India: Indirect Tax Newsletter February 15, 2013

Last Updated: 1 March 2013



Circular No. 06/2013-Cus. dated February 06, 2013

Pursuant to decision of the Hon'ble Supreme Court of India in Civil Appeal Nos. 4053-4061 of 2012 in the case of Sunil Kohli and Others Vs. Union of India, the Central Board of Excise & Customs ("the Board") has modified Circular No. 09/2010 – Cus., dated April 08, 2010 and clarified that those who had passed the examination under Custom House Agents Licensing Regulations, 1984 will not have to additionally qualify in new subjects.

Enterprise International Ltd. Vs. Commissioner of Customs [2013-TIOL-101- HC-MAD-CUS]

The High Court of Madras held that the Customs Tariff Act, 1975 provide for imposition of provisional anti-dumping duty; for finalization of provisional anti-dumping duty; and for consequent refund, if there is a reduction in the anti-dumping duty. In case of such reduction in anti-dumping duty, refund is to be granted automatically and department cannot insist that applicant should file appeal to the Appellate Authority of approach the appropriate authority for reassessment of the assessment order.

Ruchi Soya Industries Ltd. Vs. Commissioner of Customs [2013-TIOL-249-CESTAT-MUM]

Assessee did not claim exemption under Notification No. 21/2002- Cus., dated March 1, 2002 at the time of filing bill of entry although they were entitled for the same. Thereafter, assessee filed refund claim which was rejected on the ground that the assessment was not challenged. The Tribunal held that since the appellant had complied with the conditions of Notification No. 21/2002- Cus., dated March 1, 2002, it is duty of assessing officer to give benefit and since this has not been done, assessee is entitled to claim refund without challenging assessment.


Central Excise

Larsen & Toubro Ltd. Vs. Union of India [2013-TIOL-99-HC-MUM-CX]

The High Court of Mumbai held that the Board's Circular No. 967/01/2013 dated January 01, 2013 mandating initiation of recovery proceedings thirty days after filing of an appeal, if no stay is granted, cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond control of assessee. Where however, an application for stay has remained pending for more than a reasonable period, on account of default or improper conduct of an assessee, recovery proceedings can well be initiated.

Krishna Saa Fabs Pvt. Ltd. Vs. Union of India [2013-TIOL-102-AP-CX]

The High Court of Andhra Pradesh directed revenue not to initiate any coercive measures for recovery of excise or service tax liability or interest or penalty, as the case may be, as assessed in Order in Original and Order in Appeals pending disposal of stay application or application of waiver of pre-deposit in light of current ineffectual functioning of the Tribunal, Bangalore.

Cenvat credit

Hindustan Zinc Ltd. Vs. CCE [2013-TIOL- 287-CESTAT-DEL]

The question before the Tribunal was whether Cenvat credit of ambulance services is available to assessee. The Tribunal observed that Section 45(4) of the Factories Act, 1948 mandates every factory to maintain first-aid service facility and if strength of employees of factory is more than 500, factory is required to maintain ambulance room of prescribed size containing prescribed equipment. Thus, every factory owner is under legal obligation to ensure basic medical facility to its employees. Therefore, service tax paid on ambulance service by assessee has nexus with production of final product. Accordingly Cenvat credit of ambulance service is available to assessee.

Service Tax

Wipro Ltd. Vs. Union of India [2013-TIOL- 119-HC-DEL-ST]

The High Court of Delhi held that in this case description, value and amount of service tax and cess payable on input-services actually required to be used in providing a taxable service to be exported were not determinable prior to the date of export and could be determined only after export. Therefore, condition No. 3 of Notification No. 12/2005-ST dated April 19, 2005 requiring furnishing of such information prior to export was incapable of compliance. Hence rebate is not to be denied in this case.

Delhi Chartered Accountants Society Vs. Union of India [2013-TIOL-81-DEL-ST]

The issue before the High Court of Delhi was as to what would be the rate of Service tax where service is provided by Chartered Accountants prior to April 1, 2012 and invoice is also issued prior to April 1, 2012 but payment is received after April 1, 2012. The department relied on two circulars issued by the Board viz., Circular Nos.154 dated March 28, 2012 and 158 dated May 08, 2012 (collectively "the Circulars") in terms of which if payment is received or made, as the case maybe, on or after 1st April 2012 in case of 8 specified services including Chartered Accountant service provided by individual or proprietary firms or partnership firms, rate of service tax would be 12%. The High Court of Delhi quashed the Circulars and held that where services of Chartered Accountants were actually rendered before April 1, 2012 and invoices were also issued before that date, but payment was received after the said date, rate of tax will be 10% and not 12%.


Prathista Industries Ltd. Vs. Commercial Tax Officer [2013-VIL-16-AP]

The question before the High Court of Andhra Pradesh was whether provisions relating to clarification and advance rulings contained in Section 67 of the Andhra Pradesh Value Added Tax Act, 2005 ("the AP VAT Act") apply to assessments made under the Central Sales Tax Act, 1956. The High Court held that Section 67 (1) of the AP VAT Act does not empower the said Authority to issue clarifications or rulings in respect of implementation of statutes such as the Central Sales Tax Act.

Krishak Bharati Cooperative Limited Vs. State of Gujarat [2013-VIL-14-GUJ]

The High Court of Gujarat held that the department cannot withhold refund payable to assessee arising out of a finalized assessment order which has attained finality under the Gujarat Value Added Tax Act, 2003 ("the Gujarat VAT Act"), merely on the ground that legal issue is pending before the Supreme Court.

Panel to frame model GST law [ZEE News, February 15, 2013]

The Empowered Committee of State Finance Ministers on GST has decided to prepare model legislation and set up three committees to sort out various issues for smooth roll-out of the GST.

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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