India: Indirect Tax Newsletter January 1, 2013

Last Updated: 9 January 2013
Article by Amit Kapur



Notification No. 63/2012-Cus., dated December 31, 2012

Exempts Crude Petroleum oils and oils obtained from bituminous minerals, when imported into India from Brunei Darussalam, from custom duties subject to satisfaction of condition of origin of these goods.

Anita Grover Vs. CCE [2012-TIOL-1049-HCDEL- CUS]

The High Court of Delhi held that property of former director of a company cannot be attached for recovering dues from the Company. The High Court observed that there is no provision in the Customs Act, 1962 ("the Customs Act") corresponding to Section 179 of the Income Tax Act, 1961 or Section 18 of the Central Sales Tax, 1956 which enable revenue authorities to proceed against directors of companies or such like third parties who are not defaulters.

Areva T & D Ltd. Vs. Commissioner of Customs [2012-TIOL-1045-HC- MAD-CUS] The High Court of Madras in the case of refund of encashed bank guarantee for nonfulfillment of export obligation, which was subsequently fulfilled held that department is bound to pay interest on delayed payment of refund even if claim of assessee for payment of interest on delayed refund may not arise based on Section 27A of the Customs Act.


Central Excise

Circular No. 967/01/2013-CX dated January 1, 2013 ("the Circular")

The Central Board of Excise & Customs ("the CBEC") rescinded all previous circulars issued in regard to recovery of confirmed demand during pendency of stay application and has laid down fresh parameters for recovery. This circular has un-settled position being followed so far by trade and revenue in terms law laid down by large number of judicial pronouncements on this issue..

Indorama Synthetics India Ltd. Vs. Union of India [2013-TIOL-08-HC-MUM-CX] The High Court held that once allegations in show cause notice are admitted by the petitioner, it is not open to the petitioner to contend that the Settlement Commission ought to have passed a detailed reasoned order before imposing a penalty.

M/s Oswal Woolen Mills Ltd. Vs. CCE, Ludhiana [2012-TIOL-1963-CESTAT-DEL] The Tribunal held that valuation of excisable goods cleared to related unit can be done in terms of Rule 4 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (i.e. on the basis of transaction value) when goods are cleared on the same price to related as well as to unrelated buyers.

Cenvat credit

M/s ITC Ltd. Vs. CCE, Salem [2012-TIOL- 1943-CESTAT-MAD]

The Tribunal held that input credit attributable to â€Üsludge' arising as a byproduct during manufacture of paper and paper boards which is exempted by way of an exemption notification is not required to be reversed.

Service Tax

Notification No. 48/2012-ST dated November 30, 2012

Amends Form ST-1 so as to enable applicants seeking registration to choose description of service being provided by them. Notification No. 49/2012-ST dated December 24, 2012 Amends Notification No. 25/2012-ST dated June 20, 2012 ("the Mega Exemption Notification") to exempt services of life insurance business from service tax provided under Janashree Bima Yojana and Aam Aadmi Bima Yojana schemes.

Circular No. 166/1/2013-ST dated January 1, 2013

The CBEC clarified that reminder letters/ notices for insurance policies not being invoices would not invite levy of service tax. Circular No. 167/2/2013-ST dated January 1, 2013

The CBEC clarified that service by way of transportation of milk by rail or a vessel from one place to another is covered by the Mega Exemption Notification and is not chargeable to service tax.

Ranchi Club Ltd. Vs. CCE [2012-TIOL-1031- HC-JHARKHAND-ST]

The Issue before the High Court of Jharkhand was whether services provided by club to its members are subject to service tax under Chapter V of the Finance Act, 1994. The High Court held that in view of principle of mutuality, if a club provides any service to its members in any form, then it is not a service by one to another as foundational fact of existence of two legal entities in such transaction is missing. Accordingly, no service tax held to be payable in such cases.


Malabar Gold Pvt. Ltd. Vs. Commercial Tax Officer [2012-TIOL-1032-HC-KERALA-VAT] The question before the High Court was whether transfer of right to use trademark is â€Üsale' under the Kerala Value Added Tax Act, 2003 ("the Kerala VAT Act") and whether intangibles like trademark is â€Ügoods'. The High Court held that trademark is â€Ügoods' and royalty received from franchisees for use of trademark and for sharing business know-how is leviable to VAT under the Kerala VAT Act. Panacea Biotec Ltd. Vs. Commissioner of Trade & Taxes & Ors [2012-VIL-111-DEL] The High Court held that selling of used cars cannot by any stretch of the imagination be characterized as "ancillary" or incidental to business of a pharmaceutical company. Therefore sale of second hand cars by a pharmaceutical company is not exigible to VAT.

No need for a major revision in GST Bill: Sushil Kumar Modi [The Financial Express, January 02, 2013]

Previously published on January 1, 2013.

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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