CA Manoj Batra Amendments Nov 2011 Summary

8/3/2019 CA Manoj Batra Amendments Nov 2011 Summary

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Summary of amendment for Nov 11

For Branded Readymade Garments

1. RULE-4(1A)- who will pay duty- RMS/BO (but jobworker may be authorised )2. RuLE-12D-CER 2002 Provisions apply to RMS/BO3. RULE-9- Registration by RMS/BO4. SSI Exemption-8/2003-AVAILABLE

5. Sec 3(2)-Tariff value-45% of RSP6. R- 2(naa)-CCR 04- Manufacturer includes r- 4(1A) person (Means RMS/BO Can take CCR)7. R-5 CER 02- CL. STOCK ON 28/2/11- When cleared liable to duty.

On 130 items- 1%duty

Rule 2(d)- 1% duty goods- exempted goodsRule 6 (1) CCR not allowed of IP/ISRule 6 (4) CCR not allowed of CGRule 3(4) - If he is also manufacturing goods attracting normal duty (e.g 10%)- CCR of IP related to those noallowed to be utilised for payment of 1%-(Proviso To R-3(1) - Buyer Of 1% Duty Goods Shall Not Take Credit Of 1% EdQUARTERLY RETURN- within 10 days after close of qtr

Cir- 937/27/2010&

940/01/2011

If the FP is exempt under 2 notification1. 100% Exempt without any condition.

2. 4% duty payable with availability of CCR of IPThen as per Sec 5A(1A), full exemption notification mandatory and any anount charged representing duty onexempted Final Product will have to be deposited u/s 11D . Further if the buyer has taken credit on such duwill be recoverable u/r 14 of CCR 2004.

Cir 038/28/10 Quantity discount not deductible while calculating value based on MRP basis.CCR 2004

Rule 2- cap goods Treated as Capital goods Even If used outside factory for generation of electricity for captive use withinfactory

R- 2- input Means- all goods used within factoryAny goods + accessory + goods used for Free warranty if there value included in FPAll goods used for generation of electricity or steam for captive useAll goods used for providing output service

Excludes- 1) any goods for const of buildg or support of cap goods ( but treated as IP-forport/Airport/commercial const/ Res complex/ works contract service)2) Cap goods ( when cap goods used as part or component then treated as input)3) Motor vehicle, any goods for personal use, any goods which have no relationship

R- 2 input service Used by provider of taxable service or used by manufacturer directly or indirectly and includes ------------------------ excludes

1. Architect/port/Airport/ commercial const/ Res complex/ works contract service when used for for conof buildg or support of cap goods ( except when they used for providing these services)

2. General Ins/rent a cab/ service station/ supply of tangible goods when they are for motor vehicle ( S. Providers who are allowed motor vehicle as capital goods can take credit of these services

3. Services which are for personal use of employee.Proviso to Rule 3 CCR of 85% of CVD on ships, boats and other floating structure for breaking up

Cir 933/23/10 When EOU clear to Depot in DTA than Value as per Rule 4 to 9 of import valuation rules sequentially .Proviso rule 3(5) No payment if the input removed outside the factory for providing free warranty for final product.Rule 3(5B) Payment of amount related to credit even if input or cap goods partially written off.

Rule 4(2) CCR allowed on CG even if recd outside factory when used outside factory for generation of electricity forcaptive use within factory

Rule 6 Refer chart made during class6(3B) Banking Co/ NBFC/ shall pay monthly 50% of credit availed on IP/IS

6(3C) Life ins/ ULIP Service provider shall pay monthly 50% of credit availed on IP/IS


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R- 6(5) deleted Earlier 100 % CCR allowed on 16 services. Now proportionate CCR allowed for which either maintain separaA/cs or pay amt equal to 5%

R- 6(6A) The provider of Output service to SEZ unit/Developer can take CCRR- 9(1) CCR allowed on supplementary invoice issued by service provider.R-9(7) SSI will file return with in 10 days form end of quarter.

Cir 942/3/11 Interest will be recovered under Rule 14 of CCR 2004 on Cenvat Credit wrongly availed even if not utilized [Also Affirmed in -Ind-Swift Laboratories Ltd.

the interest on irregular credit under rule 14 of the CENVAT Credit Rules, 2004 arises from date

availing such credit

8/2003 Packaging Material Include Label of all kindsRule 7/8/19 of CER02 & sec 11AB

Interest @13 % p.a has been changed to 18% p.a

Rule 9 CER 2002 If CBS/CAS maintained of goods produced by different mines and took registration of that premises then minare exempt from registration.If ER-1 to ER- 8 not filed then penalty can be imposed upto Rs 5000.

classification PAPER LICENSE OF SOFTWARE classifiable under49070030 - Documents of title conveying the right touse IT softwarePUK CARDS - classifiable under 4911 Other printed matter

Package software- ifaffixation of MRP mandatory- [Media + license]-excise dutyAffixation of MRP not mandatory - EXCISE DUTY on AV U/S 4 excluding value of right to use and SERVICETax on value of right to use

DDB SHALL NOT BERECOVERED R-16A

Sale proceed compensated by ECGC AndRBI- waive off the requirement of realisation of proceeds on merit AndExporter produces a certificate from concerned foreign mission about the fact of non- recovery

R- 6(3) Limit of self adjustment of Rs. 1,00,000 has been increased to Rs. 2,00,000.

6(6A) SERVICE TAX self assessed but not full or partially PAID then Service tax can be recovered without serviceSCN and Demand order u/s 73

6(7A) If the whole premium is not towards risk cover in life then insurer has the option to pay(i) tax @ 10 % on the gross premium charged reduced by the amount of investment or savings on behalf ofpolicyholder, if such amount is intimated to policy holder or(ii) in all other cases- 1.5 %of gross premium as tax.

A foreign exchange broker, authorized dealer in foreign exchange or authorized money changer shall have thoption to pay tax at following rate.

Amount of currency exchanged Rate of service tax1. Upto Rs. 1,00,000 0.1 %, minimum Rs 25.

2. Exceeding Rs. 1,00,000 upto 10 Lakhs Rs. 100 + 0.05%

3. Exceeding Rs.10 Lakhs Rs. 550 + 0.01%Maximum Rs 5,000 .

Rule 2B of ServiceTax (Determinationof value) Rules, 2006

Value of Money Changing Services shall be determined as under:

(a) For a currency, when exchanged from, or to Indian Rupees

Difference between buying rate or selling and RBI Reference rate for that currency at that tmultiplied by total units of currency.

(b) Where RBI reference rate is not available

1% of gross amount of Indian Rupees provided or received


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(c) Where neither of the currencies exchanged is Indian Rupees

1% of lower of the amount of two foreign currencies after converting them in to Indian currency on day at the reference rate provided by the RBI.

Rule 3 Export of Service Rules, 2005 & of Taxation of services (provided from outside India and receive

India) Rules, 2006Technical testing and analysis service and certain other services shifted from performance categoryResiduary category

SEZ exemption Refer chart

131/13/2010 Hire charges collected for Electricity meters is exempt

137/6/2011 Visa application charges1.not covered in Business Auxiliary Service- because not acting as agent of Foreign Embassay. [ i.

service not provided on behalf or client]2.not covered in Business support Service- because individual directly making payment and that ca

be considered as support service for business or commerce.3.not covered in Manpower Recruitment Service- because doesnt act as agent of foreign employe

for recruitment.

4.covered in bus support- if payment by business entitycovered in Manpower Recruitment Service- if act as agent of foreign employer for recruitme

134/3/2011 If service tax exempt then EC & SHEC ALSO EXEMPT.TAXABLE SERVICES

Travel by Air Service taxin business class (Domestic & International)- 10%in economy class (Domestic)- maximum- 150in economy class (International)- maximum- 750

Transport of Coastal goods or Transport of goods through national or Inland waterwaysAbatement of25% of the gross amount charged shall be allowed.

PORT & AIRPORT [Construction, repair, alteration and renovation of wharves quays, docks, stages, jetties, piers and railwayswithin port & Service provided wholly within the airport

ERECTION &COMMISSIONING

Shifting of overhead cables/ wires for any reasons

such as widening/renovation of roads

Not a taxable service under any clause of sub-sectio

section 65 of the Finance Act, 1994.

Laying of cables under or alongside roads Not a taxable service under any clause of sub-sectio

section 65 of the Finance Act, 1994

Laying of electric cables between grids/sub-stations/

transformer stations en route



Installation of transformer/ substations undertaken

independently

Taxable service, namely Erection, commissioning or

services [section 65(105)(zzd)].

Laying of electric cables up to distribution point of

residential or commercial localities/ complexes



Laying of electric cables beyond the distribution point Taxable service, namely commercial or industrial co

construction of complex service [section 65(105)(zz


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of residential or commercial localities/complexes. the case may be.

Installation of street lights, traffic lights flood lights, or

other electrical and electronic appliances/devices or

providing electric connections to them

Taxable service, namely Erection, commissioning or

services [section 65(105)(zzd)].

Railway electrification, electrification along the

railway track


section 65 of the Finance Act, 1994

TELECOMMUNICATION

Explanation- for the telecommunication service, the value of taxable service shall be the gross amount paidthe person to whom telecom service is provided by the telegraph authority.

CONST OFCOMPLEX

Services rendered for carrying out construction services under Jawaharlal Nehru Urban Renewable Miss(JNURM) & Rajiv Awaas Yojna.

Works ContractServices

Services rendered for carrying out construction services under Jawaharlal Nehru Urban Renewable Miss(JNURM) & Rajiv Awaas Yojna.The CENVAT credit of tax paid on taxable services as referred to underErection, commissioning & installation service, commercial or industrial construction service and

construction of complex serviceshall be available only to the extent of 40% of the service tax paid when such tax has been paid on thfull value of the service after availing CENVAT credit on inputs..

BANKING &FINANCIAL

CG exempts the taxable service, provided to a Scheduled bank, by any other Scheduled bank, any baincluding a bank located outside India, or money changer, by any other bank or money changerrelation to inter-bank transactions of purchase and sale of foreign currency, from the whole of the service tax

Transport ofgoods by Air

Exempted to the extent air freight is included in the value of goods determined u/s 14 of the CustoAct

Transport ofgoods by Air/

Rail/ GTA

Services provided to a person located in India when the goods are transported from a place locaoutside India to a final destination which is also outside India.

MGT,MAINTENANCEOR REPAIR

CG exempts the taxable service, provided to any person by any other person in relation to managemmaintenance or repair of roads,bridges, tunnels, dams, airports, railways and transport terminals fromwhole of the service tax

126/08/2010 Underwriting commission received by the Primary Dealers for the auction of Government Securitiesliable to service tax

133/2/2011- it is clarified that customized group JPAP insurance schemes floated by various insurance companies as perthe specifications of State Governments concerned, to extend risk cover to target populations, and to fulfill thprescribed rural or social sector obligation, are covered by the subject service tax exemption.

132/1/2011 Specialised cleaning services of containers used for export goods are exempt from the service tax by virtuan exemption notification.

Basic concepts


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Clean energy cess[CEC]

Rs 50 per tonne levied on raw coal, raw lignite and raw peatNo EC,SHEC will be leviable.CEC exempt on goods produced or extracted as per traditional and customary rights enjoyed by localtribals in the state of Meghalya without any license or leaseNo CCR of CEC, For payment of CEC, CCR cant be utilised, CEC only paid through PLA.

Cir 927/17/2010 Pickling and oiling of metals as preparatory steps not manufacture.

VALUATIONCir 936/26/2010 Pre-delivery Inspection charges and After-sale Service includible in Assessable value

Rule 5 - Actual/average cost of transportation deductible except from factory to branch.Forward / return journey both transport deductible.Profit on transport includible, in case transportation charged more in invoice than actual incurred.

Accurate meters Ltd- if deemed delivery at factory gate as sec 39 of sale of goods act, then transport is irrelevant for TV.

Bolting Cloth/screens/Silicon cylinders which carry design fitted on machine used in ceramic tileindustry for priming of design on tiles are part/ component of machinery- CCR allowed.

Cenvat creditCapital goods forspecified serviceproviders

Dumper, tippers & its component, spares and accessories forSite formation service and miningservice are capital goods. Similarly Motor vehicle and its component, spares and accessories arecapital goods for specified services

No.267/11/2010- 1. No CCR on cement, angles, channels, CTD or TMT bars and other items used for constructionof factory shed, building or laying of foundation or making of structures for support of capitalgoods because cannot be treated as either inputs for capital goods or as inputs in relation tothe final products

2. CCR allowed on welding electrodes.Cir- 930/20/2010

if FP destroyed (i.e Bottled Beverage),

Remission of duty on FP claimed under rule 21

0f CER 2002

Reverse CCR on IP as per rule 3(5C) of CCR

2004

If the input (bottle) is written off by the assessee

as destroyed,

Reverse CCR on IP as per Rule 3(5B) of CCR

2004

Rule 6(6) CCr can be taken even if FP is exempt, no requirement to maintain separate accounts, no need to pay5% of value of exempted goods, when the goods are supplied for the use of foreign diplomatic missionsor consular missions or career consular offices or diplomatic agents.

Rule 9(8) first/second stage dealer submit Quarterly return electronically.

Rule 9A I(i) nformation relating to principal inputs - ER-5(ii) Monthly return of receipt and consumption of each of principal inputs - ER-6Filed electronically if duty paid Rs 10 lakh or more in Previous year

Rule 12(2) ER-4 shall be filed electronically if the manufacturer of final products has paid total excise duty ofRs.10,00,000 or more in P.Y

Rule 17 100% EOU shall file monthly return (ER-2) electronically if duty paid 10 lakh or more in Previous year.

Note- E- Filing of Return mandatory (ER-1 to ER-6 ) if in P.Y duty paid 10 lakh (PLA+ CCR)Rule 19 that export of excisable goods which are chargeable to nil rate of duty or are wholly exempted

from payment of duty, other than goods cleared by a hundred per cent export-orientedundertaking, shall not be allowed under this notification;


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Sec 33 Power of adjudication Amt of duty involvedSuperintendent upto 1 lakh ( excluding ROD/Value and cases involving EPL AC/DC upto 5 lakh except where superintendent empowered to adjudicateJC above 5 lakh upto 50 lakh

Addl. Commisioner above 20 lakh and upto 50 lakh

Commissioner without limitSec 37(2)(xiiia) Central Government empowered to make rules for withdrawal of facilities/imposition of

restrictions on CENVAT credit

Explanation to sec11A (2B)

IF duty short paid and interest thereon is paid under section 11A(2B) before service of SCN. THENpenalty under any of the provisions of CEA 1944 or the rules ( CER 2002) SHALL NOT be imposed

1.In excise, applications for the settlement of cases can be made where an assessee admits short-levyfor goods in respect of which he has not maintained proper records in his daily stock register(i.e. cases of misdeclaration, clandestine removal etc.).

In Custom applications for the settlement of cases can be made where assessee admits short

levy in respect of the goods which were not included in the Bill of entry or Shipping Bill, as thecase may be.

2.EXTENSION of order by the Settlement Commission for a further period by 3 months.3.Now the assessee can apply for settlement more than oncehe CANT apply for settlement under section 32E in relation to any other matter if1. an order of settlement passed for the imposition of a penalty On the ground of

concealment of particulars of his duty liability; or2. after the passing of an order of settlement in relation to a case, such person is convicted of

any offence under this Act in relation to that case; or3. the case of such person is sent back to the Central Excise Officerhaving jurisdiction by the

Settlement Commission

[Circular No.

929/19/2010

Polyester Staple Fibre manufactured out of PET scrap and waste bottles is a textile material

classifiable under Section XI of the Central Excise Tariff -

Classification of TEA fortified with Vitamins will be classified under chapter 21

Cir 924/14/2010 Rice parboiling machinery and drier which are essentially for use in conjunction with the ricemill will be classified under heading 8437.

NN. 33/2010 Goods supplied to UN or an international organisation exempted from additional and specialadditional duty of excise

Goods notified under Medicinal and Toilet Preparations (Excise Duties) Act, 1955

Assessable value for CVD = MRP less abatement

Circular 34/2010- manufacturers in textile sector will not be allowed refund of special CVDCir 933/23/2010 goods cleared from an 100% Export Oriented Undertaking to a depot which are subsequently sold in

DTA will be valued as per Rule 3 to 9 of imported goods valuation Rules 2007

CircularNo.11/2010

Sec 14 of CA 1962- value of the imported goods shall be the transaction value of goods.the price at which the imported goods are sold after warehousing them in India does not qualify to bethe transaction value as per section 14.


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rule 5 of the Re-export of ImportedGoods (Drawbackof CustomsDuties) Rules,1995

claim for drawback shall be filed within 3 months from the date on which an order permitting clearanceand loading of goods for exportationthe said period of 3 months may be extended by a period of three months by AC/DC on an applicationaccompanied with a fees of 1% of the FOB value of exports or Rs. 1000/- whichever is less and afurther period of 6 months by Commissioner on an application accompanied with a fees of 2% of theFOB value or Rs. 2000/- whichever is less.

rules 6, 7, 15Customs, CentralExcise Duties andService TaxDrawback Rules,1995

The time period for the following has been extendedfrom 60 days to 3 months:(a) making an application to the Commissioner of Central Excise/Commissioner of Customs andCentral Excise for determination of the amount or rate of drawback [Rule 6].(b) making an application to the Commissioner of Central Excise/Commissioner of Customs andCentral Excise for determination of the amount or rate of drawback where the amount or rate ofdrawback is low(i.e Where the exporter finds that the drawback rate fixed under Rule 3 or Rule 4is less than 4/5th of the duty or taxes paid on inputs or input services ) [Rule 7].

Authority for extension Period of extension Fees payable with application for

extension

Assistant or Deputy Commissioner Further 9 months 1% of the FOB value of exports or Rs.1000/- whichever is less

commissioner Further 6 months 2% of the FOB value or Rs. 2000/-

whichever is less

RULE 16A of DDBRules 1995

Where sale proceeds are realized by exporter and duty drawback has been recovered from him , the

exporter produce evidence of realization with in 1 year[3 months] from date of such realization.

The period may be extended by the Commissioner by 9 months subject to the condition that the

amount has been realized on a date covered by the extensions of time limit given by the RBI for

realizing export proceeds. Application fee equivalent to 1% of the FOB value of exports or Rs. 1000/-,

whichever is less, shall be payable for applying for grant of extension by the Commissioner.

Rule 3 of theBaggage Rules,1998

Rule 3 shall apply in case of persons returning from Hong Kong. As Hong Kong is a separate CustomsTerritory from China.

Circular No.125/7/2010-

Services provided by state governments under Centrally Sponsored Schemes (CSS) not leviableto service tax. Grant cannot be presumed as a consideration for providing a service.

N.No. 36/2010 Exemption to advances received prior to 1-7-2010 towards 8 new services introduced and specifiedexisting services expanded by Finance Act, 2010 are exempt to the extent of amount of advancepayment received before 1-7-2010 in respect of them.However any advance payment relating to retrospective amendments in Commercial Training &Coaching Centre and Renting of immovable property shall not be so exempt.

NN 11/2010 CG exempts the taxable service provided to any person, by any other person for transmission ofelectricity, from

NN- 32/2010 CG exempts the taxable service provided to any person, by a distribution licencee, adistribution franchisee, or any other person by whatever name called, authorized to distributepower under the Electricity Act, 2003(36 of 2003), for distribution of electricity,

CBECCLARIFICATION

Service tax on commercial training and coaching clarification whether donation is consideration - NO


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Rule 6(7c)-promotion ofLottery ticket-optional S. TaxRate

Rs 6000/- on every Rs 10 Lakh (or part of Rs 10

Lakh) of aggregate face value of lottery tickets

printed by the organising State for a draw

If the lottery or lottery scheme is one where the

guaranteed prize payout is more than 80%

Rs 9000/- on every Rs 10 Lakh (or part of Rs 10

Lakh) of aggregate face value of lottery ticketsprinted by the organising State for a draw

If the lottery or lottery scheme is one where the

guaranteed prize payout is less than 80%

Rule 4A of ServiceTax Rules, 1994

Provided also that incase the provider of taxable service is aircraft operator providing the service ofair transport of passenger, an invoice, a bill or as the case may be, challan shall include ticket in anyform by whatever name called and whether or not containing registration number of the service

provider, classification of the service received and address of the service receiver but containing otherinformation in such documents as required under this sub-rule..

Old amendment

Cir- 910/30/2009 the activity of transferring the goods from tankers into smaller drums cannot be said to be deemedmanufacture because the tankers cannot be termed as bulk packs.

Cir- 915/5/2010 the value for payment of excise duty for physician sample ( Free Sample ) would be the valuedetermined under Section 4A for the similar goods

Sec 3A Chewing tobacco, jarda scented tobacco and branded unmanufactured tobacco notified undersection 3A- duty paid on basis of production capacity

Cir 911/1/2010 Regularisation of CCR taken

If the assessee has already paid duty, and in a situation where there is no manufacture as held by theCourts subsequently, and facts of the case are covered by the provisions of Section 5B of the CentralExcise Act, 1944, the assessee is at liberty to approach the Central Govt. for issue of appropriatenotification for regularization of the Cenvat credit availed.

Rule 4(2) SSI can take Full (100%) CENVAT credit on capital goods in one installment in the year ofreceipt of such capital goods in the factory.For computer & its peripherals if removed after useshall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the

for each quarter in the first year @ 10%

for each quarter in the second year @ 8%

for each quarter in the third year @5%

for each quarter in the fourth and fifth year @1%

for capital goods, other than computers and computer peripherals @ 2.5% for each quarter.]

Cbec clarification if the capital goods, on which Cenvat credit has been taken, are cleared as waste and scrap, even aftera period of 10 years, an amount equal to the duty leviable on the transaction value for such capitalgoods cleared as waste

Rule 4(5) CENVAT credit is allowed, in respect of jigs, fixtures, moulds and dies sent by manufacturer of final


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products to:-another manufacturer for the production of goods, or

Cir 907/27/09- Input Written off fully- pay amt equal to CCR takenWIP Written off fully if not considered as manufactured goods - pay amt equal to CCR taken

Finished goods Written off fully, duty remitted u/r 21 CER 02- Reverse CCR

WIP Written off fully if considered as manufactured goods - duty remitted u/r 21 CER 02- ReverseCCR

Rule 6(6) CCR allowed on all the excisable goods exempt from customs duty when imported in India and aresupplied:-(a) against International Competitive Bidding; or(b) to a power project from which power supply has been tied up through tariff based competitivebidding; or(c) to a power project awarded to a developer through tariff based competitive bidding.

Rule 5 IP/IS (C. GOODS)USED in ori.r.t FP/OS exported

Principal input provides that if a manufacturer, first stage or second stage dealer, or an exporter is found to beknowingly involved in any of the specified contraventions, certain facilities would be withdrawn orcertain restrictions would be imposed on them.

Rule 15 Other than fraud- Confiscation and penalty (duty or 2000) w.i greaterUnder Excise- Fraud- additional penalty equal to duty for manufacturer u/s 11ACUnder S. Tax- Fraud- additional penalty equal to 100% to 200% of service tax for service provider u/s78

Fibre Foils Ltd- penalty imposable u/r 15 cant be reduced.Green Alloys Ltd input cant be confiscated, If entered in stock register but not accounted in computer sheet.Ashok Kumar H. Fulwadhya penalty cant be imposed on directors, where CCR wrongly availed by company.

Small Scale Industry

NN- 8/03 Relaxation from brand name restriction under the SSI exemption scheme extendedto plastic containers and plastic bottles used as packing materials on 27 feb 2010 by NN 4/2010and then amendment made on 30th april 2010 and now word only packing material mentionedmeaning thereby every type of packing material eligible for exemption

CER 2002

Rule 11 pre-authentication of invoices is not required now.

Rule 8 1. E-payment mandatory if otal duty paid of Rs. 10 lakh or more (including the amount of duty paidby utilisation of CENVAT credit) in the preceding financial year.

2. Now SSI can PAY DUTY ON QUARTERLY BASIS RATHER THAN ON MONTHLY BASIS upto 5thof next Quarter. For the Quarter of March 31st march

Rule 12 if E- payment mandatory then ER- 1 ( For Non- SSI) , ER- 3 for SSI also E- Filing Mandatory

Rule 12(2A) Annual installed capacity statement Exempt for assessee who manufactures

biris, manufactured without the aid of machines falling under tariff item 2403 10 31

matches manufactured without the aid of power falling under heading 3605

reinforced cement concrete pipes falling under heading 6810

Rule 16 Indian Aluminum Co Ltd (2009)(Kerla)- there is no requirement for manufacturer to clear the


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returned goods to same party who returned the goodsCircular 267/44/2009- dtd 25-11-091. CCR of duty paid on returned final product can be taken on basis of self-invoice issued at time

of initial removal of final productgoods are sold on 1-7-2010 of value of Rs 100000 by Raja by which duty payable is 10300, which arereturend by customer on 6-7-2010. Duty will be paid by 5-8-2010, whether CCR can be taken on 6-7-

2010 and on basis of which document.- yesRule 18 Rebate under Rule 18 of CER 2002 is admissible when the goods are supplied from unit in DTA to

SEZSec 9A Offences non cognisable i.e no arrest without warrant

Compounding of offences- Any offence can be compounded by application to Chief CCENo compounding in following cases1. If compounded allowed once to certain offences of sec 92. Any person who accused of offence under CEA 1944 & which is also offence in Narcotic Drugs

Act.3. Allowed to compound once for Value exceeding 1 crore4. Who is convicted by court under CEA 1944 on or after 30th dec 2005

Rule 24A Return of records seized, if not relied upon- then return within 30 days of issue of SCN (or expiry of period

permissible for issue of SCN)Note- CCE has power to further retain by reasons recording in writing and CEO intimate toassessee for such further retention

CCE (A) cant remand the case back to Central excise officer

Cir- 889/09/2009 No discretion to reduce the mandatory penalty under section 11AC even though the duty paidbefore the issuance of show cause notice

Cir No.898/18/09

Benefit of reduced penalty under provisos to section 11AC not available at the appeal stage

Cir 7/2010 Recovery of drawback amount on the portion of the FOB value of export not realized by theexporter but compensated by ECGC -

NN- 14/2010 Any service provided for all activities pertaining to construction of installations, structures and vessels forthe purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.Or services provides to such installations in continental shelf and EEZ liable to service tax

Rule 6 STR 1994 E-payment mandatory if paid the total service tax of Rs. 10 lakh or more (including the amount of servicetax paid by utilisation of CENVAT credit) in the preceding financial year.

Rule 7 If E-payment mandatory then E-filing of return also mandatory.Rule 6(2)(v) - value of Taxable service not include

the taxes levied by any Government on any passenger travelling by air, if shown separately on

the ticket, or the invoice for such ticket, issued to the passenger.

NN- 18/09- No service tax on certification by Central Board of Film Certification because it is a statutoryfunction

NN-11/2010 CG exempts the taxable service provided to any person, by any other person for transmission ofelectricity,

Export & importRules forservice tax

export & import rules amended in respect of following1. India definition amended2. CA/CS/CWA category changed from performance category to Residuary category


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Jai Bhagwan oil andFlour Mills

Production of mustard oil and oil cake from mustard seeds amount to manufacture

TARPAULININTERNATIONAL

tarpaulin made-ups which are prepared after cutting and stitching the tarpaulin fabric andfixing the eye-lets would NOT manufacture

Sony MusicEntertainment (I) PvtLtd.

Importing recorded audio and video discs in boxes each containing 50 discs. Each individualdisc then packed in jewel boxes not amounting to manufacture.

Cir 904/24/09 Baggase. Aluminium/zinc dross and other product termed as waste are capable of being sold for aconsideration. Hence marketable and liable to excise duty.

Bata India Ltd Theoretical possibility of product being sold is not sufficient to establish marketability of product.The fact that product is sent outside for job work doesnt establish its marketability.

Bemcee Ltd Process of Slitting and cutting coils to produce steel sheets and polyster films does notamount to manufacture.

Karnatka VidyuthKarkhane Ltd.

Repair of Transformers by replacing coils not manufacture.

Solid & Correctengineering Works(2010)(sc)

Affixation of Asphalt Drum/ Hot-mix Plant by nuts and bolts on foundation on earth to ensurewobble- free operation of the plant Movable

Larsen & TourboLimited (2009)(Bom)

Fabrication, assembly, erection of waste water treatment is immovable. Merely bringing of duty paidparts at site doesnt amount to manufacture.

Virgo industries(Engineers) Pvt. Ltd.

Signage Erected at Various petrol bunks of IOC are movable because capable of being shifted fromone place to another without dismantling them.

MEHTA & CO. chairs, beds, tables, desks, etc., affixed to the ground ARE movable

MEDLEYPHARMACEUTICALSLTD.

SAMPLES of medicine are marketable even though cant be sold as Per Drug Act, and hence liableto excise duty.

Textile corpnmarathwada Ltd

If assessee has to pay the excise duty at each and every stage of manufacturing, but not paid. Noduty recovered because it would be entitled to Cenvat credit.

Remission of duty=R 21 CER 02

if FP lost or destroyed or unfit for consumption for marketing before removal- Duty Remitted.As per rule 3(5C) CCR 04, CCR reversed on IP, if duty remitted on FP.

Hindustan ZincLimited

Remission can be claimed on loss of goods due to de-bagging, shifting of concentrates, seepage ofrain water, storage and loading on trucks, accounting method adopted.

Gupta metal sheets No remission of duty u/r 21 in case of theft or dacoity

Valuation

Cir 902/22/2009 In case of job work value shall be determinder as per Rule 10 A on transaction value of Goods soldby Raw material supplier.

Ford India Pvt. Ltd. Extended warranty charges were not includible in the assessable value of cars.

Maruti Suzuki IndiaLtd.

cost of pre-delivery inspection and after sale services would form part of the assessablevalue

Xerographic Ltd. In case of Related person TV acceptable if no extra commercial consideration followed.

ClassificationPleasanttimeproducts

Scrabble cannot be said to be a puzzle rather it is a GAME.


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Godrej industries hair dye cannot be classified as hair lotion under tariff Item 14F.

Chamdanyindustries

Carpet classifiable as Jute Carpet. In view of chapter note as per Rule 1

CPS Textiles P Ltd description of the goods as per the documents submitted along with the Shipping Bill be arelevant criterion for the purpose of classification, if not otherwise disputed on the basis ofany technical opinion or testseparate notice is not required to be issued for payment of interest which is mandatory andautomatically applies for recovery of excess drawback

Xerox India Ltd Xerox Regal classified under heading 8471Frito Lay India cheetos Masala Balls, Cheetos Cheese Puff and cheetos X&O classified under heading 2108

AthertonEngineering Co PvtLtd

imported artemia cyst (brine shrimp eggs) classified as prawn feed under the heading 2309

Cenvat creditRule 3 (7) 100% EOU can take CCR of CVD, Special CVD, (EC, SHEC of excise0

Madras cement Ltd Capital goods used in mines - Mines if captive mines so as to constitute one integrated unit withconcerned cement factory, Cenvat credit available - Mines if not captive mines but supply to various

other cement companies of different assessees and goods used in mines outside factory ofassessee, credit not available

Rajasthan spinning& Weaving Mills Ltd

steel plates and M.S. channel was accessory to diesel generating set and hence capital goods andcredit thereon admissible

Okasa Ltd The plastic dropper packed with the pediatric drops should be construed to be an input used in or inrelation to the manufacture of the final product.- CCR allowed

Bhuwalka SteelIndustries

Transit loss- normal- CCR allowed as per industry norms for volatile and hygroscopics nature.Minor variation due to weighment difference by different machine ignored

Ambuja cementsEastern Ltd

Welding electrodes are inputs and CCR allowable.

BANSAL ALLOYS &METALS LTD.

No reversal of Credit on input service in respect of Goods Transportation Agency service

Tata engineeringLocomotive Co Ltd

CCR allowed on input consumed in quality control test and cleared as scrap.

Banco products(india) Ltd.

CCR allowed on Plastic crates either as input or capital goods.

Stelko Strips Ltd. CENVAT credit be taken on the basis of private challansFibre foils ltd tribunal is not empowered to reduce penalty imposable under rule 15 of CCR 2004

Green alloys pvt ltd Input cant be confiscated under rule 15 of CCR 2004 on the ground of non-accountal ofinputs in the records maintained in computer

Coca cola India Pvt.Ltd.-

CCR allowed on service tax paid on advertisement service, even if advertisement was of colddrinks manufactured out of concentrate on which duty has to be paid.

Maruti suzuki CCR not allowed on naptha used for generation of electricity cleared to joint venture.Ambuja cement Credit admissible on GTA serviceif ownership of goods remain with seller till delivery atcustomers doorstep

Alidhara TextoolEngineers Pvt. Ltd.

CCR allowed on Erection, commissioning and installation service received at premises of buyer ofmachine, but not rendered at factory of manufacturer.

Tata AdvanceMaterial

If capital goods destroyed after 5 years, no CCR Reversal. But if cleared as waste then as per rule 3(5A) pay amount equal to duty leviable on transaction value.


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Jaya mills If depreciation and CCR both claimed, subsequently if income tax return revised by withdrawingdepreciation. CCR not required to be reversed.

Ashok kumar hFulwadhya

Penalty cant be imposed on directors of company for wrong availment of CCR.

Bipac IndiaCorporation Ltd

No reversal of CCR on Capital goods destroyed after many years of use. But if cleared as waste &scrap, then duty leviable on transaction value.

Karnatka Soaps &Detergents Ltd- CCR allowed on supplementary invoice issued due to fraud by one unit to another unit of same

manufacturer in case of captive consumption

Raymond Ltd- CCR allowed even if different name of manufacturer indicated in invoice, so long as there is nodiscrepancy in description or quatilty or value of goods and no fraud.

SMALL SCALE INDUSTRY

Unison ElectronicsPvt. Ltd

in case of sale to Unite Tele-Shopping (UTS) and tele-Shopping Network (TSN), the supervisors ofrUTS and TSN used to examine the goods and affix a sticker thereon containing the names ofUTS/TSN. SSI exemption not allowed.

DeoraEngineeringWorks

the clearances of two firms having common brand name, goods beingmanufactured in the same factory premises, having commonmanagement and accounts etc. can be clubbed for the purposes of SSIexemption

Superior Products Where the 2 unit have separate legal identity with separate capital, premises, machinery and labour;the fact that they are managed by same person or that their products are same cannot mean thatthey are dummy units and their clearances should be clubbed for the purposed of SSI-exemption.

Demand, Refund & Appeal

Accrapac (India)Pvt. Ltd.

that non-disclosure as regards manufacture of Denatured Ethly Alcohol will not amounts tosuppression of material facts and hence it will not attract the larger period of limitationunder section 11A. because Dept. was aware of Facts.

Gem Properties (P)

Ltd

Merely because assessee has sustained loss more than the refund claim, it is not a case of

unjust enrichment since the assessee failed to prove that duty in the cost of production isnot included

SICOM LTD Secured creditors have preference over Governemnt dues

Aafloat Textiles (I) P.Ltd.

Import of gold and silver under forged Special Import Licence (SIL) Sufficient to extend period oflimitation TO Demand custom duty along with interest, penalty and confiscation

SKF India Ltd Differential duty is paid immediately upon the recovery of price difference through issuance of

supplementary invoice, interest shall still be payable on such differential duty.

RAJASTHANSPINNING &WEAVING MILLS

11 AC PenaltyNot applicable to every case of Non- payment/ short paymentPenalty If SCN under 11A (1) state that duty escaped due to conscious & deliberate doing

and order u/s 11A(2) confirms this i.e fraud

Penalty levied, even if duty paid before SCN in case of fraud

INTERNATIONALAUTO LTD.

Duty will be payable in case of retrospective recovery of increased value. Interest willalso be payable. MRF case not applicable.

Aman Medical

products Ltd.

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.

Narayan Nambiar

Meloths

refund claim cant be denied 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?

AP SPINTEX LTD ED recovered from buyer credit notes issued subsequently Doctrine of Unjust Enrichment not


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applicable

Trilux Electronics an appeal against the consent order cannot be filed by the Revenue.

Appeals

Electronics

Corponation of

India Ltd.

One cannot possibly expect timely clearance by CoD for filing appeal by PSU. In such cases,grant of clearance to one and not to the other may result in generation of more and morelitigation. The mechanism has outlived its utility. In the changed scenario,

time has come to recall the directions of the Supreme Court in its various earlier Orderssetting up the said mechanism

Advance Ruling

UAE ExchangeCentre Ltd.

a writ petition can be invoked against advance rulings.

Settlement commission

Vishwa Traders Pvt

ltd

If case referred back to Department then Revenue shall continue the adjudication proceedings fromthe stage at which the proceedings before Settlement Commission commenced

Ashwani TobaccoCo. Pvt. Ltd.

Benefit under the proviso to section 11AC could not be granted by the Settlement Commission incases of settlement.

East and WestShipping Agency

order of the Settlement Commission be considered to be a judicial proceeding

Sanghvi

Reconditioners Pvt.

Ltd.

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.

Cus. & C. Ex.SettlementCommission

Settlement Commission have jurisdiction to settle cases relating to the recovery ofdrawback erroneously paid by the Revenue

customDecorativeLaminates (I) Pvt.Ltd.

If imported goods warehoused and then extension taken and goods not cleared even afterexpiry of extended period. application for remission of duty under section 23 of the CustomsAct, 1962 not allowed on the ground that the said goods had become unfit for use on accountof non-availability of orders for clearance.

Paras FabInternational

issue for use by 100% EOU would not amount to clearance for home consumption.

Miscellaneous - custom

Alfred Menezes in case of prohibited goods, there is discretion in the officer to release the confiscated

goods

Poona Health

Services

In case the imported goods are confiscated, and goods are not redeemed by paying

fine, the importer is bound to pay the customs duty

Gawar

Construction Ltd.

the notice for confiscation is required to be issued to owner when owner is in

possession of goods and goods are seized from his custody. In case of seizure of goodsfrom the custody of person other than importer, notice must also be given to person

from whose custody goods were seized

Jaya Singh Vijaya

Jhaveri

Is the want of evidence from foreign supplier enough to cancel the confiscation order

of goods undervalued?- No

Sanghvi

Reconditioners Pvt

Ltd

the appellant cannot be permitted to dissect the Settlement Commissions order with a view toaccept what is favourable to them and reject what is not


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Finesse Creation

Inc.

improperly imported goods are liable for confiscation under sec 111 of the Customs

Act, 1962, if the same are cleared and not available for seizure. Redemption fine

cannot be imposed with regard to such goods.

Infotech Software

Dealers Association

(ISODA)

in the transactions taking place between the members of ISODA with its customers, the

software is not sold as such, but only the contents of the data stored in the software are

sold which would only amount to service and not sale.

Vahoo Colour Lab components of sale of photography, developing and printing etc. were clearly distinct and discerniblethan that of photography service. Photography was in the nature of works contract and it involvedthe elements of both sale and service, therefore, the service tax was not leviable on the sale portion.

P. C. Paulose once the licence was given by the Airport Authority (i.e authorized ) to the assessee to permit entryand allow enjoyment of services provided to the visitors, the assessee was a service providerthough he was acting only as an agent and therefore, was liable for service tax.

Karamchand Thapar& Bros. (Coal Sales)Ltd.

a) The deeming provision under Rule 4(5) of Service Tax Rules, 1994 providing that registrationcertificate deemed to have been granted if not granted within seven days from the date ofreceipt of application is applicable only to registration granted by Superintendent of Central

Excise and not to centralized registration granted under Rule 4(2).b) Though no time limit is specified for grant of centralized registration, however the same cannotbe indefinitely delayed and be granted within reasonable time and seven days can beconsidered as reasonable time.

BSBK Pvt. Ltd service provided by way of advice, consultancy or technical assistance in the case ofturnkey contracts attract service tax and turnkey contracts can be vivisected.

NagarjunaConstructionCompany Ltd

the option for composition scheme under works contract service be exercised BEFOREpayment of service tax on a particular works contract

SHUBH timb SteelsLtd

Service tax on renting of immovable property is constitutionally valid.

Mahavir generics commission agent also acting as a consignment agent be covered under the definitionof clearing and forwarding agent

Bajaj auto Finance Hire purchase finance not liable to service tax

Madras Hire

Purchase

Association

levy of service tax on hire purchase and leasing transactions falling under section

65(12) of the Finance Act, 1994 is constitutionally valid

Idea MobileCommunicationsLtd.

the value of SIM card supplied by the assessee would form part of the value taxable

service on which service tax was payable by the assessee.

Nahar Industrial

Enterprises Ltd.

service tax is not chargeable on the buffer subsidy provided by the Government for

storage of free sale sugar, under the category of `storage and warehousing services

EXCISE

1. Does a product with short shelf-life satisfy the test of marketability?

Nicholas Piramal India Ltd. 2010 (S.C.)

The product had a shelf-life of 2 to 3 days. The appellant contended that since the product did not have shelf-life, it did

satisfy the test of marketability.


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It was held that if it was capable of being brought or sold during that shelf-life. It is marketable.

Hence, product with the shelf life of 2 to 3 days was marketable and hence, excisable.

2. NCC Blue Water Products ltd(2010)(SC)Proviso to Sec 3(1) applies to all excisable goods manufctured by 100% EOU and brought to any other place in India. It is irrelevant t

they have brought into india with approval of development commissioner or whether such clearance to DTA is wihtin the limits permitte

by policy and procedures rlating to EOU. No doubt earlier proviso applied only to goods allowed to be sold in INDIA BUT After

amendment by F.Act 2001 apply to all excisable goods brought to any other place in India.

3. EON Polymers Ltd (2010)(Tri)Exemption available In respect of Permitted quota of DTA clearance allowed by Development commisisoner to 100% EOU. And

clearance beyond permissible quota shall be liable to full duty provided in proviso to sec 3.

4. Whether assembling of the testing equipments for testing the final product in the factory amounts to

manufacture?

Usha Rectifier Corpn. (I) Ltd.i 2011 (S.C.)

The assessee is a manufacturer of electronic transformers, semi-conductor devices and other electrical and electronics equipments.

During the course of such manufacture the appellant also manufactured machinery in the nature of testing equipments to test the final

products of the assessee company. Thre the assessee contending that assembly of testing equipments from various parts and

components bought from outside is not manufacture. Further he contended that even if it is treated as manufacture, it is not marketabl

since testing equipments were not removed outside the factory

It was held that testing equipments having different name and use, hence it is manufacture. Further the profuct will be treated as

marketable because assessee have clearly taken a stand in their reply to show cause notice that they bought various parts and

components to develop the testing equipments for use within the factory and that such steps were undertaken to avoid importing of

such equipments from the developed countries with a view to save foreign exchange. As pe Explanation to Rule 5 of CER 2002Rate of duty for captiley consumed goods will be date of issue for such use.

5. Does the process of cutting and embossing aluminum foil for the purpose of packing of the cigarettes amoun

to manufacture?

GTC Industries Ltd. 2011 (Bom.)

A roll of aluminum foil was cut horizontally to make separate pieces of the foil and word PULL was embossed on it.

Thereafter fixed number cigarettes were wrapped in it. An aluminium foil being a resistant to moisture was used as a

protector for the cigarettes and to keep them dry.

Revenues submitted that the process of cutting and embossing aluminum foil amounted to manufacture. Since the

aluminum foil was used as a shell for cigarettes to protect from them moisture; the nature, form and purpose of foil we

changed.

It was held that cutting and embossing did not transform aluminum foil into distinct and identifiable commodity. Ther

were no records to suggest that cut to shape/embossed aluminum foils used for packing cigarettes were distinct

marketable commodity. Since, foil was cut to size in a continuous process, process did not amount to manufacture as p


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section 2(f) of Central Excise Act, 1944. because the process which produces distinct and identifiable commodity will

amount to manufacture.

6. 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 (S.C.)

It was held that compounded levy scheme is a separate scheme from the normal scheme for collection of excise duty o

goods manufactured. Since the compounded levy scheme is comprehensive scheme in itself, general provisions of the

Central Excise Act and rules are excluded. Hence, it held that the time-limit under section 11A of the Central Excise Ac

1944 is not applicable to recovery of dues under compounded levy scheme.

Author Note- this case is not applicable now because Rules made u/s 3A made sec 11A applicable.

CUSTOMS

7. Can separate penalty under section 112 of the Customs Act be imposed on the partners when same has alrea

been imposed on partnership firm?

Mohammed Farookh Mohammed Ghani 2010 (Guj.)

It was held that once penalty was levied on the firm for contravention of any provision of the Act or the Rules framed

thereunder, it amounted to levy of penalty on the partners. Hence, there was no question of penalizing the partners

separately for the same contravention, unless the intention of the legislature to treat the firm and partners as distinct

entities was borne out from the statute itself.

8. Whether Chartered Accountants certificate alone is sufficient evidence to rule out the unjust enrichment und

customs?

BPL Ltd. 2010 (Mad.)

Assessee had not produced any document other than the certificate issued by the Chartered Accountant to substantia

its refund claim. The certificate issued by the Chartered Accountant was merely a piece of evidence acknowledging cert

facts. It would not automatically entitle a person to refund in the absence of any other evidence. Hence, the responden

could not be granted refund merely on the basis of the said certificate.

9. Whether the benefit of exemption meant for imported goods can also be given to the smuggled goods?

M. Ambalal & Co. 2010 (260) E.L.T. 487 (SC)

The Apex Court held that the smuggled goods could not be considered as imported goods for the purpose of benefit o

the exemption notification. It was of the view that if the smuggled goods and imported goods were to be treated as th

same, then there would have been no need for two different definitions under the Customs Act, 1962.


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