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RECENT
CASE LAWS OF INDIRECT TAX
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1.
Does the
process of washing of ironore for removal of foreign materials from such ore
amount to manufacture?
Commissioner v. Steel Authority of India
Ltd. 2012 (283) E.L.T. A112 (S.C.)
The Supreme Court held that removal of
foreign materials from iron ore, i.e., mining iron ore from mines and then
subjecting to process of crushing, grinding, screening and washing with a view
to remove foreign materials to concentrate such ores do not result in
manufacture of different commercial commodity. No Central excise duty is
leviable on iron ore concentrate.
2.
Whether the
addition and mixing of polymers and additives to base bitumen results in the
manufacture of a new marketable commodity and as such exigible to excise duty?
CCE v. Osnar Chemical Pvt. Ltd. 2012 (276)
E.L.T. 162 (S.C.)
The Supreme Court was of the view that
“manufacture” could be said to have taken place only when there was
transformation of raw materials into a new and different article having a
different identity, characteristic and use. It was a well settled principle that
mere improvement in quality did not amount to manufacture.
3.
Whether the
metal scrap or waste generated during the repair of his worn out
machineries/parts of cement manufacturing plant by a cement manufacturer
amounts to manufacture?
Grasim Industries Ltd. v. UOI 2011 (273) E.L.T.
10 (S.C.) (Refer
Page No: 7)
The generation of metal scrap or waste
during the repair of the worn out machineries/parts of cement manufacturing
plant does not amount to manufacture.
4.
Are the
physician samples excisable goods in view of the fact that they are statutorily
prohibited from being sold?
Medley Pharmaceuticals Ltd. v. CCE & C.,
Daman 2011 (263) E.L.T. 641 (S.C.) (Refer
Page No: 12)
The Court inferred that the physician
samples were excisable goods and were liable to excise duty.
5.
Whether
assembling of the testing equipments for testing the final product in the
factory amounts to manufacture?
Usha Rectifier Corpn. (I) Ltd. v. CCEx., New
Delhi 2011 (263) E.L.T. 655 (S.C.) (Refer
Page No: 12)
The Supreme Court observed that once the
appellant had themselves made admission regarding the development of testing
equipments in their own Balance Sheet, which was further substantiated in the
Director’s report, it could not make contrary submissions later on. Moreover,
assessee’s stand that testing equipments were developed in the factory to avoid
importing of such equipments with a view to save foreign exchange, confirmed
that such equipments were saleable and marketable. Hence, the Apex Court held
that duty was payable on such testing equipments.
6.
Does a
product with short shelf-life satisfy the test of marketability?
Nicholas Piramal India Ltd. v. CCEx., Mumbai
2010 (260) E.L.T. 338 (S.C.) (Refer
Page No: 11)
The Supreme Court ruled that short
shelf-life could not be equated with no shelf-life and would not ipso facto
mean that it could not be marketed. A shelf-life of 2 to 3 days was
sufficiently long enough for a product to be commercially marketed. Shelf-life
of a product would not be a relevant factor to test the marketability of a
product unless it was shown that the product had absolutely no shelf-life or
the shelf-life of the product was such that it was not capable of being brought
or sold during that shelf-life.
7.
Whether the
theoretical possibility of product being sold is sufficient to establish the
marketability of a product?
Bata India Ltd. v. CCE 2010 (252) ELT 492 (SC) (Refer
Page No: 12)
8.
Whether the
machine which is not assimilated in permanent structure would be considered to
be moveable so as to be dutiable under the Central Excise Act?
CCE v. Solid & Correct Engineering Works and
Ors 2010 (252) ELT 481 (SC) (Refer
Page No: 11)
9.
Does the
activity of packing of imported compact discs in a jewel box along with inlay
card amount to manufacture?
CCE v. Sony Music Entertainment (I) Pvt. Ltd.
2010 (249) E.L.T. 341 (Bom.) (Refer
Page No: 7)
10.
Does the process of preparation of tarpaulin made-ups
after cutting and stitching the tarpaulin fabric and fixing the eye-lets amount
to manufacture? (Refer
Page No: 7)
CCE v. Tarpaulin International 2010 (256) E.L.T.
481 (S.C.)
The Apex Court opined that stitching of
tarpaulin sheets and making eyelets did not change basic characteristic of the
raw material and end product. The process did not bring into existence a new
and distinct product with total transformation in the original commodity.
Conversion of tarpaulin into tarpaulin made-ups would not amount to
manufacture.
11.
In case of
a specific entry viz-a-viz a residuary entry, which one should be preferred for
classification purpose?
CCE v. Wockhardt Life Sciences Ltd. 2012 (277)
E.L.T. 299 (S.C.) (Refer
Page No: 24)
12.
Whether the
price used for selling of a product below the cost price for penetration of market
can be considered as transaction value?
CCEx.,
Mumbai v. Fiat India Pvt. Ltd. 2012 (283) E.L.T. 161 (S.C.)
The Fiat India Pvt. Ltd. (Fiat) was the
manufacturer of motor cars. They were selling Fiat UNO model cars below cost
and were making losses in wholesale trade.
The Department disputed that as the extra
commercial consideration was involved in this case an additional consideration
should be added to the price for the purpose of duty. Thus, the Department
invoked Best Judgment Assessment.
Supreme Court opined that this is a case
of extra commercial consideration in fixing of price, and artificially
depressing it. Full commercial cost of manufacturing and selling was not reflected
in the price as it was deliberately kept below the cost of production. Thus,
price could not be considered as the sole consideration for sale. No prudent
business person would continuously suffer huge loss only to penetrate market;
they are expected to act with discretion to seek reasonable income, preserve
capital and, in general, avoid speculative investments.
13.
Whether the
charges towards pre-delivery inspection and after-sale-service recovered by
dealers from buyers of the cars would be included in the assessable value of
cars?
Maruti Suzuki India Ltd. v. CCE 2010 (257)
E.L.T. 226 (Tri. – LB) (Refer
Page No: 56)
14.
In case the
testing is critical to ensure marketability of manufactured product i.e. the manufacture
is not complete without testing; is CENVAT credit of the testing material allowed?
Flex Engineering Ltd. v. Commissioner of Central
Excise, U.P. 2012 (276) E.L.T. 153 (S.C.)
(Refer Page No: 63)
15.
The
assessee claimed the CENVAT credit on the duty paid on capital goods which were
later destroyed by fire. The Insurance Company reimbursed the amount inclusive
of excise duty. Is the CENVAT credit availed by the assessee required to be
reversed?
CCE v. Tata Advanced Materials Ltd. 2011 (271)
E.L.T. 62 (Kar.) (Refer
Page No: 100)
16.
In case of
combo-pack of bought out tooth brush sold alongwith tooth paste manufactured by
assessee; is tooth brush eligible as input under the CENVAT Credit Rules, 2004?
CCus. v. Prime Health Care Products 2011 (272)
E.L.T. 54 (Guj.) (Refer
Page No: 78)
17.
Whether
CENVAT credit can be denied on the ground that the weight of the inputs recorded
on receipt in the premises of the manufacturer of the final products shows a
shortage as compared to the weight recorded in the relevant invoice?
CCE v. Bhuwalka Steel Industries Ltd. 2010 (249)
ELT 218 (Tri-LB) (Refer
Page No: 69)
18.
Whether
penalty can be imposed on the directors of the company for the wrong CENVAT
credit availed by the company?
Ashok Kumar H. Fulwadhya v. UOI 2010 (251)
E.L.T. 336 (Bom.) (Refer
Page No: 78)
19.
Can CENVAT
credit be taken on the basis of private challans?
CCEx. v. Stelko Strips Ltd. 2010 (255) ELT 397
(P & H) (Refer
Page No: 78)
20.
Whether
Additional Director General, Directorate General of Central Excise Intelligence
can be considered a central excise officer for the purpose of issuing SCN?
Raghunath International Ltd. v. Union of India,
2012 (280) E.L.T. 321 (All.)
In this notification, Additional
Director General, Directorate General of Central Excise Intelligence was
specified as Commissioner of Central Excise. Hence, he was fully competent to
issue the impugned show cause notice.
21.
Would the
copy of the order mandatory to be served via registered post or a speed post
also suffice?
Amidev Agro Care Pvt. Ltd. v. Union of India
2012 (279) E.L.T. 353 (Bom.)
As per section 37C(1)(a) of the Central
Excise Act, 1944, it was obligatory on the part of the Revenue, either to
tender a copy of the decision to the assesse or to send it by ‘registered post
with due acknowledgment’ to the assessee or its authorized agent.
22.
If Revenue
accepts judgment of the Commissioner (Appeals) on an issue for one period, can
it be precluded to make an appeal on the same issue for another period?
Commissioner of C. Ex., Mumbai-III v. Tikitar
Industries, 2012 (277) E.L.T. 149 (S.C.)
The Supreme Court observed that since
the Revenue had not questioned the correctness or otherwise of the findings on
the conclusion reached by the first appellate authority, it may not be open for
the Revenue to contend this issue further by issuing the impugned show cause
notices on the same issue for further periods.
23.
Whether
time-limit under section 11A of the Central Excise Act, 1944 is applicable to
recovery of dues under compounded levy scheme?
Hans Steel
Rolling Mill v. CCEx., Chandigarh 2011 (265) E.L.T. 321 (S.C.) (Refer Page No: 111)
24.
Whether
non-disclosure of a statutory requirement under law would amount to suppression
for invoking the larger period of limitation under section 11A?
CC Ex. & C v. Accrapac (India) Pvt.
Ltd. 2010 (257) E.L.T. 84 (Guj.)
Assessee was engaged in manufacture of
various toilet preparations such as after-shave lotion, deo-spray, mouthwash,
skin creams, shampoos, etc. The respondent procured Extra Natural Alcohol (ENA)
from the local market on payment of duty, to which Di-ethyl Phthalate (DEP) is
added so as to denature it and render the same unfit for human consumption.
Denaturing process in the cosmetic industry
was a statutory requirement under the Medicinal & Toilet Preparations
(M&TP) Act. Thus, addition of DEP to ENA to make the same unfit for human
consumption was a statutory requirement. Hence, failure on the part of the
respondent to declare the same could not be held to be suppression as Department,
knowing the fact that the respondent was manufacturing cosmetics, must have the
knowledge of the said requirement. Further, as similarly situated assesses were
not paying duty on denatured ethyl alcohol, the respondent entertained a
reasonable belief that it was not liable to pay excise duty on such product.
25.
Whether
under section 11BB the interest on delayed refund would be payable from the date
of deposit of tax or from the date of receipt of application for refund?
Kanyaka Parameshwari Engineering Ltd. v.
Comm of Cus & Cx 2012 (26) STR 380 (A.P)
Under section 11BB of the Central Excise
Act, 1944, if any duty is not refunded within threemonths from the date of
receipt of application under sub-section (1), the interest shall be paid on
such duty from the date immediately after expiry of three months from the date
of receipt of such application till the date of refund of such duty.
26.
What is the
date of commencement of the period for the purpose of computing interest on
delayed refunds under section 11BB- the date of receipt of application for
refund or date on which the order of refund is made?
Ranbaxy Laboratories Ltd. v. UOI 2011
(273) E.L.T. 3 (SC)
The liability of the revenue to pay
interest under section 11BB commences from the date of expiry of three months
from the date of receipt of application for refund under section 11B(1) and not
on the expiry of the said period from the date on which order of refund is
made.
27.
Can the
excess duty paid by the seller be refunded on the basis of the debit note
issued by the buyer?
CCE v. Techno Rubber Industries Pvt Ltd.
2011 (272) E.L.T. 191 (Kar.)
In the instant case, when the buyer had
refused to pay excess duty claimed and had raised a debit note, the only
inference to be drawn was that the assessee had not received that excess duty
which he had paid to the Department. Consequently, Department was bound to refund
to the assessee the excess duty calculated. Hence, the substantial question of
law raised was answered in favour of the assessee and against the revenue.
28.
Merely
because assessee has sustained loss more than the refund claim, is it
justifiable to hold that it is not a case of unjust enrichment even though the
assessee failed to establish non-inclusion of duty in the cost of production?
CCE v. Gem Properties (P) Ltd. 2010
(257) E.L.T. 222 (Kar.)
The claim of the assessee had been
rejected on the ground that if the application was allowed, it would amount to
unjust enrichment because all the materials sold by the assessee had been inclusive
of the duty. Therefore, the burden had been heavy on the assessee to prove that
while computing the cost of the material it had not included the duty paid by
it.
The Court elucidated that merely because
the assessee had sustained the loss in the relevant year, could not be a ground
to hold it had not been a case of unjust enrichment.
29.
Whether
doctrine of merger is applicable when appeal dismissed on the grounds of
limitation and not on merits?
Raja Mechanical Co. (P) Ltd. v.
Commissioner of C. Ex., Delhi-I, 2012 (279) E.L.T. 481 (S.C.)
The Court observed that if for any
reason an appeal is dismissed on the ground of limitation and not on merits,
that order would not merge with the orders passed by the first appellate
authority. Apex Court opined that the High Court was justified in rejecting the
request made by the assessee for directing the Revenue to state the case and
also the question of law for its consideration and decision. In view of the
above discussion, Supreme Court rejected the appeal.
30.
Whether the
construction of pre-fabricated components at one site to be used at different
inter-connected metro construction sites in Delhi would get covered under
exemption Notification No. 1/2011-C.E.(N.T.) dated 17-2-2011 exempting the
‘goods manufactured at the site of construction for use in construction work at
such site’ ?
Commissioner of Central Excise v.
Rajendra Narayan 2012 (281) E.L.T. 38 (Del.)
The construction was done virtually all
over Delhi and construction sites were interconnected, practically prefabrication
was done on construction site only.
Therefore, it allowed the appeal in the
favour of the respondent-assessee.
31.
Can
re-appreciation of evidence by CESTAT be considered to be rectification of
mistake apparent on record under section 35C(2) of the Central Excise Act,
1944?
CCE v. RDC Concrete (India) Pvt. Ltd.
2011 (270) E.L.T. 625 (S.C.)
The Apex Court elucidated that
re-appreciation of evidence on a debatable point cannot be said to be
rectification of mistake apparent on record. It is a well settled law that a
mistake apparent on record must be an obvious and patent mistake and the
mistake should not be such which can be established by a long drawn process of
reasoning.
The Supreme Court observed that
arguments not accepted earlier during disposal of appeal cannot be accepted
while hearing rectification of mistake application. Submissions made before
Tribunal while arguing rectification of mistake application had also been
advanced before Tribunal when appeal heard at earlier stage. The Apex Court held
that CESTAT had reconsidered its legal view as it concluded differently by
accepting the arguments which it had rejected earlier.
Hence, the Court opined that CESTAT
exceeded its powers under section 35C(2) of the Act. In pursuance of a
rectification application, it cannot re-appreciate the evidence and reconsider
its legal view taken earlier.
32.
Is the
CESTAT order disposing appeal on a totally new ground sustainable?
CCE v. Gujchem Distillers 2011 (270)
E.L.T. 338 (Bom.)
The High Court elucidated that in the
instant case, the CESTAT had disposed of the appeal on a ground which was not
urged by the respondents before the adjudicating authority. Thereby the CESTAT
had disposed of the appeal on a totally new ground which was not laid before
the adjudicating authority and which would entail a finding on facts.
33.
Whether an
assessee can claim the benefit of SSI exemption on the brand name of another
firm if its proprietor is also a partner in such other firm?
Commissioner v. Elex Knitting Machinery
Co. 2012 (283) E.LT. A18 (S.C.)
The Supreme Court held that the
appellant was eligible to claim benefit of the SSI exemption as the proprietor
of Elex Knitting Machinery Co. was one of the partners in Elex Engineering Works.
And hence being the co-owner of the brand name of Elex, he could not be said to
have used the brand name of another person, in the manufacture and clearance of
the goods in his individual capacity.
34.
Whether the
exempted goods on which duty has been paid by mistake by the assessee and
refund thereof has also not been claimed would be excluded while computing
turnover for preceding year for claiming SSI exemption?
Bonanzo Engg. & Chemical P. Ltd. v.
CCEx. 2012 (277) E.L.T. 145 (S.C.)
The Supreme Court opined that SSI exemption
would be allowable to the assessee.
35.
Whether the
clearances of two firms having common brand name, goods being manufactured in
the same factory premises, having common management and accounts etc. can be
clubbed for the purposes of SSI exemption?
CCE v. Deora Engineering Works 2010
(255) ELT 184 (P & H)
The clearance of the common goods under
the same brand name manufactured by both the firms had been rightly clubbed.
36.
Can the
Settlement Commission decline to grant immunity from prosecution and confirming
the demand and imposing the penalty without placing the burden on the
Department to prove the clandestine manufacture and clearances of goods?
Maruthi Tex Print
& Processors P. Ltd. v. C. & C. Ex. Sett.Comm., Chennai 2012(281)
E.L.T. 509 (Mad.)
Settlement Commission should not have
refused the benefit of immunity from prosecution.
37.
Whether a
consolidated return filed by the assessee after obtaining registration, but for
the period prior to obtaining registration, could be treated as a return under
clause (a) of first proviso to section 32E(1)?
Icon Industries v. UOI 2011 (273) E.L.T.
487 (Del.)
It rejected the submission of the
petitioner that filing of consolidated return covering all the past periods
would serve the purpose. Hence, it held that the order passed by the Settlement
Commission was absolutely justifiable.
38.
Is the
Settlement Commission empowered to grant the benefit under the proviso to section
11AC in cases of settlement?
Ashwani Tobacco Co. Pvt. Ltd. v. UOI
2010 (251) E.L.T. 162 (Del.)
Decision
of the case: The Court ruled that benefit under the proviso to section 11AC could
not be granted by the Settlement Commission in cases of settlement.
CUSTOMS
39.
Are the
clearance of goods from DTA to Special Economic Zone chargeable to export duty
under the SEZ Act, 2005 or the Customs Act, 1962?
Tirupati Udyog Ltd. v. UOI 2011 (272) E.L.T. 209
(A.P.) (Refer
Page No: 203)
40.
Whether
remission of duty is permissible under section 23 of the Customs Act, 1962 when
the remission application is filed after the expiry of the warehousing period
(including extended warehousing period)?
CCE v. Decorative Laminates (I) Pvt. Ltd. 2010
(257) E.L.T. 61 (Kar.) (Refer
Page No: 171)
41.
Where a
classification (under a Customs Tariff head) is recognized by the Government in
a notification any point of time, can the same be made applicable in a previous
classification in the absence of any conscious modification in the Tariff?
Keihin Penalfa Ltd. v. Commissioner of
Customs 2012 (278) E.L.T. 578 (S.C.)
42.
Whether
classification of the imported product changes if it undergoes a change after
importation and before being actually used?
Atherton Engineering Co. Pvt. Ltd. v.
UOI 2010 (256) E.L.T. 358 (Cal.)
If the embryo within the egg was
incubated in controlled temperature and under hydration, a larva was born. This
larva did not assume the character of any different product. Its nature and characteristics
were same as the product or organism which was within the egg.
43.
Will the
description of the goods as per the documents submitted along with the Shipping
Bill be a relevant criterion for the purpose of classification, if not
otherwise disputed on the basis of any technical opinion or test? Whether a
separate notice is required to be issued for payment of interest which is
mandatory and automatically applies for recovery of excess drawback?
M/s CPS Textiles P Ltd. v. Joint
Secretary 2010 (255) ELT 228 (Mad.)
Decision of the case: The High Court
held that the description of the goods as per the documents submitted along
with the Shipping Bill would be a relevant criteria for the purpose of
classification, if not otherwise disputed on the basis of any technical opinion
or test.
interpreting section 75A(2) of the
Customs Act, 1962, noted that when the claimant is liable to pay the excess
amount of drawback, he is liable to pay interest as well. The section provides
for payment of interest automatically along with excess drawback. No notice
need be issued separately as the payment of interest become automatic, once it
is held that excess drawback has to be repaid.
44.
Whether
subsequent increase in the market price of the imported goods due to inflation
would lead to increase in customs duty although the contract price between the
parties has not increased accordingly?
Commissioner of Cus., Vishakhapatnam v.
Aggarwal Industries Ltd. 2011 E.L.T. 641 (S.C.)
The commodity involved had volatile
fluctuations in its price in the international market, but having delayed the
shipment; the supplier did not increase the price of the commodity even after the
increase in its price in the international market. There was no allegation of
the supplier and importer being in collusion. Thus, the appeal was allowed in
the favour of the respondent- assessee.
45.
Whether the
issue of the imported goods warehoused in the premises of 100% EOU for
manufacture/production/processing in 100% EOU would amount to clearance for
home consumption?
Paras Fab International v. CCE 2010 (256) E.L.T.
556 (Tri. – LB) (Refer
Page No: 212)
46.
Whether
Revenue can prefer an appeal in case of a consent order?
CCus v. Trilux Electronics 2010 (253) E.L.T. 367
(Kar.)
The High Court held that an appeal
against the consent order cannot be filed by the Revenue.
47.
Whether Chartered
Accountant’s certificate alone is sufficient evidence to rule out the unjust
enrichment under customs?
CCus., Chennai v. BPL Ltd. 2010 (259) E.L.T. 526
(Mad.) (Refer
Page No: 299)
48.
Can a
refund claim be filed under section 27 of the Customs Act, 1962 if the payment
of duty has not been made pursuant to an assessment order?
Aman Medical products Ltd. v. CCus.,
Delhi 2010 (250) ELT 30 (Del.)
The assessee filed a Bill of Entry and
paid the higher duty in ignorance of a notification which allowed him the
payment of duty at a concessional rate. There was no assessment order for being
challenged in the appeal which was passed under erstwhile section 27(1)(i) [now
clause (a) of sub-section (1) of section 27].of the Act. The Revenue contended
that a refund in appeal can be asked for under section 27 of the Customs Act,
1962 only if the payment of duty had been made pursuant to an assessment order.
The High Court held that the refund
claim of the appellant was maintainable under section 27 and the non-filing of
the appeal against the assessed bill of entry did not deprive the appellant to
file its claim for refund under section 27 of the Customs Act, 1962. The refund
claim, in the case on hand, would fall under clause (ii) of erstwhile sub-section
(1) of section 27 [now clause (b) of sub-section (1) of section 27].
49.
Can the
assessee be denied the refund claim only on the basis of contention that he had
produced the attested copy of TR-6 challan* and not the original of the TR-6 challan*?
Narayan Nambiar Meloths v. CCus. 2010
(251) E.L.T. 57 (Ker.)
The Kerela High Court decided that the
petitioner could not be denied the refund claim.
50.
Whether
discharge of liability on indicated value would still make the assesse liable
for confiscation of goods if he has initially made a mis-declaration of the value
thereof?
Wringley India Pvt.Ltd. v. Commr.of
Cus.(Imports), Chennai 2011 (274) E.L.T. 172 (Mad.)
When the Customs Department directed the
appellant to obtain the certificate from the local Chartered Engineer, even at
that time they did not disclose the true value assessed by the load port
Chartered Engineer M/s. S.G.S. Spain. Even after obtaining the valuation
certificate from M/s. S.G.S. India Private Limited, the appellant had
no grievance. In fact the valuation so done by the local Chartered Engineer was
readily accepted by the appellant as evident from the letter issued by them to
the Customs Department and the subsequent payment made by them.
The High Court was thus convinced that
there was clear mis-declaration of value by the appellant and as per section
111(m) of the Customs Act, the Revenue was asked to confiscate the goods so
imported.
51.
Whether the
smuggled goods can be re-exported from the customs area without formally
getting them release from confiscation?
In Re: Hemal K. Shah (Order No.
102/2011-Cus., Dated 14-6-2011 In F.No. 380/82/B/10-RA)
52.
Can the
goods be detained indefinitely without any formal order under section 110 of
the Customs Act, 1962?
S.J. Fabrics Pvt. Ltd. v. UOI 2011 (268) E.L.T.
475 (Cal.) (Refer
Page No: 299)
53.
Is it
mandatory for the Revenue officers to make available the copies of the seized
documents to the person from whose custody such documents were seized?
Manish Lalit Kumar Bavishi v. Addl. DIR.
General, DRI 2011 (272) E.L.T. 42 (Bom.)
The High Court directed the Revenue to
make available the copies of the documents asked for by the assessee which was
seized during the course of the seizure action.
54.
Under what
circumstances can the penalty be imposed in terms of section 112(a)(ii) of the
Customs Act, 1962?
O.T. Enasu v. UOI 2011 (272) E.L.T. 51 (Ker.) (Refer
Page No: 299)
55.
Can
separate penalty under section 112 of the Customs Act be imposed on the partners
when the same has already been imposed on partnership firm? (Refer Page No: 299)
Textoplast Industries v. Additional
Commissioner of Customs 2011 (272) E.L.T. 513 (Bom.)
The High Court held that for the purpose
of imposing penalty, the adjudicating authority under Customs Act, 1962 might,
in an appropriate case, impose a penalty both upon a partnership firm as well
as on its partners.
56.
Is the want
of evidence from foreign supplier enough to cancel the confiscation order of
goods undervalued?
CCus. v. Jaya Singh Vijaya Jhaveri 2010
(251) E.L.T. 38 (Ker.)
Decision of the case: In the instant
case, the High Court held that in a case of confiscation of goods because of
their under valuation, Tribunal could not cancel the confiscation order for the
want of evidence from the foreign supplier. The Court considered it be
illogical that a person who was a party to undervaluation would give evidence
to the Department to prove the case that the invoice raised by him on the respondent
was a bogus one and that they had received underhand payment of the differential
price. Resultantly, the Court upheld the confiscation order.
57.
Whether the
benefit of exemption meant for imported goods can also be given to the smuggled
goods?
CCus. (Prev.), Mumbai v. M. Ambalal
& Co. 2010 (260) E.L.T. 487 (SC) (Refer
Page No: 148)
58.
In case of
a Settlement Commission's order, can the assessee be permitted to accept what
is favourable to them and reject what is not?
Sanghvi Reconditioners Pvt. Ltd. V. UOI
2010 (251) ELT 3 (SC)
Decision
of the case: The Apex Court held that the application under section 127B of the
Customs Act, 1962 is maintainable only if the duty liability is disclosed. The disclosure
contemplated is in the nature of voluntary disclosure of concealed additional customs
duty. The Court further opined that having opted to get their customs duty liability
settled by the Settlement Commission, the appellant could not be permitted to dissect
the Settlement Commission's order with a view to accept what is
favourable to them and reject what is
not.
59.
Can the
order of the Settlement Commission be considered to be a judicial proceeding?
UOI v. East and West Shipping Agency
2010 (253) E.L.T. 12 (Bom.)
Decision
of the case: The High Court observed that as per section 127M of the Customs Act, 1962,
the order passed by the Settlement Commissioner is in judicial proceedings and
it is a judicial order. Further, the appellants had not challenged the said
order.
SERVICE TAX
60.
In case
where rooms have been rented out by Municipality, can it pass the burden of
service tax to the service receivers i.e. tenants?
Kishore K.S. v. Cherthala Municipality
2011 (24) S.T.R. 538 (Ker.)
Facts of the case: The petitioners
entered into agreements with the respondent-Municipality and had taken rooms on
rent from it. They were called upon to pay service tax.
It was held that Municipality can pass
on the burden of service tax to the tenants.
61.
Were
services provided to the pilgrims taxable under short term accommodation
service?
Tirumala Tirupati Devasthanams, Tirupati
V. Superintendent of Customs, Central Excise,
Service Tax (2012-TIOL-97-HC-AP-ST)
Facts
of the Case: Tirumala Tirupati Devasthanams, Tirupati was running guest houses for
the pilgrims. The department issued S.C.N stating that the assesse were liable
to get service tax registration under “short term accommodation service” and
thus liable to pay service tax. The assessee, on the other hand, submitted that
they were not club or any other
association and thus, were not liable to get registered under service tax.
Point
of Dispute: Assessee contested that since they were running guest houses without
any profit motive hence they were not liable to pay service tax.
Decision
of the Case: The Andhra Pradesh High Court held that the petitioner was religious
and charitable institution and was running guest houses by whatever name called,
whether it was a shelter for pilgrims or any other name for a considerable time
and thus was liable to get itself registered under ‘Short term accommodation
service’ and pay service tax on the same.
62.
Can a
software be treated as goods and if so, whether its supply to a customer as per
an "End User Licence Agreement" (EULA) would be treated as sale or
service?
Infotech Software Dealers Association
(ISODA) v. Union of India 2010 (20) STR 289 (Mad.)
*Note: Services
of development, design, programming, customisation, adaptation, upgradation,
enhancement, implementation of information technology software have now been
included in the declared service under section 66E.
63.
Whether
service tax is chargeable on the buffer subsidy provided by the Government for
storage of free sale sugar, under the category of `storage and warehousing
services'?
CCE v. Nahar Industrial Enterprises Ltd.
2010 (19) STR 166 (P & H)
The assessee was engaged in the manufacture
of sugar. The Central Government directed him to maintain buffer stock of free
sale sugar for the specified period. In order to compensate the assessee, the
Government of India extended buffer subsidy towards storage, interest and
insurance charges for the said buffer stock of sugar.
Revenue issued a show cause notice to
the assessee raising the demand of service tax alleging that amount received by
the assessee as buffer subsidy was for the services covered within the
definition of `storage and warehousing services’.
The storage of specific quantity of free
sale sugar could not be treated as providing `storage and warehousing' services
to the Government of India.
64.
Whether the
penalty is payable even when service tax and interest has been paid before
issue of show cause notice?
CCE & ST v. Adecco Flexione
Workforce Solutions Ltd. 2012 (26) S.T.R 3 (Kar)
The authorities had no authority to
initiate proceedings for recovery of penalty under section 76 of the Act when the
tax payer paid service tax along with interest for delayed payments promptly.
65.
Whether the
service tax liability created under law can be shifted by a clause entered in
the contract?
Rashtriya Ispat Nigam Ltd. v. Dewan
Chand Ram Saran 2012 (26) S.T.R. 289 (S.C.)
With regard to the submission of
shifting of tax liability, Supreme Court held that service tax is indirect tax
which may be passed on. Thus, assessee can contract to shift their liability.
it is irrelevant to determine rights and liabilities between service provider
and recipient as agreed in contract between them. There is nothing in law to prevent
them from entering into agreement regarding burden of tax arising under
contract between them.
Note: In present
context, liability to pay service tax does not lie on service recipient under
clearing and forwarding agent’s services. However, the principle derived in the
above judgment that ‘service tax liability can be shifted by one party on to
the other by way of contractual clause’ still holds good.
66.
Will
service tax paid mistakenly arouse service tax liability?
CCE (A) v. KVR Construction 2012 (26)
STR 195 (Kar.)
It was held that refund of an amount
mistakenly paid as service tax could not be rejected on ground of limitation
under section 11B of the Central Excise Act, 1944.
67.
Is the
service tax and excise liability mutually exclusive?
Commissioner of Service Tax v. Lincoln
Helios (India) Ltd. 2011 (23) S.T.R. 112 (Kar.)
Facts
of the case: The assessee undertook not only manufacture and sale of its products,
but also erected and commissioned the finished products. The customer was charged
for the services rendered as well as the value of the manufactured products.
The assessee had paid the excise duty on whole value including that for
services, but did not pay the service tax on the value of services on the
ground that there could not be levy of tax under two parliamentary
legislations.
Decision
of the case: The High Court held that the excise duty is levied on the aspect of manufacture
and service tax is levied on the aspect of services rendered. Hence, it would
not amount to payment of tax twice and the assessee would be liable to pay service
tax on the value of services.
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