content at glance :- news & updates - avinash poddar at glance :- ... ahmedabad-iii disallowance...

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Content at Glance :-

1.0 News & Updates

1. Don’t roll back the duty on jewellery2. Venkaiah Naidu hopes GST bill will get Parliament nod in 2nd part of Budget

session3. Jewelery stocks melt as FM refuses to rollback 1% excise hike4. Numbers Change In Rajya Sabha Will Permit GST Passage: Arun Jaitley5. Difficult to accept Cong demand to cap GST rate: FM6. FinMin reiterates stand on jewellery excise, as GST preparation7. There must be a cap on GST bill: Chidambaram8. Congress govt is keen on early introduction of GST9. Differences with Congress on GST have narrowed down: Finance Minister Arun

Jaitley10. GST will be reality soon: PM Modi assures Saudi business leaders11. GST about to happen; retro tax thing of past: PM Narendra Modi12. Better to wait till April 1, 2017 for better GST: Debroy13. Congress Not Trying To Block GST Bill, Has Some Concerns: Anand Sharma14. Government to engage Congress to break GST deadlock: Arun Jaitley15. GST a key factor in improving ease of doing business: Das

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2.0 Case Laws2.1 Case Laws related to Excise

Sr.No. Relevant Section Case Name Issue

1 Section 4 [2015] 62 Taxmann.Com 7 (Sc) TamilNadu Petroproducts Ltd.V.Commissioner, Central Excise,Chennai

Valuation

2 Rule 18 [2015] 62 Taxmann.Com 101 (Sc)Spentex Industries Ltd.V.Commissioner Of Central Excise

Rebate

3 Section 11A readwith Section 73 ofthe Finance Act1994

[2015] 62 Taxmann.Com 12 (Sc)Greaves Ltd.V.Commissioner Of Central Excise &Customs, Aurangabad

Recovery

4 2015-Tiol-2211-Cestat-Ahm-Lb 1)M/S Krap Chem Pvt Ltd2) Shri R P Gupta3) M/S Ravi Gum Industries4) Shri Ramnikbhai N Patel5) Shri Babulal K Sakaria6) Shri Jivrajbhai Vamanjibhai PatelVsCommissioner Of Central Excise AndService Tax, Daman, Rajkot

5 2015-Tiol-2165-Cestat-AhmM/S Cema Electric Lighting ProductsIndia Pvt LtdVsCommissioner Of Central Excise,Ahmedabad-Iii

Disallowance of Cenvat

6 Section 5A [2016] 67 Taxmann.Com 121 (NewDelhi - Cestat) K.E.I.Industries Ltd.V.Commissioner Of Central Excise,Jaipur

Exemption from ExciseDuty

7 Rule 13, 14 and14A of CentralExcise Rules 1944and Rule 19 of

[2016] 67 Taxmann.Com 171 (Kerala)Itel Industries (P.) Ltd.V.Commissioner Of Central Excise

Export withoutpayment of duty

8 Section 11B [2016] 67 Taxmann.Com 196 (NewDelhi - Cestat)Rites Ltd.V.Commissioner Of Service Tax, Delhi

Refund

3

9 Section 35B [2016] 67 Taxmann.Com 275 (Madras)Commissioner Of Central Excise,Chennai-I CommissionerateV.B.S. Garg

Appeals

10 Section 2(f) [2016] 67 Taxmann.Com 336 (Kolkata -Cestat) Indian RareEarths Ltd.V.Commissioner Of Central Excise &Service Tax, Bhubaneshwar-I

Manufacture

11 Section 11B [2016] 67 Taxmann.Com 314 (Madras)Elgi Ultra Industries Ltd.V.Deputy Commissioner Of CentralExcise, Coimbatore Iv Division

Refund

12 Section 4 read withSection3

[2016] 68 Taxmann.Com 46 (Sc)Commissioner Of Central Excise,IndoreV.Grasim Industries Ltd.

Valuation

13 Section 4 [2016] 68 Taxmann.Com 12 (Sc)Commissioner Of Central Excise &CustomsV.Mahindra & Mahindra Ltd.

Levy and Collection ofDuty

2.2 Case Laws related to Service Tax

Sr.No. Relevant Statute Case Name Issue

1 Rule 13 2015-Tiol-2363-Hc-Ahm-Cx PremFabricationsVsUnion Of India And 3

Deemed Credit

2 2015-TIOL-2169-CESTAT-AHM M/SNAWAZ SHIPPINGVsCOMMISSIONER OF CENTRAL EXCISEAND SERVICE TAX, RAJKOT

Valuation

3 [2016] 67 Taxmann.Com 162 (Mumbai -CESTAT)Commissioner, Central Excise & Service TaxV.Union Bank Of India

Admission of Appeal

4 [2016] 67 Taxmann.Com 174 (Mumbai -CESTAT) ArpannaAutomotive (P.) Ltd.V.Commissioner Of Customs & Central Excise

4

5 Section 65 [2016] 67 Taxmann.Com 172 (New Delhi -CESTAT) Goyal AutomobilesV.Commissioner Of Central Excise, Chandigarh-

II

Recovery

6 Section 65(19) [2016] 67 Taxmann.Com 197 (Chennai -CESTAT) Indian Hume Pipe Co.Ltd.V.Commissioner Of Central Excise, Trichy

Appeals

7 Section 65(19) [2016] 67 Taxmann.Com 194 (New Delhi -CESTAT) Joshi Auto Zone (P.)Ltd.V.Commissioner Of Central Excise, Chandigarh

Taxable Services

8 Section 73, read withsections 65(39a) and65(105)(zzzza)

[2016] 67 Taxmann.Com 198 (New Delhi -CESTAT) Sanjeev ChaudhariV.Commissioner Of Central Excise, Chandigarh

Cenvat Credit

9 Section 65(19) [2016] 67 Taxmann.Com 193 (Karnataka)Commissioner Of Service TaxV.Tavant Technologies India (P) Ltd.

Recovery

10 Section 65(19) and65(68) and 67

[2016] 67 Taxmann.Com 215 (Mumbai -CESTAT) Reliance Infratel Ltd.V.Commissioner Of Central Excise, Thane-II

Taxable Services

11 Rule 3 read withRule 5

[2016] 67 Taxmann.Com 251 (Mumbai -CESTAT) Nirlon Ltd.V.Commissioner Of Central Excise, Mumbai

Appeals

12 Section 67 [2016] 67 Taxmann.Com 252 (New Delhi -CESTAT) Bharti Airtel Ltd.V.Commissioner Of Central Excise, Panchkula

Commission

13 Rule 2(l) [2016] 67 Taxmann.Com 252 (New Delhi -CESTAT) Bharti Airtel Ltd.V.Commissioner Of Central Excise, Panchkula

14 Section 65(109a) readwith Section 67

[2016] 67 Taxmann.Com 252 (New Delhi -CESTAT) Bharti Airtel Ltd.V.Commissioner Of Central Excise, Panchkula

CENVAT Credit ofInput & Input Services

15 Section 65(109a) readwith Section 67

[2016] 67 Taxmann.Com 252 (New Delhi -CESTAT) Bharti Airtel Ltd.V.Commissioner Of Central Excise, Panchkula

Writ Petition

16 Rules 9 [2016] 67 Taxmann.Com 254 (Bangalore -CESTAT) Mangalore Refinery AndPetrochemicals Ltd.V.Commissioner Of Central Excise And ServiceTax, Mangalore

Appeals

5

17 Section 73 [2016] 67 Taxmann.Com 273 (Madras)Atchaya Engineering (P.) Ltd.V.Additional Commisssioner, Chennai

Offences and Penalties

18 Section 73 [2016] 67 Taxmann.Com 274 (Hyderabad-CESTAT ) Alliance Global ServicesIT India (P.) Ltd.V.Commissioner Of Customs, Central Excise &Service Tax, Hyderabad-II

Short payment andrecovery thereof

19 Section 87 [2016] 67 Taxmann.Com 311 (New Delhi -CESTAT) Dewsoft Overseas (P.)Ltd.V.Commissioner Of Service Tax

Tour Operator Service

20 Rule 5 read withRule 2(I)

[2016] 67 Taxmann.Com 313 (Bangalore -CESTAT) Infosys TechnologiesLtd.V.Commissioner Of Service Tax, Bangalore

Input

21 Section 65(27) [2016] 67 Taxmann.Com 315 (Chennai -CESTAT) Tab India Granites (P.)Ltd.V.Commissioner Of Central Excise & ServiceTax, Chennai-III

Input Service

22 Rule 5 [2016] 67 Taxmann.Com 349 (Chennai -CESTAT) Commissioner OfCentral Excise, Chennai IIV.Lucas TVS Ltd.

Taxable Services

23 Section 93 read withSection 11B of theCentral Excise Act

[2016] 67 Taxmann.Com 350 (Madras)Perfect Vending India (P.) Ltd.V.Customs, Excise & Service Tax AppellateTribunal

Input Service

24 Rules 2(I) read withRule 2(qa)

2015-Tiol-2363-Hc-Ahm-Cx PremFabricationsVsUnion Of India And 3

Credit of TelecomTowers & PreFabricated Sheltors

25 Section 65(76a), readwith section 66E(i)

2015-TIOL-2169-CESTAT-AHM M/SNAWAZ SHIPPINGVsCOMMISSIONER OF CENTRAL EXCISEAND SERVICE TAX, RAJKOT

Condonation of Delay

2.3 Case Laws related to Customs

Sr.No. Relevant Statute Case Name Issue

1 [2015] 62 Taxmann.Com 184 (SC)Commissioner Of Customs, BangaloreV.G.M. Exports

Anti Dumping Duty

https://gst.taxmann.com/fileopennew.aspx?Page=CASELAWS&id=102120000000003262&source=link

https://gst.taxmann.com/fileopennew.aspx?Page=CASELAWS&id=102120000000003262&source=link

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2 Section 27A 2015-TIOL-2202-CESTAT-MUMM/S S S DYES AND CHEMICALSVsCOMMISSIONER OF CUSTOMSMUMBAI

Interest on delayedrefund

3 Section 27 [2016] 67 Taxmann.Com 217 (Delhi)Micromax Informatics Ltd.V.Union Of India

Refund

Go to Content at Glance 7

1.0 News & Updates

1. Don’t roll back the duty on jewellery

Makers of jewellery want the government to rollback the Budget proposal to levy a 1% excise dutyon gold and diamond jewellery. This governmentmust not yield. The levy is eventually borne by theconsumer and involves no monetary loss tojewellers. True, their fears that they could sufferharassment at the hands of excise inspectors are notmisplaced. Rightly, the government has directedexcise officials not to make factory visits andremoved the stock declaration limits. However, thedemand that jewellers must be kept outside the taxnet is simply irrational.Jewellers claim to comply with a value addedtaxation, and the levy — a nominal excise duty of1% without input credit or 12.5% with input credit— will only help generate an extra audit trail. If thetwo match, it would spare further visits from exciseofficials. Similarly, making it mandatory for thebuyer to quote her PAN number makes sense. Itcreates audit trails, and would prevent people fromusing their unaccounted money to buy jewellery.Therefore, it is tough not to suspect that jewellersare opposing the Budget proposal because of theaudit trail it would generate to their incomes too. AVatable tax is superior to an information returnfiling, to keep tabs on jewellery purchases, now thatthe goods and services tax (GST) is on the horizon.The Arvind Subramanian panel had said, rightly,that it is inconsistent for the government to promotethe gold monetisation and gold bond schemes, andsimultaneously have a highly concessional tax rateof about 1-1.6%. The Centre and states shouldimplement its recommendation to impose a 4-6%GST on gold. But the government should scrap the10% import duty on gold, to curb smuggling. Thereis no need for it when the current account deficit isfully under control.

(Ref -http://blogs.economictimes.indiatimes.com/et-editorials/dont-roll-back-the-duty-on-jewellery/)

2. Venkaiah Naidu hopes GST bill will getParliament nod in 2nd part of Budget session

"If we can pass real estate bill, I do not think there isa problem in passing GST bill in next part of theBudget session"

Enthused by the passage of bills including realestate, Parliamentary Affairs Minister M VenkaiahNaidu today expressed confidence that the pendingGST bill can also get Parliament's nod in the secondpart of the Budget session.

However, he castigated Congress for pressing anamendment to the President's address in the RajyaSabha.

Referring to the passage of 10 bills by both Houses,he said, "If we can pass real estate bill, I do not thinkthere is a problem in passing GST bill in next part ofthe Budget session" and noted happily thatdisruptions of proceedings have substantially comedown.

Training guns on Opposition for pressingamendments to the Motion of Thanks to thePresident's address in Rajya Sabha, he said this is anembarrassment to Opposition, particularly theCongress and not to the NDA government. Itaccused the main Opposition party of "depriving"millions of people the basic education even after 68years of independence.

Leader of Opposition in Rajya Sabha Ghulam NabiAzad had given an amendment in a division inwhich 94 voted for the amendment and 61 against.The amendment regretted that President's addressdid not commit support to rights of all citizens tocontest panchayat elections in the backdrop of lawin Rajasthan and Haryana where matriculation hasbeen fixed as the criteria for contesting the polls.

Naidu said the amendment got approved "becauseCongress is numerically more in Rajya Sabha. Nowthey are calling it a set back to the Modigovernment".

"But I personally feel that the opposition,particularly Congress has embarrassed itself. Let usconsider the basic issue; who is responsible fordepriving millions of people the basic educationeven after 68 years of independence. Congress andits supporters were in power for most of the time,both at the Centre and in the states."

He said that having neglected that Congress is now"criminally" trying to spread "disinformation"against NDA.

"By moving such an amendment, Congress admittedthat basic education during their tenure was inshambles and it was glaring that they failed


miserably. So moving an amendment on such issuewas an embarrassment to the Congress reflecting itsfailure to fulfill the basic right of the citizen," hesaid.

He also argued similar provisions existed inHaryana, which Congress never tried to amenddespite being in power there for long.

"The Congress party during its tenure neverbothered to amend it and was now crying hoarse.After having failed in fulfilling its responsibility, itnow has the audacity to bring in an amendment tothe Motion of Thanks to the

President's address. By making this amendment, theopposition has endorsed all other aspects of thePresident's address which is a policy statement ofour government. I need to thank Opposition forthis," he said.

(Ref -http://www.dnaindia.com/money/report-venkaiah-naidu-hopes-gst-bill-will-get-parliament-nod-in-2nd-part-of-budget-session-2190278)

3. Jewelery stocks melt as FM refuses torollback 1% excise hike

NEW DELHI: Shares of branded jewellery makersdeclined up to 11 per cent in trade on Wednesdayafter the finance minister said he won't rollback theproposed 1 per cent excise hike on non-silverornaments.

Reacting to the development, stocks of RajeshExports slumped 11 per cent, PC Jewellers 6 percent, Tribhovandas Bhimji Zaveri 3.68 per cent andTitan 1.70 per cent on the BSE.

Despite calls for rollback of the proposed exciseduty hike from the opposition and jewellers, the FMsaid that the move was to bring taxes on gold in linewith the proposed GST rate as and when it isimplemented.

Stocks of jewellery makers has plunged as much as21 per cent in the year so far.

(Ref -http://economictimes.indiatimes.com/markets/stocks/news/jewelery-stocks-melt-as-fm-refuses-to-rollback-1-excise-hike/articleshow/51422380.cms)

4. Numbers Change In Rajya Sabha WillPermit GST Passage: Arun Jaitley

NEW DELHI: The government hopes that thebiennial elections in the Rajya Sabha will give itenough seats in the upper house of parliament topass the Goods and Services Tax (GST) Bill, FinanceMinister Arun Jaitley said today.

"Numbers are going to significantly change in theRajya Sabha with the biennial elections. Everypolitical party in parliament, barring one, has toldme it will support GST," Mr Jaitley said, fieldingquestions at the annual India Today Conclave inNew Delhi.

The GST Bill has been approved by the Lok Sabhaand is currently stalled in the upper house, wherethe ruling National Democratic Alliance (NDA)lacks a majority.

Referring to the Congress party, that is opposing thebill in its current form, Mr Jaitley said the party hasan "issue on constitutional capping" of GST tariffs.

"Our tariffs are not decided by constitutional caps,"the finance minister said, adding that such a movewould limit the scope of making future changes.

"Today state governments tell me they are all infavour of GST. Even Karnataka, which has aCongress government, wants the GST," he added.

(Refhttp://www.ndtv.com/india-news/numbers-change-in-rajya-sabha-will-permit-gst-passage-arun-jaitley-1288161)

5. Difficult to accept Cong demand to cap GSTrate: FM

New Delhi, Mar 17 (PTI) Finance Minister ArunJaitley today said it is difficult to accept demand ofthe Congress to cap GST rate in the pendingConstitution Amendment Bill, but remained hopefulthat it will get passed in the second half of thecurrent Budget session.

"Today, every state government, including allCongress ones, is in favour of goods and services tax(GST). You have every political party in Parliamentwhich has said they will vote in favour," he said atthe India Today Conclave here.

"In the Lok Sabha, the Congress walked out, everyother party voted in favour. The Congress partynow made a statement that it has only one issueabout the Constitutional cap which is a little difficultbecause our tariff is not decided throughConstitution amendment."


The GST Bill has already been passed by the LokSabha and is pending ratification by the UpperHouse, where the ruling NDA does not have amajority. After it is approved by the Rajya Sabha,the legislation needs to be approved by half of the 29states so as to roll out GST possibly by October 1.

Explaining the rationale, the finance minister said, itis extremely difficult to accept because every timeyou need to increase tariff in a given emergency,you have to amend the Constitution.

The tariff needs to be decided by the GST Counciland not by a Constitutional cap, he explained.

"I think that's the only glitch that remains. I wouldstill want the Congress party to come on board. I caneasily see and this is going to happen at this stage ofbiennial election. The numbers are significantlychanging and in any case, I am reasonably confidentthat the numbers in the Upper House now also arein favour of GST," he said.

The constitutional amendment to GST, India'sbiggest indirect tax reform since Independence,seeks to replace a slew of central and state levies,transforming the nation of 1.3 billion people into acustoms union.

The Bill is supported by all parties, barring theCongress, which has 67 MPs in the Rajya Sabha andAll India Anna Dravida Munnetra Kazhagam(AIADMK) with 12 members.

The Congress, the original author of the tax reform,is opposed to the current "flawed" version andwants GST rate to be capped at 18 per cent, aproposed state levy scrapped and an independentmechanism to resolve disputes on revenue sharingbetween states.

The government has support of 155 members in the242-member Rajya Sabha, short of two-thirds or 162votes needed to approve the Constitutionamendment bill.

(Ref -http://www.ptinews.com/news/7230565_Difficult-to-accept-Cong-demand-to-cap-GST-rate--FM-)

6. FinMin reiterates stand on jewellery excise,as GST preparation

While the jewellery trade continues its stir forwithdrawal of the one per cent excise duty

announced in the Union Budget, the financeministry does not indicate a compromise.

"There is no question of a rollback," said a ministryofficial, on condition of anonymity, adding: "Ourinternal calculations show the government will getonly about Rs 1,000 crore (a year) from the levy."

The strike entered the 17th day on Thursday, alsomarked by a big rally at Delhi's Ramlila Maidan.

"What are they scared of? We have given them allthe assurance that they want. The taxman will notvisit their premises," said the official. The ministryhas instructed field formations against interferingwith the business functions of manufacturers.Instructions to tax officials say no stock declarationwill be required to be made to the excise taxauthorities by jewellery makers. And, tax officialshave been told not visit the premises of theseassessees for routine purposes like stock verificationof records. And, to ensure export consignments arenot delayed on account of the new levy.

The official said the one per cent duty was apreparation for the coming national goods andservices tax (GST) regime. "If they cannot pay oneper cent excise, how will they pay the higher taxunder GST," he asked.

A panel chaired by chief economic adviser ArvindSubramanian has proposed taxing of gold andprecious metals at two to six per cent under GST, asagainst the standard rate of 17-18 per cent.

As against an excise exemption limit of 1.5 crore ayear for normal small scale industry, the jewellerysector has an exemption limit of Rs 6 crore. Jewellerswith a turnover below Rs 12 crore in a financial yearwill be eligible for exemption up to Rs 6 crore thenext year.

(Ref -http://www.business-standard.com/article/economy-policy/finmin-reiterates-stand-on-jewellery-excise-as-gst-preparation-116031701351_1.html)

7. There must be a cap on GST bill:Chidambaram

Reiterating his views on constitutionalising thegoods and services tax (GST), former union financeminister P Chidambaram has said that in case of agenuine emergency, parliament can change it. “Ifyou don’t put restraint on the government, it has thetendency to increase rates,” he said.


“Of the three objections raised by the Congressparty, practically everyone has endorsed two. Whydoesn’t the government say we accept those twoobjections? On the third objection, the governmentseems to be giving the reason that there is noprecedent. That is wrong. On the very bill endorsedby me, Jaitley in one clause has put one percent inthe constitutional amendment bill. That very bill isthe precedent. Article 276 is another precedentwhere for professional tax the constitution imposesa cap. So precedent argument is no argument. Forany other precedent the government must engagethe Congress party, the party may or may notconsider alternatives,” Chidambaram said. He wasresponding to a range of queries at the ExpressAdda Friday evening.

On 18 percent cap in the bill, he said it was soundeconomic advice to have a cap. Giving an examplehe said at one point of time marginal rate of incometax was 97.5 percent, which was driving honestpeople to become dishonest. “The question is shouldthe cap be in the constitution or should it be in thelaw? We believe it must be put in constitution.Answer is there is no precedent... I just told you wehave a precedent.... The other argument is it will bedifficult to change it and that is precisely myargument. The idea is that it must be difficult tochange it. Let the government first accept a cap, if itdoes, then we can argue if there should be aconstitutional or any other equally efficacious cap,”Chidambaram said.

Responding to a question on the Indian economygrowing at 7.5 percent, Chidambaram asked in thatcase why were exports going down for 15 months ina row. “Why IIP head is barely above water? Why iscredit growth limping along at 9 percent, sales of allfirms are down at 6 percent, sales of allmanufacturing firms are down at 11.5 percent?Keeping this aside, nothing has been done toaddress issues of sluggish aggregate demand; thechief economic advisor himself had admitted thattwo of the four economic growth engines i.e. exportsand private investment are virtually stalled. Thegovernment seems to have given up on exports asthere is no word on it. Even though global exportshave slowed down, China and Korea’s exports arestill positive. Only one out of seven people will saythat India’s economy is growing at 7.5.”

On NPAs, he said that they have to be classified intowilful defaults and victims of an economicslowdown. In case of MSMEs, 95 percent are victimsof slowdown and need a helping hand untileconomy takes an upturn.

On Ishrat Jahan case, Chidambaram said the issue isnot whether Ishrat was a terrorist or not. The issue iscan anyone be killed in a fake encounter? Drawingparallels in the Rohit Vermula case, he said there theissue was not whether he was a dalit or not, theissue was can a first generation learner from a poorbackground be driven to such desperation by aninsensitive university administration that he isforced to commit suicide. Assuming Ishrat was aterrorist, does it give the state right to kill her in afake encounter? This government will not answerand Mr Gopal Pillai conveniently omits to answerwhen in August 2013, as the home secretary, hecompletely justified the second affidavit on videowhich was telecasted.

Answering the question if BJP will succeed inappropriating the nationalism plank with referenceto recent incidents, the senior congress leaderreplied in the negative. “You cannot define a patriotby whether he raises a slogan along with others ornot. We are all patriots and we all love our countrybut I refused to be told that unless I raise a slogan, Iam not a patriot. I have no hesitation in saying‘Bharat Mata ki Jai’, but I can’t dictate to anotherperson that unless I say so I am not a patriot.”

(Ref -http://www.governancenow.com/news/regular-story/there-must-be-a-cap-gst-bill-chidambaram)

8. Congress govt is keen on early introductionof GST

Bengaluru: The Congress government has batted forquick introduction of the goods and services tax(GST), even as the bill has been stalled in Parliamentby the party demanding some amendments.

According to the Karnataka fiscal plan for 2016-2020, released after chief minister Siddaramaiahpresented the budget on Friday, introduction of GSTwill create a healthy and competitive environmentbesides propelling growth and development. It saidthe emergence of a common market will endcompetition among states in offering tax incentivesfor attractive investments and that a conduciveatmosphere of ease of doing business will attractinvestors.

The state government is geared to switch over to theGST regime, according to the plan. Karnataka hashad to face the brunt of losing some investments toneighbouring Andhra Pradesh, which promised alot of incentives.


Shortfall of Rs 100cr revenueThe overall collection of revenue from stamps andregistrations for 2015-2016 is expected to be Rs 8,100crore as against the target of Rs 8,200 crore. This hasbeen attributed to the growth rate which was 22% inthe first quarter of the fiscal year dropping to 9% inthe last quarter.

(Ref -http://timesofindia.indiatimes.com/city/bengaluru/Congress-govt-is-keen-on-early-introduction-of-GST/articleshow/51477952.cms)

9. Differences with Congress on GST havenarrowed down: Finance Minister ArunJaitley

NEW DELHI: Arun Jaitley said differences with theCongress on the goods and services tax bill havenarrowed down and announced that he and hisCabinet colleague M Venkaiah Naidu will reach outto the main opposition to iron out the contentiousissues.

NEW DELHI: Arun Jaitley said differences with theCongress on the goods and services tax bill havenarrowed down and announced that he and hisCabinet colleague M Venkaiah Naidu will reach outto the main opposition to iron out the contentiousissues.

Like the petroleum prices, the interest rates ofgovernment securities would also have to be linkedto the market and would be revised every quarter,he added.

(Ref -http://economictimes.indiatimes.com/news/politics-and-nation/differences-with-congress-on-gst-have-narrowed-down-finance-minister-arun-jaitley/articleshow/51486765.cms)

10. GST will be reality soon: PM Modi assuresSaudi business leaders

RIYADH: Promising easier business environmentfor global investors, Prime Minister Narendra Moditoday said retrospective taxation has been relegatedto history, but he is "not able to do anything" on twopending cases from the previous government as"they are sub-judice".

Inviting Saudi businesses to come and invest inIndia in sectors like railways, defence and energy,Modi also said a common indirect taxation regime in

form of GST (Goods and Services Tax) was "about tohappen". He, however, refrained from giving anyspecific timeframe.Addressing Saudi CEOs and Indian business leadershere, Modi said his government has opened upvarious sectors to foreign investment and Indiastands out as a "beacon of hope" amidst globaleconomic slowdown.

"World Bank has upgraded India by 12 ranks inEase of Doing Business. I expect in the next review,our ranking will improve further because we havemade a lot of administrative reforms.

"You are worried about GST. Do not worry aboutGST. GST will happen. I cannot give a timeframe,but it will happen. It was our commitment, and it isabout to happen," Modi said.

Prime Minister added the government is in favourof long-term stable and predictable policies and anyretrospective amendment to tax laws is a thing ofpast.

"There are two cases of the previous government,but they are sub-judice matter, so I am not able to doanything... Now, retrospective tax in India hasbecome a thing of past. It will not happen goingahead," Modi said.

Although Prime Minister did not specifically namethe pending cases, the major retrospective taxdisputes include those involving Vodafone andCairn.

Modi said with huge growth potential and evolvingglobal relations, India should have a predictabletaxation system.

"Retrospective tax is also a thing of the past. Wehave said this again and again in Parliament. Todayagain I am saying.

"If someone plans to come to India after 10 years, heshould be able to predict the tax structure. So I'm infavour of a long-term predictable tax system and wehave implemented it. So I don't think that in comingdays there will be any problem," he said.

Prime Minister also said Saudi investors can look atpetroleum, renewable energy, infrastructure anddefence manufacturing as possible areas forinvestment.


"Saudi investment in fertilisers, warehousing, coldchain facilities and agriculture would be a win-winpartnership as it would ensure good quality foodproducts for Saudi Arabia," he said, adding defencesector accounts for second largest contributor to theimport bill, after oil.

"We import everything for Defence sector. Why canwe not manufacture defence equipment in India?You investors can play a big role in that. Whateverwill be manufactured, India is a very big buyer,"Modi said.Prime minister added that today's world is scared oftwo things. First is terrorism and the other is moredangerous, cyber terror, which is unknown, but canstill happen.

"There is a need for innovation in the field of cybersecurity and India has the talent. There is a need fordynamic professional management and for thatthere is lot of investment that is required," Modisaid.Inviting investments in petroleum sector, Modi saidinvestors can partner India in energy sector as thecountry offers "transparent" policies.

He said in one year, India has already achieved5,500 MW of renewable energy production."When I first time said 175 GW renewable energypeople were surprised.... And I am confident thatwe will do it within the time period. I wantinvestment in solar equipment manufacturing andwe are ready to produce 175 GW renewable energy,which will be a strange thing for the world," Modisaid.

(Ref http://timesofindia.indiatimes.com/india/GST-will-be-reality-soon-PM-Modi-assures-Saudi-business-leaders/articleshow/51669790.cms)

11. GST about to happen; retro tax thing of past:PM Narendra Modi

RIYADH: Wooing investors with promise of aneasier business environment and stable tax regime,Prime Minister Narendra Modi today saidretrospective taxation has been made a thing of thepast but he is "not able to do anything" on two casesinherited from the previous government as they are"sub-judice".

Inviting Saudi businesses to come and invest inIndia's defence, energy, railway, health andagriculture sectors, Modi also said that a commonindirect taxation regime in form of GST (Goods and

Services Tax) was "about to happen". He, however,refrained from giving any specific timeframe.

Addressing a select group of Saudi and Indianbusiness leaders on the last day of his two-day visitto Saudi Arabia, Modi said his government hasopened up many sectors to foreign investment andIndia stands out as a "beacon of hope" amidst globaleconomic slowdown.

Prime Minister further said his government wastrying to strengthen the banking network in Indiaby freeing them from non-performing assets (NPAs)of state-run electricity companies whose liabilitieshad gone up significantly.

Modi said India has taken major policy initiatives tocreate favourable environment for investors besidesremoving administrative bottlenecks. In this regardhe said the World Bank has placed India on 12thposition in the list of countries that had ensured easeof doing business.

"Today, the world is facing a very deep economiccrisis and in this situation, India is a beacon of hope.Whether it is World Bank, IMF or credit ratingagencies, all of them consider India one of the fastestgrowing economies," he said.

On roll out of the much-delayed GST, PrimeMinister said, "GST will happen. I cannot give atimeframe, but it will happen. It was ourcommitment, and it is about to happen."

To a question on retrospective tax, Modi said it willnever be brought back again. He said two caseswere 'sub- judice' and it would not be proper forhim to comment further.

"As far as retrospective tax is concerned, it is a thingof the past. We have repeatedly said this inParliament and I am repeating here again today.

"There were two incidents that took place under thelast government. These are sub-judice. So, I am notbeing able to do anything on them. In one of thecases, positive outcome has come. Retrospective taxdoes not exist in India anymore. It has become athing of the past. It won't come," he said.

Although Prime Minister did not specifically namethe pending cases, the major retrospective taxdisputes include those involving Vodafone andCairn.


"I think in international relations, the taxationsystem should be predictable. If somebody wants tocome (to India) after 10 years, he should knowIndia's tax structure is like this. That's why we areworking on a long-term tax system and we areimplementing and I do not think there will be anyproblem in that," Modi said.

A Saudi businessman had asked Modi aboutretrospective tax regime, GST, banking system andsome other issues and wondered whether Modi willbe able to address their concerns.

Incidentally, Cairn Energy CEO Simon Thomsontold PTI in an interview in London today thatinternational investors want the Modi governmentto walk the talk on resolving retrospective tax issuesand send a clear signal that things are changingunder the new dispensation.

Cairn, which gave India its biggest onland oildiscovery that now accounts for a fifth of thecountry's oil production, will press ahead with thearbitration challenging use of a legislation to taxinternal business reorganisation with retrospectiveeffect and will seek USD 1 billion in damages, hefurther said.

Eyeing billions of dollars of investment from SaudiArabia, which is setting up a USD 2 trillion publicinvestment fund, Modi invited top CEOs to invest indefence, energy, railway, health and agriculturesectors in India.

Holding that there was huge opportunity to rampup trade ties, he said time has come to move from'buyer-seller relationship' to chart a new path ofgrowth and development which will benefit peopleof both the countries.

"We have to look beyond the buyer-sellerrelationship, because that will be an obstacle in thepath of progress," he said at the interactionorganised by the Council of Saudi Chambers.

Saudi Arabia's Minister for Commerce and IndustryTawfig Fawzan Al Rabiah and Minister of Economicand Planning Adel Faqih were also present on theoccasion.

Prime Minister also sought joint ventures andtransfer of technology in the fields of defence, deepsea oil exploration and railway.

He said Saudi investors can invest in building coldstorage network in India as well as in

manufacturing of equipment for generation of solarenergy.

He said Saudi investment in fertilizers,warehousing, cold chain facilities and agriculture,would be a win-win partnership, as it would ensuregood quality food products for Saudi Arabia.

He also said India and Saudi Arabia should look atworking together in the field of cyber-security as ithas emerged as a major area of concern.

Saudi Arabia is India's fourth largest partner withbilateral trade exceeding USD 39 billion in 2014-15.It is also India's largest crude oil supplier andaccounts forabout one-fifth of total imports.

Describing India and Saudi Arabia as "old friends",Prime Minister said both the countries should takebold new steps to a "golden future".

Emphasizing the strength of ties between the twocountries, he recalled King Salman bin Abdulaziz AlSaud mentioning that he was taught by an Indianteacher.

Modi said India had a unique combination ofdemocracy, demography and demand, and severalpolicy initiatives had been taken over the last twoyears to spur growth and progress.

Speaking about health sector, he said there wastremendous scope for investment in themanufacturing of medical devices.

He said India's health sector which is globallyextremely cost competitive, offers immense scopefor health tourism. He added that Indian nurses,present in large numbers in the Gulf, are a testamentto India's well-trained manpower.

"We import everything for defence sector. Why canwe not manufacture defence equipment in India?You investors can play a big role in that. Whateverwill be manufactured, India is a very big buyer,"Modi said.

Inviting investments in petroleum sector, Modi saidinvestors can partner India in energy sector as thecountry offers "transparent" policies.

He said in one year, India has already achieved5,500 MW of renewable energy production.

"When I first time said 175 GW renewable energypeople were surprised.... And I am confident that


we will do it within the time period. I wantinvestment in solar equipment manufacturing andwe are ready to produce 175 GW renewable energy,which will be a strange thing for the world," Modisaid.

Later, Ministry of External Affairs spokespersonVikas Swarup tweeted that Prime Minister metChairman of Saudi Aramco, Khalid A al-Falih anddiscussed issues related to energy and healthcaresectors.

Al-Falih, who is also the Minister of Health saidAramco looks at India as its number one target forinvestment, read Swarup's tweet.

Saudi Minister of Foreign Affairs Adel al-Jubeir alsomet Narendra Modi before the ceremonial welcome.

While interacting with 30 Saudi CEOs and Indianbusiness leaders here, Prime Minister said theCentre along with state governments have workedto take over the distressed power sector loans frombanks. "Now we are working with privatecompanies. On that also we have progressed fast. SoNPAs will not be an issue in the near future."

Modi said a lot of foreign banks are functioning inIndia and going forward, whatever is needed, thegovernment will do.

Modi said India had a unique combination ofdemocracy, demography and demand, and severalpolicy initiatives have been taken over the last twoyears to spur growth.

He said there was tremendous scope for investmentin the manufacturing of medical devices.

(Ref -http://economictimes.indiatimes.com/news/economy/policy/gst-about-to-happen-retro-tax-thing-of-past-pm-narendra-modi/articleshow/51670038.cms)

12. Better to wait till April 1, 2017 for betterGST: Debroy

It would be preferable to wait till April 1, 2017, for abetter Goods and Services Tax (GST) regime so thatthe essential objective of the GST to harmonise allthe taxes prevails, NITI Aayog member BibekDebroy said on Tuesday.

"It is far better in my personal view to wait till April1, 2017, to have a better GST than a GST which tiesour hands such that we nullify the essentialobjective of the GST which is harmonisation of allthe taxes," Debroy said here at a special sessionorganised by Bharat Chamber of Commerce.

The government had signalled last month that theGST would be implemented from April 1, 2017 evenif the constitution amendment bill on GST, currentlystuck in the Rajya Sabha where the governmentdoen't have a majority, got cleared in the budgetsession.

Debroy also said that "once we have the ideal GST,we know what the revenue neutral GST rate willbe".

"When we have the rate, no one should ideally beallowed to have exemptions or deviations from therate. Trouble, of course, is we have never been ableto get rid of exemptions. The more you allowexemptions, the more is to nullify the objective ofGST," he said.

"An ideal GST is one where all other taxes aresubsumed into the GST. There will be no other taxesand all will be clubbed to GST, said Debroy.

The noted economist also pointed out that due to taxexemptions, a huge amount of revenue was lost. Ifexemptions did not exist, the government wouldhave greater revenues to fund more developmentalwork, he added.A

Tax-GDP ratio in India is about 17 percent, if oneincludes both union and state governments' taxes,he added.

(Ref http://www.business-standard.com/article/news-ians/better-to-wait-till-april-1-2017-for-better-gst-debroy-116040500919_1.html)

13. Congress Not Trying To Block GST Bill, HasSome Concerns: Anand Sharma

NEW DELHI: Senior Congress leader AnandSharma today said the party had some concerns


about the Goods and Services Tax or GST Bill but itwas not trying to block the proposed tax.

Addressing a special plenary session of CII in NewDelhi, Ms Sharma said GST should be there and itwill happen.

"The government may say that our concerns are notcorrect. But I as an Indian citizen feel that theconcerns we have registered with the governmentare correct," he said, adding that issues of surcharge,in-built dispute redressal mechanism and a realisticcap on proposed tax as the contentious areas. He,however, assured that Opposition will have ameeting point with the government over the issue.

"We hope we will have a meeting point. We areengaged with the government and I assure ourobjective is definitely not to block it."

Mr Sharma also praised Prime Minister NarendraModi for acknowledging "unfair" criticism of hispredecessor Manmohan Singh by the BJP.

"We are very happy that the present Prime Ministerhas realised that what they said about ManmohanSingh in 2008 was unfair and what we did was toserving the supreme national interests of thecountry. We are grateful," he said.

Citing opening up of insurance, banking, telecom,multi-brand retail sector and FDI in civil aviationsectors by the previous government in the Centre,he demanded the government to end the confusionover foreign investments in the country. "What Iwould expect that confusion must end for theforeign investors. Two years down the line pleasetell the investors that it's on," he said.

The Deputy Leader of Congress in the Rajya Sabhaalso criticised the nationalism debate and said it wasnot going to help India enhance its competitivenessin the global market place.

"Do I need a minister, who never went to auniversity, with due respect, that what should bethe height at which the tricolor should be unfurledin Central Universities," he said about the need forpeaceful environment in the country to facilitateease of doing business.

He also pointed to "urgent and serious" need ofadministrative reforms and cutting of red tape toensure that country attains competitiveness andmaintains it in future.

(Ref http://www.ndtv.com/india-news/congress-not-trying-to-block-gst-bill-has-some-concerns-anand-sharma-1338718)

14. Government to engage Congress to breakGST deadlock: Arun Jaitley

NEW DELHI: The government will attempt to breakthe deadlock on the Goods and Services Tax (GST)Bill in the Rajya Sabha by engaging the oppositionCongress party in discussions, Finance MinisterArun Jaitley said on Thursday.

"The only opponent on the GST is the Congressparty. In its belated wisdom, the Congress hasdemanded a constitutional cap on the GST rate. I amgoing to discuss with them," he said, addressing theGrowth Net conference here.

Jaitley said the GST Council would decide the taxrate, but he favoured a "reasonable" rate.

"I hope there will be some consensus on thatreasonable rate between two national parties," theminister said.

The bill for a pan-India GST for a thorough reformof the country's indirect tax regime has been passedby the Lok Sabha, but is stalled in the Rajya Sabha,where the ruling National Democratic Alliance(NDA) lacks a majority.

The government hopes to have the bill passed in thesecond half of the Budget session of Parliamentbeginning on April 25.

Jaitley juxtaposed the use of the upper house to"block" the decision making with the need to allowthe view of the "directly elected house" -- the LokSabha -- to prevail.

"To what extent our upper house is going to be usedto block economic decision making. In Australia thedebate is on; the UK has gone through this debate awhile ago, and Italy is having the same debate.Because ultimately the weight of a directly electedHouse will always have to be maintained," he said.

The finance minister said the Congress party, whichhad sponsored the law in the first place, has now"curiously" changed its stand.

"I am faced with a reversal of position when I acceptsome of the moves which the Congress party itselfstarted," he said.


"GST was first mooted by Chidambaram and thenintroduced by the present President when he wasfinance minister, and there is no point in taking areversal as far as those issues are concerned," hesaid, referring to two of his predecessors.

Referring to the ongoing opposition to levying ofexcise duty on jewellery, Jaitley said it is notjustified to keep "luxury items" untaxed.

"I want to make it clear that when tax imposes onitems of common people and the society runsthrough tax, then it's not justified to keep luxuryitems aside from tax," he said.

On Monday, he said exempting luxury items fromindirect tax would not help keeping the proposedGST rate in the 16-18 percent range.

"If luxury items are kept out, then it will be verydifficult to keep the GST (Goods and Services Tax)rate between 16 percent and 18 percent," Jaitley hadsaid.

Jewellers are continuing their protest strike againstthe one percent excise duty on non-silver jewelleryintroduced by the finance minister in the unionbudget for the current financial year.

Jaitley had earlier said an 18 percent cap on the GSTrate as suggested by the Congress party wouldresult in a flawed system as it could lower duties ona host of "sin" products and luxury items thatshould attract higher taxes.

(Ref http://economictimes.indiatimes.com/news/politics-and-nation/government-to-engage-congress-to-break-gst-deadlock-arun-jaitley/articleshow/51729268.cms)

15. GST a key factor in improving ease of doingbusiness: Das

Expecting an early passage of goods and services tax(GST) Bill by Parliament, Economic Affairs SecretaryShaktikanta Das said administrative machinery isready to implement the new indirect tax regime,which will be a key component in improving ease ofdoing business.

"I think the biggest contribution to ease of doingbusiness in our country will be made if GST isimplemented in time. We are quite hopeful andoptimistic that Parliament will definitely very soonappreciate the urgency of GST and have theConstitution Amendment Bill passed," he said.

Addressing industry leaders at a CII event here, Dassaid the administrative machinery is "fully geared"both at states and central level to implement theGST at the earliest.

"GST is critical component of improving ease ofdoing business. Apart from having a commonmarket, which will make our cost of production andour competitiveness far more effective...(GST) willalso make a big contribution to logistic cost andtransactions costs that we today are faced aseconomy," the Secretary said.

Quoting an estimate, Das said a truck carryinggoods, on an average, remain stranded at differentcheck points for 48 hours.

Implementation of the Goods and Service Tax (GST)will help in removing such bottlenecks, theSecretary said.

The GST bill was passed by the Lok Sabha in Maylast year and is pending ratification by the RajyaSabha or Upper House, where the ruling NDA doesnot have a majority. Congress is opposing the bill incurrent form and demanding that a cap on GST ratebe included in the Constitution Amendment Bill.

Keen on getting the much delayed GST billapproved by Parliament in second half of theBudget Session beginning next month, FinanceMinister Arun Jaitley recently said he will reach outto the Congress again to persuade it to support thelegislation.

The GST Bill, India's biggest indirect tax reformsince independence, seeks to replace a slew ofcentral and state levies, transforming the nation of1.3 billion people into a customs union.

After it is approved by the Rajya Sabha, thelegislation needs to be ratified by half of the 29states so as to roll out GST possibly by October 1.

(Ref -http://www.business-standard.com/article/pti-stories/gst-a-key-factor-in-improving-ease-of-doing-business-das-116040401011_1.html)


2.0 Case Laws

2.1 Case Laws related to Excise

Sr. No. 1RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub Issue Sale to related partiesFavour of Partly in favour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee-manufacturer set up a

Joint Venture Company (JVC) inpartnership with a foreigncompany - JVC was tomanufacture Epoxy Resins usingassessee's final product ECH -Department argued that assesseeand JVC were 'related person', asthey were interconnected andthere was mutuality of interest, asmajority production of assesseewas sold to JVC and JVC alsocould not function withoutassessee's product ECH - Tribunalfound that : (a) there was nointerconnection; but, (b) there wasmutuality of interest, as buyer-JVChad an indirect interest in businessof assessee and vice versa - HELD :Tribunal gave cogent reasons forits conclusions - Hence, same wereupheld Valuationunder Central Excise - Transactionvalue - Best judgment assessment -Period September, 2001 toDecember, 2004 - Assessee sold itsfinal product to related person(being, Joint Venture Company,JVC) at below 'cost' - Departmentsought to apply rule 11 and valuegoods at 'cost plus 15 per cent' -Assessee argued that sales tounrelated parties were also belowcost, as international market priceswere very low - HELD : Since novaluation rule is directlyapplicable, rule 11 would apply,which provides for best judgment

assessment - A best judgmentassessment must be madereasonably and not arbitrarily -Since sales to unrelated partieswere also below cost and objectiveof rule 11 is to arrive at arm'slength price/value, 'cost plusmethod' cannot be applied, as itwould work arbitrarily - Hence,value was enhanced to pricecharged from arm's lengthpurchasers

Citation [2015] 62 taxmann.com 7 (SC)Tamil Nadu Petroproducts Ltd.v.Commissioner, Central Excise,Chennai

Sr. No. 2RelevantSection Rule 18RelevantStatute Central Excise Rules 2002Issue RebateSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Word "or" in rule 18 of the Central

Excise Rules, 2002, to beinterpreted as "and" and therefore,the exporters are entitled to boththe rebates under rule 18 (viz.input‐stage rebate as well asoutput‐stage rebate on finishedgoods) and not one kind of rebate

Citation "[2015] 62 taxmann.com 101 (SC)Spentex Industries Ltd.v.Commissioner of Central Excise"

Sr. No. 3RelevantSection

Section 11A read with Section 73 ofthe Finance Act 1994

RelevantStatute Central Excise Act 1944Issue RecoverySub Issue Extended period invocationFavour of AssesseeIssuingAuthority Supreme CourtJudgment Invocation of extended period of


limitation - Period 1993-94 to 27-9-1997 - Department issue noticedated 3-2-1998 raising demandalleging non-inclusion of certainexpenses in cost of production ofcaptively consumed goods -Assessee challenged invocation ofextended period on ground thatnecessary clarification was issuedby department only on 30-10-1996and therefore, there was nosuppression/misstatement/mis-declaration on part of assessee -HELD : Manner of computation ofcost of production and inclusionstherein, were clarified bydepartment vide Circular, dated30-10-1996 - Hence, mis-declaration cannot be alleged forperiod prior to October 1996 andtherefore, extended period oflimitation cannot be invoked uptoSeptember, 1996 - For balanceperiod, tax effect was negligibleand hence, demand was set aside

Citation "[2015] 62 taxmann.com 12 (SC)Greaves Ltd.v.Commissioner of Central Excise &Customs, Aurangabad"

Sr. No. 4RelevantSectionRelevantStatute Central Excise Act 1944IssueSub Issue Extended period invocationFavour of Partly in favour of AssesseeIssuingAuthority

CESTAT Ahmedabad LargerBench

Judgment the process carried out by theassessee amounts to manufacture.The impugned goods Guar DalPowder would be classifiableunder Heading 1301: The seed ofGuar plant in powder form knownas Guar Dal Powder, was receivedby the assessee. The assessee hadundertaken a process of the saidpowder added with other product

and TKP. It is also mixed withMethonol and Glycol in aminimum quantity. There is achemical reaction during mixing ofthese items and the viscosity of thefinal product ranges from 0 to 5000CPH as per requirement of enduse of the product. The chemicalreaction in the Blender isexpressing the magnitude ofinternal friction in a fluid andthere is a change of properties asper end use of the goods. Thus,there is a change of character ofthe impugned product. Theassessee received Guar DalPowder and after due process, itwas sold as Guar DalPowder/Guar Gum. There is nodispute that the said product wasknown in trade as Guar Gum. So,there is a change of character,identity and use of the goods.There is change of character of thegoods of different properties asper viscosity used in variousindustries. Revenue’s argumentthat the product was coveredunder Heading 13.01 of the ExciseTariff has more merit.No extended period as there werecontrary decisions: It is seen fromthe records that the Appellant fileddeclaration under Rule 174 oferstwhile Rules from the year1997-98. The Appellant hadspecifically mentioned thedescription of the goods as GuarDal Powder, with the process ofmanufacture by the Declarationdt.29.09.1997. In any event, therewere contrary decisions of the co-ordinate Benches of the Tribunalon this issue. It is noticed that theappellant’s own case, the Tribunalin earlier occasion, observed thatthe impugned goods are NIL rateof duty under Chapter 11 ofCETA. So, the ingredients inproviso to Section 11 A (1) of


Central Excise Act, 1944 cannot beinvolved.

Citation "2015-TIOL-2211-CESTAT-AHM-LB1) M/s KRAP CHEM PVT LTD2) SHRI R P GUPTA3) M/s RAVI GUM INDUSTRIES4) SHRI RAMNIKBHAI N PATEL5) SHRI BABULAL K SAKARIA6) SHRI JIVRAJBHAI

VAMANJIBHAI PATELVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,DAMAN, RAJKOT"

Sr. No. 5RelevantSectionRelevantStatute CENVAT Credit Rules 2004Issue Disallowance of CenvatSub IssueFavour of Partly in favour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Total cenvat credit of Rs.

46,05,092/- was disallowed toassessee out of which Rs.30,88,512/- availed in or in relationto cenvat credit on various inputservices and remaining amount ofRs. 15,16,580/- availed in or inrelation to trading related activities- So far as disallowing CenvatCredit of Rs. 30,88,512/- isconcerned, inclusive part ofdefinition of input service at thematerial time in 2007-08 allowedcredit of services used in anyactivity relating to business -Regarding cenvat credit pertainingto canteen services, no evidenceexists on record that any amounthas been recovered fromemployees of assessee - ST paid onany activity relating to business ofmanufacturing will be available asCenvat Credit to assesseeSo far as disallowing CenvatCredit of Rs. 15,16,580/- isconcerned, credit in question

relates to services used in Tradingactivities carried out at assessee's16 branches all over India - Fromrecords, it is not forthcoming as towhich are these services on whichassessee has taken cenvat creditand also whether services attrading branches availed iscovered under above mentioned17 services mentioned under Rule6(5) of CCR, 2004 - Although,assessee claims that they areentitled to 100% credit in respect ofservices covered under Rule 6(5),but they have also not come outwith clarity on actual servicesavailed by them - Matterremanded to original adjudicatingauthority

Citation "2015-TIOL-2165-CESTAT-AHMM/s CEMA ELECTRIC LIGHTINGPRODUCTS INDIA PVT LTDVsCOMMISSIONER OF CENTRALEXCISE, AHMEDABAD-III"

Sr. No. 6RelevantSection Section 5ARelevantStatute Central Excise Act 1944Issue Exemption from Excise DutySub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Machineries, appliances and

components required for settingup of water supply plants/projectswere exempt, on production ofcertificate from DistrictCommissioner - Assessee, amanufacturer of wires and cables,cleared wires and cables for watersupply projects availing saidexemption - Department deniedexemption as certificate was inname of ONI, whereas order hadbeen placed on assessee by VWL -Assessee submitted that ONI hadplaced orders on VWL and VWL


had, in turn, placed orders onthem - HELD : In absence ofallegation of possible mis-use ofgoods for unintended purposes,beneficial notification issued inpublic interest cannot be denied -Even before clearance, assesseehad informed department aboutpurchase order from VWL, being asub-contractor - Certificate issuedin name of ONI also mentionedpurchase order placed on VWL,who placed purchase order onassessee - Since goods wereultimately put in use by sub-contractor, exemption was allowed

Citation [2016] 67 taxmann.com 121 (NewDelhi - CESTAT) K.E.I.Industries Ltd.v.Commissioner of Central Excise,Jaipur


Rule 13, 14 and 14A of CentralExcise Rules 1944 and Rule 19 of

RelevantStatute Central Excise Rules 2002Issue Export without payment of dutySub IssueFavour of RevenueIssuingAuthority High Court of KeralaJudgment Department denied export benefit

and demanded duty with interestand penalty on ground thatassessee failed to produce proof ofexport within 6 months fromexport - Assessee explained that :(a) export documents were filedeven prior to actual manufactureonly in anticipation of exportorder; (b) goods were not actuallymanufactured; and (c) foreignbuyers did not confirm exportorder - Tribunal held that havingrecorded manufactured in DailyStock Account (RG-1) and havingfiled export documents, assesseemust furnish proof of export -HELD : Assessee never informed

department regarding non-availing and non-utilisation ofresult of formalities carriedforward in anticipation of export -Assessee failed to discharge itsburden of proof to establish export- Hence, no substantial question oflaw arose

Citation [2016] 67 taxmann.com 171(Kerala) ITELIndustries (P.) Ltd.v.Commissioner of Central Excise

Sr. No. 8RelevantSection Section 11BRelevantStatute Central Excise Act 1944Issue RefundSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment When refund claim has been

allowed on merits by higherappellate authority, then, lowerauthorities must merelyimplement appellate order; lowerauthorities cannot deny refundclaim on new grounds (includingtime-bar)

Citation [2016] 67 taxmann.com 196 (NewDelhi - CESTAT)RITES Ltd.v.Commissioner of Service Tax,Delhi

Sr. No. 9RelevantSection Section 35BRelevantStatute Central Excise Act 1944Issue AppealsSub Issue Condonation of DelayFavour of AssesseeIssuingAuthority High Court of MadrasJudgment Department filed appeal against

manufacturers in time, but, forgotto file appeal against co-noticees


(brokers and individuals) and filedappeal against co-noticees after adelay of 2249 days - Tribunaldenied condonation - Departmentsubmitted that : (a) appeal againstco-noticees was inadvertently leftout; (b) if same is not admitted,appeal against manufacturer mayalso fail; and (c) even ifdepartment succeeds in mainappeals, co-noticees would be leftout - HELD : Department'sexplanation was not a reason but amere apology - Department'sconcerns were illusory because :(a) main appeals filed against mainnoticees cannot fail merely becauseco-noticees were left out; and (b) ifDepartment succeeds againstmanufacturers, orders can becertainly enforced against theirproprietors/partners becauseliability of a partnership firm isthat of partners and liability ofproprietary concern is that ofproprietor - Hence, condonationwas denied

Citation "[2016] 67 taxmann.com 275 (Madras)Commissioner of Central Excise,Chennai-I Commissioneratev.B.S. Garg"

Sr. No. 10RelevantSection Section 2(f)RelevantStatute Central Excise Act 1944Issue ManufactureSub Issue Deemed ManufactureFavour of Partly in favour of AssesseeIssuingAuthority CESTAT KolkataJudgment Assessee was engaged in

extracting minerals from beachsand as follows : (a) dredging ofbeach sand, (b) washing ofdredged sand to separate/removequartz, (c) obtaining concentratescontaining minerals, (d) separatingconducting minerals from non-

conducting minerals and (e) usingmagnetic separation method toseparate each mineral - Assesseewas not paying duty on saidprocess on ground that saidprocess did not amount tomanufacture and argued that,even otherwise, this process isexempt under Notification 63/95-CE - Department argued that asper Chapter Note 4 to Chapter 26,process of converting ores intoconcentrates amounts tomanufacture; hence, presentprocess amounts to manufacture -HELD : As per HSN, 'concentrates'are defined to include thoseobtained out of physical, physico-chemical or chemical operationson 'ores' such as crushing,grinding, magnetic separation,floatation, screening, grading,drying, calcinations, roasting, etc. -Hence, assessee's activityamounted to conversion of 'ores'into 'concentrates' and coveredwithin deemed manufacture underChapter Note 4 ibid - Deemedmanufacture would arise even ifcontent/purity of ores does notimprove - However, since issue ofexemption under Notification63/95-CE was not examined, samewas remanded back forconsideration thereof

Citation [2016] 67 taxmann.com 336(Kolkata - CESTAT)Indian Rare Earths Ltd.v.Commissioner of Central Excise &Service Tax, Bhubaneshwar-I

Sr. No. 11RelevantSection Section 11BRelevantStatute Central Excise Act 1944Issue RefundSub Issue Doctrine of Unjust EnrichmentFavour of Revenue


IssuingAuthority High Court of MadrasJudgment Assessee claimed exemption for

Drip Irrigation System with'plastic pipes/tubes' as partsthereof - Department proposeddenial of exemption on 'plasticpipes/tubes' - Assessee paid dutyunder protest on 'plasticpipes/tubes' - Later, Tribunalallowed exemption on 'plasticpipes/tubes' and assessee filedrefund - Department deniedrefund on ground of unjustenrichment - Assessee argued thatprice had remained unchanged,hence, burden of duty was notpassed on - HELD : Unjustenrichment applies to : (a) 'captiveconsumption' of pipes/tubes formanufacture of Irrigation System,as well as (b) 'indirect passing onof burden of duty' - Assessee failedto produce documentary proofthat : (a) duty was not passed ontobuyer, or (b) there was no changein price of final product - Assesseedid not submit invoices to showthat price charged has beenuniform throughoutnotwithstanding payment of dutyon plastic tubes - Mere payment ofduty under protest does not ruleout unjust enrichment - Hence,denial of refund was upheld

Citation "[2016] 67 taxmann.com 314 (Madras)Elgi Ultra Industries Ltd.v.Deputy Commissioner of CentralExcise, Coimbatore IV Division"

Sr. No. 12RelevantSection Section 4 read with Section3RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of Matter referred to Constitutional

BenchIssuingAuthority Supreme Court

Judgment Assessee had collectedrental/packing/facility chargesfrom buyers for providingcylinders, tonners, canisters, etc.,while supplying gas - Departmentsought inclusion thereof intransaction value of gas - Assesseeargued that since 'charges forcylinders' had no relation withmanufacture of 'gas', they cannotbe included in excisable value ofgas - Vide order dated 30-7-2009,two-judge Bench of SupremeCourt noted apparent conflictbetween three-judge benchdecisions in : (a) Acer India's case(valuation must follow scope ofmanufacture); and (b) BombayTyre's case (valuation is differentfrom manufacture); and hadreferred matter to larger bench -On being posted before three-judge Bench of Supreme Court -HELD : Since two co-ordinatebenches of three-judges had takenapparently conflicting views,present three-judge Bench cannotventure into issues raised andcannot express any opinion onmerits - Hence, matter wasreferred to yet larger bench

Citation [2016] 68 taxmann.com 46 (SC)Commissioner of Central Excise,Indorev.Grasim Industries Ltd.

Sr. No. 13RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue Levy and Collection of DutySub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Valuation of excisable goods for

purposes of charging of duty ofexcise (Bullet proofing, process of)- Assessee was a manufacturer of


jeeps - Police Department ofvarious states asked assessee tosupply jeeps with bullet proofingsystem - Assessee cleared jeepsfrom factory without any bulletproofing - Thereafter, bulletproofing was carried out by jobworkers outside factory premises -Whether, on facts, Tribunal wasjustified in holding that cost ofbullet proofing could not be addedto arrive at transaction value -Held, yes

Citation [2016] 68 taxmann.com 12 (SC)Commissioner of Central Excise &Customsv.Mahindra & Mahindra Ltd.


2.2 Case Laws related to Service Tax

Sr. No. 1RelevantSection Rule 13RelevantStatute Cenvat Credit Rules 2004Issue Deemed CreditSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee, a manufacturer of steel

bars/rods, purchased raw materialviz. old and discarded rails,wheels, fish plates, etc. in auctionfrom Railways - Though assesseedid not pay duty on purchase fromRailways, however, it claimeddeemed credit at Rs. 920 per ton interms of Notification/order dated7-7-1992/1-3-1994 - Commissioner(Appeals) denied deemed crediton ground that purchase bills ofscrap from Railways do notindicate rate and amount of dutypaid thereon at time ofclearance/sale by Railways -HELD : There was no obligationon part of assessee to pay duty attime of purchase from Railways -In fact, assessee was claimingdeemed credit of duty paid byRailways at time of purchases byRailways, as perNotification/order, dated 7-7-1992/1-3-1994 - Since assesseesatisfied all eligibility conditions asper Notification/order, dated 7-7-1992/1-3-1994, impugned creditcould not be denied

Citation [2015] 62 taxmann.com 8 (SC)Ankur Steelsv.Commissioner of Central Excise,Allahabad

Sr. No. 2RelevantSectionRelevantStatute Finance Act 1994

Issue ValuationSub Issue Business Auxilliary ServicesFavour of Partly in favour of assessee and

partly in favour of RevenueIssuingAuthority CESTAT AhmedabadJudgment BAS - Manufacture of Alcoholic

Beverages on job work basis wasincluded in service tax net w.e.f1.9.2009 - Appellants hadchallenged the constitutionalvalidity of levy of the Service Taxbefore the Bombay High Court -High Court by Order dtd14.10.2010 admitted the WP andobserved that the Revenue wouldbe at liberty to proceed with theShow Cause Notice – Adjudicatingauthority confirmed demand ofservice Tax of Rs 28,60,30,676/-along with interest and penalty –appellant have paid the tax of Rs17,66,51,082/- alongwith interestof Rs 3,27,50,955/- - Appeal beforeTribunal Held:Reimbursable expenses paid to theappellant insofar as cost andexpenditure as stipulated underRule 5(i) ST Valuation Rules, 2006cannot be included in the taxablevalue - despite the fact that WritPetition is pending before the HighCourt, the appellant paid tax withinterest and there is reasonablecause to invoke Section 80 forwaiver of the penalty underSection 76 & 78 of the Act - order ismodified to the extent that thetaxable value would be computedby excluding the amount ofsurplus/profit returned to theBrand Owner and the otherreimbursable expenses paid to theappellant, covered under Rule 5(i)of the ST Valuation Rules -Adjudicating authority directed tore-determine demand of taxalongwith interest - penaltyimposed u/s 77 is upheld butother penalties imposed u/s 76 &78 are set aside: CESTAT


Citation 2015-TIOL-2208-CESTAT-AHMM/s BIOSSOM INDUSTRIES LTDVsCOMMISSIONER OF CENTRALEXCISE, CUSTOMS ANDSERVICE TAX-DAMAN

Sr. No. 3RelevantSectionRelevantStatute Finance Act 1994Issue Admission of AppealSub IssueFavour of AssesseeIssuingAuthority High Court of GujaratJudgment Appeal filed by the assessee with the

Commissioner (Appeals), whodisposed of the same through acommunication that the appeal lieswith the CESTAT, but not withCommissioner (Appeals) -Communication of the Commissioner(Appeals) challenged on the groundthat the same was passed withoutproviding an opportunity of personalhearing. Held:It is an undisputed fact that beforereturning the appeal to the petitioner,the petitioner has not been calledupon to explain on the maintainabilityof the appeal before the Commissioner(Appeals) - Even if the appealpreferred by the petitioner before theCommissioner is not maintainable, theauthority ought to have passed areasoned order that too after giving areasonable opportunity of hearing tothe petitioner - Commissioner(Appeals) directed to decide all issuesafter providing an opportunity ofpersonal hearing

Citation 2015-TIOL-2363-HC-AHM-CXPREM FABRICATIONSVsUNION OF INDIA AND 3

Sr. No. 4RelevantSectionRelevantStatute Finance Act 1994Issue

Sub Issue Supply of Tangible Goods ServiceFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Supply of Tangible Goods service -

appellants had paid service tax ofRs. 21,20,864/- alongwith Cess ofRs. 63,630/- and had also paidinterest of Rs. 2,15,616/- (periodMarch to August 2011) for thedelayed payment of service tax(for period July 2008 to March2011) at the commencement ofinvestigation itself, and muchbefore issuance of SCN inNovember 2011 - further there wasno service tax liability on a fewinvoices/ debit notes, many ofwhich contentions were acceptedby the adjudicating authority -another amount of Rs. 2,38,607/-sanctioned as refund was alsoappropriated in July 2013 -appellants had also paid Rs.1,11,988/- vide challan No. 00438dated 13.08.2015 - penalty of Rs.5,000/- u/s 77 of FA, 1994 and apenalty of equivalent tax of Rs.30,93,660/- on the appellantschallenged before Tribunal.Held: Matter is no more res-integra, Division Bench of theKarnataka High Court in the caseof CCE & ST, LTU, Bangalore vs.Adecco Flexione WorkforceSolutions Limited - 2011-TIOL-635-HC-KAR-ST has held that assesseeis not liable to pay any penaltyunder such circumstances –penalties set aside – appealdisposed of

Citation "2015-TIOL-2169-CESTAT-AHMM/s NAWAZ SHIPPINGVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,RAJKOT"

Sr. No. 5RelevantSection Section 65


RelevantStatute Finance Act 1994IssueSub Issue Banking and Financial ServicesFavour of Partly in favour of assessee and

partly in favour of RevenueIssuingAuthority CESTAT MumbaiJudgment Assessee, Union Bank of India,

received certain services fromSociety for Worldwide InterbankFinancial Telecommunication(SWIFT) - It was utilizing servicesof SWIFT network essentially totransmit financial messagesinternationally - It was payingcommercial considerations toSWIFT for hiring said servicesperiodically - AdjudicatingAuthority held that servicesrendered by SWIFT to assesseeamounted to a taxable serviceclassifiable under category ofbanking and other financialservices under sub-clause (vii) ofsection 65(12) and were liable toservice tax - He accordingly raisedservice tax demand upon assesseefor period from 1-1-2005 toDecember, 2009 and from January,2010 to September, 2010 - Whetherin view of decision of MumbaiBench of Tribunal rendered in caseof Bank of Baroda v. CST [FinalOrder No. A/85010/16/STB,dated 5-1-2016], demand of servicetax only for period 18-4-2006 toDecember, 2009 and January, 2010to September, 2010 deserved to bemaintained - Held, yes

Citation [2016] 67 taxmann.com 162(Mumbai - CESTAT)Commissioner, Central Excise &Service Taxv.Union Bank of India

Sr. No. 6RelevantSection Section 65(19)Relevant Finance Act 1994

StatuteIssue Differential Amount Earned on

RTO work feeSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Assessee, a motor dealer, earned

'differential amount' kept back onfees charged for RTO registrationfrom their customers - Departmentargued that amount collected overand above actual charges paid toRTO authorities is liable to servicetax - HELD : Assessee was : (a)neither promoting/marketing anyservice provided by any client, (b)nor providing any customer careservice on behalf of client -Assessee was merely helpingvehicle-buyers with registrationwith RTO under Motor VehicleAct and same cannot beconsidered as Business AuxiliaryService or 'Business SupportServices' - Hence, demand wasdropped

Citation "[2016] 67 taxmann.com 174 (Mumbai- CESTAT)Arpanna Automotive (P.) Ltd.v.Commissioner of Customs & CentralExcise"

Sr. No. 7RelevantSection Section 65(19)RelevantStatute Finance Act 1994IssueSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee was

franchisee/distributor of SIMcards, recharge coupons and top-up coupons of BSNL - Assesseeearned commission on SIM Cardsand discount on coupons -Assessee argued that service taxhad been discharged on full MRP


by BSNL, hence, no service taxcould be demanded from assessee- Department demanded servicetax on commission on SIM cardsbut dropped demand on discounton coupons - HELD : Assessee wasagent of BSNL and wascompensated in form ofcommission or discount - Servicerecipient of telecom services wassubscriber and full service tax onfull MRP was collected and paidby principal viz. BSNL -Commission paid to assessee wasincluded in value on which taxwas paid by BSNL - Hence, SIMCard could not be treateddifferently from coupons and,therefore, demand of service taxon SIM cards was set aside

Citation "[2016] 67 taxmann.com 172 (NewDelhi - CESTAT) GoyalAutomobilesv.Commissioner of Central Excise,Chandigarh-II"


Section 73, read withsections 65(39a) and 65(105)(zzzza)

RelevantStatute Finance Act 1994Issue Recovery of DutySub Issue Invocation of Extended Period of

LimitedFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee was constructing

pipeline, etc. for water supply -Department demanded service taxunder Works Contract Services(WCS) invoking extended periodon charge of suppression -Assessee argued that Explanation(ii)(b) of section 65(105)(zzzza)covers "construction of a pipelineprimarily for purposes ofcommerce or industry"; however,since construction by assessee wasmeant for water supply viz. non-

commercial purposes, it was notcovered under WCS - Departmentargued that service was taxable, asit was covered within Explanation(ii)(a) i.e., "drain laying or otherinstallations for transport of fluids"- HELD : Prior to 1-6-2007, serviceswere held to be not taxable underErection, Commissioning andInstallation Services in assessee'sown case by Tribunal; therefore,prima facie, there was nojustification for change inclassification to WCS - Further,assessee's view that 'constructionwas non-commercial' was notcontroverted by department withreasons - In any case, assessee hadbona fide belief that service taxwas not payable and, therefore,extended period cannot beinvoked

Citation [2016] 67 taxmann.com 197(Chennai - CESTAT)Indian Hume Pipe Co. Ltd.v.Commissioner of Central Excise,Trichy

Sr. No. 9RelevantSection Section 65(19)RelevantStatute Finance Act 1994IssueSub Issue Business Auxilliary ServicesFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee, a motor dealer, allowed

table space to finance companieswithin its premises and receivedfollowing sums : (a) commissiontowards efforts made by assessee'semployees for promotion offinancial products and suchcommission was fully distributedamong employees, (b) processingfees for processing of loanapplications; (c) sum towardsproviding table space -


Department demanded service taxon all three sums - HELD :Providing table space to financecompanies within assessee'spremises does not amount toBusiness Auxiliary Services andhence, not taxable - Commissionreceived for promotion of productsof finance companies by assessee'semployees amounts to BusinessAuxiliary Services provided byassessee himself becauseemployees were not free agent;hence, same is taxable in hands ofassessee even if entire sum isdistributed among employees -Processing fees is for handlingloan applications and is incidentalto promotional services and is,therefore, taxable

Citation [2016] 67 taxmann.com 194 (NewDelhi - CESTAT)Joshi Auto Zone (P.) Ltd.v.Commissioner of Central Excise,Chandigarh

Sr. No. 10RelevantSection Section 65(19) and 65(68) and 67RelevantStatute Finance Act 1994IssueSub Issue Business Auxilliary ServicesFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee was running petrol outlet

owned by IOCL including : (a)delivery of petroleum products tocustomers; (b) handling receipts,stock, etc.; (c) maintaining security,housekeeping, air/water facilities,etc. - Assessee received fixedcharges per litre from IOCL alongwith reimbursements towardsvarious expenses - Departmentdemanded service tax underBusiness Auxiliary Services -HELD : Assessee was providingservices for sale of goods

belonging to client IOCL andhence, services were BusinessAuxiliary Services - Underagreement, assessee was alsoresponsible for recruiting andutilizing staff, hence,reimbursements therefor wouldform part of Business AuxiliaryServices - Hence, entire amountwas liable to tax

Citation [2016] 67 taxmann.com 198 (NewDelhi - CESTAT)Sanjeev Chaudhariv.Commissioner of Central Excise,Chandigarh

Sr. No. 11RelevantSection Rule 3 read with Rule 5RelevantStatute Cenvat Credit Rules 2004Issue Refund of Exports without

RegistrationSub IssueFavour of AssesseeIssuingAuthority High Court of KarnatakaJudgment Assessee, an exporter of services,

took credit of input services andclaimed refund thereof under rule5 - Department denied credit andconsequent refund on ground thatassessee was not registered underservice tax law - HELD :Department could not show thatthere was any liability on part ofassessee to pay service tax whichwas required to be paid and whichwas required to be adjustedagainst cenvat credit or thatassessee was not entitled to refund- Exported service was not liable toservice tax - Moreover, there is noprovision even under rule 5 ibidwhich provides for conditionprecedent for registration ofservice provider - Hence, creditand refund was allowed

Citation [2016] 67 taxmann.com 193(Karnataka)


Commissioner of Service Taxv.Tavant Technologies India (P) Ltd.

Sr. No. 12RelevantSection Section 67RelevantStatute Finance Act 1994Issue ValuationSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Where actual lease rent paid to

assessee for first five years of 10year lease period was meagre ascompared to amount payable fornext five years and assessee passedentry of a notional amount for'lease rent equalisation' to reflectlease rent income on a straight lineover lease period, notional amountwas not liable to tax

Citation "[2016] 67 taxmann.com 215 (Mumbai- CESTAT) RelianceInfratel Ltd.v.Commissioner of Central Excise,Thane-II"

Sr. No. 13RelevantSection Rule 2(l)RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue Input ServicesFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Assessee was providing renting of

immovable property services -Assessee took credit ofconstruction services - Departmentdenied credit on ground thatrenting services were not 'outputservice' for 'input constructionservices' - HELD : Renting ofimmovable property and servicetax liability thereon will not ariseunless immovable property comes

into an existence in form ofconstructed building/warehouse -Hence, in view of precedents,credit of construction services isallowable

Citation [2016] 67 taxmann.com 251(Mumbai - CESTAT)Nirlon Ltd.v.Commissioner of Central Excise,Mumbai


Section 65(109a) read with Section67

RelevantStatute Finance Act 1994Issue Telecomunication ServicesSub IssueFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee did not pay service tax

on value of SIM cards whilerendering 'telecommunicationservices' - Assessee argued that ithad paid VAT thereon - HELD :SIM cards do not have a functionother than as a service inextricablylinked to activation thereof whichis itself acknowledged as a taxableservice - Hence, value of SIMCards was includible in value oftaxable services and liable toservice tax - Hence, discharge ofVAT obligation to StateGovernment will not relieveassessee of tax liability underservice tax law

Citation [2016] 67 taxmann.com 252 (NewDelhi - CESTAT)Bharti Airtel Ltd.v.Commissioner of Central Excise,Panchkula


Section 65(109a) read with Section67

RelevantStatute Finance Act 1994


Issue Telecomunication ServicesSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Period September 2002 and March

2006 - Assessee was collectingcharges on roaming facility availedby customers of overseas serviceprovider while in India -Department denied exemptionunder Notification No. 36/2007-STon ground that assessee was not atelegraph authority - HELD : Taxwas not being collected and paidon this service since introductionof tax in 1994 and CentralGovernment has decided toregularize this industry practiceprevailing for period upto January2007 - Assessee being a licenceewho has been conforming to tradepractice, is also a beneficiary ofthis magnanimity - Hence,assessee was eligible forexemption under Notification No.36/2007-ST

Citation "[2016] 67 taxmann.com 252 (NewDelhi - CESTAT) BhartiAirtel Ltd.v.Commissioner of Central Excise,Panchkula"

Sr. No. 16RelevantSection Rules 9RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Documents on which credit may

be taken - Assessee (Bharti Airtel)had taken credit on invoices inname of Bharti Cellular - Assesseeargued that : (a) names given ininvoices were names of variousentities which had merged into it;and (b) wrong address was printed

by a clerical error and was clarifiedby service providers - HELD :Undoubtedly amalgamated entitycomprised many erstwhile unitswhich may have accumulatedcredit in course of their earlierexistence - Nevertheless, onusvests on claimant of credit toevidence receipt of such services atsuch premises as are pertinent totaxable services being rendered -Goods permit a certain ease ofascertainability by tax officer; but,services are not easily amenable tosuch authentication and mereevidence of amalgamation of anentity with assessee will not sufficefor purpose of rule 9(2) withoutevincing place of receipt of inputservice as place pertinent tosupply of output service - Hence,credit was denied


Sr. No. 17RelevantSection Section 73RelevantStatute Finance Act 1994Issue Extended Period invocationSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee was paying VAT but not

service tax on SIM cards - Assesseechallenged invocation of extendedperiod on ground that inclusion ofvalue of SIM cards had beensubject matter of interpretationand re-interpretation - HELD :Generally accepted principle ofmutually exclusive domain offiscal regime in constitutionalframework does lend credibility toclaim of assessee - Hence, there


was no intent to evade tax inpractice of discharging VATliability alone on value of SIMcards - Hence, invocation ofextended period and consequentdemand was set aside


Sr. No. 18RelevantSection Section 73RelevantStatute Finance Act 1994Issue Extended Period invocationSub IssueFavour of AssesseeIssuingAuthority CESTAT BangloreJudgment Period December 2007 to February,

2009 - Entire credit was availed byappellant public sectorundertaking and it was reflected instatutory records as also inmonthly returns filed by them -Held: Appellant being publicsector undertaking, there could beno mala fide intent on their part toavail irregular and non-availablecredit - There being no positiveevidence to show that there wasany suppression or mis-statementwith any mala fide intent, penaltycould not be imposed - Further,extended period of limitationcould not be invoked - For samereason, penalty imposed is setaside, along with setting asidedemand raised

Citation [2016] 67 taxmann.com 254(Bangalore - CESTAT)Mangalore Refinery andPetrochemicals Ltd.v.Commissioner of Central Exciseand Service Tax, Mangalore

Sr. No. 19RelevantSection Section 87RelevantStatute Finance Act 1994Issue RecoverySub IssueFavour of AssesseeIssuingAuthority High Court of MadrasJudgment Director of assessee-company

(AEPL) was proprietor of AE -Department demanded service taxfrom AE and said demand waschallenged by AE in appeal -Pending appeal, departmentinitiated recovery proceedingsagainst assessee-AEPL demandingservice tax dues of AE and freezedbank account of assessee-AEPL -Department submitted thatassessee-AEPL was incorporatedto circumvent tax payable by AE -Assessee submitted that it wasincorporated even before issuanceof notice/confirmation of demandagainst AE - HELD : Sinceassessee-AEPL is a separate andindependent entity, bank accountof assessee-AEPL cannot beattached for dues of AE - Hence,attached of bank account ofassessee-AEPL was raised

Citation "[2016] 67 taxmann.com 273 (Madras)Atchaya Engineering (P.) Ltd.v.Additional Commisssioner, Chennai"

Sr. No. 20RelevantSection Rule 5 read with Rule 2(I)RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of AssesseeIssuingAuthority CESTAT HyderabadJudgment Assessee, an exporter of software

services, claimed refund of creditpertaining to input services suchas security, consultancy,


telecom/internet, maintenance,recruitment, renting, etc. -Department denied refund claimciting absence of nexus inwardremittances and export invoices -Assessee argued that foreignexchange was received in runningaccount and export bills wereadjusted against it - Commissioner(Appeals) held that one-to-onecorrelation is not required butremanded matter back forverification - Department soughtan opportunity for verification -HELD : Credit was allowed, as allactivities relating to business areeligible as input service - Assesseehas submitted all necessarydocuments - After having twoopportunities to verify facts,Department cannot to seek furtheropportunity for verification - Inabsence of any dispute regardingexport and receipt inwardremittance, and in absence ofspecification from department asto which furtherdocument/evidence is required,refund claim cannot be denied inguise of verification - Hence,refund was allowed

Citation [2016] 67 taxmann.com 274(Hyderabad-CESTAT )Alliance Global Services IT India(P.) Ltd.v.Commissioner of Customs, CentralExcise & Service Tax, Hyderabad-II

Sr. No. 21RelevantSection Section 65(27)RelevantStatute Finance Act 1994Issue Taxable ServicesSub Issue Commercial Training or Coaching

ServiceFavour of RevenueIssuingAuthority CESTAT New Delhi

Judgment Assessee was providing computertraining - Department demandedservice tax thereon on ground thatduring period in question,exemption in respect of vocationaltraining was not in force - Assesseeclaimed that it was an educationalinstitution using online medium asa channel of pedagogy - Assesseealso challenged inclusion of valueof online storage space, softwareand on-line course materials intaxable value - HELD : Distinctionsought to be canvassed by assesseethat they are providers ofeducation and not a commercialcoaching or training institutiondoes not exist within scope ofdefinition in section 65(26) forpurpose of taxation under section65(105)(zzc) - Since assessee wasnot covered under exclusionaryclause under said definition,assessee was liable to service tax

Citation [2016] 67 taxmann.com 311 (NewDelhi - CESTAT)Dewsoft Overseas (P.) Ltd.v.Commissioner of Service Tax

Sr. No. 22RelevantSection Rule 5RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of AssesseeIssuingAuthority CESTAT BangloreJudgment Assessee, an exporter of services,

claimed refund of accumulatedunutilized Cenvat credit videclaim dated 30-6-2008 -Department rejected part of refundclaim as time-barred on groundthat refund claim must be filedwithin 1 year from export - HELD :Notification issued under rule 5provides for time-limit of section11B, i.e., 1 year from relevant date


- Though there is no specific'relevant date' under section 11B toclaim refund of unutilized credit,but, that would not rule outapplicability of section 11B -Relevant date should be date ofexport - Since, as per rule 3(2) ofExport of Services Rules, 2005,export of service is complete whenconsideration for same is receivedfrom foreign buyers, hence,relevant date would be 'date onwhich consideration exportedservice is received' - Hence, matterwas remanded back for allowingrefund falling within 1 year fromdate of receipt of consideration

Citation [2016] 67 taxmann.com 313(Bangalore - CESTAT)Infosys Technologies Ltd.v.Commissioner of Service Tax,Bangalore


Section 93 read with Section 11B ofthe Central Excise Act

RelevantStatute Finance Act 1994Issue ExemptionsSub IssueFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee, an exporter of goods,

paid service tax on services usedfor export goods - Assessee : (a)filed refund claim of said servicetax on 7-1-2011; (b) refund claimwas returned on 11-3-2011 for re-submission with relevantdocuments; (c) assessee re-submitted claim on 2-5-2011; (d)thereafter, on insistence of RangeOffice, assessee filed originaldocuments on 4-11-2011 -Department denied refund claimas time-barred being beyond 1year time-limit, as it wassubmitted only in November, 2011- HELD : Date of filing refund

claim is first date of filing ofrefund claim; therefore, claim hasto be treated as filed on 7-1-2011 -Considering period January toMarch, 2010, refund claim filed on7-1-2011 was well within 1 yeartime-limit - Therefore, refund wasupheld on point of limitation andwas remanded back forconsideration on merits

Citation [2016] 67 taxmann.com 315(Chennai - CESTAT)Tab India Granites (P.) Ltd.v.Commissioner of Central Excise &Service Tax, Chennai-III

Sr. No. 24RelevantSection Rules 2(I) read with Rule 2(qa)RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub Issue Transportation ServicesFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee-manufacturer took credit

of transportation services availedfor clearance of goods from factoryto 'port of export' - Departmentdenied credit on ground thattransport beyond place of removalis ineligible for credit - HELD :When property in goods istransferred under Sale of GoodsAct, 1930, at that point only,removal of goods from control ofseller is said to have occurred -Codified provisions in Sale ofGoods Act, 1930 have beenadopted by Circular No.999/6/2015-Cx., dated 28-2-2015 -Therefore, credit of transportationservice is available upto place ofexport or agreed place of delivery -Any other interpretation wouldmake principle of elimination ofcascading effect otiose and exportshall be taxable, which isimpermissible - Similarly, credit of


Clearing and Forwarding Agentand Customs House Agentservices will be admissible - Matterwas remanded back for beingdisposed of in accordance withthis judgment - Sinceinterpretation of law is involvedand conduct of assessee is notfound to be questionable, thereshall be no penalty

Citation [2016] 67 taxmann.com 349(Chennai - CESTAT)Commissioner of Central Excise,Chennai IIv.Lucas TVS Ltd.


Section 65(76a), read with section66E(i)

RelevantStatute Finance Act 1994Issue Taxable ServicesSub Issue Outdoor Caterer's ServiceFavour of Assessee

IssuingAuthority High Court of MadrasJudgment Period April 2011 to June 2012 -

Stay Order - Assessee wasselling/supplying coffee and tea,through vending machinesinstalled at their customer'spremises and was recoveringconsideration at fixed rate per cup- Sometimes, assessee wasleasing/selling machines and inthat case, it used to sellconsumables such as pre-mix onpayment of VAT - Departmentdemanded service tax thereontreating same as 'outdoor caterer'sservice' - Assessee argued thatactivity was purely sale and didnot have any personalized service- Tribunal ordered pre-deposit ofRs. 15 lakh - HELD : Assessee mayhave a prima facie case/anarguable case before AppellateAuthority - Hence, consideringsame and also considering undue

financial difficulties, pre-depositwas reduced to Rs. 5 lakh

Citation "[2016] 67 taxmann.com 350 (Madras)Perfect Vending India (P.) Ltd.v.Customs, Excise & Service TaxAppellate Tribunal"


2.3 Case Laws related to Customs

Sr. No. 1RelevantSectionRelevantStatute

Customs Act 1962 & CustomsTariff Act 1975

Issue Anti Dumping DutySub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Where: (a) provisional anti-

dumping was levied on 2-5-2002and same became ineffective oncompletion of 6 months on 1-11-2002, and (b) final anti-dumpingwas levied only on 1-5-2003, then,no anti-dumping duty could belevied during gap period, viz., 2-11-2002 to 30-4-2003

Citation [2015] 62 taxmann.com 184 (SC)Commissioner of Customs,Bangalorev.G.M. Exports

Sr. No. 2RelevantSection Section 27ARelevantStatute Customs Act 1962Issue Interest on delayed refundSub IssueFavour of AssesseeIssuingAuthority CESTAT MUMBAIJudgment Appellant paid an amount of

Rs.30,53,905/- at the time ofinvestigation and which paymentwas confirmed as duty andamount was appropriated in o-in-odated 01.05.1996 - therefore, thereis no doubt that what has beenpaid by appellant has beenadjusted towards duty and it is nota mere pre-deposit as canvassedby Revenue - further while passingrefund order, adjudicatingauthority had considered theapplicablity of unjust enrichmentand only thereafter, granted

refund which also shows that whatwas sanctioned as refund was onlyduty paid in excess - therefore,question of payment of interest ondelayed refund wouldautomatically arise - appellant hadfiled refund application on12.09.1994, therefore, provisions ofsection 27A of CA, 1962 is clearlyattracted and said section providesfor payment of interest on expiryof three months from the date ofrefund application till date ofgrant of refund irrespective ofwhen the order for refund wasactually passed - since s.27A itselfcame into force in May 1995 andappellant claimed interest forperiod from 01.12.1995 onwards,appellant is rightly entitled forinterest at applicable rates from01.12.1995 till the date of actualpayment of refund - appealallowed with consequential relief

Citation "2015-TIOL-2202-CESTAT-MUMM/s S S DYES AND CHEMICALSVsCOMMISSIONER OF CUSTOMSMUMBAI

"

Sr. No. 3RelevantSection Section 27RelevantStatute Customs Act 1962Issue RefundSub IssueFavour of AssesseeIssuingAuthority High Court of DelhiJudgment A person can now claim refund of

duty/interest "paid" or "borne"him and there is no requirementthat payment of duty must havebeen made pursuant to an order ofassessment - Whether or not dutyis paid under protest, once anapplication for refund is made,authorities must pass orderthereon taking into accountassessment order, if any, along


with any review/appellate order,if any passed on assessment order- Authorities cannot refuse toconsider application for refundonly because no appeal has beenfiled against assessment order, ifthere is one

Citation "[2016] 67 taxmann.com 217 (Delhi)Micromax Informatics Ltd.v.Union of India"


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