Leaf No: 53 Month : August Year : 2014

Greetings from Team SA!

 Shri. K V Chowdary appointed as new CBDT Chairman.

 Finance (No. 2) Bill, 2014 has received the assent of the President on 6th August, 2014, published in the Gazette of India, dated 6th August 2014.

 WHO declares Ebola an international health emergency.

 The Ministry of Corporate Affairs (MCA) has floated ‘Company Law Settlement Scheme 2014’ that provides one-time opportunity for defaulting companies to file their annual statutory documents.

 The Supreme Court refused to stay amended rules governing its practice and procedures on a petition filed by the Apex court lawyers challenging their constitutionality.

 Safeguard duty imposed on imports of Seamless Pipes and Tubes into India for a period of two and a half years.

 Safeguard Duty imposed on Saturated Fatty Alcohols.


Guest Column

- v. sundararajan, c.a

 Return of medicines on expiry beyond the prescribed period – Deduction for sales return is not permissible.

It is the trade practice that the retailers return the medicines after its expiry through distributers to the manufactures. The Kerala High Court has held that if the goods are not returned within the prescribed period deduction is not allowed. However the High Court has given a direction that return of medicines after its expiry is genuine problem of the medicine dealers on which the government has to consider the issue. – M/s. Glaxo Smithkline Pharmaceuticals Ltd. Vs State of Kerala, (2012) 50 VAT 486 (Ker).

 Disallowance of Input Tax Credit for Mismatch is unlawful

Comparing the returns of the purchasing and the selling dealer will help the assessing authority to carry out further enquiry. However the same cannot be the basis for disallowing the ITC. The Tribunal directed to verify the transactions and check whether tax is paid into the government treasury and decide the claim of ITC as per the provisions of the law - Modern Steel (VAT App.no .47&48 of 2014 dt 13.6.14 readwith Corrigendum dt 9.7.14). Mumbai Tribunal.

 Denial of ITC on the ground that the selling dealer has not filed the monthly returns in Form-I is not sustainable.

If Rule 10(2) is satisfied and tax is paid to the selling dealer then Sec 19 (1) is complied.

It is another matter that the selling dealer has not paid the collected tax and that liability has to be fastened on the selling dealer. It cannot be mulcted on the petitioner-purchasing dealer, which had shown proof of payment of tax on purchases made - Sri Vinayaga Agencies vs The Assistant Commissioner (Ct) on 29 January, 2013 Madras High Court.

ITC cannot be denied to the purchasing dealer on account of non-payment of tax by a selling dealer in the Govt. Treasury unless the case was a collusion or fraudulence between the parties. In other words, no liability can be fastened on such purchasing dealer – Gheru Lal Chand vs. The State of Haryana &Others (The Punjab and Haryana High Court).

 Software – Sale price

VAT is levied on the licensing of IT software as transfer of right to use goods falling under the deemed sales transactions specified under Article 366(29A) of the Constitution of India.The software is also intellectual property. The licensing of software is also a taxable service under clause (c) of section 66E.

VAT is applicable on the basic price of software license and not on the basic price of software license plus service tax – Delhi VAT department clarification.

VAT is applicable on the basic price of software license plus service tax – Haryana VAT department clarification. 

 Guidelines for considering request for exemption from payment of Customs Duty under Section 25(2) of Customs Act, 1962.

 Draft Circular seeking comments pertaining disposal of seized/ confiscated cylinders filled with refrigerant gases.

 Notification No.12/2012-Cus dated 17.3.2012 amended so as to increase duty on raw as well as refined/white sugar from 15% to 25%.

 Principal Chief Commissioner and Commissioner of Customs notified under Customs.

 Rate of interest to be paid on refund of Pre-deposit made under Section - 129E of the Customs Act, 1962 notified.

 Tariff value of Gold increases and Silver decreases.

 Exchange rates for Imported Goods and for Export Goods notified.

 Principal Chief Commissioner and Commissioner of Central Excise notified under Central Excise.

 Rate of interest to be paid on refund of Pre-deposit made under Section - 35F of the Central Excise Act, 1944 notified.

 Cenvat Credit Rules, 2004 amended.

 CENVAT Credit (Eighth Amendment) Rules, 2004 - seeks to extend CENVAT credit benefit on the basis of Service Tax Certificate for transportation of goods (STTG Certificate) issued by the Indian Railways.

 Export benefits / incentives against exports to Iran.

 Quantity of input to be allowed under Advance Authorisation/DFIA shall be in proportion to the quantity of input actually used/consumed in production.

 Export of onion for the item description at Serial Number 51 & 52 of Chapter 7 of Schedule 2 of ITC(HS) Classification of Export & Import Items shall be permitted subject to a Minimum Export Price (MEP) of US$ 300 per MT.

 Deferment in the date of effect of implementation of bar-coding on Mono-carton as Secondary Level Packaging on export consignment of pharmaceuticals and drugs for tracing and tracking purpose.

 Review of SIONs A-1443,A-1170, A-3627 and K-134.

 Dealer opting for composition of tax cannot be permitted to resile and seek regular assessment in same year - Koothattukulam Liquors v Deputy Commissioner of Sales Tax - 2014 72 VST 353 (SC).

 Selling dealer not to be penalised for misuse of declaration forms by purchasing dealer - Nataraja Timber Trading Corporation v State of Tamilnadu - 2014 72 VST 399 (Mad).

 Deduction towards gross profit allowable in addition to standard deduction available towards labour and like charges in works contract - Sobha Developers Pvt Ltd v Additional Commissioner of Commercial Taxes, Bangalore - 2014 72 VST 426 (Kar).

 Quantity discount given every quarter as incentive to distributors on basis of performance being not relating to sale under invoice but to past sales, not eligible for deduction as discount - Maya appliances (P) Ltd v Additional Commissioner of Commercial Taxes, Bangalore - 2014 72 VST 505 (Kar).

 Recovery of cheques from dealer towards future tax liability in absence of provisional or final assessment order by which demand crystallised, impermissible. Cheques to be returned - Bhavesh Trading Co & Anr v State of Gujarat & Anr - 2014 73 VST (Guj).

 Non-disclosure of actual taxable turnover and non-payment of tax disentitling dealer from claiming input tax credit - State of Kerala v Smt.V.M.Rajalakshmi - 2014 73 VST 218 (Ker).

 Whether in case of financial crisis faced by the assessee, it is within the powers of the Revenue authorities to direct the assessee to furnish personal bond instead of bank guarantee -TVS Srichakra Ltd v The Commercial Tax Officer, Madurai 2014 TIOL 1069 HC MAD.

 Interest payable @6% per annum from date of deposit till date of payment in respect of refund of amount paid by way of deposit paid during investigation - CCE, Chennai-II Vs UCAL Fuel Systems Ltd - 2014 (306) ELT 26 (Mad).

 Whenever, any issue is decided by the Supreme Court or/and High Court then it has to be first referred by the Authorities/Tribunals and then decision should be rendered on the issue involved - CCE Vs Advani Oerlikon Ltd - 2014 (306) ELT 66 (Chhattisgarh).

 Once proceedings against the firm stand concluded, penalty proceedings against partners of the firm cannot continue under Rule 26 - CCE,Chandigarh-I Vs Vikas Garg - 2014 (306) ELT 94 (P&H).

 Goods, even if are not confiscated or not have been rendered liable for confiscation, while indulging into any of the activities concerning such goods, provisions of Rule 26 would be attracted - Sanjay Vimalbhai Deora Vs CESTAT - 2014 (306) ELT 533 (Guj).

 Settlement Commission is required to pass appropriate order under Section 32F(5) of the Act and determine the amount of duty, interest, fine and penalty on the issue which is not accepted by the petitioner after following due procedure as required under Section 32F(3) to 32F(5) of the Act - Mann Pharmaceuticals Ltd. Vs UOI - 2014 TIOL 1310 HC AHM CX.

 Finance Act, 1994 itself does not authorise a general audit of the type envisioned by the impugned Rule 5A(2) instead stipulates a special audit as per Section 72A. CBEC Circular F. No. 137/26/2007-CX.4 dated 1.1.2008 is patently contrary to the statute - Travelite (India) Vs UOI & Ors - 2014 TIOL 1304 HC DEL ST.

 Cement cleared to industrial/institutional consumers in 50 kg bags are eligible for the benefit of Notification No. 4/2006 - M/s Heidelberg Cement (India) Ltd M/s Ultratech Cement Ltd Vs CCE, Raigad - 2014 TIOL 1433 CESTAT MUM.

 Demand based mainly on the evidence of power consumption without any evidence of clandestine removal set aside by majority view - SRJ Peety Steels Pvt. Ltd. & Ors. Vs CCE, Aurangabad - 2014 TIOL 1530 CESTAT MUM.

 Provisions of Rule 6(3) of the CENVAT Credit Rules 2004 will not apply to by-products arising in the course of manufacture - Sahakar Shiromani Vasantrao Kale Sahakari Sakhar Karkhana Ltd Vs CCE, Pune-III - 2014 TIOL 1498 CESTAT MUM.

 Provisions of Rule 8 of Central Excise (Valuation) Rules, 2000 would be applicable only when the entire production of a particular commodity is captively consumed - M/s U.P Filament (India) Vs CCE, Ghaziabad- 2014 TIOL 1568 CESTAT DEL.

 Subsidy received by fertilizer Company from Government cannot be considered as an additional consideration and not includible in assessable value in accordance with the guidelines issued by Board vide Circular no.983/7/2014-CX dated 10.7.14 - M/s Coromandel International Limited Vs Commissioner of CCE, Visakhapatnam-I - 2014 TIOL 1553 CESTAT BANG.

 Even if the service tax liability has been discharged by the recipient of the service, that cannot compensate for the payment required to be made by the appellant nor does it obliterate the liability to pay service tax by the appellant - Janata Sahakari Bank Limited Vs CCE, Pune-III - 2014 TIOL 1497 CESTAT MUM.

 Consignment note is mandatory to constitute GTA. - South Eastern Coal Fields Ltd. Vs CCE, Raipur - 2014 TIOL 1554 CESTAT DEL.

 The purpose of Section 66A is for taxing the import of services and not for taxing monetary transactions between the branch and head-office - KPIT Technologies Ltd. Vs CCE, Pune-I - 2014 TIOL 1529 CESTAT MUM.


   swamy associates © 2014
Find us on google map Disclaimer