Leaf No:    009
Month:   December
Year:   2010
latest news

 #   Right to Information Act (RTI) is slowly and steadily becoming a tool for enforcing accountability. The Central Information Commission has held in a reference (V.R.Chandran vs Directorate of Enforcement 2010 TIOL 1 CIC ) that Enforcement Directorate is not exempted from disclosure obligation and has been specifically directed to provide estimate of volume of cases where investigation is pending on illegal money deposits in foreign banks as Swiss bank.

#   The judgment of Hon’ble Supreme Court in Maruti Suzuki vs. CCE (2009-TIOL-94-SC-CX) has been referred to larger bench for reconsideration of restricted meaning given to definition of ‘inputs’ as per Rule 2 (e) of Cenvat Credit Rules, 2004. The reference has been made while disposing off Ramala Sahakari Chini Mills Ltd vs. CCE 2010 TIOL 102 SC.

#   Shri. Sumit Dutt Majumder , former Director General of DRI  and Member (Excise) in CBEC, has taken over as acting Chairman of the Central Board of Excise and Customs from Shri.V. Sridhar, who retired on November 30.

 #   Foreign Contribution Regulation Act, 2010 notified. Act has been enacted with a view to keep track of inflow of foreign funds as gifts, donations etc.

#   Mobile number portablility to be effective from 20-01-2011. With this facility the consumers will have the choice of selecting their Telecom Service Provider (operator) without changing their number, provided a minimum period of 90 days has elapsed after subscription to the mobile service of the current service provider. 
circulars & notifcations


Foreign trade policy has been amended permitting Duty free import of samples up to value of Rs. 3,00,000 ... Click here for copy of instruction 


Clarification has been issued to the effect that the obligation to monitor amount under bond cum legal undertaking is on the developer or unit themselves and it is their obligation to intimate the concerned authority if there is a shortfall the developer or unit is required to execute an additional bond cum legal undertaking. The same circular also clarifies that the bond can be executed for import or procurement of raw materials for a period of one year or three years ... Click here for copy of Circular.


The scope of notification regarding exemption on transmission or distribution of electricity has been clarified to be applicable to even electricity meters installed at premises of consumers. This has been viewed as an activity in relation to distribution and transmission of electricity and is held to be exempted from tax under Notification 11/10-ST dated 27.02.10 and 32/2010-ST dated 22-06-10 ….Click here for copy of Circular


Circular has been issued clarifying applicability of larger bench decision in Indica Laboratories Vs CCE, Ahmedabad - 2007-TIOL-713-CESTAT-AHM-LB on inclusion of bonuses, discounts etc for valuation under Section 4 in absence of stay by the High Court... Click here for Copy of Circular 

genie in aladdin’s lamp
SAP India Private Limited vs CCE, Bangalore III (2010-TIOL-1569-CESTAT-BANG) : Carving out an exception to attempts of confining services within boundaries of literal interpretation, the Hon’ble CESTAT, Bangalore has held that maintenance of all types in relation to software is not intended to be covered under the category of ‘Management, maintenance and repair service. Categories as perfective maintenance and corrective maintenance results in enhancement of effectives and is hence held to be covered more appropriately under ‘Information technology service’ with effect from 16-05-08….Click here for copy of the CESTAT Order.
CCE, Chandigarh I vs M/s Punjab Steels & Others (2010-TIOL-786-HC-P&H-ST) :   The Hon’ble Highcourt of Punjab and Haryana while dismissing an appeal preferred by the Department has held that there is no requirement to reverse the CENVAT credit availed on the input services consumed, when the input are cleared as such …..Click here for Copy of Judgment.
State of Karnataka vs Azad Coach Builders Pvt Ltd (2010-TIOL-70-SC-CST-CB):   Constitutional bench of the Hon’ble Supreme Court, on a reference on eligibility of ‘penultimate sales’ under Section 5 (3) of Central Sales Tax Act, 1956 for export benefit, has held that penultimate transactions would be treated as qualified for export benefits if the sale is inextricably connected with the export outside India. This is a deviation from the ‘same goods’ theory so far evolved by the Hon’ble Supreme Court and followed by other Courts in the country. It is interesting to note that the reference has not overruled the Judgments which sustained the ‘same goods’ theory.....Click here for copy of Judgment.
Nirmal products vs. CCE, Jaipur (2010-TIOL-1573-CESTAT-DEL): Service of Orders, Summons etc through any mode other than those prescribed under Section 37 C has been held to be invalid. Despatch of Order in Original through courier has therefore been held not to be a proper service …Click here for copy of CESTAT Order
Bird Machines vs. CCE, Delhi IV (2010-TIOL-1566-CESTAT-DEL):  Benefit of Notification 108/95-Cus has been held to be not applicable to contractors but is available only to supplies to United Nations or International Organisation for their official use or to projects approved by them and approved by Central Government. ... Click here for Copy of CESTAT Order.

Vee Gee Faucets Pvt Ltd vs CCE, Gurgaon (2010-TIOL-1572-CESTAT-DEL):  Use of brand name of another person by virtue of an assignment has been held to disentitle a person from availing benefit of SSI Exemption ……Click here for Copy of CESTAT Order.

APITCO Ltd vs CST,Hyderabad (2010-TIOL-1564-CESTAT-BANG):  Receipt of ‘grants in aid’ by implementing agencies from the Government has been held as not constituting taxable service so as to subject same to service tax ...Click here for copy of CESTAT Order.





The views expressed and the information provided in this newsletter are of general nature and is not intended to address the circumstances of any particular individual or entity. Further the above content should neither be regarded as comprehensive nor sufficient for making decisions. Although we endeavor to provide accurate and timely information, there is no assurance or guarantee in this regard. No one should act on the information or views provided in this publication without appropriate professional advice. It should be noted that no assurance is given for any loss arising from any actions taken or to be taken or not taken by anyone based on this publication.





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editor’s desk -sindhu
Dear Readers,

Greetings from Team SA!!!

You may agree or disagree with it as you please but you can’t ignore it. Free trade has penetrated deep in to world economy in guise of expansion of domestic market through economic integration. We have seen variants of it from GATT to trade agreements , trade treaties, comprehensive economic cooperation agreements, frame work agreements, regional agreements, preferential trade agreements and last but not the least, free trade agreements. India has ongoing free trade agreements with Srilanka and Thailand and is vigorously following up with European Union and China which may be finalised by 2011. It is worthwhile in this context to decipher that a free trade agreement signifies elimination of tariff between contracting countries...

read more ...
sa corner

Police vs Customs      

 - g. natarajan, advocate

It is one of the fundamental principle of criminal jurisprudence that any statement given by the accused person before the Police Officer is not an evidence. This fundamental principle has been given an exception in matters relating to Customs and Central Excise and statement given before the officers of Customs and Excise and treated as valid evidences.

This special privilege being given to the department, for whatever purpose is often leading to misuse of such power. Under criminal jurisprudence, the trial is totally delinked from the investing agency. While the role of the Police is limited to filing of the charge sheet and prosecution of the accused, where the decision is taken by an independent judiciary, under tax administration both investigation and adjudication powers vest with the same department. It is quite common that the officer who has issued the show cause notice himself adjudicating the case. Especially in such circumstances, the role of investigating officers should have been circumscribed by more safeguards in the interest of fair administration of justice.

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“I like to pay taxes. With them I buy civilization."

- Oliver Wendell Holmes, Jr.

In the first leg of this sequel, in a trilogy, the First Draft Paper by the Empowered Committee, released on 10/1/2009 was analyzed. In this second leg of the sequel, once again in a trilogy, the report of the Task Force (The Thirteenth Finance Commission) and also the Commentary by the Department of Revenue on the First Draft Paper of The Empowered Committee (FDP for short) are addressed.

The Report of the Task Force on GST was released on 15/12/2009! On the fundamentals, it syncs with the FDP on both policy and issues like having a DUAL GST regime in India in consonance with the federal structure of the country comprising of a Central GST (CGST) which would be levied by the Centre and a State GST (SGST) which would be levied by the States on all goods and services up to the final consumer point. It also concurs that the Centre and the State would have concurrent jurisdiction over the levy and that the CGST would be administered by the Centre and the SGST would be administered by the respective States. It also concurs that there shall be both CGST as well as SGST on imports. There is also a concurrence that the GST shall be on a destination principle so that the SGST on imports shall accrue to the consuming State. The report also agrees to the policy that the exports shall be zero rated but there shall be no exemption to either the units in Special Economic Zones as well as to its developers.
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before parting ... -jk


“devil's advocate”


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