Leaf No : 47
Month : February
Year : 2014
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Greetings from Team SA!

 The total trade of goods and services stands at over USD one trillion which is 56% of GDP.

 India born Satya Nadella is Microsoft’s new CEO.

 Justice Ashok Kumar Mathur is appointed as Chairman of 7th Pay Commission.

 Ms. J. M. Shanti Sundaram appointed CBEC Chairperson.

 Income Tax Department identifies 21.75 lakh tax 'non-filers'.

 Forex reserves rise $ 1.46 billion to $ 293.79 billion.

 Tax Administration Reform Commission to submit its first report by May-end.

 Supreme Court restrains Central Government from collecting service tax from Tirupati Temple.

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An assessee manufacturing headlamp assembly and motor vehicle parts falling under Central Excise Tariff heading No.8512 and 8705 had been availing cenvat credit on inputs under Cenvat Credit Rules, 2002. During the period April 2003 to March 2004, the assessee had cleared certain inputs as such and had not reversed the credit at the time of removal but reversed the credit at the end of the month. The department issued a demand for recovery of interest as per the provisions of Section 11AB of the CEA, 1944 holding that interest is payable on the delayed payment.

The Appellate authority has held in favour of the assesse on the ground that the duty liability had been paid prior to issue of show cause notice. On appeal by the department, the Tribunal also held in favour of the assesse on the ground that there were no enabling provisions in the statute for recovering interest.

The department preferred an appeal before Hon’ble High Court. Relying upon the provisions of Rule 3(3) and 3(4) of the Cenvat Credit Rules, 2002 and specifically as per the provisions of Rule 3(4) as it existed prior to 1.3.2003 and the substituted provisions of Rule 3(4) vide notification 13/2003-CE(N.T) dated 1.3.2003, the Hon’ble High Court has held that the expression, “on the date of such removal” is referable to the rate applicable to such goods and it cannot be understood to mean that the duty should be paid at the time of removal in terms of substituted provisions. The Hon’ble High Court has also observed that the phrase “on the date of such removal” was deleted in the substituted provisions w.e.f 1.3.2003.

Thus the Hon’ble High Court, after considering the provisions of Rule 8 of Cenvat Credit Rules, 2004 which specifies the manner of payment of duty read with the provisions of sub-rule 4 to Rule 3 of Cenvat Credit Rules, has held that the payment made at the end of the month in respect of input clearances “as such” was correct and before the date specified in proviso 1 to Rule 8 i.e 5th day of the following month rejected the Revenue’s appeal.

CMA Order No. 1418 of 2009.





 Exemption to services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.

 Exemption to services by way of loading, unloading, packing, storage or warehousing of rice.

 Human embryo for non commercial purpose exempted from Customs duty.

 Customs duty on Non Edible industrial grade oil reduced to 7.5%.

 LNG imported for consumption in Dahej SEZ exempted.

 Certain Capital Goods imported for Construction of Roads exempted.

 Plant and machinery for Bank Note Press imported by or on behalf of BNPMIPL to attract 5% customs duty and exempted from SAD.

 Excise duty reduced for mobile phones, automobiles, capital goods covered under Chapter 84, 85 barring certain exceptions upto 30.6.2014.


"SA Times' Special"


 Government Authority – “and” or “or” doesn’t make any difference ... By G. Natarajan, Advocate.


 Services provided by a sub-broker in relation to a forward contract to a member of a recognized association- retrospectively exempted.

 Exemption to taxable services provided against a FMS duty credit scrip amended.

 Exemption to all excisable goods when procured against a Focus Market Scheme (FMS) duty credit scrip notification amended.

 Input Service Distributor Rule 7 of CCR 2004 amended.

 Exemption to imports under Focus Market scheme.

 CBEC amends Customs Baggage Declaration Regulations 2013 - Hand baggage to be included and Indian Currency enhanced to Rs. 10,000.

 Tariff Value of Gold and Silver increased.

 Proper officer assigned in relation to various sections of the Customs Act.

 New Exchange Rates notified- Notification No.13/2014-Customs (N.T.) dated 20th February, 2014.

 Tunnel boring goods and their parts exempted from Customs duty. 

 Di-calcium phosphate (DCP) of animal feed grade – Exempted;

 Effective rate of duty on Railway or tramway track construction material of iron and steel at 12% subject to non-availment of CENVAT credit of the duty paid on rails with an exclusion of the value of rails from the a.v.


 Export of Arms and related material to Government of Iraq has been permitted subject to ‘No Objection Certificate’ from the Department of Defence Production.

 The existing Foreign Trade Policy 2009-14 (RE-2013) relating to export and import of goods and services is being extended beyond 31.3.2014 until further orders to provide continuity in policy environment.

 Additional time of 3 years for fulfillment of EO may be allowed to the concerned EPCG Authorization holder, if such holder receives relief under Corporate Debt Restructuring mechanism.

circulars notifications

 Clarification on Export of a prohibited item under Advance Authorization.

 Third party payments for export / import transactions.

 Clarification on Effective date for levy of excise duty on cigarettes at the enhanced rates vide Finance Act, 2012.

 Clarification on scope and applicability of various exemptions available to various activities in relation to rice, under the negative list approach.

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 Confidential documents - Bar on Court from directing production of Sales tax documents of a party - Applicable only against Government or Government Servants - No bar from directing a party to proceeding to produce such documents - Delta Distilleries Limited vs United Spirits Limited & Anr - 2014 68 VST 153 (SC).

 Writ Petition against Show Cause Notice not maintainable - Dealer must disclose all material facts – Court declines to interfere with the SCN in exercise of discretionary writ jurisdiction under Article 226 of the Constitution of India - Hindustan Coca-Cola Beverages vs State of UP - 2014 67 VST 435 (All).

 Service of Notice at wrong address and assessment without hearing dealer not sustainable - M.Adinarayana V Commercial Tax Officer, Piduguralla Circle, Piduguralla & Ors - 2014 67 VST 527 (AP HC).

 Transfer of right to use trade mark, goodwill, reputation in respect of a particular outlet to franchisee for operation of supermarket amounts to transfer of right to use goods exigible to tax - Vitan Departmental Stores & Industries Limited vs State of Tamilnadu - 2014 68 VST 70 (Mad HC).

 Interstate transfer of property in goods involved in execution of works contract - Whether CST payable on Central Excise Duty component reimbursed by Central Government under scheme - Matter remanded for consideration afresh in light of scheme - Assistant Commercial Tax Officer vs CIMMCO Ltd - 2014 68 VST 145 (Raj HC).

 State Legislature is competent to fix uniform rate of tax for various goods involved in execution of works contract - Impermissible for the assessee to contend that some of the items supplied in the contract should attract less tax - State of Karnataka vs Vijaya Electrical & Engineering Works - 2014 68 VST 172 (Kar HC).


 If there is any conflict between the jurisdictional High Court and the CBEC circular, the decision of the jurisdictional High Court is binding to the department rather than CBEC circular... Astik Dyestuff Pvt Ltd vs CCE - 2014-TIOL-237-HC-AHM-ST.

 Coercive measures by Revenue to collect tax without waiting for statutory period of appeal would lead to injustice to assessee as his opportunity to obtain a stay from the appellate authority would stand foreclosed... Tata Teleservices Maharashtra Limited vs Ministry of Finance - 2014-TIOL-147-HC-MUM-ST.

 High Court holds that indiscriminate denial of the power of waiver by the Tribunal would result in a situation where an aggrieved party would be indirectly told "pay or perish"... Patel Engineering Ltd vs CCE - 2014-TIOL-137-HC-AP-ST.

 Challenge to Rule 5A(2) of Service Tax Rules, 1994 regarding access to registered premises by an officer / audit party setaside holding that the Rule is in consonance with Section 72A of the Finance Act’... ACL Education Centre Pvt Ltd vs UOI - 2014-TIOL-120-HC-ALL-ST.

 Instruction given to Tribunal to give reasonable time to assessee to approach High Court in case of orders requiring pre-deposit... P.K.International & Anr vs CCE - 2014-TIOL-180-HC-MUM-CUS.

 Freezing of bank account does not fall under seizure of goods U/Sec.110 of Customs Act and hence unconditional defreezing if no notice is issued with six months is not possible... Ravi Corp Science vs UOI - 2014-TIOL-213-HC-DEL-CUS.

 Issue regarding liability of subcontractor to pay ST when main contractor has discharged ST on entire amount referred to third member... Sunil Hitech Engineers Ltd vs CCE - 2014-TIOL-160-CESTAT-MUM.

 Film actor/ producer not entitled to avail credit of service tax paid on club service as same relates to his personal activity and has no nexus with business... Ajay Devgan vs CCE - 2014-TIOL-244-CESTAT-MUM.

 Share of authorised dealer recovered from manufacturer for organising advertisements and road shows is liable to service tax as same relates to provision of sales promotion service... CCE vs Premier Motor Garage - 2014-TIOL-226-CESTAT-DEL.

 Non payment of service tax by recipient would not take away/obliterate the liability on the service provider to discharge the tax... Avtar Company vs CCE - 2014-TIOL-287-CESTAT-MUM.

 Tribunal has the power to extend stay even after insertion of third proviso to sub section (2A) of Section 35 C of Excise Act... PCS Technology Ltd vs CCE - 2014-TIOL-308-CESTAT-MAD.

 When value of inputs are reduced to 5%/10% of actual value there is no requirement to reverse the credit equivalent to credit availed on these inputs... CCE vs Mahindra & Mahindra Ltd 2014-TIOL-307-CESTAT-MUM.

 Payment of SAD is attracted on clearance of products from EOU to DTA when sales tax is exempted and is not applicable on inter-branch transfer of goods from EOU to DTA as nonpayment of sales tax on is not on account of any exemption... Micro Inks vs CCE - 2014-TIOL-258-CESTAT-AHM.

 When pilferage was found during the course of examination before out of charge was given, the assessee is entitled for refund claim of duty paid on shortage of the goods... Caliber Chemicals Pvt Ltd vs Commr.of Customs - 2014-TIOL-255-CESTAT-MUM.

 "Tower sections" imported for Wind Operated Electricity Generator (WOEG) are classifiable under tariff heading 8503 as components of WOEG and not under Heading 7308 as 'Parts of tower'... Vestas Wind Technology India Private Ltd vs Commr.of Customs - 2014-TIOL-237-CESTAT-AHM.

 DTA sales under Advance Authorisation Scheme are to be considered for purpose of calculating NFE during the period 2006 to January 2011... Exechon vs CCE - 2014-TIOL-215-CESTAT-AHM.

 Issue whether when an assessee waives his right to SCN his right to challenge the proposed SCN is waived forever is referred third member... Marque Enterprises vs Commr.of Customs - 2014-TIOL-229-CESTAT-DEL.

before parting...


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