Apr 19, 2013

Tax Update
Vol.3, Issue 7, April 2013 HSA(IDT)3(2013)7
CONTENTS
CASES
Excise
 Procedural lapses not sufficient ground for denying cenvat credit
 CBEC Circular on recovery applicable-only in situations as provided in the
CESTAT order
CONTRIBUTORS
Akkriti Bhatt
Ankita Bhasin
Chinmay Agarwal
Mannat Waraich
Suresh Uniyal
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Abhishek Dutta
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Nand Kishore
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Rashmi Chaudhury
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MODE OF
CITATION: HSA(IDT)3(20
13)7
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Service Tax
 Input services used in relation to inputs-cenvat credit allowed
NOTIFICATIONS & CIRCULARS
Excise
 Clarification on the scope of exemption under a notification
 Amendment in the CESTAT Appeal forms
Service Tax
 Last date for filing ST-3 extended
VAT/Sales Tax
 Exemption withdrawn under AP VAT Act
 Tax paid on MRP -Goods notified under WB VAT Act
 Incidental goods- eligible to claim concessional rate and set off under MP
Entry Tax Rules
 Amendments in Chhattisgarh VAT Act
 Exemption to certain goods from entry tax in Chhattisgarh
 Rate of VAT increased under Kerala VAT Act
 Exemption to certain goods under Delhi VAT Act
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CASES
Excise
Procedural lapses not sufficient ground for denying cenvat credit
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In the present case, the Commissioner denied cenvat credit of the service tax paid on
input services to Taxpayer on the ground that there were procedural lapses and the tax
invoices did not contain all the particulars. Further, the Commissioner held that the
cenvat credit on which the credit was taken was in the name of their head office and
their head office was not registered as ISD. Therefore, the cenvat credit should be
denied to the Taxpayer.
The tribunal while remanding the matter held that since all the procedural lapses were
rectifiable the cenvat credit should not be denied to the Taxpayer. Further, the tribunal
held that in a number of cases, cenvat credit has been allowed even if the invoices
were in the name of the ISD, therefore t such ground of denying cenvat is invalid
M/s Gujarat Sidhee Cement Ltd v. Commissioner of Central Excise, Bhavnagar,
2013-TIOL-CESTAT-Ahmedabad
CBEC Circular on recovery applicable-only in situations as provided in the
CESTAT order
The CESTAT Bangalore passed an order under Rule 41 of the CESTAT Rules on the
validity of the CBEC circular no 967/01/2013-CX, dated January 1, 2013 which
provided for initiation of recovery proceedings within 30 days of filing the appeal if
no stay was granted. The order states that coercive action would not be taken by the
Department against the Assessee during the pendency of the stay application except in
the following situations:



Where Service Tax/Central Excise duty has been collected but not paid;
Where the admitted duty/service tax liability (before adjudicating
authority/Commissioner (Appeals)) is yet to be discharged with interest;
Where the Commissioner (Appeals) rejected the appeal on the ground that the
appeal was filed beyond the time limit
Further, The Tribunal also held that coercive action should not be taken Where the
Assessee had deposited the entire duty/service tax liability determined at any stage.
The Tribunal directed the field formation within its jurisdiction that no action would
be taken unless the Assessee’s case falls into any of the aforementioned situations.
Suo Motu Miscellaneous Order No. 25453/2013 dated April 2 ,2013, 2013-TIOL-533CESTAT-Bangalore
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Service Tax
Input services used in relation to inputs-cenvat credit allowed
The Taxpayer was engaged in the manufacture of excisable goods and had installed
storage tanks for storing ammonia at its premises. The Taxpayer was availing cenvat
credit of the input services which were used in relation to the storage tanks. The
Revenue sought to deny the cenvat credit availed on the basis that the storage tanks
were located outside the factory of production. Further, the Tribunal had held that the
input services provided in relation to inputs were limited to the specified categories as
provided in the inclusive part of the definition of input services under Rule 2(l) of
CCR.
The HC held that the definition of input services as provided under Rule 2(l) of the
CCR covers any service used by the manufacturer directly or indirectly, in or in
relation to the manufacture of final products and includes the two specified categories
of services in relation to inputs. The HC held that the input services provided in
relation to inputs cannot be restricted to the two specified categories as provided
under Rule 2(l) of the CCR. Further, Rule 3(1) of the CCR allows a manufacturer of
final products to take credit of any input service received in the factory of
manufacture of the final product. Accordingly, the HC gave a broad and
comprehensive meaning to the definition of input services and held that the Taxpayer
was allowed to avail cenvat credit of the input services.
Deepak Fertilizers and Petrochemical Corporation Ltd. v. CCE, Belapur, 2013-TIOL212-HC-Mum-CX
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NOTIFICATIONS AND CIRCULARS
Excise
Clarification on the scope of availing the area based exemption on certain goods
It has been clarified that the benefit of the area based exemption under Notifications
No. 49/2003-CE and 50/2003-CE, dated June 10, 2003 could only be extended to
units that undertake expansion by acquiring the adjoining plot with at least one
common boundary with the existing plot. The said notification would not cover plots
that are not immediately adjoining to the existing plot but are at some distance away
from the plot.
Circular No. 968/02/2013-CX, dated April 1, 2013
Amendment in the CESTAT Appeal forms
Certain amendments/ revisions have been made in the CESTAT appeal forms for
quick disposal of cases and better administration. Key amendments are as follows:




Single forms has been prescribed for appeal against order passed by the
Commissioner and Commissioner (Appeals) in central excise and customs
matters
Furnishing of IEC has been made mandatory in the appeal form for customs
A separate field for premise code for identification of the jurisdictional
Commisionerate/Division/Range has been introduced in service tax forms
Furnishing of PAN or UID has been made mandatory
These amendments would be effective from June 1, 2013. However, the old forms
could be valid for a period of 3 months from the effective date. From September 1,
2013 all appeal would have to be filed in the new form.
Circular no. 969/03/2013-CX, dated April 11, 2013
Service Tax
Last date for filing ST-3 extended
The last date for filling the service tax return in Form ST-3 for the period July 01,
2012 to September 30, 2012 has been further extended to April 30, 2013.
Order No 02/2013- Service Tax, dated April 12, 2013
VAT/Sales Tax
Exemption withdrawn under AP VAT Act
Exemption from payment of VAT has been withdrawn in respect of the following
goods: 

Sale of goods to any unit located in SEZ
All goods sold to units, operator, developer, co-developer and contractors
engaged by them for use in processing area of the respective SEZ except
certain specified goods
Circular No. 10 CCT’s Ref. No. L.III(2)/48/2013 dated April 6, 2013
Tax paid on MRP -Goods notified under WB VAT Act
Certain goods such as drugs, medicines, chemical fertilizers, LPG etc., have been
notified for the purposes of levying VAT on MRP. The notification provides rate of
tax in the both situations where MRP is inclusive of tax and where MRP is exclusive
of tax
Notification No. WB (Part -I)/2013/SAR -116 dated March 28, 2013
Incidental goods- eligible to claim concessional rate and set off under MP Entry
Tax Rules
Under the MP Entry Tax Rules, the concessional rate of entry tax has been made
applicable to incidental goods in addition to the raw materials. Further, the dealer
would also be eligible to claim set off in respect of the incidental goods.
Notification No. F-A 3-12-2013-1-V (26) dated April 1, 2013
Amendments in Chhattisgarh VAT Act


Exemption has been granted to certain specified machinery and equipments
used in the execution of civil works contract. The exemption is to the extent
that the specified goods would be taxable at the rate of 5 percent
Exemption to dealers undertaking works contracts involving supply of goods
from applicability of section 27(2) Chhattisgarh VAT Act subject to certain
conditions and restriction
The above are applicable for the period from April 1, 2013 till March 31, 2014.
Notification No. F-10/10/2013/CT/V (12) and Notification No. F-10/10/2013/CT/V
(17) dated March 28, 2013
Exemption to certain goods from entry tax in Chhattisgarh
Certain goods such as devices and equipment used in generation of solar energy, iron
ore, pig iron and steel scrap etc. subject to certain restrictions have been exempt from
whole or part of entry tax under the Schedule.
Notification No. F-10/08/2013/CT/V (10) dated March 28, 2013
Rate of VAT increased under Kerala VAT Act
The rate of tax in Kerala has been increased from 13.5 percent to 14.5 percent.
Circular No. 4/2013- C1-33000/12/CT dated April 2, 2013
Exemption to certain goods under Delhi VAT Act
Certain goods such as RDF and tiles made from malba and kerbstones made from
malba have been exempted from payment of VAT in Delhi.
Notification No. F.3(18)/Fin.(Rev.1)/2012-13/ dsvi/265 dated March 30, 2013
Top
GLOSSARY OF TERMS
AP VAT
CESTAT
CESTAT Rules
CCR
Delhi VAT Act
FCCBs
Finance Act
IEC
Import Rules
ISD
JPMS
Kerala VAT
MP Entry Tax Rules
MRP
PAN
RDF
UID
WB VAT
Andhra Pradesh Value Added Tax Act, 2005
Custom Excise Service Tax Appellate Tribunal
CESTAT( Procedure Rules),1982
Cenvat Credit Rules, 2004
Delhi Value Added Tax Act, 2005
Foreign Currency Convertible Bonds
Finance Act, 1994
Importer Exporter Code
Taxation of Service (Provided from Outside India and
Received in India) Rules, 2006
Input Service Distributor
J.P. Morgan Securities Ltd.
Kerala Value Added Tax Act, 2003
Madhya Pradesh Sthaniya Kshetra me Mal Ke Pravesh
Par Kar Niyam, 1976
Maximum Retail Price
Permanent Account Number
Refuse Derived Fuel
Unique Identification Number
West Bengal Value Added Tax Act, 2003
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