Wednesday, December 17, 2014

[aaykarbhavan] Judgments and Infomration






Cenvat credit on Outdoor Catering services used in relation to business activities

Even after amendment made in the definition of 'Input services' w.e.f April 1, 2011, Cenvat credit on Outdoor Catering services used in relation to business activities continues to be eligible when the cost is borne by the Company and not recovered from the employees.
Hindustan Coca Cola Beverages Pvt. Ltd. Vs. Commissioner of Central Excise, Nashik [Order No: A/1479 – 1480/14/SMB/C- IV]
In the instant case, Hindustan Coca Cola Beverages Pvt. Ltd. (the Appellant) availed Cenvat credit on Outdoor Catering services for the period December, 2011 to December, 2012, which was denied by the Lower Authorities and the Ld. Commissioner (Appeals) on the ground that the definition of Input services given under Rule 2(l) of the Cenvat Credit Rules, 2004 (the Credit Rules) has been amended w.e.f April 1, 2011 to specifically exclude any Input service used for personal use or consumption by any employee.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Mumbai, and relying upon Circular D.O.F No. 334/3/2011-TRU dated February 28, 2011 and Circular No. 943/4/2011-CX dated April 29, 2011, submitted the following:
  • Outdoor Catering service is used by the Appellant in relation to carrying out the business of manufacturing of excisable goods;
  • Cenvat credit has been claimed only to the extent the cost of such expenses are borne by the Appellant and not recovered from the employees;
  • Outdoor Catering services per se is not ineligible Input services but it is not eligible for Cenvat credit only when it is used for personal use or consumption of any employee or a sub-group of employee;
  • Deletion of the word 'activities relating to business' from the definition of Input services and adding of specific clauses of inclusion and exclusion is only to make it explicit what was already implicit. Accordingly, all Input services used for business continue to be eligible for Cenvat credit unless excluded specifically.
The Hon'ble CESTAT, Mumbai observed the following:
  • Rule 2(l) of the Credit Rules specifically uses the words 'used primarily for personal use or consumption of any employee', which should be given due effect;
  • Outdoor Catering services is used by the Appellant in relation to their business activities and the same is used by all employees in general;
  • The Government while issuing the Budget clarification or subsequent Circulars has clarified that what is not eligible is the Input services meant for personal use or consumption of any employee or the cost of which is included as part of salary of the employee as a cost to Company basis;
Therefore, on the basis of above, the Hon'ble Tribunal held that since in the instant case, Outdoor Catering services are used by the Appellant in relation to their business activities, cost of which is borne by the Appellant and not by the employees, they are rightly entitled to claim Cenvat credit of the same.
- See more at: http://taxguru.in/service-tax/cenvat-credit-outdoor-catering-services-relation-business-activities.html#sthash.hbKVPeRa.dpuf

RBI imposes monetary penalty on two banks; cautions three banks for violating KYC/AML Instructions

The Reserve Bank of India has imposed monetary penalty on the following two banks for violation of its instructions, among other things, on know your customer/anti money laundering Know Your Customer(KYC)/Anti Money Laundering (AML). The details of the penalty are:
Sl. No.
Name of the bank
Penalty Amount (in Rs. mn)
1
ICICI Bank Ltd.
5.00
2
Bank of Baroda
2.50
The penalties have been imposed in exercise of powers vested in the Reserve Bank under the provisions of Section 47(A)(1)( c ) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
Background
The Reserve Bank of India (RBI) received a complaint from a reputed statutory organisation in August, 2013 through which the details of a fraud perpetrated in five banks, namely, State Bank of India, ICICI Bank Ltd., Bank of Baroda, Axis Bank Ltd. and State Bank of Patiala, with the connivance of certain officials of the statutory organisation were brought to the Reserve Bank's notice. The fraudsters had managed to open fictitious accounts in the name of the statutory organisation in the above five banks and operated the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks.
A scrutiny was undertaken in the above five banks in January, 2014 to ascertain the adherence to extant regulatory instructions by banks in the instant case. The findings of the scrutiny revealed violation of certain regulatory guidelines issued by the Reserve Bank, namely:
  • non-adherence to certain aspects of know your customer Know Your Customer(KYC) norms like customer identification and acceptance procedure
  • internal norms regarding customer identification procedure of a bank being violative of Know Your Customer (KYC) directions issued by Reserve Bank
  • non-adherence to instructions on monitoring of transactions in customer accounts
Based on the findings of the scrutiny, the Reserve Bank issued a show cause notice to each of these banks, in response to which the individual banks submitted written replies. After considering the facts of each case and individual bank's reply, as also, personal submissions, information submitted and documents furnished, the Reserve Bank came to the conclusion that some of the violations of serious nature were substantiated and warranted imposition of monetary penalty as determined above on two banks, namely, ICICI Bank Ltd. and Bank of Baroda. Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and their impact.
In respect of the three remaining banks, namely, State Bank of India, Axis Bank Ltd. and State Bank of Patiala, where such scrutinies were conducted and banks' explanation called for, based on written and oral submissions, it was decided not to impose any monetary penalty as the banks' explanations regarding the circumstances which led to the fictitious accounts getting opened and operated without detection, was judged to be reasonable. However, these banks have been cautioned to put in place appropriate measures and review them from time to time to ensure strict compliance of Know Your Customer (KYC ) requirements in future.
Alpana Killawala
Principal Chief General Manager
Press Release : 2014-2015/1260
- See more at: http://taxguru.in/income-tax/rbi-imposes-monetary-penalty-banks-cautions-banks-violating-kycaml-instructions.html#sthash.JT910qQZ.dpuf

Do not invest in schemes offered by entities barred by SEBI from raising money

SEBI cautions investors not to invest in schemes offered by entities barred by SEBI from raising money

It has been observed that certain entities collect / mobilize money under existing / new schemes even after SEBI has directed such entities not to collect any further money, not to launch any new schemes, etc. These companies / entities without obtaining registration are illegally collecting / mobilising moneyfrom investors by making false promises, assuring unrealistic return, etc.
Wherever SEBI has found schemes offered by these entities, to be in the nature of Collective Investment Schemes (CIS), appropriate actions have been taken against the entity/ies and its Directors. In this regard, since January 01, 2011, SEBI has passed orders against 51 entities and its Directors, carrying on unregistered CIS. As part of interim directions, SEBI directs the entities and its Directors to stop collecting further money under existing / new schemes, not to launch any new scheme or float any new companies/firm to raise fresh money, not to divert or alienate any assets or money collected etc., and through final directions SEBI debars the company and its Directors from accessing the Capital markets, etc. List of the Companies against whom orders have been passed by SEBI is given below with this press release. The orders are also available on SEBI website at www.sebi.gov.in
Investors and general public are hereby cautioned that other than "GIFT Collective Investment Management Company Limited" no other entity is registered with SEBI under the CIS Regulations. If any of the following entities are found to be collecting / mobilising money, investors are advised not to subscribe to such schemes and to report the same to SEBI, State authorities including Police authorities immediately, along with appropriate details / documents.
S.N.
Case Name
Date of SEBI Order
1
Sun-plant Agro Ltd
03-05-2011
2
NGHI Developers India Limited
06-11-2012
3
MPS Greenery Developers Limited
06-12-2012
4
Nicer Green Forest Ltd
12-03-2013
5
Maitreya Services Pvt. Ltd
25-03-2013
6
Osian's Connoissurers of Art Ltd
15-04-2013
7
Saradha Realty India Ltd
23-04-2013
8
Ken Infratech Ltd
18-06-2013
9
Alchemist Infra Realty Ltd
21-06-2013
10
Sumangal Industries Ltd
09-07-2013
11
HBN Dairies & Allied Ltd
12-07-2013
12
Sai Prasad Foods Ltd.
17-07-2013
13
Sai Prasad Properties Ltd
17-07-2013
14
Maitreya Plotters & Structures Pvt. Ltd
30-08-2013
15
MVL Limited
26-09-2013
16
Samruddha Jeevan Foods India Ltd
31-10-2013
17
Servehit Housing & Infrastructure  India Ltd
31-10-2013
18
Orient Resorts (India) Pvt. Ltd
26-11-2013
19
Kim Infrastructure & Developers  Ltd
05-12-2013
20
Green  Ray International Limited
03-02-2014
21
Royal Twinkle Star Club Ltd.
07-03-2014
22
Ecogreen Realestate (India) Limited
26-03-2014
23
Peers Allied Corportaion Ltd
23-04-2014
24
Green Buds Agro Farm I Ltd
16-05-2014
25
M/s. KBCL India Ltd
26-05-2014
26
Adel Landmarks Ltd (Era Landmarks Ltd)
05-06-2014
27
JSR Dairies Ltd
05-06-2014
28
Nikhara Bharath Construction Company Ltd.
12-06-2014
29
Haldhar Realty and Enterprises Ltd
17-06-2014
30
Rose Valley Real Estate & Constructions Ltd.
18-06-2014
31
Beetal Livestocks & Farms (Pvt) Ltd
25-06-2014
32
Ramel Industries Ltd
11-07-2014
33
Remac Realty India Ltd
15-07-2014
34
Sunshine Agro Global Ltd (Sunshine Forestry Pvt. Ltd)
15-07-2014
35
Ally Multi-Trade India Pvt. Ltd.
22-07-2014
36
Sai Prasad Corporation Ltd
22-07-2014
37
Nicer Green Housing and Infrastructure Developers Limited
28-07-2014
38
Dhanolty Developers Ltd
30-07-2014
39
JSV Developers India Ltd.
31-07-2014
40
HNC Infrastructures and Shares India Ltd
05-08-2014
41
Shubham Kroti Foods Pvt. Ltd
08-08-2014
42
Viswas Real Estates and Infrastructure India Ltd
08-08-2014
43
IHI Developers India Ltd
11-08-2014
44
PACL
22-08-2014
45
Step Up Marketing Pvt. Ltd.
22-08-2014
46
SPNJ Land Projects and Developers India Ltd
17-09-2014
47
G N Dairies Limited
31-10-2014
48
Sheen Agro and Plantation Ltd
14-11-2014
49
Garima Real Estate and Allied Ltd.
24-11-2014
50
Raghav Capital & Infrastructure Ltd.
24-11-2014
51
Shree Sai Space Creation Ltd
24-11-2014
 PR No. 174/2014 , Mumbai, December 17, 2014
- See more at: Do not invest in schemes offered by entities barred by SEBI from raising money
 

Amendment to CESTAT Appeal Forms – reg.

Circular No. 991/15/2014-CX
F.No.390/Misc./46/2011-JC
 dated    17th December, 2014
Sub: – Amendment to CESTAT Appeal Forms – reg.
Reference is invited to Circular No.969/03/2013-CX dated 11th April, 2013 whereby the forms for filing appeal in the CESTAT were amended/revised and new forms for Central Excise (E.A.-3, E.A.-4, E.A.-5), Customs (C.A.-3, C.A.-4, C.A.-5) and Service Tax (S.T.-5, S.T.-6, S.T.-7) were notified vide Notification Nos 6/2013-Central Excise (N.T.), 37/2013-Customs (N.T.) and 5/2013-Service Tax, all dated 10.04.2013 respectively and made effective from 1.6 2013.
ii) Along with the above forms, the pre-figured alpha numeric numbers to be filled in for the orders passed by the Commissioner or Commissioner (Appeal) or Commissioner (Adjudication), as the case may be were also issued for all the Commissionerates of Central Excise, Customs and Service Tax including all the Commissioners (Appeals) and Commissioners (Adjudication).
iii)         Consequent to Cadre Restructuring certain new Commissionerates have been created, Board has received references from the field formations requesting for assigning/creating alpha-numeric codes for new Commissionerates.
iv) In respect of Customs Commissionerates in Chennai/Delhi/Mumbai, the codes given in the third part has been suitably amended to capture the nature of the Commissionerate. For example, code CHN-CUSTM-AIR refers to refers to the Commissionerate of "Chennai Customs (I) Airport", CHN-CUSTM-002 refers to "Chennai Customs (II)", CHN-CUSTM-006 refers to "Chennai Customs (VI)", CHN-CUSTM-ACC refers to " Chennai (VII) Air Cargo Complex" and CHN-CUSTM-GEN refers to Chennai (VIII) (General) Commissionerates as per the table given below:
CHENNAI (I) (AIRPORT) CUSTOMS CHN CUSTM AIR
CHENNAI (II) CUSTOMS CHN CUSTM 002
CHENNAI (III) CUSTOMS CHN CUSTM 003
CHENNAI (IV) CUSTOMS CHN CUSTM 004
CHENNAI (V) CUSTOMS CHN CUSTM 005
CHENNAI (VI) CUSTOMS CHN CUSTM 006
CHENNAI (VII) (AIR CARGO COMPLEX) CUSTOMS CHN CUSTM ACC
CHENNAI (VIII) (GENERAL) CUSTOMS CHN CUSTM GEN
 v) References have been received from field formations regarding difficulties being faced in accommodating order number in given three boxes in cases where the Adjudicating Authority/Commissioner (Appeals) has passed a common order disposing of multiple cases or appeals involving more than one party and wherein range of order number has to be assigned to such orders viz. order no 12-15 or 12 to 15. In such cases, Adjudicating Authority/Commissioner (Appeals) may pass individual orders in each case and assign single number only viz Order No 999 etc.
vi) In Commissionerates where more than 999 orders are being passed, the number of boxes (meant for order number) are being increased from three to four to accommodate an order number exceeding 999. Accordingly the total number of boxes given for alpha numeric code is increased from 21 to 22.
vii)       Therefore, revised/amended pre-figured alpha numeric numbers are being issued and annexed herewith.
(2)        The new alpha numeric series would be effective from 01-01-2015.
(3)      Hindi version follows.
(Sunil K. Sinha)
Director (Judicial Cell)
- See more at: Amendment to CESTAT Appeal Forms – reg.
 

Neither the Central Government nor DGFT have power to amend Foreign Trade Policy or withdraw any export benefit with retrospective effect

Neither the Central Government nor the DGFT have the power to amend Foreign Trade Policy or withdraw any export benefit with retrospective effect
Malik Tanning Industries Vs. Union of India And Ors; Kavish Impex Pvt Ltd Vs. Union of India And Ors [2014-TIOL-2197-HC-DEL-CUS]
Malik Tanning Industries and Kavish Impex Pvt. Ltd. (the Petitioners) exported polyester printed and dyed fabrics (impugned goods) and therefore were granted an incentive under the Focus Product Scheme (FPS) by way of Duty Credit Scrips (Scrips) in terms of paragraph 3.15 of the Foreign Trade Policy 2009-2014 (FTP). These Scrips were utilized/ sold by the Petitioners. This incentive was granted to the Petitioners as impugned goods exported were considered to be 'Technical Textiles', notified under Appendix 37D of the Handbook of Procedures (Appendix).
Later on, vide Circular No. 42 (RE-2010)/2009-14 dated October 21, 2011 (the Impugned Circular) issued by the Director General of Foreign Trade (DGFT), the benefit available under FPS in respect of 'Technical Textiles' was curtailed to only 33 items with retrospective effect from April 1, 2011. Inasmuch as the Impugned Circular excluded, with retrospective effect, the products exported by the Petitioners from the definition of 'Technical Textiles' and thus rendered the Petitioners ineligible for claiming the incentive under the FPS. Accordingly, the demand letters were raised on the Petitioners. Being aggrieved, the Petitioners filed a Writ petition before the Hon'ble High Court of Delhi raising an issue as to whether the DGFT could issue the Impugned Circular to recall a benefit provided to the Petitioners under the FTP, with retrospective effect.
The Hon'ble High Court of Delhi observed that:
  • The policy to grant export incentives by way of the FPS is an integral part of the FTP; the role of DGFT with regard to the same is limited to specifying the procedures to be followed by an importer and exporter for implementing the said scheme and providing any clarification in that regard, where necessary;
  • A bare reading of the provisions of Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (the FTDR Act) indicates that a policy cannot be made with retrospective effect. Inasmuch as the expression 'formulate and announce' used in Section 5 of the FTDR Act clearly meant that the power is to be exercised prospectively;
  • The power exercised by the Central Government is a power delegated by the Legislation. It is well settled that in absence of an express provision enabling a delegate to make delegated Legislation with retrospective effect, no such power can be inferred;
  • By virtue of Section 6(3) of the FTDR Act, DGFT may also exercise such powers as may be specified by an Order made by the Central Government but the said Section expressly excluded the powers, which are to be exercised by the Central Government under Section 5 thereof. Hence DGFT cannot alter or amend with retrospective effect the schemes framed under the FTP;
Therefore, the Hon'ble High Court decided the matter in favour of the Petitioners and held that neither the Central Government, nor the DGFT would have the power to amend the FTP or withdraw any export benefit with retrospective effect. It was further held that since, the Petitioners have already availed incentives under FPS, the effect of the Impugned Circular to recall a vested right would violate Article 300A of the Constitution of India.
- See more at: http://taxguru.in/custom-duty/central-government-dgft-power-amend-foreign-trade-policy-withdraw-export-benefit-retrospective-effect.html#sthash.mt5i3Mkd.dpuf

Assessee is entitled to refund of Anti-Dumping Duty paid provisionally even when the Assessment Order on the Bills of Entry is not challenged

Assessee is entitled to refund of Anti-Dumping Duty paid provisionally even when the Assessment Order on the Bills of Entry is not challenged
Circuit Systems India Pvt. Ltd. Vs. Commissioner of Customs (Import), Nhava Sheva [2014 (12) TMI 21 – CESTAT MUMBAI]
Circuit Systems India Pvt. Ltd. (the Appellant) imported Glass Epoxy Copper and filed 5 Bills of Entry for the period October 2003 to January 2004 (Impugned period). During the Impugned period, the Anti-Dumping Duty was payable by the Appellant provisionally in terms of the Notification No. 141/2003 dated September 19, 2003 (the Notification). Later the Notification was withdrawn; therefore the Anti-Dumping Duty was not leviable on the Appellant.
Consequently, in terms of Rule 21 of the Customs Tariff (Identification, Assessment & Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1975, the Appellant filed refund claim of Anti-Dumping Duty paid by them provisionally, which was allowed by the Adjudicating Authority.
Being aggrieved, the Revenue preferred an Appeal before the Hon'ble Commissioner (Appeals). The Hon'ble Commissioner (Appeals) relying on the  decision of the Hon'ble Supreme in case of Priya blue Industries [2004 (172) ELT 1455 (SC)] rejected the refund claim filed on the ground that the Assessment of Bills of Entry has not been challenged and the Appellant has failed to pass bar of unjust enrichment. Aggrieved by the order of the Hon'ble Commissioner (Appeals), the Appellant preferred an appeal before the Hon'ble Tribunal, Mumbai.
The Hon'ble CESTAT, Mumbai relying on the decision of the Hon'ble High Court of Delhi in case of Aman Medical Products Ltd. [2010 (250) ELT 30 (Del)] held that as per Section 27(2) of the Customs Act, 1962, the duty borne by the Assessee is refundable without challenging the Assessment Order.
It was further held by the Hon'ble CESTAT, Mumbai that the Appellant has passed the bar of unjust enrichment as the Appellant had produced the Balance Sheet, which shows that the amount of Anti-Dumping Duty paid by them originally is recoverable advance from the customers and has also produced a certificate to the effect that the Anti-Dumping Duty has not formed part of the final product.
Therefore, the Hon'ble Tribunal allowed the appeal in favour of the Appellant and allowed the refund claim filed.
- See more at: http://taxguru.in/custom-duty/assessee-entitled-refund-antidumping-duty-paid-provisionally-assessment-order-bills-entry-challenged.html#sthash.HJUmY5lx.dpuf

Where all factual facts are available on the records, the Tribunal couldn't remand back the case

L'Oreal India (Pvt.) Ltd. Vs. Union of India [(2014) 51 taxmann.com 561 (Bombay)]
L'Oreal India (Pvt.) Ltd. (the Petitioner) was engaged in the manufacture of cosmetic products classified into two categories, namely Technical products cleared to Salon/ Beauty Parlour (Technical products) and Retail sale products meant for sale to consumers (Retail sale products). The Petitioner was valuing both the products under Section 4A of the Central Excise Act, 1944 (the Excise Act), but, the Department argued that Technical products were to be valued as per Section 4 of the Excise Act.
The Adjudicating Authority after considering the reply of the Petitioner dropped the proceedings and held that both the products were to be valued under Section 4A of the Excise Act. Being aggrieved, the Department preferred an appeal before the Hon'ble CESTAT. The Hon'ble CESTAT set aside the Order of the Adjudicating Authority and directed the Adjudicating Authority to pass fresh order on merits regarding valuation of the Technical products and also after considering the issue of limitation.
Being aggrieved, the Petitioner filed a Writ petition before the Hon'ble High Court of Bombay arguing that since the matter was
heard on merits before the Hon'ble Tribunal, the Tribunal should have decided the appeal and not remanded the matter back.
The Hon'ble High Court of Bombay relying upon the finding of the Apex Court in the case of M.G. Shahani & Co. (Delhi) Ltd. Vs. Collector of C. Excise [1994 (73) ELT 3] and after observing that the Tribunal had not remanded the matter seeking any additional facts, held as under:
  • If, on materials on record, the Tribunal can analyse evidence and arrive at a factual conclusion, the Tribunal ought not to remand the matter and instead hear the matter and pass order on merits;
  • Though dispute related to valuation of Technical products and the Adjudicating Authority held that both products are liable to be assessed under Section 4A of the Excise Act, the Tribunal should have decided appeal with reference to valuation of Technical products;
  • It was not proper to set aside Adjudication Order and remand the case for fresh adjudication.
Hence, the Hon'ble High Court allowed the Writ petition and the matter was sent back to the Tribunal for disposal on merits.
- See more at: Where all factual facts are available on the records, the Tribunal couldn't remand back the case



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Posted by: Dipak Shah <djshah1944@yahoo.com>


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