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Content at Glance :-

1.0 News&Updates

1. V S Krishnan: GST and reforms in tax administration

2. IMF Urges India To Advance GST

3. V S Krishnan: Revenue buoyancy in the GST

4. Modigovt slow in implementing key reforms like GST: US official

5. BJP to Rahul Gandhi: Pass GST, take credit for it too

6. The digital economy and GST

7. Companies will have to pay service tax on services availed from government from nextfiscal year

8. NarendraModi seeks political consenus for GST law

9. Hope GST Bill is passed in this budget session: Government

10. Delay in GST will add to government's burden

11. Circular No. 1020/8/2016 - CX

12. Govt. hopes to pass Bankruptcy, GST Bills

13. Use GST, oil revenues to pay for patient care

14. Delayed GST has hit Maharashtra's Budget, but Plan B ready: State Finance Minister

15. Baby steps to GST

16. ArunJaitley hopes to pass GST Bill in second half of budget session

17. Congress vs NDA: Fight over Aadhaar Bill likely to hit GST negotiations

18. GST poses a big risk for Indian solar industry: Report

19. GST will integrate Indian economy, help attract FDI: ADB chief TakehikoNakao

20. Advancing Asia Conference: Hope to pass bankruptcy bill, GST this session, saysArunJaitley

21. Don’t roll back the duty on jewellery


2.0 Case Laws2.1 Case Laws related to Excise

Sr.No. Relevant Section Case Name Issue

1

Rule 18

[2015] 62 taxmann.com 46 (Punjab& Haryana) JSL Lifestyle Ltd.v.Union of India

Rebate of Duty inExport

2

Section 4

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

3

Rule 18

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

4Section 11A readwith Section 73 ofthe Finance Act1994

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

5 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 JIVRAJBHAIVAMANJIBHAI PATELVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,DAMAN, RAJKOT

6

Section 4

2015-TIOL-2194-CESTAT-KOLM/s CASTROL INDIA LTDVsCOMMISSIONER OF CENTRALEXCISE-KOL-VI Valuation

7

Section 4

2015-TIOL-2183-CESTAT-MUMCOMMISSIONER OF CENTRALEXCISE, NAGPURVsDIFFUSION ENGINEERING LTD Valuation


8 2015-TIOL-2165-CESTAT-AHMM/s CEMA ELECTRIC LIGHTINGPRODUCTS INDIA PVT LTDVsCOMMISSIONER OF CENTRALEXCISE, AHMEDABAD-III

Disallowance ofCenvat

9

Section 2(f)

[2016] 66 taxmann.com 195(Mumbai - CESTAT) DeepakNitrite Ltd.v.Commissioner of Central Excise,Raigad Manufacture

10Section 9 , readwith sections 9A,11A and 11AC

[2016] 66 taxmann.com 226(Jharkhand) HemantGoyalv.Union of India

Offences andPenalties

11Section 21, readwithsections 19 and 20

[2016] 66 taxmann.com 226(Jharkhand) HemantGoyalv.Union of India Arrests

12

Rule 16

[2016] 66 taxmann.com 237(Mumbai - CESTAT)Commissioner of Central Excise,Mumbai-Iv.Mega Rubber Technologies (P.) Ltd.

Return of Duty paidgoods to factory

13

Rule 6

[2016] 66 taxmann.com 244(Chennai - CESTAT) SifyTechnologies Ltd.v.Commissioner of Service Tax, LTU,Chennai Cenvat Credit

14 [2016] 66 taxmann.com 320(Mumbai - CESTAT) MahanagarGas Ltd.v.Commissioner of Central Excise Cenvat Credit

15

Section 11A readwith Section 3

[2016] 66 taxmann.com 270 (Kolkata- CESTAT) Commissioner ofCentral Excise, Kolkata-IVv.Birla NGK Insulators (P.) Ltd. Recovery


16

Section 4

2016-TIOL-484-CESTAT-AHMM/s UNITED PHOSPHOROUSLTD2) SHRI KANUBHAI MOHANLALDESAI3) SHRI HASMUKHBHAI NDESAI4) SHRI ARUN C ASHARVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, VAPI Valuation

17

Section 5A

[2016] 66 taxmann.com 331 (NewDelhi - CESTAT)Steel Authority of India Ltd.v.Commissioner of Central Excise,Raipur

Exemption fromExcise Duty

18

Section 11A readwith Section11AC

[2016] 66 taxmann.com 326 (SC)Commissioner of Central Excise,Punev.Hindustan National Glass &Industries Ltd.

Recovery of amountShort Paid

19

Section 11A readwith Section 73 ofthe Finance Act1994

[2016] 66 taxmann.com 333(Chennai - CESTAT)Commissioner of Central Excise &Service Tax, Pondicherryv.Ravishankar Industries (P.) Ltd. Recovery

20

Section 4 readwith Section 4A

[2016] 66 taxmann.com 289(Bangalore - CESTAT)Geltec (P.) Ltd.v.Commissioner of Central Excise,Customs & Service Tax, Bangalore-I Valuation

21

Section 4

[2016] 67 taxmann.com 10 (NewDelhi - CESTAT)Commissioner of Central Excise,Raipurv.AkashIspat Ltd. Valuation

22

Section 2(f)

[2016] 67 taxmann.com 12 (NewDelhi - CESTAT) TajSats AirCatering Ltd.v.Commissioner of Central Excise,Delhi-II Manufacture


23

Section 4 readwith Section 4C

[2016] 67 taxmann.com 34 (NewDelhi - CESTAT) Commissioner ofCentral Excise,Bhopalv.Lupin Ltd. Valuation

24

Section 2(f)

[2016] 67 taxmann.com 69 (NewDelhi - CESTAT) Gurdev Singhv.Commissioner of Central Excise,Meerut-I Manufacture

25

Rule 2(a) readwith Rule 2(k)

[2016] 67 taxmann.com 75 (NewDelhi - CESTAT) Jindal Steel &Power Ltd.v.Commissioner of Central ExciseRaipur (CG) Cenvat Credit

26

Section 4A readwith Section 4

[2016] 67 taxmann.com 66 (Mumbai- CESTAT) Commissioner ofCentral Excise & Customs, Mumbaiv.LSR Speciality Oils (P.) Ltd.

Levy and Collectionof Duty

27

Section 5A

[2016] 67 taxmann.com 71 (NewDelhi - CESTAT)Kusum Foundry & Metal Works(P.) Ltd.v.Commissioner of Central Excise,Indore

Exemption fromExcise Duty

28

Rule 2(a) readwith rule 2(k)

[2016] 67 taxmann.com 70 (NewDelhi - CESTAT)N.R. Ispat& Power (P.) Ltd.v.Commissioner of Central Excise,Chhattisgarh Capital Goods

29

Section 35G

[2016] 67 taxmann.com 122(Bombay) PrincipalCommissioner of Central Excise &Customs, Daman Commissioneratev.Omnitex Industries (India) Ltd. Appeals

30

Rule 5

[2016] 67 taxmann.com 123(Bombay)Commissioner of Customs, CentralExcise & Service Tax, Goav.Automobile Corporation of GoaLtd. Cenvat Credit


31

Section 11BB readwith Section 11B

[2016] 67 taxmann.com 125 (SC)Union of Indiav.Hamdard (Waqf) Laboratories Interest

32

Rule 7 of CentralExcise Rules 2002read with Section11AA

[2016] 67 taxmann.com 150(Chennai - CESTAT)Commissioner of Central Excise,(ST) LTU, Chennaiv.Tube Products of India Interest

33

Section 32 O

[2016] 67 taxmann.com 149(Calcutta)Commissioner of Central ExciseAnd Service Tax, Durgapurv.Rohit Ferro Tech Ltd. Settlement of Cases

34

Section 11A

[2016] 67 taxmann.com 151(Allahabad) TriveniEngineering & Industries Ltd.v.Commissioner of Central Excise,Allahabad Recovery

2.2 Case Laws related to Service Tax

Sr.No. Relevant Statute Case Name Issue

1

Rule 13

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

2 2015-TIOL-2208-CESTAT-AHMM/s BIOSSOM INDUSTRIES LTDVsCOMMISSIONER OF CENTRALEXCISE, CUSTOMS AND SERVICETAX-DAMAN Valuation

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

Admission ofAppeal


4 2015-TIOL-2169-CESTAT-AHMM/s NAWAZ SHIPPINGVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, RAJKOT

5

Section 11A readwith Section11AC

[2016] 66 taxmann.com 196 (Gujarat)Commissioner of Central Excise &Service Taxv.Saurashtra Cement Ltd. Recovery

6

Section 86

[2016] 66 taxmann.com 197 (Madras)Empee Distilleries Ltd.v.Deputy Commissioner of Service Tax,service Tax Commissionerate Appeals

7

Section 65(25),read withsections 65(19) and 65A

[2016] 66 taxmann.com 228 (Chennai -CESTAT) Raja CharityTrustv.Commissioner of Central Excise,Tirunelveli Taxable Services

8

Rule 9

[2016] 66 taxmann.com 241 (Mumbai -CESTAT)Suyash Chemicalsv.Commissioner of Central Excise, Pune-I Cenvat Credit

9

Section 73

[2016] 66 taxmann.com 256 (Gauhati)Bordubi Engineering Worksv.Union of India Recovery

10

Section 65(90a)read with Section67

[2016] 66 taxmann.com 254 (New Delhi- CESTAT) Lake PalaceHotel and Motels (P.) Ltd.v.Commissioner of Central Excise, JaipurII Taxable Services

11 Section 35C ofCentral ExciseAct 1944 readwith Section 86

[2016] 66 taxmann.com 268 (Gujarat)WaghbakriwalRayonsv.Commissioner of Central Excise Appeals

12

Section 65(19)

2016-TIOL-502-CESTAT-MUMFULCHAND TIKAMCHANDVsCOMMISSIONER OF CENTRALEXCISE & CUSTOMS, NAGPUR Commission


13 2016-TIOL-508-CESTAT-MUMBHAVEN DESAIVsCOMMISSIONER OF SERVICE TAX,MUMBAI

14

Section 67 of theFinance Act 1994& Rule 2A

[2016] 66 taxmann.com 329 (Bombay)Commissioner of Central Excise,Customs & Service Tax, Vapiv.S.V. Jiwani

CENVAT Credit ofInput & InputServices

15

Article 226 Readwith Section 85

[2016] 66 taxmann.com 292 (Gujarat)Nice Constructionv.Union of India Writ Petition

16

Section 86 readwith Section 78

[2016] 66 taxmann.com 291 (Bombay)JetkingInfotrain Ltd.v.Commissioner of Service Tax Appeals

17

Sections 73, 76, 78 and 89

[2016] 66 taxmann.com 293 (SC)Air Customs Officer IGI New Delhiv.Pramod Kumar Dhamija

Offences andPenalties

18

Section 73

[2016] 67 taxmann.com 11 (Mumbai -CESTAT) AdityaVidyutAppliances Ltd.v.Commissioner of Central Excise,Mumbai

Short payment andrecovery thereof

19

Section 65(115)

[2016] 67 taxmann.com 36 (Mumbai -CESTAT) Jet Airways(India) Ltd.v.Commissioner of Service Tax, Mumbai

Tour OperatorService

20

Rule 2(k)

[2016] 67 taxmann.com 51 (Mumbai -CESTAT) ICICILombard General Insurance CompanyLtd.v.Commissioner of Service Tax,Mumbai-I Input

21Rule 2(I)

[2016] 67 taxmann.com 90 (AAR - NewDelhi) GSPL India Transco Ltd. Input Service


22

Section 65(64)

[2016] 67 taxmann.com 92 (MadhyaPradesh) M.P. Audhyogik KendraVikas Nigamv.Chief Commissioner of Customs,Central Excise & Service Tax Taxable Services

23

Rule 2(I)

2016-TIOL-520-CESTAT-AHMM/s ESSAR STEEL INDIA LTDVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, SURAT-I Input Service

24 2016-TIOL-539-CESTAT-DEL-LBM/s BHARTI INFRATEL LTDVsCOMMISSIONER OF SERVICE TAX,DELHI-IV, GURGAON

Credit of TelecomTowers & PreFabricated Sheltors

25

Section 85

2016-TIOL-568-CESTAT-MADM/s SRI BALAJI AGENCYVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, TRICHY

Condonation ofDelay

26 2016-TIOL-576-CESTAT-MUMADITYA BIRLA NUVO LTDVsCOMMISSIONER OF CENTRALEXCISE, LTU MUMBAI

Cenvat Credit oftax paid undersection 66A

27

Section 65B(44)

[2016] 67 taxmann.com 142 (AAR -New Delhi) SICPA India (P.)Ltd., In re Service


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 DumpingDuty

2

Section 27A

2015-TIOL-2202-CESTAT-MUMM/s SS DYES AND CHEMICALSVsCOMMISSIONER OF CUSTOMSMUMBAI

Interest on delayedrefund

3

Section 27

[2016] 66 taxmann.com 271(Gujarat) RoxulRockwool Insulation India (P.) Ltd.v.Union of India Refund - SEZ

4 Section 3(5) of theCustoms Tariff Act,1975, read withsections 25 and 151A

[2016] 66 taxmann.com 253 (Delhi)Allen Diesels India (P.) Ltd.v.Union of India

Additional Duty ofCustoms/SpecialCVD

AP Institute For Training and Learning Pvt Ltd Go to Content at Glance 5

1.0 News& Updates

1. V S Krishnan: GST and reforms in taxadministration

Successful implementation of the goods and servicestax hinges on the quality of tax administrationreforms that the states can carry out. The CBEC'sexperience can offer useful lessons to the states

The Goods and Services Tax (GST) has been seen,and rightly so, as the most important reform in post-Independence India. The deliberations in numerousseminars and workshops organised on GST havetended to focus on the provisions contained in theConstitution Amendment Bill, its passing in theRajyaSabha and the concomitant question of "GSTwhen?"

In my view, while these are legitimate questions, theimplementation of issues is equally important. Thishinges on the quality of tax administration reformsthat the states can carry out: the Central Board ofExcise and Customs' (CBEC) experience may offeruseful lessons to the states while the CBEC itself canbenefit from innovative administrative experimentsof the states.

An ideal tax administration must have suitablearrangements where there is ownership andfunctional responsibility built around key businessprocesses. These are: registration, payment of duty,submission of returns and refunds, audit, anti-evasion and dispute resolution. It would benecessary to prepare a standardised manual forreturn scrutiny, audit and anti-evasion. For this theCentre and the states would have to get together.Similarly, collaboration on a common trainingprogramme would also be vital, which couldculminate in the preparation of a common trainingmanual. To achieve efficiencies in these businessprocesses there is need for strong "facilitationprocesses" like taxpayer services, performancemeasurement and training for capacity building.

A good tax system must have an effectivecompliance verification arrangement based on theprinciple of "trust, but verify". This requires makinga clear conceptual distinction between the threeprongs of the compliance verification system,namely, return scrutiny, audit and anti-evasion. Inmany state commercial tax departments thisdistinction is often blurred. Let us look at each oneof these prongs. Return scrutiny relates toevaluation of the correctness of the assessment made

in a self-assessment scenario. What can be donefruitfully is to reconcile the information given in thereturns furnished by the taxpayer with the detailsgiven to the income tax department in the ITR 4, 5and 6 (as applicable). This scrutiny should beconfined mainly to smaller units below an annualduty threshold limit of Rs 50 lakh. These units mustbe selected for verification on the basis of riskparameters which assess the quantum of rupee risk.There are well-established ways of doing this.Audit, on the other hand, looks at reconciling theinformation given in the return with that furnishedin the financial records, besides evaluating theinternal control system of the company. Such acompliance verification may be confined to largerunits above an annual threshold duty payment levelof Rs 1 crore. In this arrangement, the two prongs ofthe compliance verification system, i.e. returnscrutiny and audit, would complement each other.Finally, anti-evasion would cover cases ofsuppression of fact and clandestine transactions.This prong of the compliance verification systemwould benefit from information sharing amongCBEC, Central Board of Direct Taxes and the stateVAT departments.

Therefore, an effective compliance verificationsystem would require three important elements - arisk management system to select delinquent unitsfor verification (return scrutiny and audit),information sharing between central and state taxdepartments, and creating skill sets among taxofficers for scrutiny of financial records.

The states will have to draw up an action plan foradministrative re-organisation of their commercialtax departments. The technology backup here willbe provided by GST-N. Both the Centre and thestates must create administrative structures to dealwith legacy issues even as they move towardsimplementing the GST. Some of the contentiousissues must be quickly resolved in the interregnumavailable before the implementation of the GST. Thiswill help the tax administration to look ahead andfocus attention on GST administration.

There is also an imminent need for creating anadministrative structure for Centre-state interaction.An important and successful parallel was thecreation of the Empowered Committee of StateFinance Ministers in 2001 and its institutionalisationin 2004. The empowered committee was a uniqueIndian innovation which delivered the state VATand is now poised to deliver the design of the GST.The time has come to create another set ofinstitutions. There is a need to create a GST


secretariat in each state to bring senior CBEC andstate commercial tax officers together. These bodiescan be registered under the Societies Act, its terms ofengagement defined, provided with a dedicatedsecretariat and adequately funded to meetadministrative requirements. These structures canhelp CBEC and state officers to resolve a number ofGST-related implementation issues, besides forgingthe bonds of fiscal federalism. The states wouldrequire some handholding in the taxation of serviceswithin the GST as they have not handled this taxsegment earlier. These structures could provide themedium of such handholding. Exchange of staff ondeputation or on loan basis could also be an area ofengagement. Finally, the sharing of risk informationabout units for better compliance verification maybe the icing on the cake.

With consensus now being built on GST, there is thehappy prospect of its early implementation.Therefore this is perhaps the appropriate time todiscuss issues of tax administration in addition totax policy. These are last-mile issues which canmake or mar the successful implementation of theGST. Tax policy experts and consultancyorganisations must therefore focus attention onlaying goals and concomitant milestones forrestructuring the commercial tax department in thestates and the formations in CBEC. This is critical.As Seneca, the Roman philosopher, once said, "Ifyou do not know to which port you are sailing, nowind is favourable."

(Ref -http://www.business-standard.com/article/opinion/v-s-krishnan-gst-and-reforms-in-tax-administration-116030700946_1.html)

2. IMF Urges India To Advance GST

India should prioritize the implementation of agoods and services tax to raise revenue for prioritycapital and social expenditures, according to theInternational Monetary Fund (IMF).

India's revenue-to-GDP ratio remains considerablybelow its emerging market peers, the Fund said inits 2016 Article IV consultation report for thecountry.

The long-awaited GST should be implemented, as itwould create a single national market, enhance theefficiency of intra-Indian movement of goods andservices, and boost gross domestic product (GDP)growth, the report said. It also said that the GSTshould have minimal exemptions and a moderatesingle rate.

The IMF noted that the GST is not likely to beimplemented by April 2016, as previously planned.It also pointed out that even though the ratestructure of the GST is likely to be revenue neutral,the authorities anticipate that a good GST designwill support revenue administration improvementsby encouraging firms to join the formal economy totake advantage of input tax credits. It said thatimproved tax administration has the potential toproduce large revenue gains.

The Fund also said that it supports the FinanceMinister's plans to lower the corporate income taxrate while eliminating exemptions.

India's overall fiscal position remains vulnerable,given that, at the general government level, thedeficit is expected to remain around 6-7 percent ofGDP, the IMF said.

(Ref -http://www.tax-news.com/news/IMF_Urges_India_To_Advance_GST____70633.html)

3. V S Krishnan: Revenue buoyancy in the GST

Even with less than ideal design features, the stateVAT pushed up revenues. The GST, with animproved design and a fully integrated IT systemfor both the Centre and the states, will fare betterRevenue uncertainties have dominated discussionsabout the goods and services tax (GST). This hasbeen especially pronounced among the states whichsee the movement towards the GST as a leap in thedark.

What then are the reasons to assert that theimplementation of GST will lead to revenuebuoyancy? One can look for answers in the earlierexperience of the states which implemented thevalue-added tax (VAT) in 2004-05 when there was asimilar air of "revenue pessimism". The tablealongside indicates the trends in state VATcollections for the period 2001-02 to 2008-09(covering both the pre-VAT and post-VAT periods).

One can see from the trends that 2004-05 (the yearthe state VAT was implemented) was an inflexionpoint when revenues went up sharply, indicatingthe impact of implementation of the state VAT thatreplaced the retail sales tax. Even after theimplementation of the VAT the revenue momentumwas maintained. The revenue buoyancy could havebeen even more but for some states such as Tamil


Nadu and Gujarat that retained generous sales taxdeferral schemes. The debilitating effects of aconscious base erosion cannot be laid at thedoorstep of the new tax. What is important is thatthis revenue buoyancy was achieved despite lessthan ideal design features of the state VAT: highthresholds, continuance of exemptions and a non-integrated IT system. It would therefore be fair toexpect that the GST, with a far better design and afully integrated IT system for both the Centre andthe states, will deliver far greater revenue buoyancy.

(Ref -http://www.business-standard.com/article/opinion/v-s-krishnan-revenue-buoyancy-in-the-gst-116030901320_1.html)

4. Modigovt slow in implementing key reformslike GST: US official

The NarendraModi government has not moved asfast as expected to implement long-awaited reformslike the GST and Land Acquisition Bill, a senior UStrade official said and asked American businesses tobe patient since reforms cannot be implementedovernight.“US businesses still find it difficult to do business inIndia due to an inconsistent regulatoryenvironment, systemic infrastructure bottlenecks,lack of transparency and uncertainty in corporategovernance rules,” Arun Kumar, Assistant Secretaryfor Global Markets in the US Department ofCommerce, International Trade Administration, saidin New York.“We consistently dialogue with the Indiangovernment on these subjects,” he said, adding thatUS’ trade and investment with India will alsogreatly depend on the Government of India’s effortsto strengthen the local business climate.Kumar, in his keynote address to a session on India-US relations and impact of the Indian Budget 2016jointly organised by the Asia Society, KPMG andUS-India Business Council, said IntellectualProperty Rights protection is another key concernfor US businesses that will need to be addressed toprompt greater foreign investment.He said that US companies are looking to India to“approve and implement long-awaited reforms”including the Goods and Services Tax (GST), theLand Acquisition Bill and the Bankruptcy Law thatwould considerably lower the burden of doingbusiness.“The Modi government is well aware of the hurdlesand while it may not be moving as fast as somewould like, it has taken a number of initial positivesteps,” he said, citing the “real progress” made byIndia on complex tax issues, reducing the backlog of

transfer pricing cases and easing foreign investmentrestrictions in the defence and railways sector.He said India has also shown an “initialwillingness” to address long standing agriculturalconcerns.He pointed out that US businesses have to be patientsince reforms cannot be implemented overnight andgiven the vast growth opportunities in India, it isimportant that US businesses do not lose faith buthold on to the Indian economic growth story.“For our part, we will need to show continuingpatience, perseverance and understanding and alsobe creative in our problem solving as we know fromour own national experience that implementingreforms in a vibrant democracy is complicated anddoes not happen overnight but make no mistakeIndia’s vast untapped opportunity makes stayingthe course a commercial imperative,” Kumar added.He, however, noted that high tariffs on inputs andprocurement and other policies that favour domesticsourcing have historically complicated India’sintegration in the global supply chains and its abilityto increase exports.In this context, Kumar said a “welcome feature” ofthe new budget is the reduction of duties on importsof parts and components.

(Ref-http://www.hindustantimes.com/india/modi-govt-slow-in-implementing-key-reforms-like-gst-us-official/story-fPQY61AUUV3Ovlo6dbVm6L.html)

5. BJP to Rahul Gandhi: Pass GST, take creditfor it too

NEW DELHI: The BJP sneered at Congress vicepresident Rahul Gandhi's claim that the Centrewithdrew its plan to tax EPF after he put pressure,saying he can take credit for GST too if he lets it passin Parliament.

"Congress and Rahul Gandhi can take credit for alldecisions. He can take credit for the passage of GSTand other bills if he lets Parliament function andhelps the government in the passage of the bills.These are not the bills of BJP but of the country," theBJP told ET Now.

Gandhi on Tuesday claimed credit for the EPF taxrollback, saying his pressure made the governmentgive in.

"My pressure worked... I had warned thegovernment against suppressing salaried class," theCongress vice-president said soon after financeminister ArunJaitley announced the decision. "I feltmiddle-class people were being hurt by the


government, so I decided to put some pressure.Happy that they have got some relief," Rahul said,adding, "The attempt to tax the safety net of millionsof hard working, middle-class people was morallywrong and shows this government's anti-peoplemindset."

BJP snubbed Gandhi's claim, with Finance MinisterArunJaitley telling TV channel ET Now thatCongress did nothing to create a social safety net forpeople when it was in power.

Jaitley appealed to the Opposition to give up"disruptive" politics in Parliament, but then engagedin an attack on Gandhi and the erstwhile UPAgovernment for its controversial decisions on theIshratJahan encounter case and foreign policy,especially with regard to Pakistan.

Close on the heels of Prime MinisterNarendraModi's attack on Rahul Gandhi in theLokSabha last week, Jaitley took on the Congressvice-president. However, unlike the PM, the financeminister mentioned the controversial issues — JNU,intolerance, inflation and foreign policy.

In his 45-minute speech, Jaitley said: "This is thetime when we don't need obstructive democracy.Our approach will have to be to work together. Thisis the spirit with which this government needs tofunction."

Participating in the debate in RajyaSabha on themotion of thanks to the President's address, Jaitleyunderlined that the NDA government has nothingagainst a "particular student", referring to JNUSUpresident Kanhaiya Kumar, but asserted that freespeech cannot be allowed to be used to advocatebreak-up of the country.

"I expect mainstream political parties like theCongress to be in the forefront of being against thesepeople. Please don't do anything that lendsrespectability to such people," he said.

Jaitley rejected Gandhi's charge earlier in theLokSabha that the government has "frittered away"the benefits of previous years on Pakistan, saying:"We are compelling Pakistan for first time to own upthat attack in India is taking place from their land."

(Ref -http://economictimes.indiatimes.com/news/politics-and-nation/bjp-to-rahul-gandhi-pass-gst-take-credit-for-it-too/articleshow/51322577.cms)

6. The digital economy and GST

It is not easy to define the digital economy; indeedthe Organisation for Economic Cooperation andDevelopment (OECD) admits as much. However, itis possible to point to examples of how consumersmake use of it: When they download a game froman online gaming company, purchase songs througha music platform or order physical goods through aWeb-based portal and have the goods delivered viathe postal system.

The digital economy gives rise to a Goods andServices Tax (GST) problem which the OECD hasidentified as part of its work to address the issue ofBase Erosion and Profit Shifting (BEPS) bybusinesses that exploit gaps to avoid paying tax.

The GST problem arises from most online providersnot being located in the same country as theirconsumers. For GST systems, this does not compute.Take Singapore's GST system, which is based on a1983 statute from Britain. Back in 1983, the web waswhere a spider lives and the statute was not draftedwith the expectation that suppliers would sell thingsvia an electronic version of a spider's house.

In order to collect GST from consumers, the GSTsystem requires the supplier making the final sale ina Business to Consumer or B2C transaction to beregistered for the tax, collect it from the localconsumer and pay it to the local tax authority.

In the online B2C world, the GST system faces twotypes of supply in particular that it is not very goodat dealing with.

The first type of supply involves a consumer buyinggoods from an online retailer located in anothercountry. The goods are shipped via post or courierdirect to the consumer. GST rules generally allowgoods below a certain value to be imported via postinto a country without the imposition of GST, so asto minimise the inconvenience to the retailer ofhaving to register for GST where there is a one-offsale or the value of the goods is low. In Singapore,that value is currently $400. Hence, as long aswhatever the consumer buys is valued below thisthreshold, the goods would not be subject to localGST. Good news for the consumer, but not for anylocal-based suppliers who have similar or identicalproducts to sell, since theirs will be more expensivein comparison.

The second type of supply involves the provision ofservices such as the digital download of music or a


game, which is treated for GST purposes as being aservice, and not goods. GST systems like Singapore'susually treat this type of supply as being madewhere the supplier is, not where the consumer islocated. Therefore, such downloads are then freefrom local GST and, as the consumer is not in thecountry where the supplier belongs, the supply isusually zero-rated for the supplier. As the value ofthe services supplied in this manner increases, theOECD suggests that it is important the GST systemevolves to keep up.

The OECD suggests two ways to deal with the GSTsystem's inability to bring these supplies to tax.

For goods purchased online but delivered via thepostal system, the OECD recommends that the valuebelow which goods can be imported into a countrywithout any GST being levied should be reduced oreliminated. That means the price of the goods wouldrise, in Singapore's case, by at least 7 per cent, asthat is the current GST rate here. However, thegoods could potentially still be cheaper thancomparable local purchases, because the onlineretailer might not have to incur costs ofinfrastructure and associated overheads in the sameway as the local retailer would. The responsibility tocollect the GST will likely fall on the postal serviceor the courier that delivers to the consumer. Thatmay also result in a local handling charge to coverthe administrative costs, which the consumer mightalso have to pay.

For digital services, the OECD suggests thatcountries set up a GST registration process, with arequirement that overseas suppliers register andaccount for local GST on downloads, for example,supplied to consumers in that country. This is theapproach taken in the European Union and, morerecently, in South Korea, Japan and other Asia-Pacific countries. One question for tax authorities ishow to persuade overseas suppliers to register,although the experience of South Korea and Japanindicates that responsible overseas businesseswould want to be compliant and so would choose toregister.

If Singapore were to do this, the price to the endconsumer for a download would likely increase,assuming that the overseas supplier chooses to passon the GST charge in the first place. Again, theexperience in other countries is that they usually dopass it on.

With Singapore's 2016 Budget Statement coming up,one area to watch is whether Singapore will join the

other Asia-Pacific countries in making changes to itsGST system to address the challenges of the digitaleconomy. Whether Singapore does so or not, it isclear that BEPS is not just about multinationalcompanies paying their fair share of tax - consumerswill be affected too.

(Ref -http://www.straitstimes.com/opinion/the-digital-economy-and-gst)

7. Companies will have to pay service tax onservices availed from government from nextfiscal year

NEW DELHI: Indian companies will have to payservice tax on any service they avail from thegovernment or local authority from the next fiscalyear, broadening the scope of the levy to include notjust spectrum but all auctions, right of way, licencefees and development rights. These will all attractservice tax, now applied at 15%, inclusive of twocesses. The government has notified a provision ofthe last Budget that will kick in on April 1.

This will bring almost every service provided by itto companies under the tax net. "This is in line with(proposed) goods and services tax ( GST) whereineverything is taxed," a senior government officialsaid, putting the move in context. "Some businesssupport services provided by the government werealready under the tax net and this now completesthe whole package.

Globally, similar regimes are followed as it enablesseamless flow of credit."

According to the Budget "all services provided bythe government or local authority to a businessentity, except the services that are specificallyexempted, or covered by any other entry in thenegative list, shall be liable to service tax".

Services provided by the government or localauthorities, excluding certain specified ones, arecurrently in the negative list, implying that noservice tax can be levied on them.

Under the negative list system, all services are taxedunless specifically mentioned in the list.

The Finance Act, 2015, has made an enablingprovision to exclude all services provided by thegovernment or local authorities to a business entityfrom the negative list. The provision, however, doesnot cover government services provided to


individuals.

"Thus, all services provided by the government orlocal authority to a business entity, except theservices that are specifically exempted, or coveredby any other entry in the negative list, shall be liableto service tax," said the Budget.

That means if a telecom company wants to laycables, it will need permission from the localauthority and there will be a service tax levied onthis right of way. Mine auctions and developmentrights for land in the nature of governmentproviding a service by allowing exploitation of aresource becomes taxable.

A large number of government obligations andfunctions are regarded as services provided by it,pointed out EY partner BipinSapra, calling forgreater explanation.

"There is an urgent need for clarification as thegovernment and local authority provide a numberof services/obligations on which reverse charge willget potentially attracted," he said.

"Since a number of these recipients are not currentservice taxpayers, this has a potential for hugelitigation."

The tax payable will be eligible for input tax credit ifthe service so availed goes into producing othergoods and services. The business will be able to setoff this tax against its excise or service tax liability.

(Ref -http://economictimes.indiatimes.com/news/economy/finance/companies-will-have-to-pay-service-tax-on-services-availed-from-government-from-next-fiscal-year/articleshow/51319067.cms)

8. NarendraModi seeks political consenus forGST law

New Delhi: Prime Minister NarendraModi hasmade a fresh pitch for political consensus aroundthe early passage of a constitutional amendment billthat will enable the rollout of the goods and servicestax (GST).

But his speech in the RajyaSabha—part of themotion of thanks to President Pranab Mukherjee’saddress to both houses of Parliament at thebeginning of the budget session—was hyper criticalof the Congress and other opposition parties and

could potentially trigger a sharp reaction, undoingany efforts to generate consensus.

In his speech, which stayed on the pro-poor themeevident in the 2016 Union budget, Modi toldmembers of the RajyaSabha that the next round ofeconomic reforms was awaiting their consent.

“The country is awaiting the goods and services tax.LokSabha has accepted it, but the bill is pending inthe RajyaSabha. The upper house should give visionto the country and pending bills should be clearedto push forward reforms,” the prime minister said.

The ruling National Democratic Alliance (NDA) hasjust 64 members of Parliament (MPs) in the upperhouse and needs the support of the Congress party,which has 66 MPs, for the passage of the GST bill.

The bill has been opposed by the Congress, the Leftparties and the All India AnnaDravidaMunnetraKazagham (AIADMK).

“Let us pass those bills, passed in the LokSabha, assoon as possible and give impetus to India’sprogress. This is a chamber of ideas, and it mustguide the nation. A coordination between bothhouses is essential,” said Modi, while pointing outthat the upper house had conducted businesssuccessfully so far in the budget session.

With just four working days left in the first half ofthe budget session, the government is keen to passat least two crucial bills—the GST and the real estatelegislations.

However, a lot will depend on how the Congressreacts to the prime minister’s speech in which hesought to distinguish the party from the rest of theopposition.

“When we criticize the Congress, it is reported ascriticism of the opposition, not criticism of theCongress. Congress never gets a bad name. If wecriticize Janata Dal (United) and BahujanSamajParty, it is never said that BJP criticized theopposition,” said the prime minister.

Modi argued that the NDA is working with a focuson good governance, which includes accountability,decentralization and an effective delivery system.

“During the previous government, corruption and(the rule of a) dynasty had impacted the image ofthe country abroad. But our government is policy-


driven and doesn’t work on the whims of anyindividual,” Modi said.

The prime minister also said that the government isworking with the objective of doubling the incomeof farmers in the country by 2022.

An analyst said that Modi and the BharatiyaJanataParty (BJP) should do more to build bridges with theopposition.

“Passage of key bills is crucial, and since the NDA isin a minority in RajyaSabha, the BJP leadership,including the prime minister, must initiate adialogue with the opposition. Confrontation willonly hurt the country and the BJP because peoplewill ultimately blame the NDA for not being able totake the opposition on board,” said A.K. Verma, aKanpur-based political analyst and political scienceprofessor at Christ Church College.

Later on Wednesday, the government suffered anembarrassment when the RajyaSabha adopted themotion of thanks to the President’s address with anamendment moved by the leader of the oppositionin the upper house, veteran Congress leaderGhulamNabi Azad. Ninety-four members voted forthe amendment and 61 against.

Azad’s amendment regretted that the President’saddress did not support the right of all citizens tocontest panchayat elections, in the backdrop oflegislations in Rajasthan and Haryana fixingminimum educational qualifications to contest suchpolls.

Modi, in his speech, had urged the lawmakers topass the motion without any amendments, keepingin mind the “respect of the office and vision” of thePresident.

The Congress party was critical of Modi’s address.

“(It is) the first time that a prime minister mentionednone of the important issues in the country duringthe motion of thanks to the President’s address,”Azad told reporters, adding that the primeminister’s speech was “disappointing”.

(Ref -http://www.livemint.com/Politics/EOomQGaOPfTf079jgZLdHI/Narendra-Modi-seeks-political-consenus-for-GST-law.html)

9. Hope GST Bill is passed in this budgetsession: Government

The government on Wednesday expressed the hopethatparliament will pass the proposed Goods andServices Tax (GST) Bill in the ongoing budgetsession for enacting the comprehensive reform ofIndia's indirect tax regime.

"I am sure parliament will appreciate theadvantages of GST...we hope it will be passed in thecurrent session," Economic Affairs SecretaryShaktikanta Das said at a post-budget interactionhere organised by industry chamber Assocham

He said the government, on its part, was fullyprepared with the infrastructure for implementingthe new tax regime.

Regarding the budget 2016-17, Das said thegovernment had stuck to the path of financialdiscipline, pegging the fiscal deficit for 2016-17 at 3.5percent of the GDP.

"Why fiscal deficit target is important because it isabout credibility of the government, especially whenit had benefitted from low crude oil prices," he said.

In this connection, he said the proposed committeeon review of the Fiscal Responsibility and BudgetManagement (FRBM) Act would be constituted in amonth or so for giving a road map to fix the deficittarget in a band rather than to the last decimalfigure.

(Ref -http://www.business-standard.com/article/news-ians/hope-gst-bill-is-passed-in-this-budget-session-government-116030901360_1.html)

10. Delay in GST will add to government'sburden

In a double jolt for the already cash-strapped stategovernment, the delay in enforcing a Goods andServices Tax (GST) regime in the country will meanthat it has to bear an additional outgo towardscompensating local bodies for abolition of the localbody tax (LBT). This is in addition to the revenueloss due to the delay in rolling out the tax reform.

Last year, the BhartiyaJanta Party (BJP)- Shiv Senaled government had announced that the faith-basedLBT, which replaced octroi in all municipalcorporations except Mumbai, would be scrappedfrom August 1. This was in culmination of the BJP's


promise to the powerful traders lobby before theLokSabha and state assembly polls.

Continuing to compensate the civic bodies for lossof revenues and devolution of stamp dutycollections from municipal areas will burden thealready cash-strapped government. The governmentwas expected to devolve Rs4,210crore of stamp dutycollections to local bodies in the current fiscal.

The state expected the new system to be in place fora few months only as the Centre was looking tointroduce the GST from the 2016-17.

However, with political expediencies forcing theNarendraModi-led Union government to put theintroduction of GST on the back-burner, the statewill have to continue bearing the burden ofcompensating local bodies for at least another year.

The GST aims at creating a single, unified tax regimefor goods and services across India replacing otherindirect levies like central excise, VAT, octroi andentry tax. It will boost the manufacturing sector andaccelerate state's 'Make in Maharashtra' plans andalso reform the taxation process, hike tax collectionsand curb the black money economy.

A senior state finance department official said thatthey would continue with this committed liability.Recently, DevendraFadnavis had pointed out thatdelay in implementing the GST regime would leadto a Rs15,000crore revenue loss for the state.Maharashtra is both, a manufacturing andconsuming state and creation of a single market,through GST, is expected to benefit it.

"The state government is dragging itself intofinancial difficulties," noted economist AbhayTilak,adding that doing away with octroi, regardless of itssystemic difficulties like corruption, was akin to"throwing away the baby with the bathwater."Octroi was the largest source of revenue for localbodies, ensuring daily cash collections to meetliquidity needs.

This and later, scrapping LBT had affected thefinancial autonomy of local bodies. "Moreinvestments are needed due to pressure on cityinfrastructure... but we are cutting down onfinancial sources," he noted, adding that scrappingLBT amounted to tax concessions for businessmen,who generated profits, and hence this "defied everytype of financial logic."

(Ref http://www.dnaindia.com/mumbai/report-delay-in-gst-will-add-to-government-s-burden-2188228)

11. Circular No. 1020/8/2016 - CX

Circular No. 1020/8/2016 - CXF.NO. 6/5/2015 - CX.IGovernment of IndiaMinistry of FinanceDepartment of RevenueCentral Board of Excise and Customs**********New Delhi, dated the 11th March, 2016

Principal Chief Commissioner of Central Excise/Service Tax (All),Chief Commissioners of Central Excise/ Service Tax(All),Principal Commissioner of Central Excise/ ServiceTax (All).

Subject:- Valuation of imported Set top boxes underSection 4 of the Central Excise Act, 1944 –reg

Madam/ Sir,

Reference has been received in Board regardingassessment of CVD payable on set top boxes (STBs),when imported by a Direct to Home (DTH)broadcasting service provider and where STBs areprovided free of cost to the consumers of DTHservice. The issue is, in such conditions, should thevalue for the purposes of calculation of CVD bedetermined on the basis of Retail Sale Price (RSP) interms of proviso to section 3(2) of the Customs TariffAct, 1975.

2. The issue stands decided by Hon'’ble Tribunalin case of M/s BhartiTelemedia Ltd. VsCommissioner of Customs (Import), NhavaShevareported as [2016 (331) E.L.T. 138 (Tri.-Mumbai)] or[2015-TIOL-1863-CESTAT-MUM], wherein it hasbeen held that one of the conditions to be met forCVD to be levied on Retail Sale Price is that underthe Legal Metrology Act, there should berequirement to declare on the package, the retail saleprice (RSP) of the goods. Hon'’ble Tribunal in thiscase in paragraph 7 has inter alia held that-".............

(k) "“retail package”" means the package which areintended for retail sale to the ultimate consumer forthe purpose of consumption of the commoditycontained therein and includes the importedpackages:


Provided that for the purpose of this clause, theexpression ‘'ultimate consumer'’ shall not includeindustrial or institutional consumers;………….............

(m) “"retail sale price"” means the maximum price atwhich the commodity in packaged form may be soldto the consumer and the price shall be printed onthe package in the manner given below ;…………….............

The retail sale price is defined above as themaximum price at which retail package may besold. And retail package means packages which areintended for retail sale to the ultimate consumer. Inother words the retail price will be required to bedeclared on the package only if it is intended forretail sale…………............. It is seen from thedefinition that there should be a transfer of propertyfor any consideration or there should be a transferon the hire-purchase system or by any system ofpayment by any instalments. We find in the presentcase that there is no transfer of property or hire-purchase system involved nor there is a system ofpayment by instalments. Thus there appears to beno sale in the use of the Set Top Box by the ultimateconsumer”

3. After detailed analysis, Hon'’ble Tribunal heldthat in the given circumstances CVD shall not beleviable on the basis of Retail Sale Price. In view ofthe above, it is clarified the judgement of Hon'’bleTribunal in case of M/s BhartiTelemedia Ltd(supra), may be followed for assessment of CVD onimported STBs, where the circumstances areidentical.

4. Difficulty experienced, if any, inimplementing the circular should be brought to thenotice of the Board. Hindi version would follow.

(Santoshkumar Mishra)Under Secretary to the Government of India

(Ref -http://www.cbec.gov.in/htdocs-cbec/excise/cx-circulars/cx-circulars-2016/circ1020-2016cx)

12. Govt. hopes to pass Bankruptcy, GST Bills

Legislation will give a fillip to reforms process:Jaitley.

The National Democratic Alliance governmenthopes to press the accelerator on reforms and passthe landmark Constitution (122nd Amendment) Billfor a national Goods and Services Tax (GST) and aseparate bill for Bankruptcy and Insolvency Code,2015, in the second half of the Budget sessionbeginning April 20, Union Finance MinisterArunJaitley said on Sunday.

The current session of Parliament has already seenthe passage of one landmark legislation two daysago, Mr.Jaitley said, referring to the Aadhaar(Targeted Delivery of Financial and other Subsidiesand Services) Bill, 2016.

The legislation meant to provide statutory backingto the unique identification number was passed lastweek.

“I do hope to see another two being passed in thesecond part of the session with regard to thebankruptcy and insolvency laws and GST,” he said,addressing the Advancing Asia Conference.

The passage of the GST and the bankruptcy andinsolvency laws, he said, would give a major fillip toIndia’s reform process.

“We are trying to have special emphasis now bothin terms of legislative changes and resources beingput to strengthen the banking system… next fewmonths, in bringing about structural change, aregoing to be extremely important.”

Mr.Jaitley said that the constituency within Indiasupporting reforms is much bigger than itsopponents. He also said that exhibitingdetermination to move on the reforms path, Indiacan provide a significant amount of growth to theworld.

There is a broad national consensus that the Indianeconomy be strengthened further so that it canattract more foreign capital, he said.

The GST Bill was passed by the LokSabha but isstuck in the Upper House, where the ruling NDAdoes not have a majority and is dependent on thesupport of the Congress for its passage. TheConstitution amendment Bill needs two-thirdmajority or 162 votes in the 242-member


RajyaSabha. The Congress, the original author of theGST reform, has refused to support the Constitutionamendment Bill in its present form.

After it clears the RajyaSabha, the legislation willhave to be ratified by at least half of the 29 States.Also speaking at the Conference, IMF ManagingDirector Christine Lagarde said that the world hadlots to learn from India’s Aadhaar initiative thatwould affect revenue generation in a big way.

Ms.Lagarde also told reporters she didn’t see muchof a downside from the global economy to India’sgrowth rate since the country has a “solid” growthmodel, a growing population, scale of market andwas pursuing reforms. India, she said, has been theprime net beneficiary from low oil prices and haddone well to prepare for the spill-over effects ofasymmetric monetary policies of central banksacross the world. She also said that an IMF teamrecently analysed the Central Statistics Office’s newseries for GDP estimates and found that it conformsto the international standards. Internationalcommentators have termed these growth estimatesover-optimistic.

(Refhttp://www.thehindu.com/news/national/parliamentary-session-govt-hopes-to-pass-bankruptcy-gst-bills/article8349455.ece)

13. Use GST, oil revenues to pay for patient care

CANCER cases have been projected to increase at analarming rate.

The suffering that the disease inflicts instils terror inthe minds of people. Quite understandably, as thereis no quick fix for it except in cases of earlydiagnosis.

Strange as it may seem, even if you lead a near-perfect and orderly life, you can still be struck by thedisease, as genetics play a vital role in cancer.

The question arises: Are we prepared to manage thescourge? The cost of treatment and management ofcancer can be both exorbitant and protracted.

An international study by Manulife InvestorSentiment Index revealed that 6 8 per cent ofMalaysians are burdened with debt that is muchhigher than the regional Asean figure of 33 per cent.

Due to escalating cost of healthcare, more and moresick individuals are ending up in debt.

It was reported that in 2010, around 25 per cent ofcredit card defaults and non-performing loans weredue to medical treatment bills at private hospitals,and cancer therapy contributed a good part of theindebtedness.

Early detection can mean 100 per cent cure of thecondition.

To facilitate early detection, the positron emissiontomography-computed tomography (PET-CT)machine is the state-of-the-art technology that isused in developed countries.

But these machines don’t come cheap.

How many of these do we have in our country?Does our government have any?As a double whammy, there is also a lack ofoncologists (cancer specialists).

Effective and good quality treatment must be thehallmark of all healthcare objectives.

Our authorities must look for cheaper and moreeffective cancer medications.

India is the high priest of generic drugs, which arechurned out ad lib, sometimes in defiance ofinternational patent laws under the defence ofnecessity.

Generic medications are about half the cost of theoriginals and just as safe and effective.

Our authorities must liaise with their Indiancounterparts to import more of these generic drugsfor cancer treatment.

How many Malaysians are covered by healthinsurance? Just a trickle, at 22 per cent.

Insurance companies are crafty enough to transactpolicies that do not cover the medical cost of theentire treatment.

So, patients who cannot afford private medical careare forced to turn to government hospitals.

This is like a jump from the frying pan into the fire;the waiting period is an inordinately long one,compounded by the lop-sidedness of the country’spatient-to oncologist ratio.


As of now, only 39 local hospitals provide oncologyservices and, of these, only 10 are linked to thegovernment and universities.

Each state should have its own oncology centre, yetsome states, such as Pahang and Terengganu, do nothave such centres.

Imagine the additional cost that patients from thesestates have to bear to go to other states fortreatment.

The government must act immediately to ease theeconomic burden borne by these unfortunate cancerpatients, as quality treatment does not come cheap.

World oil prices have seemingly bottomed out andare currently heading north.

This means that our national oil company Petronaswill soon be up and about.

We are also told that the Goods and Services Tax(GST) collection for last year has exceededexpectations, in that we have collected more thanRM27 billion.

Surely, we should set aside some 10 per cent of thePetronas and GST revenues to bankroll thehealthcare of cancer patients and their caregivers.This will translate into lesser morbidity andmortality of those suffering from the disease. In2018, Malaysia will play host to the next WorldCancer Congress.

(Ref -http://www.nst.com.my/news/2016/03/132569/use-gst-oil-revenues-pay-patient-care)

14. Delayed GST has hit Maharashtra's Budget,but Plan B ready: State Finance Minister

The BJP-led government in Maharashtra faces hugechallenge to reduce revenue deficit, curb revenueexpenditure and increase capital expenditure. Dueto the delay in GST (Goods and Services Tax)launch, the government is forced to exploreinnovative measures to mop up additional revenue.In an interview with Sanjay Jog, State FinanceMinister SudhirMungantiwar, ahead of hispresentation of the Budget on March 18, explains thegovernment's strategy to revive the state’s economy.

How is the government tackling the currentfinancial crisis?

It is true the state government faces a big challengeof high revenue expenditure and revenue deficit.The Congress-NCP government during its 15-yearrule should have devoted full attention on state'soverall development by adhering to fiscal prudence.It is their creation. This government has inheritedthe previous government's legacy and the problems.

The predecessors did not prepare annual planproperly, neither did it concentrate adequately toimprove agriculture and thereby further strengthenthe farmers. This has resulted in rising farmerssuicides. This is despite agriculture’s contribution of11.68% to the gross state domestic product. Nearly52% of the population is dependent on it.

The government is really worried about the ongoingfarmers’ suicides and is fully geared up to curbthem by implementing a comprehensive plan for thebetterment of agriculture and farmers. Had theprevious government taken necessary measures theproblem could not have aggravated. We could havegiven due justice to the people of the state andespecially to farmers and common man. It wouldhave helped remove inequality.

The present establishment is thinking with an openmind and ready to slog for the upliftment offarmers, women, unemployed and poor inparticular. Against this, backdrop the preparation isunderway for the Annual Budget for 2016-17. Youwill find adequate representation given to thesesections in the upcoming Budget.

Against your estimate of Rs 3,757 crore revenuedeficit by the end of 2015-16, it has surgedsignificantly. What is your take?

The rise in revenue deficit is due to various factorsincluding the government's outgo towards theimplementation of relief and rehabilitation packagesfor the drought and natural calamity-hit farmers. Iadmit that the government may miss fiscal targetsset for 2015-16.

However, I have been quite consistent on my viewthat farmers have first right on the state treasury.Therefore, the focus is on the revival of ailing farmsector, and, thereby (help) rescue farmers from thepresent crisis.

Notwithstanding the burgeoning revenue deficit,the government has not put curbs while helpingfarmers.


The government already provided Rs 5,000 crore onslew of relief measures for farmers and Rs 900 croreis being approved to provide food grains to them.We pray for rain gods to bless this time and hope itwill help substantially reduce the revenue deficit inthe fiscal 2016-17.

Are the fulfillment of your poll promises, includingabolition of local body tax and partial scrapping oftoll tax responsible for present crisis?

The government took the decision in this regardconsidering the introduction of Goods & ServicesTax (GST) from April 1, 2016. Its delay has certainlyburdened the state Budget. Further, the taxcollection has dipped against the estimates largelydue to present economic slump. However, thegovernment is ready with plan B.

The government is exploring non-conventional andinnovative measures instead of relying ontraditional ones to mop up additional revenue. Thegovernment will introduce measures to improvefiscal discipline on the expenditure side and alsoemphasise on raising more revenues and incomeside management. This apart, the government willpay adequate attention to improve efficiency of taxcollection, contain the revenue expenditure anddrastically reduce non-productive expenditure.

As far as infrastructure development is concerned,the government has already taken a number of stepsin this regard and launched various projects. Acommittee headed by former finance secretary VijayKelkar in its recent report had recommended properuse of available land and the government is workingin that direction.

(Ref http://www.business-standard.com/article/economy-policy/delayed-launch-of-gst-has-hit-maharashtra-s-budget-but-plan-b-ready-state-finance-minister-116031400216_1.html)

15. Baby steps to GST

The Budget has moved incrementally, but the bigmoves are awaited

The Budget has taken a number of small steps in thedirection of a unified goods and services tax. It hasbrought exempted categories into the tax net andstreamlined procedures. The first is particularlyimportant if the standard rate of GST is to be in theregion of 18 per cent, against the present norm of 25per cent on most goods (12.5 per cent excise and therest as State-level VAT) and 15 per cent on services

(only levied by the Centre). As a result, readymadegarment makers and jewellers have been broughtunder the excise net — they can either opt for a lowrate of duty with no input credit or a higher rate of12.5 per cent with credit built in. This dual systemshould be seen as an interim incentive, as the basicidea underlying GST is to create a comprehensivetax credit system. Applying a sort of presumptivetax of 30 per cent on builders and tour operators,against a range at present, will work to theadvantage of both assessees and the taxadministration. Starting this time with senioradvocates, the provider of services, and not just therecipient, will have to pay service tax. These aremoves in the right direction. However, the rates(with their break-up into Central and State levies)can be standardised only after the Centre and Statesagree on the exempted list and compensation fortransition in the case of manufacturing States inparticular — since GST is a destination-based levy.

Even though a consensus may take time in coming,the Budget has focused on how GST will pan out onthe ground. A change to ‘Rule 6’ on Cenvat creditwill aid manufacturers using both taxable andexempted raw materials. The new norms will allowproducers to claim more input credit than at presentby creating three input baskets — for exemptedgoods, taxable goods and a common one,respectively — against the existing practice oflumping all inputs into a common basket andapplying a proportional rate. The Budget has alsointroduced an annual return for service tax (now,half yearly) for those above a certain turnoverthreshold, making tax assessment easier for theauthorities. On the excise front, 27 returns have beenreduced to 13 — 12 monthly returns and one annualreturn.

With the systems for GST gradually falling intoplace the onus is on the political class to expedite thetransition. There can be no case for a separate non-VATable levy, akin to the existing central sales tax.The Fourteenth Finance Commission award seeks toaddress revenue concerns of the States. But theBudget should not cut back on its own untiedtransfers to offset the impact. If compensation formanufacturing States has to be worked out, itshould be kept out of the GST model. GST has animportant role to play in easing supply bottlenecks.More than baby steps are required to make it areality.

(Ref -http://www.thehindubusinessline.com/opinion/editorial/baby-steps-to-gst/article8349011.ece)


16. ArunJaitley hopes to pass GST Bill in secondhalf of budget session

New Delhi: The current budget session of theParliament will be “extremely important” to bringabout structural reforms, such as the goods andservices tax (GST) and bankruptcy law, which couldhelp India sustain its growth momentum andprovide support to a fragile global economicgrowth, Union finance minister ArunJaitley said onSunday.

These two legislation will give a major push togovernment’s reforms agenda, Jaitley said at theconcluding ceremony of the Advancing Asiaconference organized jointly by the InternationalMonetary Fund (IMF) and the ministry of finance.

“In next few months, bringing about structuralchanges is going to be extremely important. Thecurrent session of the Parliament has already seen alandmark legislation two days ago,” said Jaitley,referring to the Aadhaar Bill cleared by theLokSabha on Friday. “I do hope to see another twoin the second half of the session—the insolvency lawand the goods and services tax.”

The budget session of Parliament will go into arecess starting 17 March and will reassemble on 25April to conclude on 13 May. The GST Bill, whichneeds the backing of the Congress to be approved, ifpassed, will bring about a uniform indirect taxregime in the country allowing free movement ofgoods while the bankruptcy code will make it easierfor sick companies to either wind up theirbusinesses or engineer a turnaround.

Jaitley said the world looks at regions like Asia andAfrica with hope where growth potential in comingdecades is going to be much higher, at a time whenthe world is going through a phase of uncertainties.“We are unsure of at what level developed countriesare going to grow; there is a lot of volatility, there isalso worry about geopolitical situation, there isworry about Chinese slowdown, there are alsoworries about the kinds of political debates indeveloped economies—whether there will beincreasing internal pressures to become moreprotectionist,” Jaitley said.

The government’s efforts to ease the environmentfor doing business and rationalizing taxes to make itglobally competitive are all work in progress, hesaid. “We are going for a far more simplifiedtaxation regime, we have substantially resolvednumber of legacy issues of the past, only a few

remain. We have brought a lot of fairness into thegovernance system by reducing discretion andletting market mechanism find solutions,” he added.

IMF managing director Christine Lagarde said thatIndia has robust growth potential because of itsyoung population, large market, and government’sdetermination to economic reforms and drive forinnovation.

However, Lagarde said India needs to be mindful ofinclusive growth with a focus on limiting excessiveinequality and including women and young peoplein the workforce.

On the possible global headwinds impacting India’sgrowth momentum, Lagarde said India is mindfulof the spillover impact of asynchronous monetarypolicies. “It is preparing for that and is veryattentive to its fundamentals to be able to resist that.There are geopolitical factors that are at play but iscertainly more acute in other parts of the world thanin this region. India has been the prime net positivebeneficiary from the low oil prices,” she said.

Appreciating government’s and the Reserve Bank ofIndia’s efforts to clean up the banking sector,Lagarde said the Indian banking system seems to bewell-capitalized and efforts to reinforce andstrengthen Indian banks even further is well taken.

Responding to a question about RBI governorRaghuramRajan cautioning against treating genuinerisk takers and wilful defaulters on the samefooting, minister of state for finance JayantSinhasaid the government has a three-pronged strategy todeal with such situations.

Sinha said while the full force of law is beingapplied against wilful defaulters and allinvestigative agencies are working to ensure theyare brought to justice, corporate groups that arefacing significant financial distress because ofslowdown in the global economy or policy failuresof the previous government must go through anorderly resolution process.

“We have to recognize that those facing suchproblems do not have to undergo those problemsagain. So, we have to deal with the structural issues,which is where the bankruptcy code comes in,”Sinha said.


(Refhttp://www.livemint.com/Politics/OTEuTpPnKPvyCskycHmuEM/Arun-Jaitley-expects-progress-on-GST-bill-in-AprilMay.html)

17. Congress vs NDA: Fight over Aadhaar Billlikely to hit GST negotiations

NEW DELHI: The raging fight between thegovernment and the Congress-led Opposition overthe NDA's decision to have the Aadhaar billclassified as a money bill could jeopardise politicalnegotiations between the two on the GST bill, theCongress leadership has indicated.

Alleging the government had categorised theAadhaar bill as a money bill to "circumventlegislative scrutiny by the RajyaSabha", theCongress has decided to harden its stand duringnegotiations with the government on GST and otherbills, according to a senior AICC functionary. Thiseven as the Congress mobilised a group ofOpposition parties in the RajyaSabha to recommendamendments to the Aadhaar bill to force thegovernment to take the bill back to the LokSabhabefore its final clearance.

"The manner in which the government wronglycategorised the Aadhaar bill shows its intention toundercut the RajyaSabha. This is bound to haveserious implications on the government'snegotiations with Opposition on important billssuch as GST," the AICC functionary said.

The RajyaSabha secretary general had announced inthe House on Monday that the Aadhaar bill aspassed by the LokSabha has been sent to the UpperHouse and that the Speaker had declared it a moneybill. Aware of the Opposition's numericalsuperiority, the government is not likely to bring upthe bill for discussion in the Upper House in theremaining two days before the recess. Once 14 dayslapse, the bill would be deemed passed by theRajyaSabha. However, the Congress, along withlike-minded parties such as the Left, NCP, BSP,JD(U), RJD and DMK are working on a counter-strategy. They say when the minister concernedintroduces the bill, they will "recommendamendments to the money bill under Article 109".According to them, while the RajyaSabha has noright to discuss and vote for or against a money bill,"rules empower it to recommend amendments".

"Once we recommend amendments under Article109, the government has to take back the amendedbill to the LokSabha which can accept or reject the

recommendations," said a senior Congress MP.Given its numerical strength, the government willbe able to have the changes rejected by theLokSabha.

But if the Opposition succeeds to recommendamendments to the bill, government may behardpressed to find time to get the bill re-routedthrough LS before the second phase of the session.In the LokSabha, Congress president Sonia Gandhioversaw her party reaching out to the BJD andTrinamool to oppose the Aadhaar bill on Mondayby arguing it had to wait for the passage of thefinance bill.

(Ref http://economictimes.indiatimes.com/news/politics-and-nation/congress-vs-nda-fight-over-aadhaar-bill-likely-to-hit-gst-negotiations/articleshow/51401666.cms)

18. GST poses a big risk for Indian solarindustry: Report

KOLKATA: Renewable sector, currently abeneficiary of several indirect tax exemptions, maybe a big loser if goods and service tax isimplemented since the bill proposes to revoke mostof these exemptions, according to Bridge to India.Costs and tariffs are expected to rise by 12-20% as aresult.

GST is a key taxation reform as it seeks to simplify acomplex maze of state and central taxes bysubsuming these into a single tax levied at the pointof consumption. According to reports the Bill couldbe passed by July 2016. If the bill is indeed passed asanticipated, it is expected to be implemented almostimmediately.

Bridge to India, a renewable analyst house, feels ifGST is implemented, input cost or tariff will rise byanything between 12-20% in the sector and thiswould wipe out the pricing gains of the past twoyears.

"A cost increase of this magnitude would also putviability of several projects in jeopardy. TheMinistry of New and Renewable Energy (MNRE) isin dialogue with the Department of Revenue toensure that renewable power equipment isexempted from GST. A recently concluded study byMNRE suggests that solar project costs and tariffscould go up by 12-20% on account of the newindirect taxation proposal. Such a material increasewould erode most of price gains made in the pasttwo years and also put viability of several


ongoingprojects in jeopardy," said Bridge to India ina statement.

Costs would rise because at present there is noimport duty or indirect tax is applicable on solarmodules but under the new regime, GST of 17-20%would be payable thus increasing costs.

Local value added tax (VAT) and other levies suchas excise, entry tax and Octroi on solar modules andthe complete system is around 5% in most statesbecause of a slew of exemptions. These would go.

The MNRE report estimates that the cost for allequipment used in a solar project -- solar modules,inverters, cables, batteries and structures will go upadding up to a differential of 12-20% from currentlevels.

"Successful passage of the GST bill, although highlybeneficial to the wider economy, would severelyimpact both ongoing and new projects in the sector.MNRE is believed to be pushing for a waiver fromGST arguing that a sudden increase in cost wouldlead to disruption in the sector and delayimplementation of policy targets.

Bridge to India is of the opinion that the solar sectorhas a strong case for an exemption. The governmenthas put strong focus on the sector to achieve adiversified set of policy goals including energyaccess, energy security and climate changemitigation.

Moreover, as the sector is still relatively small, anexemption would not lead to significant loss ofrevenue in the short-term.

(Ref -http://economictimes.indiatimes.com/industry/energy/power/gst-poses-a-big-risk-for-indian-solar-industry-report/articleshow/51396629.cms)

19. GST will integrate Indian economy, helpattract FDI: ADB chief TakehikoNakao

NEW DELHI: ADB president TakehikoNakao haspitched for roll out of the Goods and Services Taxsaying that its introduction will integrate India as"truly one single economy" and help attract moreforeign investments.

Lauding the Budget 2016-17 proposals on the farmsector, he also stressed upon the need for morereforms and pushing infrastructure development.

ADB chief in an interview to PTI further said thatthe growth in India will continue to exceed 7 percent in the coming years while other global andAsian economies will undergo some kind ofadjustment.

"We are now expecting that economy will continueto exceed 7 per cent in fiscal year 2016-17 and 2017-18 and we are now looking at the number again. Theglobal economy and the Asian economy as a wholeare in some form of adjustment," he said.

Commending various reform measures taken by thegovernment, Nakao said the pending issue of GSTcan be done, and it will boost growth.

"For India to grow faster, FDI is important... For thatpurpose, Indian economy should be integrated astruly one single economy and...rationalisation of tax,the GST, as the government is seeking, is veryimportant reform. I hope it can be successful," hesaid.

Finance Minister ArunJaitley yesterday expressedthe hope that the landmark ConstitutionAmendment Bill for implementing GST as well asthe bankruptcy and insolvency bill will be passed inthe second half of the Budget Session beginningApril 20.

The government has taken many measuresincluding increasing investment in infrastructureand higher ceiling for foreign direct investment aswell as making efforts to improve the ease of doingbusiness, he said.

Besides, he added that "the Budget proposalincludes more investment in irrigation, agriculturesector. The identification number Bill is alreadypassed and of course the Land Acquisition Law andalso GST are waiting to get through Parliament."


When asked as to what more reforms governmentshould pursue, he said: "One of the importantagenda for India is to push infrastructureinvestment. They need to invest more ininfrastructure. We are talking lot about the PPP butalso it is important that government itself investmore and also they must invest more in health,eduction zone."

Land Acquisition is another area which requiresreform, he said, adding that state governments canframe their own land acquisitions laws.

"Government needs to have more tax revenue toGDP ratio to do all these things. Tax to GDP ratioincluding state taxes can be larger. Of course, it's adifficult issue but I think government can play betterrole in those areas of infrastructure investment," hesaid.

(Ref -http://economictimes.indiatimes.com/news/economy/policy/gst-will-integrate-indian-economy-help-attract-fdi-adb-chief-takehiko-nakao/articleshow/51393675.cms)

20. Advancing Asia Conference: Hope to passbankruptcy bill, GST this session, saysArunJaitley

The government hopes to pass the ConstitutionAmendment Bill for Goods and Services Tax (GST)and the bankruptcy and insolvency bill in thesecond half of the Budget session, finance ministerArunJaitley said on Sunday.

“The current session of Parliament has already seenone landmark legislation two days ago and I dohope to see another two being passed in the secondpart of the session with regard to the bankruptcyand insolvency laws and GST,” Jaitley said at the‘Advancing Asia Conference’

The second half of the session will begin on April 20.The Constitution Amendment Bill for GST isawaiting passage in the Upper House of Parliament,where the government does not have a majority.The bill has already been passed in the LokSabha.After it is approved by the RajyaSabha, thelegislation needs to be ratified by half of the 29states.

The Insolvency and Bankruptcy Code 2015 is aimedat timely resolution of insolvency and bankruptcyand supporting development of credit markets andencouraging entrepreneurship. The Bill proposesresolution of corporate insolvency within a period

180 days, extendable by 90 days. Currently, there isno single law dealing with insolvency andbankruptcy in India, while liquidation of companiesis handled by the high courts, individual cases aredealt with under the Presidency Towns InsolvencyAct, 1909 and Provincial Insolvency Act, 1920.

The Parliament had last week passed the AadhaarBill, providing statutory backing to the uniqueidentification number for transferring governmentsubsidies and benefits, along with the Real EstateBill.

The FM said the passage of GST and bankruptcyand insolvency laws will give “major fillip or pushto our reform process”.

India has its own share of problems and there isincreased determination to face the challenges andinternalise the reform process at a faster pace, hesaid, adding that India is a “bright spot” and thegrowth potential of emerging markets is higher inthe present global situation where uncertainty,worries about levels of growth, geopolitical tensionsand Chinese slowdown fears are prevalent.

“The constituency within India that supports reformis much bigger than those that oppose. Our growthmodel is based on concerns to eradicate poverty,” hesaid.

The government has taken a lot of steps to open upthe economy and remove unnecessaryconditionalities to bring in more foreign investment,he said, adding that there is a broad nationalconsensus for the Indian economy to bestrengthened further to attract more foreigninvestment.

(Ref -http://indianexpress.com/article/business/budget/advancing-asia-conference-hope-to-pass-bankruptcy-bill-gst-this-session-says-arun-jaitley/)

21. 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, the


demand 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/)


2.0 Case Laws

2.1 Case Laws related to Excise

Sr. No. 1RelevantSection Rule 18RelevantStatute Central Excise Rules 2002Issue Rebate of Duty in ExportSub IssueFavour of AssesseeIssuingAuthority High Court of Punjab & HaryanaJudgment Assessee exported goods in

September 2011 on payment of dutyunder claim of rebate - Departmentdenied rebate claim, as it was filedafter 1 year limitation specified insection 11B - Assessee argued thattime-limit of section 11B would notapply to rebate claim under rule 18, asNotification No. 19/2004 issued underrule 18 does not specify any time-limit- HELD : Since rebate scheme is aspecific provision, general law ofrefund under section 11B cannot beapplied to rebate claim unless same ismade applicable specifically - In fact,notification issued under erstwhilerule 12 of Central Excise Rules, 1944provided for applicability of time-limit of section 11B to rebate claims,while this is not so in present case -Since, in this case, notification issuedunder rule 18 does not provide anyperiod of limitation for a claim forrebate, rejection of claim as time-barred was not in order

Citation [2015] 62 taxmann.com 46 (Punjab &Haryana) JSL Lifestyle Ltd.v.Union of India

Sr. No. 2RelevantSection 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) in

partnership with a foreign company -JVC was to manufacture Epoxy Resinsusing assessee's final product ECH -Department argued that assessee andJVC were 'related person', as theywere interconnected and there wasmutuality of interest, as majorityproduction of assessee was sold toJVC and JVC also could not functionwithout assessee's product ECH -Tribunal found that : (a) there was nointerconnection; but, (b) there wasmutuality of interest, as buyer-JVChad an indirect interest in business ofassessee and vice versa - HELD :Tribunal gave cogent reasons for itsconclusions - Hence, same wereupheld Valuation underCentral Excise - Transaction value -Best judgment assessment - PeriodSeptember, 2001 to December, 2004 -Assessee sold its final product torelated person (being, Joint VentureCompany, JVC) at below 'cost' -Department sought to apply rule 11and value goods at 'cost plus 15 percent' - Assessee argued that sales tounrelated parties were also belowcost, as international market priceswere very low - HELD : Since novaluation rule is directly applicable,rule 11 would apply, which providesfor best judgment assessment - A bestjudgment assessment must be madereasonably and not arbitrarily - Sincesales to unrelated parties were alsobelow cost and objective of rule 11 isto arrive at arm's length price/value,'cost plus method' cannot be applied,as it would work arbitrarily - Hence,value was enhanced to price chargedfrom arm's length purchasers

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


Sr. No. 3RelevantSection Rule 18RelevantStatute Central Excise Rules 2002Issue RebateSub IssueFavour of AssesseeIssuingAuthority Supreme CourtJudgment Word "or" in rule 18 of the Central

Excise Rules, 2002, to be interpreted as"and" and therefore, the exporters areentitled to both the rebates under rule18 (viz. input‐stage rebate as well asoutput‐stage rebate on finished goods)and not one kind of rebate

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

Sr. No. 4RelevantSection

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 notice dated3-2-1998 raising demand alleging non-inclusion of certain expenses in cost ofproduction of captively consumedgoods - Assessee challengedinvocation of extended period onground that necessary clarificationwas issued by department only on 30-10-1996 and therefore, there was nosuppression/misstatement/mis-declaration on part of assessee - HELD: Manner of computation of cost ofproduction and inclusions therein,were clarified by department videCircular, dated 30-10-1996 - Hence,mis-declaration cannot be alleged forperiod prior to October 1996 andtherefore, extended period oflimitation cannot be invoked uptoSeptember, 1996 - For balance period,tax effect was negligible and hence,

demand was set asideCitation "[2015] 62 taxmann.com 12 (SC)

Greaves Ltd.v.Commissioner of Central Excise &Customs, Aurangabad"

Sr. No. 5RelevantSectionRelevantStatute Central Excise Act 1944IssueSub Issue Extended period invocationFavour of Partly in favour of AssesseeIssuingAuthority CESTAT Ahmedabad Larger BenchJudgment the process carried out by the assessee

amounts to manufacture. Theimpugned goods Guar Dal Powderwould be classifiable under Heading1301: The seed of Guar plant inpowder form known as Guar DalPowder, was received by the assessee.The assessee had undertaken aprocess of the said powder addedwith other product and TKP. It is alsomixed with Methonol 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 end use ofthe product. The chemical reaction inthe Blender is expressing themagnitude of internal friction in afluid and there is a change ofproperties as per end use of the goods.Thus, there is a change of character ofthe impugned product. The assesseereceived Guar Dal Powder and afterdue process, it was 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, identityand use of the goods. There is changeof character of the goods of differentproperties as per viscosity used invarious industries. Revenue’sargument that the product wascovered under Heading 13.01 of theExcise Tariff has more merit.No extended period as there werecontrary decisions: It is seen from the


records that the Appellant fileddeclaration under Rule 174 oferstwhile Rules from the year 1997-98.The Appellant had specificallymentioned the description of thegoods as Guar Dal Powder, with theprocess of manufacture by theDeclaration dt.29.09.1997. In anyevent, there were contrary decisions ofthe co-ordinate Benches of theTribunal on this issue. It is noticedthat the appellant’s own case, theTribunal in earlier occasion, observedthat the impugned goods are NIL rateof duty under Chapter 11 of CETA.So, the ingredients in proviso toSection 11 A (1) of Central Excise Act,1944 cannot be involved.

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. 6RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of AssesseeIssuingAuthority CESTAT KolkataJudgment If the pro rata value attributable to the

additional quantity cleared as bonusquantity, in the same pack, is added tothe MRP affixed on the said bonuspack, then the declared MRP willincrease accordingly, which theappellant had not realized from itscustomers - Demand set aside &appeal allowed

Citation 2015-TIOL-2194-CESTAT-KOLM/s CASTROL INDIA LTDVsCOMMISSIONER OF CENTRALEXCISE-KOL-VI

Sr. No. 7RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Every amount collected by the

manufacturer from the buyer is notincludible - Revenue has not been ableto establish that the amounts collectedby assessee in respect of ‘diaries andcalendars' were in connection withsale of excisable goods – unlesspurchase and distribution of suchmaterial by dealers is mandatory, thevalue of the same cannot be added -Revenue Appeal dismissed

Citation 2015-TIOL-2183-CESTAT-MUMCOMMISSIONER OF CENTRALEXCISE, NAGPURVsDIFFUSION ENGINEERING LTD

Sr. No. 8RelevantSectionRelevantStatute 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 to assessee out ofwhich Rs. 30,88,512/- availed in or inrelation to cenvat credit on variousinput services and remaining amountof Rs. 15,16,580/- availed in or inrelation to trading related activities -So far as disallowing Cenvat Credit ofRs. 30,88,512/- is concerned, inclusivepart of definition of input service atthe material time in 2007-08 allowedcredit of services used in any activity


relating to business - Regardingcenvat credit pertaining to canteenservices, no evidence exists on recordthat any amount has been recoveredfrom employees of assessee - ST paidon any activity relating to business ofmanufacturing will be available asCenvat Credit to assessee Sofar as disallowing Cenvat Credit of Rs.15,16,580/- is concerned, credit inquestion relates to services used inTrading activities carried out atassessee's 16 branches all over India -From records, it is not forthcoming asto which are these services on whichassessee has taken cenvat credit andalso whether services at tradingbranches availed is covered underabove mentioned 17 servicesmentioned under Rule 6(5) of CCR,2004 - Although, assessee claims thatthey are entitled to 100% credit inrespect of services covered under Rule6(5), but they have also not come outwith clarity on actual services availedby them - Matter remanded to originaladjudicating authority

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

Sr. No. 9RelevantSection Section 2(f)RelevantStatute Central Excise Act 1944Issue ManufactureSub Issue Deemed ManufactureFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Assessee received medicine

'paracumidine' manufactured by job-worker on payment of duty - Afterreceipt, assessee subjected same torelabelling, packing, quality control,removal of moisture content,inspection, etc. and treated same asdeemed manufacture under Note 10to Chapter 29 and cleared same onpayment of duty - Department argued

that there was no manufacture byassessee and hence, it was removal ofinput as such warranting reversal ofcredit under rule 3 - HELD : Removalof moisture content is also a processthat renders product marketable toconsumer - Further, assessee wasensuring quality tests and wasrepacking product in new containersand labelling same as their ownproduct - Hence, there was deemedmanufacture in terms of Note 10 toChapter 29 - Accordingly, payment ofduty by assessee on transaction valueand availment of credit of duty paidby job-worker was correct

Citation [2016] 66 taxmann.com 195 (Mumbai -CESTAT) Deepak Nitrite Ltd.v.Commissioner of Central Excise,Raigad


Section 9 , read with sections 9A, 11Aand 11AC

RelevantStatute Central Excise Act 1944Issue Offences and PenaltiesSub IssueFavour of RevenueIssuingAuthority High Court of JharkhandJudgment Department issued various summons

to assessee and on assessee's non-appearance conducted search/seizureand found incriminating documentssuggesting prima facie evasion of dutyof Rs. 10 crore - Intelligence Officer ofDepartment arrested assessee -Assessee argued that arrest can bemade only after final quantification ofduty and not on basis of prima faciequantification - HELD : Prima facieassessment of duty showed thatevasion was almost Rs. 10 crores, farexceeding monetary limit/ceiling ofRs. 1 crore - Hence, offence was primafacie cognizable and non-bailable andtherefore, assessee's arrest was correctin law

Citation [2016] 66 taxmann.com 226(Jharkhand) HemantGoyalv.Union of India



Section 21, read withsections 19 and 20

RelevantStatute Central Excise Act 1944Issue ArrestsSub IssueFavour of AssesseeIssuingAuthority High Court of JharkhandJudgment Intelligence Officer arrested assessee

and sought remand of assessee -Magistrate granted remand - Assesseeargued that officer empowered undersections 18 and 21 for forwardingarrested persons to Magistrate andseeking remand is Superintendent orhigher grade officer and IntelligenceOfficers are not empowered;therefore, remand proceedings andconsequent order was invalid - HELD: Intelligence Officers may have beengiven power to arrest but nothing hasbeen indicated to show whether theyare empowered under sections 19 and21 to forward arrested persons toMagistrate for judicial custody orremand or bail - Assessee's contentionthat Intelligence Officer was notempowered under sections 19 and 21was not controverted by Department -Since Intelligence Officers were notempowered in this behalf, consequentproceedings and remand order werevitiated - Assessee was directed to bereleased

Citation "[2016] 66 taxmann.com 226(Jharkhand) HemantGoyalv.Union of India"

Sr. No. 12RelevantSection Rule 16RelevantStatute Central Excise Rules 2002Issue Return of Duty paid goods to factorySub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Where re-processing of returned

'defective finished goods' results inscrap, duty is payable on such scrap atrate applicable to scrap and

asesseecannot be asked to pay backentire credit taken on return ofdefective finished goods

Citation "[2016] 66 taxmann.com 237 (Mumbai- CESTAT) Commissioner ofCentral Excise, Mumbai-Iv.Mega Rubber Technologies (P.) Ltd."

Sr. No. 13RelevantSection Rule 6RelevantStatute CENVAT Credit Rules 2004Issue Cenvat CreditSub IssueFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee, a service provider, had three

departments, namely, 'A', 'B' and 'C' -Department 'A' provided taxableservice - Department 'B' providedexempted service - Department 'C'received input service - Assesseeallocated cenvat credit of service taxpaid on input service availed bydepartment 'C' to department 'A' toextent of Rs. 1.11 crores anddepartment 'B' to extent of Rs. 6.66lakhs on ratio of turnover -Adjudicating Authority disallowedentire cenvat credit allocated todepartment 'A' on ground thatdepartment 'B', which providedexempted service, availed part ofcenvat credit - Whether disallowanceof credit allocated to department 'A'was contrary to principle ofproportionately - Held, yes

Citation "[2016] 66 taxmann.com 244 (Chennai- CESTAT) Sify Technologies Ltd.v.Commissioner of Service Tax, LTU,Chennai"


Sr. No. 14RelevantSectionRelevantStatute CENVAT Credit Rules 2004Issue Cenvat CreditSub IssueFavour of RevenueIssuingAuthority CESTAT MumbaiJudgment Where cascades were used to

transport CNG at boosting stationwherein it was re-compressed to befilled into the vehicles, cenvat creditwas not admissible on cascades sincethese were used to mere transportalready manufactured and marketablecommodity

Citation [2016] 66 taxmann.com 320 (Mumbai -CESTAT) Mahanagar Gas Ltd.v.Commissioner of Central Excise

Sr. No. 15RelevantSection Section 11A read with Section 3RelevantStatute Central Excise Act 1944Issue RecoverySub Issue Clandestine Removal of Excisable

GoodsFavour of AssesseeIssuingAuthority CESTAT KolkataJudgment Statutory auditors found

shortage/excess in stock of finishedgoods - Department argued that stock-shortage represented clandestineremoval and demanded duty -Assessee argued that : (a) stock-takingwas undertaken on test-check/sampling basis and there wereboth shortages as well as excesses dueto accounting under wrong codeswithout any actual shortage; (b) somegoods were semi-finished goods onwhich no duty could be demanded -HELD : Both shortages as well asexcesses, could only be due toaccounting under wrong codes - Therewas no evidence of clandestine salesor purchases - Further, allegedshortage was only 0.29 per cent ofproduction and was based only on

test-check/sampling - Furthermore,no duty could be demanded on semi-finished goods - Hence, demandbased on presumption/assumptionwas dropped

Citation [2016] 66 taxmann.com 270 (Kolkata -CESTAT) Commissioner of CentralExcise , Kolkata-IVv.Birla NGK Insulators (P.) Ltd.

Sr. No. 16RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub IssueFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment After clearance from factory, goods

may be sold from the depot at ahigher or lower price & the assessee isnot entitled to claim the refund forlower price & the Dept. also cannotdemand the duty of higher price atdepot - Assessee Appeal allowed

Citation "2016-TIOL-484-CESTAT-AHMM/s UNITED PHOSPHOROUS LTD2) SHRI KANUBHAI MOHANLALDESAI3) SHRI HASMUKHBHAI N DESAI4) SHRI ARUN C ASHARVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, VAPI"

Sr. No. 17RelevantSection Section 5ARelevantStatute Central Excise Act 1944Issue Exemption from Excise DutySub Issue Captively Consumed productFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee was manufacturing iron and

steel products - Assessee : (a) gave sitewithin its factory to FSNL forprocessing scrap, (b) supplied oxygenmanufactured by assessee to FSNL forsuch processing; and (c) used


processed scrap for furthermanufacture by assessee - Departmentdemanded duty on oxygen suppliedto FSNL - Assessee argued thatclearance of oxygen to FSNL withinfactory was 'use within same factory';therefore, oxygen was exempt underNotification No. 67/95-CE - HELD :Exemption under Notification No.67/95 is available if input (viz.oxygen) is used within factory of itsproduction - Factors such asconsideration, ownership of goods orvarious contractual arrangements arenot relevant to decide excise dutyliability - Here, FSNL was a separateentity and had established its factorywithin assessee's factory - Therefore,oxygen manufactured by assessee wasnot used within assessee's factory butwas used by FSNL's factory (thoughon behalf of assessee) - Hence,exemption could not be allowed

Citation [2016] 66 taxmann.com 331 (NewDelhi - CESTAT)Steel Authority of India Ltd.v.Commissioner of Central Excise,Raipur


Section 11A read with Section 73 ofthe Finance Act 1994

RelevantStatute Central Excise Act 1944Issue RecoverySub IssueFavour of RevenueIssuingAuthority CESTAT ChennaiJudgment Assessee, a job-worker, was paying

duty on behalf of principalmanufacturer - AssistantCommissioner confirmed demand onground of under-valuation -Commissioner (Appeals) set asideadjudication on ground that AssistantCommissioner did not havejurisdiction in view of monetarylimits/scope laid down in CBECCirculars - HELD : Since issueinvolved was one of valuation,Assistant Commissioner wascompetent to issue notice and passorder - Moreover, in any case, in view

of judgment in Pahwa Chemicals (P.)Ltd. v. CCE2005 taxmann.com 778(SC), CBEC Circulars are merelyadministrative and any order passedby Central Excise Officer is valid asper section 11A, even if same is inviolation of monetary limits set out inCBEC Circulars - Hence, matter wasremanded back to Commissioner(Appeals)

Citation [2016] 66 taxmann.com 333 (Chennai -CESTAT) Commissioner of CentralExcise & Service Tax, Pondicherryv.Ravishankar Industries (P.) Ltd.

Sr. No. 19RelevantSection Section 4 read with Section 4ARelevantStatute Central Excise Act 1944Issue ValuationSub Issue Transaction ValueFavour of AssesseeIssuingAuthority CESTAT BangaloreJudgment Assessee was selling physician

samples to brand owners and brandowners, in turn, used to give awaythose samples free - Assessee waspaying duty on 'samples' sold tobrand owners, based on theirtransaction value - Departmentargued that transaction value must berejected and goods must be valued asper rule 4 read with section 4A, at pro-rata value of sale pack of samples, aspharmaceutical goods are covered byMRP-based duty - HELD : Since goodswere sold to brand owner andtransaction value was available, resortcannot be made to rule 4 as laid downin CCE & C v. Sun PharmaceuticalsInds. Ltd. 2015 (326) E.L.T. 3 (SC) -Hence, demand was set aside

Citation [2016] 66 taxmann.com 289 (Bangalore- CESTAT) Geltec (P.)Ltd.v.Commissioner of Central Excise,Customs & Service Tax, Bangalore-I


Sr. No. 20RelevantSection Section 4 read with Section 4ARelevantStatute Central Excise Act 1944Issue ValuationSub Issue Transaction ValueFavour of AssesseeIssuingAuthority CESTAT BangaloreJudgment Assessee was selling physician

samples to brand owners and brandowners, in turn, used to give awaythose samples free - Assessee waspaying duty on 'samples' sold tobrand owners, based on theirtransaction value - Departmentargued that transaction value must berejected and goods must be valued asper rule 4 read with section 4A, at pro-rata value of sale pack of samples, aspharmaceutical goods are covered byMRP-based duty - HELD : Since goodswere sold to brand owner andtransaction value was available, resortcannot be made to rule 4 as laid downin CCE & C v. Sun PharmaceuticalsInds. Ltd. 2015 (326) E.L.T. 3 (SC) -Hence, demand was set aside

Citation [2016] 66 taxmann.com 289 (Bangalore- CESTAT) Geltec (P.) Ltd.v.Commissioner of Central Excise,Customs & Service Tax, Bangalore-I

Sr. No. 21RelevantSection Section 4RelevantStatute Central Excise Act 1944Issue ValuationSub Issue Transaction Value - Related PersonFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee-company had three directors

KK, RK and AK - Assessee sold goodsto five buyers being : (a) threeproprietorships of directors; (b) acompany having all three as directors;and (c) a proprietorship of relative ofdirectors - Department rejectedtransaction value on ground that

buyers were related persons beinginter-connected/relative - HELD :Since law talks about inter-connectivity between body corporates,hence, four buyers being proprietaryconcerns were not related - Further,valuation rule 9 cannot be appliedwhere all goods are not sold to relatedpersons - Furthermore, a juristicperson being assessee-companycannot be termed as 'relative' of anybuyer as definition of 'relative' underCompanies Act only covers naturalpersons being Individuals - Partiescannot be regarded as relative merelybecause profit accruing from salethrough related persons goes to samefamily; even otherwise, profit ofassessee-company would flow to itsshareholders - Hence, impugneddemand was set aside

Citation [2016] 67 taxmann.com 10 (New Delhi- CESTAT) Commissionerof Central Excise, Raipurv.AkashIspat Ltd.

Sr. No. 22RelevantSection Section 2(f)RelevantStatute Central Excise Act 1944Issue ManufactureSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Where various unbranded food items

are supplied by caterer to airlines andairlines staff places them in single traywith caterer's tag, then, such caterercannot be regarded as manufacturerof 'tray' containing 'branded foodpreparations'

Citation [2016] 67 taxmann.com 12 (New Delhi- CESTAT) TajSats AirCatering Ltd.v.Commissioner of Central Excise,Delhi-II


Sr. No. 23RelevantSection Section 4 read with Section 4CRelevantStatute Central Excise Act 1944Issue ValuationSub Issue SamplesFavour of Partly in favour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee cleared physician samples of

medicines meant for free distributionas part of marketing strategy -Assessee paid duty on samples basedon value at 110/115 per cent of cost ofproduction under rule 11, read withrule 8 - Department argued that goodswere to be valued as per rule 4 basedon value of identical drugs/medicines- HELD : For period 14-7-2004 to 6-1-2005, assessee has correctly followedCircular dated 1-7-2002 and since nospecific rule covers valuation ofsamples, Best judgment method underrule 11 is correct method andaccordingly, samples are to be valuedas per rule 11, read with rule 8 at115/110 per cent of cost - However,for period post 7-1-2005, as perCircular dated 25-4-2005, samples areto be valued in terms of rule 4 - Sinceissue was one of interpretation andCBEC itself changed its view in year2005 vis-à-vis its earlier view in 2002,no penalty could be levied

Citation "[2016] 67 taxmann.com 34 (NewDelhi - CESTAT)Commissioner of CentralExcise,Bhopalv.Lupin Ltd."

Sr. No. 24RelevantSection Section 2(f)RelevantStatute Central Excise Act 1944Issue ManufactureSub IssueFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Earlier, assessee was manufacturing

carbon paper of width exceeding 36cms. (Tariff Heading 4809) - Later,assessee installed cutting machine andstarted clearing cut carbon paper ofwidth lower than 36 cms. (TariffHeading 4816) - Department arguedthat process of cutting carbon paperinto small sizes amounted tomanufacture, as there was change intariff classification - HELD : Merechange in classification does not provemanufacture - Since, in this case,carbon paper of larger width had beenmerely cut, said process of cuttingwould not amount to manufacture

Citation [2016] 67 taxmann.com 69 (New Delhi- CESTAT) Gurdev Singhv.Commissioner of Central Excise,Meerut-I

Sr. No. 25RelevantSection Rule 2(a) read with Rule 2(k)RelevantStatute CENVAT Credit Rules 2004Issue Cenvat CreditSub Issue Capital GoodsFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Cenvat Credit was denied on Hot

Metal Transport vehicle, JumboElectric Platform truck, Trailerassembly and Ladle Transfer car,holding that these items are notcapital goods as they are vehicles andfurther that they are also not anyinputs - HELD : These goods werespecially designed for operational useinside appellant's factory - Theseitems were part of overall machinerysystem critically contributing tomanufacture of final product - All


equipments were correctly to beconsidered as accessories to variouscapital goods involved in manufactureof final products as they are integrallyconnected in process of manufacture -Cenvat Credit could not be denied

Citation [2016] 67 taxmann.com 75 (New Delhi- CESTAT) Jindal Steel &Power Ltd.v.Commissioner of Central ExciseRaipur (CG)

Sr. No. 26RelevantSection Section 4A read with Section 4RelevantStatute Central Excise Act 1944Issue Levy and Collection of DutySub Issue ValuationFavour of Partly in favour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Valuation of excisable goods for

purposes of charging of duty of excise- Period 1-8-2002 onwards - Assesseewas engaged in manfacture oflubricating oil - It sold lubricating oilpacked in 50 ltrs package to truckowners, who consumed themselves -It had not printed MRP on package -Whether since lubricating oil 50 ltrspackage was sold to ultimatecustomers, MRP was required to beaffixed on package and goods shouldbe valued in terms of section 4A -Held, yes

Citation [2016] 67 taxmann.com 66 (Mumbai -CESTAT) Commissionerof Central Excise & Customs, Mumbaiv.LSR Speciality Oils (P.) Ltd.

Sr. No. 27RelevantSection Section 5ARelevantStatute Central Excise Act 1944Issue Exemption from Excise DutySub Issue SSI ExemptionFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee was availing SSI-exemption -

On search, department found goodswith marks like 'B Gwalior', 'NationalGwalior', etc. and denied SSI-exemption as goods bore brand nameof customers - Assessee argued thatsaid markings were household marksfor identification and even as perTrademarks Department, said markswere not capable of being registeredas a trademark - Department arguedthat said marks belonged to customersand customers had confirmed thatthey had bought goods from assesseewith their (customer's) marks - HELD: Assessee's account-books, bills andstatements of customers corroboratedrevenue's stand - Clarification ofTrademarks Department is regardingregistration under Trademarks Actand cannot be applied under CentralExcise because, for denial of SSI-exemption, brand name or trade namehas a wider connotation, registrationbeing not mandatory - Hence, SSI-exemption was rightly denied

Citation [2016] 67 taxmann.com 71 (New Delhi- CESTAT) KusumFoundry & Metal Works (P.) Ltd.v.Commissioner of Central Excise,Indore


Sr. No. 28RelevantSection Rule 2(a) read with rule 2(k)RelevantStatute CENVAT Credit Rules 2004Issue Capital GoodsSub IssueFavour of RevenueIssuingAuthority CESTAT New DelhiJudgment Assessee took credit of welding

electrodes used for manufacture ofcapital goods - Department deniedcredit on ground that they were usedfor repair work - Assessee concededthat it did not have any evidence inthis behalf - HELD : Weldingelectrodes used for repair work wereineligible for credit

Citation [2016] 67 taxmann.com 70 (New Delhi- CESTAT) N.R.Ispat& Power (P.) Ltd.v.Commissioner of Central Excise,Chhattisgarh

Sr. No. 29RelevantSection Section 35GRelevantStatute Central Excise Act 1944Issue AppealsSub Issue Condonation of DelayFavour of RevenueIssuingAuthority High Court of BombayJudgment Against order of CESTAT,

Ahmedabad, revenue filed appealbefore Gujarat High Court withintime-limit - Gujarat High Courtdismissed appeal as not maintainable,as Original Order was passed byCommissioner, Daman and therefore,Bombay High Court had jurisdiction -Revenue filed appeal before BombayHigh Court seeking condonation ofdelay - HELD : As per section 14 ibid,period spent in pursuing remedybefore wrong forum bona fide isexcluded in computing period oflimitation - Here, all five conditionsfor applying section 14 ibid werefulfilled : (a) both prior andsubsequent proceedings are civil

proceedings by same party; (b) priorproceeding was prosecuted with duediligence and in good faith; (c) failureof prior proceeding was due tojurisdictional defect; (d) bothproceedings relate to same matter;and (e) both proceedings are in aCourt - Hence, period spent beforeGujarat High Court was excluded andbalance delay was condoned in viewof facts and circumstances

Citation [2016] 67 taxmann.com 122 (Bombay)Principal Commissioner of CentralExcise & Customs, DamanCommissioneratev.Omnitex Industries (India) Ltd.

Sr. No. 30RelevantSection Rule 5RelevantStatute CENVAT Credit Rules 2004Issue Cenvat CreditSub Issue RefundFavour of AssesseeIssuingAuthority High Court of BombayJudgment Adjudicating authority initially

denied refund but later, on remand,allowing refund after verification byRange Superintendent - Revenuechallenged order of adjudicatingauthority on ground that dueverification had not been done -Tribunal allowed refund on groundthat refund was granted after dueverification - HELD : Tribunal foundthat : (a) revenue's contentions wereall incorrect, (b) assessee wasmanufacturer; and (c) it had claimedrefund only in respect of inputs usedfor export and had furnishedChartered Accountant certificate tothat effect - There was no perversity infindings recorded by lower authoritiesor Tribunal - Hence, appeal wasdismissed

Citation [2016] 67 taxmann.com 123 (Bombay)Commissioner of Customs, CentralExcise & Service Tax, Goav.Automobile Corporation of Goa Ltd.


Sr. No. 31RelevantSection Section 11BB read with Section 11BRelevantStatute Central Excise Act 1944Issue InterestSub Issue On Delayed RefundsFavour of AssesseeIssuingAuthority Supreme CourtJudgment Assessee applied for refund on 25-8-

1999 and was granted same on 15-11-2000 - Assessee claimed interest onbelated refund from 26-11-1999 to 15-11-2000 - Department denied intereston ground that : (a) there were certaindefects in application, which wereinformed on 27-9-1999 and rectifiedon 30-9-1999; and (b) there was somemistake apparent from record injudgment giving rise to refund, whichwas informed to assessee on 1-12-1999and got rectified later; thus, time-limitof 3 months would commence onlyafter rectification of all defects andaccordingly, refund was not grantedbelatedly - HELD : Time-limit toprocess refund claim is 3 months from'date of receipt of application' viz. 25-8-1999 - Revenue must intimatedeficiencies in application within twodays and, if there are still deficiencies,it can proceed with adjudication andreject such application - In any event,adjudicatory process must beconcluded within 3 months andcannot be carried on beyond 3 months- Hence, assessee was entitled tointerest from 26-11-1999 to 15-11-2000

Citation "[2016] 67 taxmann.com 125 (SC)Union of Indiav.Hamdard (Waqf) Laboratories"


Rule 7 of Central Excise Rules 2002read with Section 11AA

RelevantStatute Central Excise Act 1944Issue InterestSub IssueFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Interest - On delayed payment of

duty/tax - Assessee opted forprovisional assessment for year 2008-09 - Assessee paid differential dutysuomotu on 30-4-2010 - Provisionalassessment was finalized on 7-9-2010and differential duty paid wasappropriated - Department demandinterest on differential duty - Assesseeargued that interest arises only if dutyis determined to be payable in finalorder; however, in this case, sinceduty was already paid, dutydetermined as payable in final orderwas NIL and consequently, interestwas also NIL - HELD : As per rule7(4), interest is payable only when anyamount is payable consequent toorder of finalization of provisionalassessment - Since, in this case, dutywas paid prior to finalization ofassessment and no amount waspayable consequent to finalization,rule 7(4) and interest thereunder wasnot attracted

Citation [2016] 67 taxmann.com 150 (Chennai -CESTAT)Commissioner of Central Excise, (ST)LTU, Chennaiv.Tube Products of India


Sr. No. 33RelevantSection Section 32 ORelevantStatute Central Excise Act 1944Issue Settlement of CasesSub IssueFavour of RevenueIssuingAuthority High Court of CalcuttaJudgment Bar on subsequent application for

settlement in certain cases - On earliersettlement applications, SettlementCommission passed orders imposingpenalty - When assessee filedsubsequent application, SettlementCommission rejected same as non-maintainable on ground that 'penaltyfor concealment' was imposed videearlier settlement orders - SingleJudge remanded matter back onground that earlier only 'penalty' wasimposed and there was no clarity as towhether penalty imposed earlier was'penalty for concealment' - HELD :Explanation to section 32-O(1)(i),inserted by Finance (No. 2) Act, 2014,providing that 'concealment' must be'concealment' before Central ExciseOfficer is clarificatory, because section32E always required disclosure ofliability undisclosed before CentralExcise Officer - It is clear from earlierorders of Settlement Commission thatpenalty was levied for 'concealment ofparticulars of duty liability beforeCentral Excise Officer'; hence, in viewof section 32-O(1)(i), presentapplication was barred - Order ofSingle Judge was set aside accordingly

Citation [2016] 67 taxmann.com 149 (Calcutta)Commissioner of Central Excise AndService Tax, Durgapurv.Rohit Ferro Tech Ltd.

Sr. No. 34RelevantSection Section 11ARelevantStatute Central Excise Act 1944Issue RecoverySub IssueFavour of AssesseeIssuingAuthority High Court of AllahabadJudgment Mere excess quantity of by-product

molasses arising due to mixture ofwater, does not prove clandestinepurchases of sugarcane and sale ofsugar; hence, demand based onassumption of clandestinepurchases/sales was dropped

Citation [2016] 67 taxmann.com 151(Allahabad) TriveniEngineering & Industries Ltd.v.Commissioner of Central Excise,Allahabad


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 auction fromRailways - Though assessee did notpay duty on purchase from Railways,however, it claimed deemed credit atRs. 920 per ton in terms ofNotification/order dated 7-7-1992/1-3-1994 - Commissioner (Appeals)denied deemed credit on ground thatpurchase bills of scrap from Railwaysdo not indicate rate and amount ofduty paid thereon at time ofclearance/sale by Railways - HELD :There was no obligation on part ofassessee to pay duty at time ofpurchase from Railways - In fact,assessee was claiming deemed creditof duty paid by Railways at time ofpurchases by Railways, as perNotification/order, dated 7-7-1992/1-3-1994 - Since assessee satisfied alleligibility conditions as perNotification/order, dated 7-7-1992/1-3-1994, impugned credit could not bedenied

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

Sr. No. 2RelevantSectionRelevantStatute Finance Act 1994Issue ValuationSub Issue Business Auxilliary ServicesFavour of Partly in favour of assessee and partly

in favour of RevenueIssuingAuthority CESTAT Ahmedabad

Judgment BAS - Manufacture of AlcoholicBeverages on job work basis wasincluded in service tax net w.e.f1.9.2009 - Appellants had challengedthe constitutional validity of levy ofthe Service Tax before the BombayHigh Court - High Court by Order dtd14.10.2010 admitted the WP andobserved that the Revenue would beat liberty to proceed with the ShowCause Notice – Adjudicating authorityconfirmed demand of service Tax ofRs 28,60,30,676/- along with interestand penalty – appellant have paid thetax of Rs 17,66,51,082/- alongwithinterest of Rs 3,27,50,955/- - Appealbefore Tribunal Held:Reimbursable expenses paid to theappellant insofar as cost andexpenditure as stipulated under Rule5(i) ST Valuation Rules, 2006 cannotbe included in the taxable value -despite the fact that Writ Petition ispending before the High Court, theappellant paid tax with interest andthere is reasonable cause to invokeSection 80 for waiver of the penaltyunder Section 76 & 78 of the Act -order is modified to the extent that thetaxable value would be computed byexcluding the amount ofsurplus/profit returned to the BrandOwner and the other reimbursableexpenses paid to the appellant,covered under Rule 5(i) of the STValuation Rules - Adjudicatingauthority directed to re-determinedemand of tax alongwith interest -penalty imposed u/s 77 is upheld butother penalties imposed u/s 76 & 78are set aside: CESTAT

Citation 2015-TIOL-2208-CESTAT-AHMM/s BIOSSOM INDUSTRIES LTDVsCOMMISSIONER OF CENTRALEXCISE, CUSTOMS AND SERVICETAX-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 1994IssueSub Issue Supply of Tangible Goods ServiceFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Supply of Tangible Goods service -

appellants had paid service tax of Rs.21,20,864/- alongwith Cess of Rs.63,630/- and had also paid interest ofRs. 2,15,616/- (period March to

August 2011) for the delayed paymentof service tax (for period July 2008 toMarch 2011) at the commencement ofinvestigation itself, and much beforeissuance of SCN in November 2011 -further there was no service taxliability on a few invoices/ debitnotes, many of which contentionswere accepted by the adjudicatingauthority - another amount of Rs.2,38,607/- sanctioned as refund wasalso appropriated in July 2013 -appellants had also paid Rs. 1,11,988/-vide challan No. 00438 dated13.08.2015 - penalty of Rs. 5,000/- u/s77 of FA, 1994 and a penalty ofequivalent tax of Rs. 30,93,660/- onthe appellants challenged beforeTribunal. Held: Matter is nomore res-integra, Division Bench ofthe Karnataka High Court in the caseof CCE & ST, LTU, Bangalore vs.Adecco Flexione Workforce SolutionsLimited - 2011-TIOL-635-HC-KAR-SThas held that assessee is not liable topay any penalty under suchcircumstances – penalties set aside –appeal disposed of

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

Sr. No. 5RelevantSection Section 11A read with Section 11ACRelevantStatute Central Excise Act 1944Issue RecoverySub IssueFavour of AssesseeIssuingAuthority High Court of GujaratJudgment Invocation of Extended Period of

Limitation - Department invokedextended period to deny ineligibleinput service credit - Assessee arguedthat issue was debatable and at onepoint of time, Tribunal judgment wasin assessee's favour, which wassubsequently reversed by High Court;therefore, there was no intention toevade and hence, extended period


could not be invoked - HELD : Sinceissue was debatable and at one ofpoint of time, Tribunal had opined inassessee's favour, extended periodcould not be invoked

Citation [2016] 66 taxmann.com 196 (Gujarat)Commissioner of Central Excise &Service Taxv.Saurashtra Cement Ltd.

Sr. No. 6RelevantSection Section 86RelevantStatute Finance Act 1994Issue AppealsSub IssueFavour of AssesseeIssuingAuthority High Court of MadrasJudgment Department demanded service tax

under reverse charge on GoodsTransport Agency's Services forperiods 16-11-1997 to 1-6-1998 - Onappeal, Tribunal passed order thereonon date of hearing itself noting non-appearance of assessee - Assesseeargued that Tribunal had passed orderwithout granting sufficientopportunity to put forth its legalcontention and contentions alreadyput forth in form of writtensubmissions had not been consideredin passing order - HELD : Tribunal'sorder was cryptic and devoid ofreasons - Sufficient opportunity wasnot granted by Tribunal to assesseeand written submissions filed byassessee were not taken into account -Hence, impugned order was set asideand appeal was restored beforeTribunal for disposal on merits

Citation "[2016] 66 taxmann.com 197 (Madras)Empee Distilleries Ltd.v.Deputy Commissioner of Service Tax,service Tax Commissionerate"


Section 65(25), read withsections 65(19) and 65A

RelevantStatute Finance Act 1994Issue Taxable ServicesSub Issue Clearing and forwarding agent

ServicesFavour of AssesseeIssuingAuthority CESTAT ChennaiJudgment Assessee was engaged in procuring

orders and exploring potentialcustomers for its principal and wasalso channelizing purchase orders -Department demanded service taxthereon under Clearing andForwarding Agent's services -Assessee argued that services ofgeneral agents was made taxable forfirst time from 1-7-2003 underBusiness Auxiliary Services and samewas exempt during 1-7-2003 to 8-7-2004 - HELD : Scope of taxing entry isto be strictly construed and there is nointendment about tax - Taxing entrymost specifically covering an activitywill be applicable for classification ofsaid activity - In view of facts, correctclassification is under BusinessAuxiliary Service (BAS) - Hence,demand under clearing andforwarding agent's service was setaside

Citation [2016] 66 taxmann.com 228 (Chennai -CESTAT) RajaCharity Trustv.Commissioner of Central Excise,Tirunelveli

Sr. No. 8RelevantSection Rule 9RelevantStatute Cenvat Credit Rules 2004Issue Cenvat CreditSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Documents on which credit may be

taken - Assessee took credit ofCVD/Special CVD paid on importedmaterials based on 'endorsed bill ofentry' - Department denied credit on


ground that endorsed bill of entry isnot an eligible document under rule9(1) - Assessee argued that bill ofentry (even if endorsed) continues tobe an eligible document under rule9(1)(c) - HELD : There is no disputeabout receipt of material and paymentof duty thereon - Hence, credit takenbased on endorsed bill of entry isvalid, as endorsed bill of entry is alsoa valid document for availing credit

Citation [2016] 66 taxmann.com 241 (Mumbai -CESTAT)Suyash Chemicalsv.Commissioner of Central Excise,Pune-I

Sr. No. 9RelevantSection Section 73RelevantStatute Finance Act 1994Issue RecoverySub IssueFavour of AssesseeIssuingAuthority High Court of GauhatiJudgment Burden of proof is on revenue to show

that there was wilful suppression offacts by assessee with a view to evadeservice tax; but, once revenue bringsout certain material, then, burdenshifts back to assessee

Citation "[2016] 66 taxmann.com 256 (Gauhati)Bordubi Engineering Worksv.Union of India"

Sr. No. 10RelevantSection Section 65(90a) read with Section 67RelevantStatute Finance Act 1994Issue Taxable ServicesSub Issue Renting of Immovable PropertyFavour of AssesseeIssuingAuthority CESTAT New DelhiJudgment Assessee rented out its building to a

hotel on rent/profit-sharing basis -Department raised demand of servicetax and included notional interest on'security deposit of Rs. 20 crores' indetermining value of renting services -

HELD : Renting out property to hotelsis not liable to service tax; hence,demand of service tax was set aside -Even otherwise, notional interest onsecurity deposit cannot be added to'agreed rent' for demanding servicetax - Hence, demand was set aside

Citation [2016] 66 taxmann.com 254 (NewDelhi - CESTAT) LakePalace Hotel and Motels (P.) Ltd.v.Commissioner of Central Excise,Jaipur II


Section 35C of Central Excise Act 1944read with Section 86

RelevantStatute Finance Act 1994Issue AppealsSub IssueFavour of Partly in favour of assessee and partly

in favour of RevenueIssuingAuthority High Court of GujaratJudgment Notice was issued to assessee in 2004 -

Department took up adjudication in2012, but, assessee's factory hadalready been shut-down - Notices forhearing were returned unserved andauthority proceeded ex parte -Assessee challenged such ex parteorder but, Tribunal remanded matterback subject to pre-deposit of Rs. 50lakhs - Assessee argued that remandorder could not be made conditionalupon pre-deposit - HELD : As persection 35C, Tribunal may remandmatter back with 'such directions' as itthinks fit - Hence, remand order maybe 'conditional' i.e., Tribunal mayimpose suitable conditions includingmaking of certain deposit, only ifsame is necessary due to reasonsattributed to assessee - In this case,since demand was set aside on groundthat notices of hearing were not dulyserved, condition of deposit of Rs. 50lakhs was invalid - But, since assesseehad not informed department aboutclosure of factory, assessee wasdirected to pay costs Rs. 25,000


Citation "[2016] 66 taxmann.com 268 (Gujarat)WaghbakriwalRayonsv.Commissioner of Central Excise"

Sr. No. 12RelevantSection Section 65(19)RelevantStatute Finance Act 1994Issue CommissionSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Appellant receives commission from

the borrower who does not haveeither a product or a service to placein the market - Consideration is, thus,not connected with the sale of aproduct or service - Appellant,therefore, does not find fitment insection 65(19)(vii) of FA, 1994 asprovider of ‘Business auxiliary service'- Appeal allowed

Citation (2015) 22 CCHST 0989 APHCM/S. PHOENIX LOGISTICSPRIVATE LIMITED, HYDERABADvs.THE COMMISSIONER OFCUSTOMS, HYDERABAD

Sr. No. 13RelevantSectionRelevantStatute Finance Act 1994IssueSub Issue Business Auxilliary ServicesFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment From the viewpoint of the recipient,

'business auxiliary service' is theoutsourcing in relation to externalityof the business entity while 'supportservices of business or commerce' isthe outsourcing of the internalactivities of the business entity - costsclaimed to be reimbursables are notattributable to the 'business auxiliaryservice' rendered by the assessee butto the cost of the product itself -Therefore, these fall outside the scopeof inclusion within the meaning of'gross amount charged' - Assessee

appeal allowed, Revenue appealrejected

Citation "2016-TIOL-508-CESTAT-MUMBHAVEN DESAIVsCOMMISSIONER OF SERVICE TAX,MUMBAI"


Section 67 of the Finance Act 1994 &Rule 2A

RelevantStatute

Service Tax (Determination of Value)Rules 2006

Issue CENVAT Credit of Input & InputServices

Sub Issue Works Contract ServiceFavour of AssesseeIssuingAuthority High Court of BombayJudgment Assessee paid service tax on entire

contract/construction price and tookcredit of inputs and input service -Department argued that assessee hadto apply rule 2A ibid and accordingly,service tax was payable as per saidrule and credit had to be disallowed -Tribunal found that there was norevenue loss and hence, held in favourof assessee - HELD : When tax liabilityhas been discharged on full contractprice and credit has been taken,revenue was not put to loss - Hence,leaving question of law open, presentappeals were disposed of, as therewas no revenue loss

Citation "[2016] 66 taxmann.com 329 (Bombay)Commissioner of Central Excise,Customs & Service Tax, Vapiv.S.V. Jiwani"

Sr. No. 15RelevantSection Article 226 Read with Section 85RelevantStatute Finance Act 1994Issue Writ PetitionSub IssueFavour of RevenueIssuingAuthority High Court of GujaratJudgment Assessee-builder neither took

registration nor paid service tax -Department issued notices raisingdemand but assessee did not file any


reply nor made any appearance -Assessee challenged adjudicationorder but Commissioner (Appeals)dismissed appeal as time-barredbeyond his permissible condonationpower - Assessee filed writ againstadjudication order arguing thatdemand was confirmed withoutallowing abatement for constructionservices - HELD : Though writjurisdiction is available againstadjudication order even after expiry oftime-limit to file appeal, however,such benefit cannot be extended toindolent, tardy or lethargic litigant - Inthis case, assessee never filed reply tonotices and not even participated inadjudication, despite several hearingsgranted to it - In view of assessee'slethargic conduct, writ was dismissed

Citation [2016] 66 taxmann.com 292 (Gujarat)Nice Constructionv.Union of India

Sr. No. 16RelevantSection Section 86 read with Section 78RelevantStatute Finance Act 1994Issue AppealsSub IssueFavour of AssesseeIssuingAuthority High Court of BombayJudgment On revenue's appeal, Commissioner

(Appeals) upheld evasion penalty -Tribunal passed order confirmingpenalty - Assessee challengedTribunal order on merits as well as onpenalty - High Court opined thatTribunal order was not clear as towhether assessee's appeal on meritswas allowed or not - On assessee'sapplication, Tribunal clarified that ithad dismissed assessee's appeal onmerits - HELD : In course ofclarification, Tribunal can only decidewhether initial order was ambiguousor not; it cannot travel beyond initialorder and deal with something notthere in initial order - ThoughTribunal clarified that it haddismissed assessee's appeal on merits,but, initial order did not indicate

anything to that effect - Hence,impugned order was set aside andappeal was restored for considerationafresh before Tribunal

Citation [2016] 66 taxmann.com 291 (Bombay)JetkingInfotrain Ltd.v.Commissioner of Service Tax

Sr. No. 17RelevantSection Sections 73, 76, 78 and 89RelevantStatuteIssue Offences and PenaltiesSub IssueFavour of RevenueIssuingAuthority Supreme CourtJudgment Adjudication proceedings and

criminal prosecution can be launchedsimultaneously - Decision inadjudication proceedings is notnecessary before initiating criminalprosecution - Findings in adjudicationproceedings are not binding forcriminal prosecution - However, ifassessee is exonerated in adjudicationproceedings on merits and it is foundthat allegation is not sustainable at alland assessee is held innocent, then,criminal prosecution cannot continue -Where it is found that some findingsin adjudication proceedings areincorrect and assessee has not beencompletely held innocent, criminalprosecution may continue despiteexoneration in adjudicationproceedings

Citation [2016] 66 taxmann.com 293 (SC)Air Customs Officer IGI New Delhiv.Pramod Kumar Dhamija

Sr. No. 18RelevantSection Section 73RelevantStatute Finance Act 1994Issue Short payment and recovery thereofSub Issue Extended PeriodFavour of RevenueIssuingAuthority CESTAT MumbaiJudgment Where assessee sought clarification


from department and did not payservice tax despite directions/opinionfrom department that service tax isleviable, then, department may invokeextended period to raise demand

Citation [2016] 67 taxmann.com 11 (Mumbai -CESTAT) AdityaVidyutAppliances Ltd.v.Commissioner of Central Excise,Mumbai

Sr. No. 19RelevantSection Section 65(115)RelevantStatute Finance Act 1994Issue Tour Operator ServiceSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Appellant airways offering Jet Escapes

Package to passengers who visit theirwebsite for booking Air TravelServices offered by them - Appellanthad entered into a contract with HotelChains for accommodating passengerwho opted for 'Jet Escape' Package -Held: Passengers when they wantedto opt for 'Jet Escapes Package',organized own travel dates andappellant was not helping them inplanning or organizing or schedulingtheir tours - Appellant was notcovered under category of 'touroperator service'

Citation [2016] 67 taxmann.com 36 (Mumbai -CESTAT) Jet Airways(India) Ltd.v.Commissioner of Service Tax,Mumbai

Sr. No. 20RelevantSection Rule 2(k)RelevantStatute Cenvat Credit Rules 2004Issue InputSub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment Assessee, a provider of general

insurance services, took credit offurniture and fittings - Departmentdenied credit thereof - Assesseeargued that furniture and fittingswere required for providing servicesand were eligible for credit as inputs -HELD : Furniture and fittings beingtables and chairs are used forproviding services, as employees needto sit and work on them - Hence,credit can be availed on tables andchairs

Citation "[2016] 67 taxmann.com 51 (Mumbai -CESTAT) ICICILombard General Insurance CompanyLtd.v.Commissioner of Service Tax,Mumbai-I"

Sr. No. 21RelevantSection Rule 2(I)RelevantStatute Cenvat Credit Rules 2004Issue Input ServiceSub IssueFavour of AssesseeIssuingAuthority AAR - New DelhiJudgment As input services received by assessee

from Engineering Procurement andConstruction contractors and otherswas not for laying of foundation ormaking of structural for support ofcapital goods, same does not fallunder exclusion clause (b) ofdefinition of 'Input Services',therefore, assessee is eligible to availCenvat Credit of service tax thatwould be paid by EPC contractors andothers

Citation [2016] 67 taxmann.com 90 (AAR -New Delhi) GSPL India TranscoLtd.


Sr. No. 22RelevantSection Section 65(64)RelevantStatute Finance Act 1994Issue Taxable ServicesSub Issue Service of Management, Maintenance

and RepairsFavour of AssesseeIssuingAuthority High Court of Madhya PradeshJudgment Service of Management, Maintenance

or repairs - Period 16-6-2005 to 25-7-2009 - Services were provided bypetitioner for management,maintenance and repairs of roads -After service was provided bypetitioner, this service was exemptedfrom payment of tax vide amendmentto Finance Act, 2012 inserted witheffect from 28-5-2012 - Still revenueimposed service tax - HELD:- Periodfor which impugned assessment waspassed was within aforesaid exemptperiod - Further, notification No.24/2009, dated 27-7-2009 was issuedby which, entire service in question,i.e., Management, Maintenance orrepairs of road was exempted - Thus,it was clear that initially on 27-7-2009,competent authority grantedexemption from payment of dutiesbetween 16-6-2005 to 26-7-2009 andafterwards it was thought appropriateto grant complete exemption and,therefore, statutory provision hadbeen amended retrospectively andtotal exemption was granted byamending provision under section97(1) in the Finance Act, 2012 - Hence,service in question was totallyexempted from payment of duty asclaimed by petitioner

Citation "[2016] 67 taxmann.com 92 (MadhyaPradesh) M.P. Audhyogik KendraVikas Nigamv.Chief Commissioner of Customs,Central Excise & Service Tax"

Sr. No. 23RelevantSection Rule 2(I)RelevantStatute Cenvat Credit Rules 2004Issue Input ServiceSub Issue Sales CommissionFavour of AssesseeIssuingAuthority CESTAT AhmedabadJudgment Explanation inserted in Rule 2(l) of

CCR, 2004 by Notification No. 2/2016-CX(NT) is declaratory in nature andeffective retrospectively – Creditadmissible - Appeal allowed

Citation "2016-TIOL-520-CESTAT-AHMM/s ESSAR STEEL INDIA LTDVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX, SURAT-I"

Sr. No. 24RelevantSectionRelevantStatute Cenvat Credit Rules 2004Issue Credit of Telecom Towers & Pre

Fabricated SheltorsSub IssueFavour of RevenueIssuingAuthority CESTAT New Delhi (Larger Bench)Judgment CENVAT Credit on Telecom Towers

& Pre-fabricated shelters - LargerBench says NO.

Citation 2016-TIOL-539-CESTAT-DEL-LBM/s BHARTI INFRATEL LTDVsCOMMISSIONER OF SERVICE TAX,DELHI-IV, GURGAON

Sr. No. 25RelevantSection Section 85RelevantStatute Finance Act 1994Issue Condonation of DelaySub IssueFavour of Revenue

IssuingAuthority CESTAT MadrasJudgment Appellate Commissioner has no

power to condone appeal filed beyondstipulated period under section 85 -


Wrong mentioning of the period oflimitation in the Preamble of theadjudication Order cannot overridestatutory mandate - Appeal rejected.

Citation 2016-TIOL-568-CESTAT-MADM/s SRI BALAJI AGENCYVsCOMMISSIONER OF CENTRALEXCISE AND SERVICE TAX,TRICHY

Sr. No. 26RelevantSectionRelevantStatute Cenvat Credit Rules 2004Issue Cenvat Credit of tax paid under

section 66ASub IssueFavour of AssesseeIssuingAuthority CESTAT MumbaiJudgment There is only one charging section in

service tax i.e. Section 66 & Section66A is merely a deeming provision -since tax was paid u/s 66 of the FA,1994, hence the credit is admissible tothe appellant - though the tax itselfwas not required to be paid before18.04.2006, then in that case, credit isnothing but a refund of the taxerroneously paid - Appeal allowed

Citation 2016-TIOL-576-CESTAT-MUMADITYA BIRLA NUVO LTDVsCOMMISSIONER OF CENTRALEXCISE, LTU MUMBAI

Sr. No. 27RelevantSection Section 65B(44)RelevantStatute Finance Act 1994Issue ServiceSub IssueFavour of AssesseeIssuingAuthority AAR - New DelhiJudgment Excise Department, Government of

NCT of Delhi introduced ExciseSupply Chain informationManagement System (ESCIMS) toautomate and regulate liquor sales inDelhi - Assessee entered into systemdelivery agreement with a customer toprovide for a system comprising of acomplete set of variousmachines/equipments, which wererequired to be installed andcommissioned at site of customer asper ESCIMS - Pursuant to agreement,assessee was also required to providecustomer training and documentationwith respect to system - Customer wasalso required to operate system andinform assessee regarding issuesrelated to system - It was alsomentioned in agreement that overalloperation and maintenance processesshall be responsibility of customer -Assessee stated that activityundertaken by it was a transfer ofright to use goods and same wasexcluded from definition of a serviceunder section 65B(44) - Whether termsof agreement made it clear thatpossession and effecting control ofgoods (system) would be withcustomer - Held, yes - Whether,therefore, transaction in questionqualified as a transfer of right to usegoods and, consequently, be outsidedefinition of service under section65B(44) - Held, yes

Citation [2016] 67 taxmann.com 142 (AAR -New Delhi) SICPA India (P.)Ltd., In re


2.3 Case Laws related to Customs

Sr. No. 1RelevantSectionRelevantStatute

Customs Act 1962 & Customs TariffAct 1975

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

was levied on 2-5-2002 and samebecame ineffective on completion of 6months on 1-11-2002, and (b) finalanti-dumping was levied only on 1-5-2003, then, no anti-dumping dutycould be levied 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 payment wasconfirmed as duty and amount wasappropriated in o-in-o dated01.05.1996 - therefore, there is nodoubt that what has been paid byappellant has been adjusted towardsduty and it is not a mere pre-depositas canvassed by Revenue - furtherwhile passing refund order,adjudicating authority had consideredthe applicablity of unjust enrichmentand only thereafter, granted refundwhich also shows that what wassanctioned as refund was only dutypaid in excess - therefore, question ofpayment of interest on delayed refundwould automatically arise - appellanthad filed refund application on

12.09.1994, therefore, provisions ofsection 27A of CA, 1962 is clearlyattracted and said section provides forpayment of interest on expiry of threemonths from the date of refundapplication till date of grant of refundirrespective of when the order forrefund was actually passed - sinces.27A itself came into force in May1995 and appellant claimed interestfor period from 01.12.1995 onwards,appellant is rightly entitled for interestat applicable rates from 01.12.1995 tillthe date of actual payment of refund -appeal allowed with consequentialrelief

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

Sr. No. 3RelevantSection Section 27RelevantStatute Customs Act 1962Issue Refund - SEZSub IssueFavour of AssesseeIssuingAuthority High Court of GujaratJudgment Assessee, a unit in SEZ, filed claim for

refund of additional duty of customsequal to excise duty (viz.countervailing duty) before CustomsDepartment - Customs Departmentcited Government clarification andreturned refund application as notmaintainable observing that refundclaim would lie before SEZAuthorities only - SEZ Authoritiesalso returned refund claim as notmaintainable on ground that therewere not empowered in this behalfunder SEZ Act/rules - HELD : For anycustoms duty collected, refundapplication would be maintainableunder section 27 of Customs Actbefore specified Customs Authorities -Without amending said provisions, itis not possible for Government toprevent competent customs authorityfrom entertaining and deciding suchrefund application - Hence, impugned


communication/order of Customsauthorities was quashed and refundclaims were restored before customsauthorities

Citation [2016] 66 taxmann.com 271 (Gujarat)Roxul Rockwool Insulation India (P.)Ltd.v.Union of India


Section 3(5) of the Customs Tariff Act,1975, read with sections 25 and 151A

RelevantStatute Customs Act 1962Issue Additional Duty of Customs/Special

CVDSub IssueFavour of AssesseeIssuingAuthority High Court of DelhiJudgment Assessee paid Special CVD using

balance lying in DEPB scrip - Onresale of imported goods, assesseeapplied for refund of Special CVD asper Notification 102/2007-Cus. -Department : (a) initially, grantedrefund by way of re-credit to DEPBscrip relying upon Circular, dated 28-4-2008; and (b) later, stopped grantingeven re-credit, if Special CVD waspaid by using DEPB scrip, relyingupon Circulars, dated 29-12-2012 and29-4-2013 - Assessee argued that asper Notification, refund must begranted in cash and therefore, saidCirculars were contrary to notificationand void - HELD : An amendment tonotification can be made only byissuing another notification - Circularsin question seek to impose anadditional restriction, which is notprovided for in Notification 102/2007-Cus - Hence, impugned circulars areultra vires and invalid - Refund wasallowed in cash

Citation [2016] 66 taxmann.com 253 (Delhi)Allen Diesels India (P.) Ltd.v.Union of India


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