India: Customs

Last Updated: 13 November 2012

Customs

CC Vs. Lindt Exports [2012-TIOL-218- HC-DEL-CUS]

Post dismissal of assessee's appeal by the Customs, Excise & Service Tax Appellate Tribunal ("the CESTAT") for non-compliance of its interim order, and subsequent upholding of the interim order by the High Court, even if assessee is ready to comply with the original interim order, the CESTAT has no authority to restore the appeal since according to the Doctrine of Merger, the interim order of the CESTAT stands merged with the High Court order.

DEE Pearls (India) Pvt. Ltd. Vs. CC, Mumbai [2012-TIOL-293-CESTATMUM]

On CESTAT having granted waiver of pre-deposit of differential duty and penalty imposed by adjudicating authority, appellant approached department to encash bank guarantee for payment of redemption fine but department refused to do so. CESTAT, when approached against such refusal, ordered that since recovery of duty and penalty has been waived by it, the same cannot be recovered, and directed department to encash bank guarantee to the extent of redemption fine and cancel bank guarantee for the rest of amount.

Notification No. 31/2012-Cus(NT) dated April 4, 2012

Import into India and export out of India of hazardous wastes (e.g., wastes containing mercury, asbestos, selenium, beryllium) specified in Scheduled VI to the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008 are prohibited.

CENTRAL EXCISE, SERVICE TAX, VAT & GST

Excise

Kwality Ice Cream Company Vs. UOI [2012-TIOL-252-HC-DEL-CX]

Section 11A of the Central Excise Act, 1944 ("Excise Act") prescribes limitation period for raising demand for excise duty not paid/ short paid, but no limitation is specifically prescribed in respect of interest. High Court holds that the same limitation as in the case of excise duty would apply for demanding interest.

CCE, Chandigarh Vs. Mukat Pipes Ltd [2012-TIOL-400-CESTAT-DEL]

CESTAT holds that place of removal shall be factory gate and not project site even if the assessee had undertaken to carry out certain processes not amounting to manufacture after delivery at the project site. Unless it is proved that the risk of any damage to the goods stored at project site was to the assessee's account, it cannot be held that place of sale was the project site. Accordingly, place of removal stands at factory gate, and freight etc., beyond factory gate and upto project site are not includible in assessable value for payment of duty.

Notification No. 22/2012-CE (NT) dated March 30, 2012 ("the Notification")

The Notification amends Rule 22 of the Central Excise Rules, 2002 thereby putting onus on assessees and first stage and second stage dealers to, on demand, make available documents maintained by them and certain specified documents to a cost accountant or chartered accountant nominated in terms of Section 14 A or Section 14 AA of the Excise Act.

Service Tax

Maharashtra Chamber of Housing Industry Vs. Union of India [2012- TIOL-78-HC-MUM-ST]

High Court holds that legislature has power to enact an explanation which while expounding the content of the main provision actually expands the purview and ambit of the provision. High Court also holds that Parliament has legislative competence to levy service tax on service which is rendered in relation to an activity which occurs on land. Such a levy does not render the charging provision as imposing a tax on land and buildings, nor on the general ownership of land.

Circular No. 155/6/2012–ST dated April 9, 2012 ("the Circular")

The Circular clarifies that in case of airline industry tickets issued before April 1, 2012 shall be exigible to service tax at 10% and not the revised rate of duty of 12%. However, if any airline that has collected higher rate of service tax and not refunded the same to the customer, it must credit excess service tax to the Central Government.

Cenvat Credit

CC & CE, Hyderabad Vs. ITC Limited [2012-TIOL-199-HC-AP-ST]

High Court holds that services crucial for maintenance of staff colony are input services since the staff colony, provided by the assessee, is directly and intrinsically linked to its manufacturing activity.

High Court also holds that since services pertaining to procurement of inputs are also covered by the definition clause in Rule 2(l) of the Credit Rules, the plantation activity undertaken by the assessee for ensuring steady supply of raw-material (wood) cannot be excluded. [Note: Definition of 'input service" has been amended as of April 1, 2011, post period of dispute in this case]

GST

Cabinet Okays SPV for GST Network [TIOL News service, April 12, 2012]

The Union Cabinet approved a proposal to set up a Special Purpose Vehicle ("SPV") namely Goods and Service Tax Network SPV ("GSTN SPV") to create enabling environment for smooth introduction of GST. GSTN SPV will provide IT infrastructure and services to various stakeholders including the Centre and the States. The GSTN SPV would be incorporated as a not-forprofit, non-Government, private limited company in which the Government will retain strategic control. It would have an equity capital of Rs. 10 crore, with the Centre and States having equal stakes of 24.5% each. Non Government institutions would hold 51% equity. No single institution would hold more that 10% equity, with the possibility of one private institution holding a maximum of 21% equity.

Empowered Committee to meet India Inc on GST [The Hindu, April 12, 2012]

The Empowered Committee of State Finance Ministers has convened a meeting with Industry chambers on April 17, 2012 to discuss GST implementation issues and contentious issues relating to Central Sales Tax ("CST"). Industry representatives from ASSOCHAM, FICCI and CII are likely to submit their views on GST at the meeting.

Tamil Nadu seeks compensation till GST is introduced [Business Standard April 16, 2012)]

In a letter to the Prime Minister, Chief Minister of Tamil Nadu M Jayalalithaa has asked the Central Government to provide compensation till GST is introduced as the revenue loss suffered by States was substantial and permanent. It also said that CST rate was reduced only as a precursor to the introduction of GST. Since it is the Central Government's responsibility to introduce GST by evolving a consensus and by putting in place appropriate mechanisms, States cannot be expected to bear the loss on account of its failure to introduce GST. If further delay is expected in implementing GST, CST rate must be restored immediately to original rate of 4%.

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