India: Indirect Tax Newsletter - June 15, 2012

Last Updated: 19 November 2012

CUSTOMS & INTERNATIONAL TRADE

CUSTOMS

Advance Petrochemical Co. Vs. Designated Authority [2012 (280) ELT 56]

The Customs, Excise and Service tax Appellate Tribunal ("the CESTAT") held that the CESTAT cannot exercise review powers even where the Hon'ble Supreme Court has given the assessee liberty to file a review application. The CESTAT does not possess inherent powers of review. The CESTAT can only rectify mistakes apparent on the face of record.

SRK Enterprises Vs. CC [2012 (280) ELT 264]

Goods alleged to be imported in violation of the Intellectual Property Right (Imported Goods) Enforcement Rules, 2007 ("the IPR Rules") confiscated by the Customs at the port of import. On appeal the CESTAT held that since the intellectual property right holder in India did not discharge his obligation under IPR Rules, goods are not liable to confiscation.

FTP & ENVIRONMENT

Notification No. 1(RE-2012)/2009-2014 dated June 5, 2012

The Ministry of Commerce, Industry and Textiles has released Annual Supplement 2012-13 to the Foreign Trade Policy 2009- 14 ("the Foreign Trade Policy") on June 5, 2012

CENTRAL EXCISE, SERVICE TAX, VAT & GST

CENTRAL EXCISE

CP Meier Vs. CCE [2012 (280) ELT 3]

The High Court held that where the assessee manufactured certain goods at a separate site away from the main site in order to avoid traffic jams, the expression 'site' may not be given a restrictive meaning and shall include any premises made available to the manufacturer of goods, provided that the goods manufactured at such premises are solely used in the said construction work only in terms of general exemption notification.

Loyalty Textile Mills Ltd. Vs. Joint Secretary [2012 (280) ELT 8]

The High Court held that explanatory amending notifications are in the nature of judgments of the courts, which only interprets existing rights and are therefore to be treated as part and parcel of the original notification and operative from the date of original notification.

SERVICE TAX

Notification No. 18/2012-ST dated June 1, 2012 and Notification No. 19/2012- ST to Notification No. 23/2012-ST all dated June 5, 2012

Notifies changes proposed by the Finance Act, 2012 ("the Amending Act") to Chapter V of the Finance Act, 1994 ("the Finance Act").

Notification No. 24/2012-ST dated June 6, 2012

The Service Tax (Determination of Value) Rules, 2006 amended to provide for valuation of works contract and catering service and deletion of Rule 7 thereof which provides for valuation of services under reverse charge mechanism.

Ranchi Club Ltd. Vs. CCCE&ST [2012 (26) STR 401]

The High Court held that where a club provides any service to its members, it is not service by one legal entity to another, and is therefore not liable to service tax.

Vaman Pharma Pvt. Ltd. Vs. CCE [2012 (26) STR 424]

The CESTAT held that determination of classification of service is to be decided based on the factual matrix and intention of the contracting parties. Each case has to be decided on its own facts and judicial pronouncements cannot be applied blindly.

Pearl Enterprises Vs. Union of India [2012 (26) STR 408]

The High Court held that order of the CESTAT must be consistent as inconsistent orders shake the faith of a citizen in the impartiality of judicial forums whose whole purpose is to prevent discrimination and arbitrariness.

CENVAT CREDIT

Bansal Precision Forge Ltd. Vs. CCE [2012-TIOL-670-CESTAT-BANG]

The CESTAT held that the assessee may avail of Cenvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilization in the manufacture of final product, which were cleared on payment of duty by principal manufacturer.

Zenta Pvt. Ltd. Vs. CCE [2012-TIOL-624- CESTAT-MUM]

The CESTAT held the assessee was entitled to avail of Cenvat credit on service tax paid on input services used to export exempt service.

Monarch Catalysts Pvt. Ltd. Vs. CCE [2011 (11) LCX 0114]

The CESTAT held the assessee was entitled to avail of Cenvat credit of duty paid even on a provisionally assessed Bill of Entry. Whether Bill of Entry is provisionally or finally assessed it is the document on which credit can be availed by a manufacturer.

CCE Vs. Kailash Auto Builders Ltd. [2012 (280) ELT 49]

The High Court held that merely because goods were initially used in manufacture of exempted goods, credit of duty paid on capital goods could not be denied when assessee started to use them for manufacture of excisable goods.

VAT

Notification No. 189/2012/02/(120) XXVII(8)/12 dated May 28, 2012.

The Uttarakhand State Government has enhanced rate of VAT applicable to the goods covered under Schedule II(B) from the existing 4% to 5% and goods falling under residuary entry from 12.5% to 13.5%.

GST

House Panel Asks for Study on GST Impact [The Indian Express, June 9, 2012]

The Parliamentary Standing Committee on Finance ("the Standing Committee") which began deliberations on the GST Constitutional Amendment Bill with the Finance Ministry has sought additional data on the Government's expectation that goods and services tax will help stimulate growth by 2%. The Standing Committee also questioned the Finance Ministry over the proposed Articles 279 (A) and (B) which deal with the GST Council and the GST Dispute Settlement Authority respectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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