supari, filed a claim for refund of excise duty; rejected in adjudication but allowed by Commissioner (Appeals) - Revenue agitated the OIA before Tribunal, who set aside the OIA and allowed Revenue' s appeal; matter agitated before High Court, who dismissed the appeal - Meanwhile the original authority sanctioned refund in terms of Commissioner (Appeals) order and immediately issued demand for recovery of erroneous refund, which was adjudicated after the Tribunal order, confirming demand for recovery with interest - same upheld by Commissioner (Appeals) and agitated hereunder in the second round of litigation.
Held: The present appeal is an offshoot of refund claim which was originally rejected by the adjudicating authority in his order dt. 30.5.2001 on limitation which is upheld by Tribunal in Final order dt.29.7.2005 and Hon'ble High Court - hence the demand of recovery of erroneous refund with interest; and accordingly the impugned order is upheld [Para 5] - Appeal dismissed : CHENNAI CESTAT
2015-TIOL-1489- CESTAT-MAD
Blue Mount Textiles Vs CCE & ST
CX - Stay / dispensation of pre deposit - CENVAT credit - Transfer of credit - M/s BMT & M/s GM (100% EOU), both owned by M/s STPL - M/s GM merged with M/s STPL, and subsequently, credit pertaining to M/s GM was transferred; same disallowed in adjudication, upheld by Commissioner (Appeals) and agitated herein.
Held: Appellant at every stage intimated the department and also sought for single registration under Rule 10, with an undertaking binding themselves to all assets and liabilities of other companies - The department has not caused verification in spite of appellant submitting the documents furnished in Dec'2014 - Prima facie , appellants have made out a case for total waiver of predeposit. [Para 4] - Stay granted : CHENNAI CESTAT
2015-TIOL-1488- CESTAT-DEL
M/s Achiever International Vs CCE
CX - During course of search, goods such as CFLs of Leuci Japan brand, Hquaquiang, SKN, Hans and Jewels were found - Assessee failed to produce invoices for procurement of goods - As goods are branded therefore, both lower authorities have correctly drawn conclusion that goods are procured by assessee without payment of duty - Goods are liable for confiscation - Considering quantum and value of goods, redemption fine imposed on assessee is absolutely correct - No merit in appeal, hence, same is dismissed: CESTAT - Appeal dismissed : DELHI CESTAT
CUSTOMS SECTION
DGFT NOTIFICATION
dgft15not015
Import policy of 'Controlled Substances&# 39; under the NDPS Act, 1985
CASE LAWS
2015-TIOL-152- SC-CUS + Story
M/s HCL Ltd Vs CC
Customs - Classification - Risograph covered under sub-heading 84.43: The question is as to whether Risograph is an office machine having duplicating function and thus to be classified under sub-heading 8472.90 of the Customs Tariff Act, 1975 or is it a printing machine to fall under sub-heading 8443.50.
Risograph machine consists of an automatic digital scanner, a thermal head and a printing station. The prints of tex/images which can be taken from these Risographs can be suitably enlarged or reduced as per the user. Risograph printing process is more akin to screen printing. The screen printing process requires a stencil and a screen, with the stencil carrying the design to be printed. This stencil is mounted against the screen. The printing itself takes place when the ink is squeezed through the stencil onto the screen and ultimately onto the paper. It is difficult to equate Risograph machine with duplicating machine. Duplicating, as opposed to photocopying, requires the preparation of a master sheet which makes duplicates on a machine.
Held: Risograph machine is in the nature of a screen printing machine and not duplicating machine. It would, therefore, be covered under sub-heading 84.43 and not 84.72. - Appeal Allowed in favour of assessee : SUPREME COURT OF INDIA
2015-TIOL-1487- CESTAT-MUM
M/s Desmet Ballestra India Ltd Vs CC
Cus - Refund - Department returning refund applications filed by appellant only on the ground that against the very same Bills of entry another person has filed a refund claim, which has been rejected - It is observed that the appellant was claiming the amount as refund on the ground that they have borne the incidence of duty - this assertion seems to have been overlooked by the adjudicating authority - the least he could have done is to consider the appellant' s case on merits and passed a speaking order - since the issue involved needs to be factually verified from the records matter remanded to adjudicating authority for reconsideration of the refund application afresh: CESTAT [para 5, 6] - Matter remanded : MUMBAI CESTAT
Pavitra Ashirwadit Prarthana Sangh Vs CIT
Whether when trust is formulated for the benefit of a specific religious community then the said trust cannot be said to be charitable in nature - Whether when the trust is for general public utility, but in case the objects of the trust are specifically for the benefit of particular religious community, then the activities carried on by such body/association cannot be said to be charitable - YES. - Assessee' s appeal dismssed : PUNE ITAT
SERVICE TAX SECTION
2015-TIOL-1485- CESTAT-DEL
U P Rajkiya Nirman Nigam Ltd Vs CCE
ST - Assessee signed a contract with UPCL to undertake assignment work of rural electrification within state of Uttranchal under Rajeev Gandhi Grameen Vidyutikaran Yojna on turnkey basis - Revenue views that service rendered was covered under ECIS - It is evident from contract that service rendered by assessee is squarely relating to transmission and distribution of electricity and therefore in light of Notfn 45/2010-ST, no service tax is recoverable in respect thereof - Impugned demand is not sustainable, same is accordingly quashed and appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
CENTRAL EXCISE SECTION
CIRCULAR
1004
Instructions regarding Detailed Scrutiny of Central Excise Returns
CASE LAW
2015-TIOL-1486- CESTAT-MAD
Jansons Clothing Vs CCE
CX - Exemption - Raw material procured duty free from DTA allowed to be cleared for further processing by exporter subject to condition that proof of export be furnished in terms of Notification No. 43/2001 dated 26.6.2001 - Exemption sought to be denied on the ground that the appellant himself did not effect the export clearance; and agitated herein.
Held: Controversy in this appeal is reduced to the point as to whether notification has to be interpreted to mean that export has to be made by the appellant only or the goods are to be exported - The spirit of the notification being to export the goods manufactured using duty free raw material irrespective of the person who exported the same there should not be controversy to bring the appellant to the jaws of the levy - furthermore, appellant was granted permission for clearing the duty free raw material for use in export of the finished goods supported by proof of export [Para 3] - Party appeal allowed, Revenue appeal dismissed : CHENNAI CESTAT
CUSTOMS SECTION
TARIFF NOTIFICATION
40
Re-export of polished diamonds - CBEC notifies duty exemption to import of diamonds certified by notified agencies
Whether when trust is formulated for the benefit of a specific religious community then the said trust cannot be said to be charitable in nature - Whether when the trust is for general public utility, but in case the objects of the trust are specifically for the benefit of particular religious community, then the activities carried on by such body/association cannot be said to be charitable - YES. - Assessee' s appeal dismssed : PUNE ITAT
SERVICE TAX SECTION
2015-TIOL-1485- CESTAT-DEL
U P Rajkiya Nirman Nigam Ltd Vs CCE
ST - Assessee signed a contract with UPCL to undertake assignment work of rural electrification within state of Uttranchal under Rajeev Gandhi Grameen Vidyutikaran Yojna on turnkey basis - Revenue views that service rendered was covered under ECIS - It is evident from contract that service rendered by assessee is squarely relating to transmission and distribution of electricity and therefore in light of Notfn 45/2010-ST, no service tax is recoverable in respect thereof - Impugned demand is not sustainable, same is accordingly quashed and appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
CENTRAL EXCISE SECTION
CIRCULAR
1004
Instructions regarding Detailed Scrutiny of Central Excise Returns
CASE LAW
2015-TIOL-1486- CESTAT-MAD
Jansons Clothing Vs CCE
CX - Exemption - Raw material procured duty free from DTA allowed to be cleared for further processing by exporter subject to condition that proof of export be furnished in terms of Notification No. 43/2001 dated 26.6.2001 - Exemption sought to be denied on the ground that the appellant himself did not effect the export clearance; and agitated herein.
Held: Controversy in this appeal is reduced to the point as to whether notification has to be interpreted to mean that export has to be made by the appellant only or the goods are to be exported - The spirit of the notification being to export the goods manufactured using duty free raw material irrespective of the person who exported the same there should not be controversy to bring the appellant to the jaws of the levy - furthermore, appellant was granted permission for clearing the duty free raw material for use in export of the finished goods supported by proof of export [Para 3] - Party appeal allowed, Revenue appeal dismissed : CHENNAI CESTAT
CUSTOMS SECTION
TARIFF NOTIFICATION
40
Re-export of polished diamonds - CBEC notifies duty exemption to import of diamonds certified by notified agencies
Kavita Rangwani V I T O I T A T
Whether addition on account of unexplained deposits in bank account is sustainable where the assessee is a house hold lady and her husband had expired who was critical during the assessment proceedings and the bank account was jointly operated and mostly used for construction of house standing in assessee' s name and the cost of construction as per the approved valuers report was not under question and the assessee had no knowledge of construction, debit and credit entries in the bank. - Assessee' s appeal partly allowed : JAIPUR ITAT
2015-TIOL-1132- ITAT-PUNE
2015-TIOL-1132- ITAT-PUNE
15CB Series
Please find the attached draft Form 15CB to be issued for Payment made towards Education Fees of Students
Indian residents students go abroad for studies and they have to incur expenses on account of payment towards fees to university which may include accommodation charges also. Payment made towards college fees is non-taxable whether paid to government or non-government institute as in this case income is not deemed to accrue or arise in India
DOMESTIC LAW : Section 10(16):- Section 10(16) of the Income-Tax Act, 1961, exempts scholarships granted to meet the cost of education. Since it is intended only to cover the cost of education, any savings made out of such grants may well be taxable (CIT vs. V.K. Balachandaran (1984) 147 ITR 4)
Taxation of Education fees: DTAA provisions
UN MODEL : As per Article 20 of UN MC "Payments which a student or business trainee or apprentice who is or was immediately before visiting a contracting state a resident of the other contracting state and who is present in the first mentioned state solely for the purpose of his education or training receives for the purpose of his maintenance , education for training shall not be taxed in that state , provided that such income arise from sources outside the state."
OECD MODEL : As per Article 20 of OECD " Payments which a student or business apprentice who is or was immediately before visiting a contracting state who is present and in the first mentioned state solely for the purpose of his education or training receives for the purpose of his maintenance , education for training shall not be taxed in that state , provided that such income arise from sources outside the state".
The exemption under Article 20 is intended for foreign students who are temporarily present in the host state and not for those students who intend to remain permanently in the host state (Qing Geng K Li Vs The Queen (1994) IBFD Case No. A-162-93)
Conclusion: Payment made towards education fees is not taxable in India.
Upcoming Seminar on 15CA/CB
- Seminar at Hindi Bhawan, Near ITO at 3 PM on 29th July 2015
- Seminar at Parparganj Study Circle at 7 PM on 29th July 2015
- Seminar at North Campus Study Circle at NSP at 5 PM on 5th Aug 2015
If you have any query related to Black Money Act, International taxation, Transfer pricing or 15CA/CB, please feel free to contact and discuss the same.
Thanks & regards
Avinash Gupta
A - 2/89, Safdarjung Enclave, New Delhi - 110029
M – 9810751999, caavinashgupta@gmail.com
LLM, Vienna University, Europe
B. Com (H), Shri Ram College of Commerce, Delhi University
PFA.
Posted: 22 Jul 2015 08:30 PM PDT
No.2/5/2014-E,II(B)
Government of India
Ministry of Finance
Department of Expenditure
New Delhi, 21st July, 2015.
OFFICE MEMORANDUM
Subject:- Re-Classification/Upgradation of Cities/Towns on the basis of Census-2011 for the purpose of grant of House Rent Allowance (HRA) to Central Government employees.
Reference is invited to this Department's O.M. No. 2(13)/2008-E.11(B) dated 29.08.2008 relating to grant of House Rent Allowance (HRA) to Central Government employees on the recommendations of the 6th Central Pay Commission (CPC) whereby a list of cities/towns classified as "X", "Y" and "Z" for the purpose of grant of HRA was enclosed as Annexure. The matter relating to re-classification of cities/towns on the basis of Census-2011 for the purpose of grant of HRA to Central Government employees has been considered by the Government.
2, The President is pleased to decide that in supersession of all the existing orders relating to classification of cities/towns for the purpose of grant of HRA to Central Government employees, cities/towns shall now be re-classified as "X", "Y" and "Z" for the purpose of HRA as enumerated in the Annexure to these orders.
3. Consequent upon implementation of the recommendations of the 5th Central Pay Commission, certain cities/towns were placed in a lower classification as compared to their existing classification for HRA purpose, vide this Department's G.M. No. 2(30)/97- E.II(B) dated 03.10.97. However, these cities/towns were allowed to retain their existing higher classification, vide Para 3 thereof; and further extended vide O.M. No. 2(21)/E.II(B)/2004 dated 16.03.2005 & O.M. No. 2(13)/2008-E.II(B) dated 07.01.2009. As other cities/towns to which protection of retaining earlier higher classification was allowed, got upgraded during the intervening period and as on date only two cities i.e. Ajmer in Rajasthan and Durgapur in West Bengal were retaining such protection. Consequent upon upgradation of these two cities also on the basis of their population as per Census-2011, provisions contained in Para 3 of this Department's O.M. No. 2(30)/97-E.II(B) dated 03.10.97 which Were allowed to further continue vide G.M. dated 16.03.2005 & 07.01.2009, stand withdrawn/discontinued.
4. Special orders allowing continuance of HRA at Delhi ('X" class city) rates to Central Government employees posted at Faridabad, Ghaziabad, NOIDA and Gurgaon, at Jalandhar CY" class city) rates to Jalandhar. Cantt., at "Y" class city rates to Shillong, Goa & Port Blair vide this Department's O.M. No.2(13)12008-E.11(B) dated 29.08.2008, and continuance of HRA at par with Chandigarh ("Y" class city) to Panchkula vide this Department's O.M. No,2(13)/2008-E.II(B) dated 04.03.2011, shall continue to be applicable till the recommendations of 7th CPC are considered by the Government.
5. These orders shall take effect from 1st April, 2015.
6. The Orders will apply to all civilian employees of the Central Government.The orders will also be applicable to the civilian employees paid from the Defence services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and the Ministry of Railways, respectively.
7. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders issue in consultation with the comptroller & Auditor General of India.
8. Hindi version is attached.
Sd/-
(Subhash Chand)
Director
__._,_.___
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