Leaf No: 62 Month : May Year : 2015

Greetings from Team SA!

 Finance Act 2015 effective from 14th May, 2015.

 FM sets up Kelkar Panel to revitalise PPP mode of infra sector.

 The Government has taken measures to bring Direct Taxation rates to globally competitive levels: FM.

 National Litigation Policy, 2015 aims to suggest mechanism to reduce the Government litigation and to make Government as an Efficient and Responsible litigant: Minister for Law and Justice.

 The Central and State Governments are not interested in imposing higher goods and service tax (GST) rates that could hurt people:FM.

 Govt. promises incentive to States during GST transition phase.

 In respect of tax dues of partnership firm no independent settlement with individual partner is possible so as to discharge him of his obligation to pay tax dues - Pradip Nanjee Gala V Sales Tax Officer - 2015 TIOL 95 SC CT LB.

 No requirement that a person should be engaged in business - Port Trust engaged in sale of scrap is a dealer liable to tax - Cochin Port Trust V State of Kerala - 2015 80 VST 341 (SC).

 Fabrication and installation of water chilling plant would fall under “fabrication and installation of plant and machinery” and not under the entry “installation of air-conditioners and AC coolers” under the Gujarat Sales Tax Act, 1969 - Voltas Ltd V State of Gujarat - 2015 80 VST 12 (SC).

 Emami, Boroline, Banphool oil and Navaratna Ayurvedic Oil are to be taxed as Drugs and Medicines and not as cosmetics and toilet products. Product in common parlance and on user perception a drug though used in ancillary measure as cosmetic - Emami Limited and another V State of Assam & Anr - 2015 80 VST 249 (Gauhati).

 Agreement between holding company of group and group companies for brand equity and business promotion and containing stipulations as to use of trade mark constitutes transfer of right to use trade mark. Transfer of Right to use Goods - definition includes intangible goods such as trade mark - Liability to Tax - Tata Sons Limited & Anr V State of Maharashtra & Anr- 2015 80 VST 13 (Bom).

 Whether goods of assessee dealer can be detained by the Revenue officials, in case the tax component on the same was not quantified by the Department - DYNAMIC PRODUCTS V THE DEPUTY COMMERCIAL TAX OFFICER - 2015 TIOL 1332 HC MAD VAT.

 Whether the assessee is entitled for release of goods on payment of tax, interest and penalty imposable under the Act, when it is submitted that purchaser has not became the owner of goods yet - CENTRAL ARECANUT AND COCOA MARKETING PROCESSING CO-OPERATIVE LTD (CAMPCO LTD) V STATE OF GUJARAT - 2015 TIOL 1260 HC AHM VAT.

 In case of works contract VAT is to be directed on the value of the goods at the time of incorporation and it should not purport to tax the transfer of immovable property - Mahindra Life Space Developers Ltd V State of Haryana - 2015 TIOL 1176 HC P&H  VAT.

 When applicable VAT has been paid by the purchaser in manner prescribed , there is no bar on availment of credit even if the seller has not remitted tax so collected - Bajaj Brothers V CTO - 2015 TIOL 1355-HC MAD VAT.

 When two parties have entered in to agreement for sale and purchase of cylinder, the fact that goods are moving to third party who is a lessee of purchaser does not make the movement as under interstate lease arrangement - Rajasthan Cylinders and Containers Ltd V CTO - 2015 TIOL 1309 HC RAJ CT.

 When pre-deposit is made and not refunded even after case is decided in favour of assessee, High Court can direct for refund under Section 151 of CPC - Prasad Properties & Investments Pvt Ltd V State of Tamilnadu - 2015 TIOL 1229 HC MAD VAT.

 Filing of NIL return to comply with return filing due date and revising return later on with actual turnover does not warrant imposition of penalty on account of understated liability in original return - Indus Towers Ltd vs State of Karnataka - 2015 TIOL 1174 HC KAR VAT.

 Instructions regarding Post budget changes on Service Tax.

 Instructions regarding expeditious clearance of export goods to Nepal in the wake of emergency relief operations undertaken in India.

 Clarification on post-budget central excise notifications.

 Clarification regarding Cenvat Credit in transit sale through dealer.

 Clarification regarding non-filing of SLPs before Supreme Court.

 Dispensing with SDF form.

 Simplified transit procedure for relief supplies destined to Nepal.

 Enforcement of certain provisions of the Finance Act, 2015, with effect from 1st June, 2015 including change in rate of service tax from 12.36% to 14%.

 Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

 Notification No. 26/2012- ST, dated the 20th June, 2012 amended.

Service Tax Rules amended w.e.f 1.6.2015.

 Service Tax Notification No. 25/2012, dated 20.06.2012 is notified to come into effect from 1.6.2015.

 Certain services under Power System Development Fund (PSDF) Scheme of Ministry of Power exempted.

 The amount payable as per Rule 6(3) of the CENVAT Credit Rules for exempted services is enhanced to 7 per cent.

 Refund of CENVAT Credit under Rule 5B - Manpower and security excluded.

 Rule 3(7)(b) of the CCR, 2004 has been amended.

 Excise duty exemption presently available to Ordnance Factories & Defence PSUs is withdrawn.

 Explanation has been inserted to provide exemption from Education Cess and Secondary & Higher Education Cess contained  to DTA clearances from 100% EOU

 Corrigendum to Notification No.26/2015-CE & 27/2015-CE.

 Amendment to various notifications for aligning with the changes in foreign trade policy - CE & CUS.

 Notification No. 6/2005-CE dated 1.3.2005 amended.

 Amendment to Notifications for aligning with the Foreign Trade Policy and ease of doing business - CE & CUS.

 Notification no.12/12-cus amended.

 Declaration of foreign exchange remittance under the Foreign Exchange Management Act, 1999 may be made a part of the Shipping Bill.

 Exchange Rates notified w.e.f 22nd May 2015.

 Tariff value of gold and silver reduced but hiked for RBD Palmolein.

 Updation of Importer-Exporter Profile.

 Withdrawal of Duty Free Import Authorisation (DFIA) Scheme for import of raw Sugar.

  Import of High Speed Diesel (HSD) and Light diesel oil (LDO), brought on board in the old ships / vessels for purpose of breaking, and which are incidental to such ships / vessels, is “free".

 For border trade between India and China, the CIF value per consignment is being increased for border trade between India and China.

 Pre-import condition shall be mandatory for import of “raw sugar” under Advance Authorisation scheme.

 The quantity of sugar to be exported to EU under CXL Quota and to USA under TRQ upto 30.09.2015 has been notified.

 Amendment in para 2.55 and 2.56 of Handbook of Procedures of FTP 2015-20 regarding issue of Pre Shipment Inspection Certificates.

 The procedure for implementation of the Track and Trace system for export of drug formulations has been modified in supersession of the earlier Public Notice No. 4/2015-20 dated 1st April, 2015.

 ANF3B-2 for claiming benefit of Served From India Scheme (SFIS) for foreign exchange earned in the year 2014-15 is being notified.

 Process of labelling or re-labelling of containers would amount to manufacture only if condition of repacking from bulk to retail is also satisfied - CCE V Amritlal Chemaux Ltd - 2015 TIOL 130 SC CX.(Editor’s Note: Provision is amended and hence this ratio is no longer applicable).

 Process of sterilizing syringes and needles does not amount to manufacture - Servo Med Industries Pvt Ltd V CCE- 2015 TIOL 103 SC CX.

 Appeal on the aspect of determination of question as to whether the assessment was provisional or final would lie to the High Court under Section 130 of the Customs Act, 1962 and not to the Supreme Court under Section 130E of Customs Act, 1962 - Commissioner of Customs(Imports) V Glencore India Pvt. Ltd - 2015 (319) ELT 555 (SC).

 Value of services to be provided post import cannot be loaded to assessable value for purpose of Customs duty - CC V Hindalco Industries Ltd - 2015 TIOL 132 SC CUS.

 Cenvat credit on Housekeeping and Landscaping services held eligible as input service credit based on the ratio laid down by the Hon’ble High Court in the case of Millipore India that money spent to maintain the factory premises in an eco-friendly manner, the tax paid on such services would form part of the cost of the final products and the same would fall within the ambit of "input services" - CCE & ST V M/s Rane TRW Steering Systems Ltd - 2015 TIOL 1057 HC MAD CX.

 The amended provisions of mandatory penalty of 7.5% under Section 35F would apply to the adjudication order passed before the date of such amendment and the appeal of the appellant before the CESTAT would not be maintainable in absence of deposit of an amount equivalent to 7.5% of the confirmed amount of duty liability - Premier Polyspin Pvt. Ltd. Vs UOI - 2015 TIOL 1265 HC AHM CX.

 The amendment made in Cenvat Credit Rules 2004 which came into force on 7.7.2009 was not clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature - Mundra Ports and Special Economic Zone Ltd V Commissioner of Central Excise and Customs - 2015 TIOL 1288 HC AHM ST.

 When willful suppression on part of assesee is proved dept is empowered to impose simultaneous penalties under Section 76 & 78 - CCE V Joe Transport - 2015 TIOL 1187 HC MAD ST.

 Department cannot initiate recovery proceedings without adjudication under Section 73 - ICICI Bank Ltd V UOI - 2015 TIOL 1164 HC MUM ST.

 Failure to deposit collected tax does not attract penalties under Sections 76 and 78 especially when activity of appellant was not liable to service tax at all - Ajay Kumar Gupta V CESTAT & Anr - 2015 - TIOL - 1239 HC P&H ST.

 In case of slump sale there is no requirement to reverse credit on inputs as there is no removal from factory - CCE V Hindustan Lever Ltd - 2015 TIOL 966 CESTAT MUM.

 Rule 16 of Central Excise Rules does not provide for non availment of credit on inputs used for goods received under said rule - Hotline CPT Ltd V CCE - 2015 TIOL 798 CESTAT DEL.

 Freight and transit insurance not includible in assessable value merely for reason that at instance of buyer seller has taken transit insurance - GSC Toughened Glass Pvt Ltd V CCE - 2015 TIOL 912 CESTAT DEL.

 Omission to take registration as input service distributor is only a procedural irregularity - Alarsin  V CCE - 2015 TIOL 766 CESTAT MUM.

 Self assessment not applicable to ISD since it neither provides any service nor pays any service tax as provider of output service - SKF India Ltd V CCE - 2015 TIOL 914 CESTAT MUM.

 Course imparting skill to students in field of practical accounting, auditing etc is entitled for exemption as vocational training under Notification No. 24/04 - CCE vs ACT Careears Ltd - 2015 TIOL 965 CESTAT MUM.

 Service provider eligible for refund of service tax paid on services provided to SEZ when no amount towards service tax is collected for recipient - SBI Capital Markets Ltd vs CCE - 2015 TIOL 816 CESTAT MUM.


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