Leaf No : 45
Month : December
Year : 2013
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New Year Greetings - Team SA

 Planning Commission Deputy Chairman said that implementation of the Goods and Services Tax (GST) will be the best signal to tell investors globally "India is open for business."

 Rupee Closes 2013 as Asia's Third Weakest Currency. Logs Third Successive Annual Loss and ends 2013 at 61.80/81 to Dollar - Down by 11%.

 Inflation limiting RBI's ability to boost growth: Rajan.

 The Supreme Court reinstates ban on gay sex.

 Coal India fined $290 million by the regulator Competition Commission of India.

 Congress routed in Assembly polls. 

 Reliance Industries Limited allowed to raise gas price from April 2014. 

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A processing unit engaged in processing of textile fabrics, mainly for export, was entitled for deemed cenvat credit on grey fabrics which were processed during the period 2002-03. The unit, mainly into direct exports and supplies to other exporters as per provisions of Rule 19(2) of Central Excise Rules, 2002 read with Notification 45/2001-CE(NT) was not in a position to utilize the entire cenvat credit for paying excise duty on DTA clearances. As the accumulated cenvat credit could not be utilized, refund claim was filed under Rule 5 of CCR, 2004.The adjudicating authority sanctioned the amount of cenvat credit attributable to direct physical exports and denied the refund to the credit attributable to the supplies made to other exporters.

The Appellate authority based on the decision of Hon’ble Tribunal in the case of CCE, Kolkata Vs M/s UIC Wires Ltd - 2003(158)ELT 723 have held that refund under Rule 5 was permissible even in cases where final products were cleared to another manufacturer for further manufacturing as per provisions of Rule 19(2) and remanded the case back to original adjudicating authority for grant of remaining refund subject to the condition that the lower authority had to ensure that no drawback is claimed by any merchant exporter on said processed fabrics cleared in terms of Rule 19(2).

As the processing unit was not in a position to produce the certificate of non-availment, the adjudicating authority as well as the appellate authority has rejected the refund claim. The Hon’ble CESTAT, based on the appeal filed by the processing firm and the arguments forth by the counsel for the unit of their inability to produce any certificate as required by the department and after taking into consideration the facts on record have concluded that, it is for the jurisdictional Asst. Commisioner to ascertain as to whether goods received as per provisions of Rule 19(2) are as declared in the procurement certificate and that the goods are utilized for manufacture of export goods and no drawback has been claimed on such goods.

The Hon’ble Tribunal has also held that the appellant firm cannot be penalized for the inability of the Assistant Commissioner to carry out the responsibility envisaged under Notfn.43/2001-CE(N.T). The Hon’ble Tribunal has accordingly set aside the order of lower authorities and upheld the appeal.

FINAL ORDER NO. 40551 / 2013 DATED 8.11.13



  Constitution of Core Committee for Cadre Restructuring.

 Clarification on Holding and Subsidiary relationship under Companies Act.

 CESTAT Members discharged during probation entitled to practice - Delhi High Court.

 AP High Court follows Madras HC and holds its Appeal and not Writ remedy against the Stay ordres of CESTAT.

 Only Constitutional authorities should be allowed to use the red beacon in the cars - Supreme Court.


 Benefit of SAD exemption on goods cleared from the SEZ / FTWZ unit into DTA unit on stock transfer basis for self-consumption is not available under Notification No.45/2005-Cus.

 Decisions / Judgments not appealed against due to monetary restrictions under Section 35R does not carry precedential value.

 Draft changes of UQC against HS Code in Customs Tariff of India for declaration in Bills of Entry / Shipping Bills.

 Extension of warehousing and acceptance of LUT in place of Bank Guarantee for export warehousing for Status Holder Manufacturer Exporters.

 CBEC to issue necessary guidelines in the form of an administrative circular to ensure that assessing officers and first appellate authorities decide all objections to refund claims.

 Draft CENVAT Credit Amendment Rules, on simplification of provisions relating to distribution of input service credit by Input Service Distributor.

 Clarification on various issues on VCES


 Procedure for grant of authorization for export of various chemicals.

 Export of certain Narcotics drugs and Psychotropic substances shall be permitted subject to NOC from Narcotics Commissioner of India, Gwalior.

 Para 9.28 of FTP has been amended to include Limited Liability Partnerships (LLPs) in the definition of “Group Company”.

circulars notifications

  Additional categories added in the list of exports not eligible under Focus Market Scheme and Incremental Export Incentive Scheme (Excise & Customs).

 Notification 12/2012-Cus amended (Excise & Customs).

 Deepening of tariff concessions in respect of goods covered under CECA.

 Exchange rates effective from 20.12.13 notified.

vat spot

 No period prescribed under Rules framed under Central Act for completion of Assessment - Period of 4 years prescribed for reassessments not applicable. WP dismissed - Parrisons Foods (P) Ltd Vs State of Kerala and Another - 2013 66 VST 243 (Kerala HC).

 Bed sheets made of powerloom is not cloth and not exempt under Kerala General Sales Tax Act - P.K Mumthaz Vs Additional Sales Tax Officer, Trichur & Others  - 2013 66 VST 253 (Kerala HC).

 Lifts manufactured by assessee at Ghaziabad. Job order forwarded by branch office in Tamil Nadu to factory. Lifts dismantled and despatched to customer’s site in Tamil Nadu. Delivery taken by customer and erection made. No sale effected after goods moved in to Tamil Nadu. Held as Interstate works contract entitled to deduction under Section 3B(2)(a) of TNGST Act - ECE Industries Ltd Vs State of Tamil Nadu - 2013 66 VST 163(Madras HC).

 Import of DG sets with parts and accessories for production of goods for automobile industry is condition precedent for exemption. Substantial portion of goods produced sold domestically. Hence, dealer not eligible for exemption under KTEG Act - State of Karnataka Vs Toyata Kirloskar Auto Parts Pvt Ltd - 2013 66 VST 235 (Karnataka HC).

 Sale in the course of Import - Dealer claiming High Sea Sales in favour of three parties - Finding from Tribunal that dealer got bill of lading from Bank after clearance of goods and that there were interpolations in photocopy of triplicate copy of bills of entry produced before department. No appropriation made on bulk quantity imported. Exemption not allowable under CST Act, 1956 - Laxmi Trading Pvt Ltd Vs State of Tamil Nadu - 2013 66 VST 308 (Madras HC).

 Advance Ruling binding on all dealers dealing in similar goods, but ruling stayed pending appeal against Ruling - Rak Ceramics (India) Pvt. Ltd & Others Vs ACCT - VI, Enforcement Wing, Hyderabad - 2013 66 VST 435 (AP HC).

 Contract for manufacture and laying of tiles is works contract and not sale -  MR Tiles vs State of TN- 2013 VIL 123 MAD.


 Adjudication proceedings not required for recovery of cenvat credit availed on HSD along with interest as per Section 112 of Finance Act 2000... Union of India & Ors. Vs Maharaja Shree Umaid Mills - 2013 TIOL 66 SC CX.

 When installation and testing charges not shown separately in invoice excise duty cannot be paid by deducting same from price... Sukalp Agencies vs CCE - 2013 TIOL 1066 HC ALL CX.

 Cutting of carpet rolls into smaller sizes and subjecting such cut sizes to a process of stitching linings at the edges would not amount to manufacture... Win Enterprises vs CCE - 2013 TIOL 1777 CESTAT MAD LB.

 Services of consulting engineer for developing prototype is an eligible input service for manufacturer... DGM, Tata Motors Ltd vs CCE - 2013 TIOL 1815 CESTAT MUM.

 Clearance of flux cored wire to sister unit for repair and maintenance assessable under Rule 8 of Excise Valuation Rules... CCE vs Diffusion Engineering Ltd - 2013 TIOL 1856 CESTAT MUM.

 Construction service used for constructing canteen building is an eligible input service... Positive Packaging Industries vs CCE - 2013 TIOL 1849 CESTAT MUM.

 Carpet, jack assembly and rear visual barriers are accessories of vehicle and hence value of such accessories are not to be added to assessable value... Piaggio Vehicles Pvt Ltd vs CCE - 2013 TIOL 1831 CESTAT MUM.

 Defective goods returned back to the factory on which credit taken and subsequently written-off in the books - No duty payable as duty is payable on removal and goods are lying in factory... Commissioner of C.Excise, Nagpur Vs Rallis India Ltd - 2013 TIOL 1911 CESTAT MUM.

 SAD refund not to be denied on the ground that the declaration is not in the prescribed format... Singhania Chemicals vs CCE - 2013 TIOL 1853 CESTAT DEL.

 Outward tranportation service used by manufacturer for transporting finished goods from place of removal up to premise of purchaser is not covered in scope of definition of 'input service' up to 01.04.2008... CCE vs Vesuvious India Ltd - 2013 TIOL 1038 HC KOL ST.
 Order passed by the designated authority under VCES scheme is appealable under Section 86 of Finance Act, 1994... Barnala Builders & Property Consultant vs Deputy Commr. Central Excise and Service tax - 2013 TIOL 1016 HC P & H ST.

 Where there is only one contract with the appellants showing entire scope of work individual components cannot be split on basis of separate values available for each component... Associated Soapstone Distributing Co. Pvt. Ltd vs CCE - 2013 TIOL 1850 CESTAT DEL.

 Cricket Association promoting game of cricket cannot be considered as rendering service to poor and needy and hence not eligible for exclusion from payment of service tax under clause (iii) of Club or Association service... Vidarbha Cricket Association vs CCE - 2013 TIOL 1915 CESTAT MUM.

 Planning, scheduling & organising outbound tours are outside the purview of tour operator under Finance Act, 1994 and not taxable... Cox & Kings India Ltd vs CCE - 2013 TIOL 1907 CESTAT DEL.

 Builders/Developers not liable to pay service tax under 'Maintenance and Repair service' on onetime maintenance charges collected from flat buyers... Kumar Beheray Rathi vs CCE - 2013 TIOL 1806 CESTAT MUM.

 The legal principle of implying necessary changes into a section of one Act made applicable for purposes of another Act cannot go to such extent to defeat the very objective of a beneficial scheme like grant of refund due on exports... KKSK Leather Processors (P) Ltd. Vs Commr. of Cus,C.Ex. & S.Tax, Salem - 2013 TIOL 1797 CESTAT MAD.

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