Covers February 2014 - bizsolindia.com · Bizsol UPDATE February - 2014 ... bit of communicating...

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Bizsol UPDATE February - 2014

Close on the heels of Manmohan Singh holding a

Press Conference, Rahul Gandhi also did his two-

bit of communicating with the masses through a

Television interview recently. It is obvious that the GOP

has suddenly discovered that in the process of

governance there is an entity called the people who

happen to be voters in an election. The party is now

on an overdrive to reach out to them. Rahul's interview

was part of this plan. The interview turned out to be

an unmitigated disaster is another matter. Rahul had

always been an enigma - a permanent bachelor and

a reluctant politician. Both are very "un-Indian" indeed.

For all those who wanted to know what our possible

future Prime Minister stood for, the interview only

helped to deepen that mystery. Possibly, as part of a

deal, Arnab Goswami who interviewed Rahul chose

to be civil, for a change. No person with an iota of

self-respect would want to be on his show normally,

for he, with his opinionated and judgmental stance

on all issues, becomes a panellist himself forgetting

his fundamental role as a neutral anchor of a talk show.

Be that as it may, Rahul the boy came prepared for

an examination selectively learning the subjects he

knew something about only to be asked questions on

topics on which he knew nothing about, which were

many. Rahul Gandhi's interview was remarkable for

its consistency.

For every question put to him he had only one

standard answer - the one he had come prepared

with. It was almost like a child reciting poetry. If it

forgets a line it starts from the beginning. By the time

the interview ended the boy had separated himself

from the men in the adult world of politics. If you cut

out the clichés and platitudes which he mouthed

repeatedly throughout the interview, the ninety -

minute interview would have been over in just under

twenty minutes! Thank God Arnab Goswami did not

ask him questions on subjects like global warming

and family planning. Had he done that you could

almost predict Rahul's responses - a lecture on RTI

FROM THE DESK OF THE CHAIRMAN

and the systemic problems of Indian polity! The best

part of the interview was after the interview. The spin

doctors of the Congress Party were working overtime

to project Rahul through the interview as a savant (in

simple English a learned person). Ask the same

question to a BJP spokesman prompt would come

the reply - Rahul suffers from 'savant syndrome' (again

in plain language, a condition in which an intellectually

challenged person shows streaks of brilliance normally

not associated with him). For all those looking to

decipher Rahul, he turned out to be 'a riddle wrapped

in a mystery inside an enigma' to quote Winston

Churchill, the wartime Prime Minister of Britain.

A recent nationwide survey projected that the BJP is

set to do well; perhaps even better than their own

expectation. So be it. That is not the point of

discussion here. The Survey has come out with an

interesting observation. Wherever there is a strong

Chief Minister in a State the party in power (Congress,

BJP or any other) appears to have done well even

fighting anti-incumbency. In the good old days when

the Congress had such a galaxy of powerful leaders

in the States across the country the overall

performance of the Central government run by

Congress also had improved. A charismatic leader

like Jawaharlal Nehru could carry such regional

satraps in his own party as a team. Once Indira

Gandhi took over the reins and brought about her

own brand of politics there was no room for

disagreements in the party apparatus at any level.

Dissent of any kind was branded as insubordination

and sycophancy became the order of the day. For

Indira Gandhi's Congress the State Chief Ministers

were like Branch Managers of a corporate set-up run

by circulars issued from the Head Office (read High

Command). While dismissing even genuine

differences of opinions as rebellious behaviour, the

party got rid of their tall leaders and insulated

themselves from the masses so much so that today it

is so difficult to find able leaders in the Grand Old

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Party at any level. No surprise that people like Sushil

Kumar Shinde are so much in demand. Imagine that

he is now sitting in the same chair which was once

occupied by a leader called Sardar Vallabhbhai Patel!

When Rahul Gandhi laments about his party's

disconnect with the people and a small coterie running

the affairs of the nation he has to be reminded that

this is the handiwork of his own ancestors and he

himself is the beneficiary of this unholy arrangement.

Satyapal Singh the erstwhile Commissioner of Mumbai

sprang a surprise by opting for voluntary retirement

from his post and joined politics the next day raising

certain disturbing questions. Congress is crying foul

as Singh chose to join BJP. Recently R K Singh the

former Home Secretary after retirement joined BJP

and raised a stink against his former political boss

Sushil Kumar Shinde. The former Army Chief who

had a score to settle with the Government joined the

Anna movement and is now inching closer to BJP. It

is an open secret that the bureaucrats start planning

their second innings even before they demit office.

By currying favour with the ruling establishment they

make sure that once you join the government service

you never really retire. So is the case with the

appointments post retirement for judicial officers. The

service rules only provide that an officer after

retirement cannot take up a private sector job before

completing a mandatory cooling off period of two

years which is also observed more in breach as there

is no bar in engaging their services as consultants.

Appointment as Governor of a state is another window

of opportunity to the retired bureaucrats. The recent

incident of Satyapal Singh has brought this sordid state

of affairs more into focus. This practice has to stop.

One hopes that out of sheer pique that most of these

retirees are joining the Opposition the Central

government may enact some legislation which would

bar such patently unethical practices. This could very

well be an AAP Agenda to cleanse the system.

Corruption takes many forms and this is definitely one

of them.

On a day when the whole of Andhra Pradesh should

be celebrating the achievement of one of their own

who goes by the name of Satya Nadella on being

chosen to head Microsoft as its CEO, his folks back

home are engaged in a bitter dispute over the creation

of Telengana. Manmohan Singh and his government

have gone to seed is an accepted fact and the people

of the country have also resigned to that inevitable

fact. It is, however, dangerous that even in the dying

moments the government is still trying to spawn

anarchy and lawlessness. What the congress

government is doing is to preside over a dangerous

game of permanently damaging the social fabric in

every part of the nation pitting one against the other

all in the name of politics and for electoral gains. Even

if there is merit in the creation of a new state, the

present lame duck government should not be allowed

go ahead with its plan of bifurcating Andhra Pradesh,

for the present dispensation has no credibility left to

take such an important decision involving the future

of so many people in that region. As we go to press

the government is trying to hustle the Telengana Bill

through the Parliament by hook or by crook. One hope

it doesn't succeed. By the way when we celebrate

the achievement of Satya Nadella we are also passing

an indictment on our system which forces the potential

achievers to migrate out of the country if they have to

do what they have done - be it Nobel laureates,

business tycoons or whatever. By the way again, none

of these icons who have achieved something big are

Indian citizens; they may be of Indian origin.

The flavour of the season is undoubtedly what has

now come to be known as Dharna politics. No one is

interested in the old fashioned practice of raising

people's issues in Parliament (that is, if the Parliament

were to function, in the first place). There is much

better visibility and freedom at Jantar Mantar. Kejriwal

and his Aam Aadmi Party have made it fashionable

to sit on Dharna notwithstanding the cause and effect.

In the process Dharna Dharma is being reinvented

and rewritten. As of writing this piece there is this Chief

Minister of Andhra Pradesh sitting on Dharna against

his own government in Delhi; the Telengana

protagonists on a Dharna next to him demanding

creation of a separate state; Kejriwal & Co. back again

on the ground to announce to the world that their

earlier Dharna about wanting to bust the prostitution

and drug racket have been proved right and justified,

after all. At this rate it may be advisable for the Delhi

government consider building a Dharna Complex at

Jantar Mantar on the lines of a huge Exhibition Centre.

This would generate some much needed revenue for

the state government. Proper arrangements can be

made for the Ministers and Bureaucrats to visit the

concerned stalls where causes associated with their

ministries are being agitated upon. They will save

precious time and can plan their days better. This

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could result in better traffic management, availability

of water for water-cannons, better employment

opportunities for catering services, event

management outfits and the like. Delhi would look

better organised. Moreover, Dharna as a concept

stands self authenticated as it has been invented by

none other than the original Gandhi (may his soul

rest in peace). On a serious note one sincerely hopes

that street democracy does not lead to meting out

street justice. Amen.

From Dharna politics let us now move to Statue

politics. News has just come in that the tallest statue

in the country would be that of Shivaji Maharaj off the

coast of Mumbai. In this highly competitive atmosphere

with elections round the corner every extra inch on

the statue could mean extra votes. Never mind the

cost. Whose money is it any way? Mayawati and her

handbag were criticised equally when she built her

own statue with her handbag during her tenure as

the Chief Minister of Uttar Pradesh. When Sardar

Patel, the real 'iron man' was to be resurrected through

a statue made of iron by Narendra Modi the congress

party was quick to criticise BJP. Now a Congress Chief

Minister himself has joined the bandwagon of

competitive statue politics. Prithviraj Chavan may have

won the battle but not the war yet. Remember there

are another 27 states left who are yet to announce

their decision to join the statue politics and their

budgets. Watch this space.

The chatterati in a society consisting largely of the

middle class serves a useful purpose. They serve

themselves very well even at the expense of others.

At one point in time recently it looked as though they

had lost their voice when the government at the Centre

decided that subsidised LPG cylinders would be

limited to 6 despite their vociferous protest. They had

their day when it was revised upwards to 9 a short

while later. They scored a decisive victory when Rahul

Gandhi in his newly acquired aggressive avatar at

the recent AICC session demanded this quota be

increased to 12 and the government obliged post-

haste. In the process what was rolled back was one

of the very few sensible reform measures introduced

by this government. Subsidy on LPG is a classic case

of misdirected subsidies even according to the

Governor of the Reserve Bank of India. The economist

Prime Minister then defended the earlier decision to

limit the quota to 6 by saying that "money doesn't

grow on trees". As it is still not growing on trees, at

least in India, will the government explain the rationale

for the recent decision? "Rob Paul to pay Peter" - so

goes the saying. In this instance it is robbing the poor

to pay the not-so-poor. The story of a puppet

becoming a pied piper is complete. Will the real

Manmohan Singh please stand up?

Mani Shankar Aiyar, the Congress Party's self

appointed ideologue wants the world to see him as

an erudite and scholarly politician belonging to a

different class. He kicked up a controversy recently

by contemptuously calling Narendra Modi an ordinary

chai-walla and not worthy of his attention even. In

one stroke he gave BJP a stick to beat the congress

with and also showed himself up as an intellectually

arrogant bigot. He belongs to that class which equates

command over the English language to uncommon

common sense and even some form of extreme

wisdom. His comment was not only in bad taste but

also obnoxious. With people like him the ruling party

is increasingly looking like a zoo where all kinds

inmates are allowed thrive with total protection.

Revolutionaries across the globe justify their actions

with the rationale that end justifies the means. In a

well entrenched system running on its own inertia

looking for volunteers to make change happen is

difficult, nay, impossible. Kejriwal the Chief Minister

of Delhi was pilloried by all the arms of the established

society like the government, the media, the judiciary,

the police and what have you when he took the unusual

step of sitting on a Dharna to demand action against

the Delhi Police for dereliction of duty. In doing so

Kejriwal did not endear himself to the puritans in the

society. But these tactics suited him politically and

helped him to highlight the rot in the police system

quite effectively though perhaps not so conventionally.

No police reform has come about through

conventional means all these years till date. It is

perhaps time that someone thinks out of the box to

force the hands of those who are well entrenched in

the establishment and use the police to do their

bidding. The jury is still out on whether the means

adopted by Kejriwal would indeed be condoned if it

results in cleansing the rotten system in which we all

live.

Thank you.

Venkat R. Venkitachalam

4


CUSTOMS

NOTIFICATIONS

Tariff

• Import of specified goods from the Republic of

Korea shall attract lesser duties on most of the

products since there is further reduction in rate

of customs leviable on specified goods w.e.f 1st

January 2014. [Notification No. 54/2013-Cus

dated 31-12-2013]

• Import of Tanks and other armoured fighting

vehicle (8710) and Hydraulic Turbines, Water

Wheels and regulators, Turbo Jets, other engines

(falling under 8410 to 8412) from Japan will

attract higher duties w.e.f 1st January 2014.

[Notification No. 55/2013-Cus dated

31-12-2013]

• Import of goods from Malaysia shall attract lesser

duties on most of the products since there is

further reduction in rate of customs leviable on

goods as described in the notification w.e.f 1st

January 2014. [Notification No. 56/2013-Cus

dated 31-12-2013]

• Import of specified goods from Member States

of the Association of Southeast Asian Nations

(ASEAN) shall attract lesser duties on most of

the products since there is further reduction in

rate of customs leviable on goods as described

in the notification w.e.f 1st January 2014.


31-12-2013]

• Exemption from payment of whole of customs

duty, additional duty, safeguard duty and anti-

dumping duty on material imported into India

against Advance Authorization meant for export

of prohibited item, subject to certain conditions

as specified in the notification. [Notification 01/

2014-Cus Dated 17-01-2014]

• Standard rate of customs duty has been

increased from 7.5% to 10% in case of following

chapter heading nos. pertaining to edible oils:

Sr.No. Chapter Heading Description of goods

56 15079010 All goods

58 1508, 1509, 1510, 1512, All goods, refined and

1513, 1514 or 1515 edible grade

59 1511 90 All goods

63 15121910 All goods

66 1514 19 or 15 14 99 All goods, edible grade

69 1516 20 All goods, edible grade

71 1517 10 21, 1517 90 10, All goods, edible grade

1517 90 20, 1518 00 11,

1518 00 21 or 1518 00 31


20-01-2014]

• Standard rate of custom duty on import of "Iron

ore pellets" under chapter heading 26011210 has

been increased to 5% from nil rate of duty as

provided in Notification No. 27/2011-Cus dated

01-03-2011. [Notification No. 03/2014-Cus

Dated 27-01-2014]

• Exemption for Tunnel Boring Machine has been

revised to read as under,

Table Chapter or AddiSr.No. Heading or Description of Stand- tional Condi-

sub-heading goods ard duty tionor tariff item rate rate No.

397 84 or any The followingother Chapter goods, namely :-

(A) Tunnel boring Nil - -machines(B) Parts and Nil - -

components of(A) for using theassembly of Tunnelboring machines

[Notification No. 04/2014-Cus Dated 03-02-2014]

5


• Rate of All Industry duty drawback has been amended for goods falling under chapter headings - 3, 42,

48, 57, 60, 61, 62, 63, 73, 84, 87 & 95 with effect from 25th January 2014. Details are given separately as

below.

1. In CHAPTER - 3, for Tariff item 030602 and the entries relating thereto, the following Tariff items

and entries shall be substituted, namely :-

030602 In frozen form other than Accelerated Kg 3.3% 14.6 2.3% 10.2

030603 Accelerated Freeze Dried Kg 1.8% 38 1% 21.1

2. In CHAPTER - 42, -

a) against Tariff item 420207, for the entry in column 5, the entry "70" shall be substituted;

b) against Tariff item 420207, for the entry in column 7, the entry "15.4" shall be substituted;

c) against Tariff item 420210, for the entry in column 5, the entry "70" shall be substituted;

d) against Tariff item 420210, for the entry in column 7, the entry "15.4" shall be substituted;

e) against Tariff item 420307, for the entry in column 5, the entry "42" shall be substituted;

f) against Tariff item 420307, for the entry in column 7, the entry "14.3" shall be substituted;

3. In CHAPTER - 48,-

a) against Tariff item 4820200001, in column 2, the words "or without", shall be omitted;

b) against Tariff item 4820200001, for the entry in column 4, the entry "6.7%" shall be substituted

c) against Tariff item 4820200001, for the entry in column 5, the entry "7.2" shall be substituted;


e) against Tariff item 4820200009, for the entry in column 4, the entry "6.7%" shall be substituted;


g) against Tariff item 4820200009, for the entry in column 7, the entry "1.8" shall be substituted;


a) against Tariff item 570206, for the entry in column 5, the entry "53.5" shall be substituted;

b) against Tariff item 570206, for the entry in column 7, the entry "28.4" shall be substituted;

c) against Tariff item 570305, for the entry in column 5, the entry "53.5" shall be substituted;


e) against Tariff item 570505, for the entry in column 5, the entry "53.5" shall be substituted;



a) after the Tariff item 600209 and the entries relating thereto, the following Tariff items and entries

shall be inserted, namely:-

Tariff

ItemDescription of goods Unit

Drawback when

Cenvat facility has

not been availed

Drawback when

Cenvat facility has

been availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

6


Tariff


Drawback when

Cenvat facility has

not been availed

Drawback when

Cenvat facility has

been availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

600210 Of Man Made Fibres containing 5% or more

by weight of spandex/lycra/elastane (Grey) Kg 8.30% 60 3.10% 22.4

600211 Of Man Made Fibres containing 5% or more

by weight of spandex/lycra/elastane (Grey) Kg 8.80% 72 3.10% 25.4

600212 Of Cotton containing 5% or more by weight

of spandex/lycra/elastane (Grey) Kg 5.90% 34 1.60% 9.2

600213 Of Cotton containing 5% or more by weight

of spandex/lycra/elastane (Dyed) Kg 6.40% 40 1.60% 10

600214 Of Blend containing Cotton and Man Made

Fibre where MMF predominates by weight

and containing 5% or more by weight of

spandex / lycra / elastane (Grey) Kg 7.50% 57.3 3.10% 23.7


Fibre where MMF predominates by weight


spandex / lycra / elastane (Dyed) Kg 8% 63.9 3.10% 24.8


Fibre where Cotton predominates by weight


spandex / lycra / elastane (Grey) Kg 5.90% 37.9 1.30% 8.3




spandex / lycra / elastane (Dyed) Kg 6.40% 50.1 1.30% 10.2

b) after the Tariff item 600409 and the entries relating thereto, the following Tariff items and entries shall be

inserted, namely:-

Tariff


Drawback when

Cenvat facility has

not been availed

Drawback when

Cenvat facility has

been availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

600410 Of Man Made Fibres containing 5% ormore by

weight ofspandex/lycra/elastane (Grey) Kg 8.3% 60 3.1% 22.4

600411 Of Man Made Fibres containing 5% or more by

weight ofspandex/lycra/elastane (Dyed) Kg 8.8% 72 3.1% 25.4

600412 Of Cotton containing 5% or more by weight of

spandex/lycra/elastane (Grey) Kg 5.9% 34 1.6% 9.2

7


Tariff


Drawback when Cenvatfacility has

not been availed

Drawback whenCenvat facility has

been availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

600413 Of Cotton containing 5% or more by weight of

spandex/lycra/ elastane (Dyed) Kg 6.4% 40 1.6% 10.0

600414 Of Blend containing Cotton and ManMade

Fibre where MMF predominates by weight and

containing 5% or more by weight of spandex/

lycra/elastane (Grey) Kg 7.5% 57.3 3.1% 23.7


Fibre where MMF predominates by weight and

containing 5% or more by weight of spandex/

lycra/elastane (Dyed) Kg 8% 63.9 3.1% 24.8



and containing5% or more by weight of

spandex/lycra/elastane (Grey) Kg 5.9% 37.9 1.3% 8.3



and containing5% or more by weightofpandex/

lycra/elastane (Dyed) Kg 6.4% 50.1 1.3% 10.2";

6. In CHAPTER - 61, after the Tariff item 611608 and the entries relating thereto, the following

611609 Gloves, specially designed for use in sports Per

namely Golf Gloves made of synthetic materials piece 7.6% 35.2 1.7% 7.9

7. In CHAPTER - 62, after the Tariff item 621607 and the entries relating thereto, the following

TariffItem

Description of goods Unit


not been availed

Drawback when Cenvatfacility has been

availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

621608 Gloves, specially designed for use insports Per

namely Golf Gloves made of synthetic Piece 7.6% 35.2 1.7% 7.9

materials

8


8. In CHAPTER - 63, for Tariff items falling under heading 6307 and the entries relating thereto, the following

Tariff items and entries shall be substituted, namely :

Tariff Description of goods Unit



Drawback Drawbackcap per

Drawback Drawbackcap per

630701 Fabric Swatches Kg 7.2% 69.2 1.8% 17.3

630702 Others (excluding fabricswatches)

63070201 Of Cotton Kg 7.2% 75 1.8% 18.7

63070202 Of Blend containing Cotton and

Man Made Fibre Kg 8.2% 84 1.5% 15.4

63070203 Of Man Made Fibres Kg 9.2% 94 1.1% 11.2

63070204 Of Silk (other than containing noil silk) Kg 7.8% 414.5 4% 212.6

63070205 Of Noil Silk Kg 7.8% 129 4% 66.2

63070206 Of Wool Kg 7.2% 108 1.8% 27

63070207 Of Others Kg 7.2% 69.2 1.8% 17.3

9. In CHAPTER - 73, after Tariff item 732643 and the entries relating thereto, the following Tariff item and

the entries shall be inserted, namely:-

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

732644 Steel Cops/Pirn/Bobbins 1.9% 1.9%

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

8436 Other agricultural, horti-cultural, forestry,

poultry-keeping or bee- keeping machinery,

including germi-nation plant fitted with

echanical or thermal equipment; poultry

incubators and brooders

843601 Poultry equipment and parts thereof Kg 7.2% 10 1.7% 2.3

843699 Others 1.7% 1.7%

10. In CHAPTER - 84, for Tariff item 8436 and the entries relating thereto, the following Tariff items and

entries shall be substituted, namely :-

9


11. In CHAPTER - 87, for all the Tariff items and the entries relating thereto, the following Tariff items and

entries shall be substituted, namely :-

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

8701 Tractors (otherthantractors of heading 8709) 1 No. 6.5% 26000 2% 8000

8702 Motorvehiclesforthetransport

Oftenormorepersons,including the driver

870201 CommercialVehicleofGVWupto

7.5 MT in CBU/SKD/CKD Condition 2% 2%

870202 Commercial Vehicles of GVW

above7.5MTinCBU/SKD/CKD condition 2% 2%

870299 Others 2% 2%

8703 Motor cars and other motor vehicles principally

designed for the transport ofpersons (other

thanthoseofheading 8702), including station

wagons and racing cars

870301 Rear Engine Auto Rickshaw in

CKD/ SKD/ CBU condition 2% 2%

870302 Motor cars having Manual Transmission 1 No. 2.85% 25000 2.85% 25000

870303 Motor cars having Automatic Transmission 1 No. 3.67% 34000 3.67% 34000

870399 Others 2% 2%

8704 Motorvehiclesforthetransport ofgoods





870499 Others 2% 2%

8705 Special purpose motor vehicles, other than

those principally designed for the transport of

persons or goods (for example, break down

lorries, crane lorries, firefighting vehicles,

concrete- mixers lorries, spraying lorries,

mobile workshops, mobile radiological units)





1 0


TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

870599 Others 2% 2%

8706 Chassis fitted with engines, for the motor

vehicles of headings 8701 to 8705

870601 Front EngineThree Wheeler Drive away

Chassis in CKD/ SKD/CBU condition 2% 2%

870602 Chassis,with or without cabin, for Commercial

Vehicle of GVW upto 7.5 MT in CBU/SKD/CKD

Condition 2% 2%

870603 Chassis,with or withoutcabin, for Commercial

Vehiclesof GVW above 7.5MTinCBU/SKD/CKD

condition 2% 2%

870699 Others 2% 2%

8707 Bodies (including cabs), for the motor vehicles

of headings 8701 to 8705 2% 2%

8708 Parts and accessories of the motor vehicles of

headings 8701 to 8705

870801 Nozzles Kg 7.2% 17.0 2% 4.7

870802 Piston Pin/ GudgeonPin Kg 7.2% 17.0 2% 4.7

870803 Steel Anchor Pin Kg 7.2% 17.0 2% 4.7

870804 BB Axle Kg 7.2% 17.0 2% 4.7

870805 Brake shoe plate Kg 7.2% 17.0 2% 4.7

870806 Chain Cover Hinges Shakle Plates

Made of CRCA Sheet Kg 7.2% 17.0 2% 4.7

870807 ConnectingRods Kg 7.2% 17.0 2% 4.7

870808 Crank for chain wheel Kg 7.2% 17.0 2% 4.7

870809 FrontAxlebeam/I-Beam, made of Alloysteel Kg 7.2% 17.0 3% 7.1

870810 Front Axle beam/I-Beam, made of

non-alloy steel Kg 7.2% 17.0 2% 4.7

8708011 FullTensionSleeve Kg 7.2% 17.0 2% 4.7

8708012 Spokes (Galvanised) Kg 7.2% 17.0 2% 4.7

8708013 Machined trailor ball/ hitch pin/Linkage pin Kg 7.2% 17.0 2% 4.7

8708014 Push rod Kg 7.2% 17.0 2% 4.7

1 1


8708015 RadiatorCap Kg 7.2% 17.0 2% 4.7

8708016 SleeveShaftandBallJoint Kg 7.2% 17.0 2% 4.7

8708017 Slip StubShaft Kg 7.2% 17.0 2% 4.7

8708018 Spindles Kg 7.2% 17.0 2% 4.7

8708019 Sprocket with central axle Kg 7.2% 17.0 2% 4.7

8708020 V-BeltCoverBcP Kg 7.2% 17.0 2% 4.7

8708021 Valve Tappets Kg 7.2% 17.0 2% 4.7

8708022 Automotive Radiator Core of Copper/Brass

construction Kg 7.2% 49.5 2% 13.7

8708023 Automotive Radiator assembly with radiator

core of Copper/ Brassconstruction Kg 7.2% 49.5 2% 13.7

8708024 Automotive Radiator assembly with radiator

core of Steel/Brass construction Kg 7.2% 34.0 2% 9.4

8708025 Roller for auto break shoe Kg 7.2% 17.0 2% 4.7

8708026 SplineHubforClutchPlates Kg 7.2% 17.0 2% 4.7

8708027 Front/rear axle shaft Kg 7.2% 17.0 2% 4.7

8708028 Auto Parts Double Brake Chamber

Type 24 L/S Kg 7.2% 17.0 2% 4.7

8708029 Auto Parts Brake Chamber Type 16L/S Kg 7.2% 17.0 2% 4.7




8708033 Auto Parts Brake Chamber Type 30 S/S Kg 7.2% 17.0 2% 4.7

8708034 Steering Knuckle Kg 7.2% 17.0 2% 4.7

8708035 TractorParts-Top Link Assembly and

Parts thereof Kg 7.2% 17.0 2% 4.7

8708036 Tractor Parts-Stabilizer Assembly/Chain

Assembly and Parts thereof Kg 7.2% 17.0 2% 4.7

8708037 Tractor Parts- Lift Arm/Lower

Link and Parts thereof Kg 7.2% 17.0 2% 4.7

8708038 Tractor Parts-Draw Bar Kg 7.2% 17.0 2% 4.7

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

1 2


8708039 Tractor Parts- Ratchet Jack

AssemblyandParts thereof Kg 7.2% 17.0 2% 4.7

8708040 Tractor Parts- Levelling Assembly and

Parts thereof Kg 7.2% 17.0 2% 4.7

8708041 Tractor Parts-BallforTractor Parts Kg 7.2% 17.0 2% 4.7

8708042 Tractor Parts-Reducing Bush Kg 7.2% 17.0 2% 4.7

8708043 Deleted

8708044 Tractor Parts-StubAxle/Front Axle Spindle Kg 7.2% 17.0 2% 4.7

8708045 Tractor Parts- Tie Rod End and Parts thereof Kg 7.2% 17.0 2% 4.7

8708046 Deleted

8708047 Deleted

8708048 ConeSleeve/Axle Stud sleeve 2% 2%

8708049 Rear Axle Assembly for LCV/

HCV (Assembly/SKD) 2.6% 2.6%

8708050 RockerArm/Rocker Shaft made of Steel 2% 2%

8708051 Aluminium Pistons, in fully machined conditions 2% 2%

8708052 Clutch Cover Assembly 2% 2%

8708053 Clutch Plate /Disc Assembly/Driven plate 2% 2%

8708054 Brake Drums madeof Alloy Cast Iron 2% 2%

8708055 Nut and Shaft Assembly for Automobile 2% 2%

8708056 Rear Axle Housing Assembly for LCV/HCV 2% 2%

8708057 Chrome/Nickel Plated wire wheel

For all types of car 2% 2%

8708058 ShockAbsorber 2% 2%

8708059 Power takeoffs /clutches 2% 2%

8708060 Diffuserand parts thereof 2% 2%

8708061 Distributor Type Fuel Injection Pump 3.3% 3.3%

8708062 End-Cap Assembly 2% 2%

8708063 General Purpose Metal Fitted/ Metal Bonded /

Metal Un-bonded Automobile Rubber Parts

(Moulded/Extruded) including Engine Mounting Kg 3% 17.1 3% 17.1

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

1 3


8708064 Identifiable ready touse machined Parts/

components made whollyor predominantly of

iron / carbon steel /Non Alloy Steel/Alloy steel

(other than StainlessSteel) (not less than 90%

by weight) manufactured through casting

process, not else where specified. 2% 2%

8708065 Identifiable ready touse machined Parts/

components madewhollyor predominantly of

Stainless Steel (not less than 90% by weight)

manufactured through casting process, not else

where specified. Kg 2.6% 6.2 2.6% 6.2

8708066 Identifiable ready touse machined parts/

components made whollyor predominantly of

carbon steel / Non Alloy Steel/ (not less than

90% by weight) manufactured through forging

process, not else where specified. 2% 2%

8708067 Identifiable ready touse machined parts/

components made wholly or predominantly of

Alloy Steel (not less than 90% by weight)

manufactured through Forging process, not else

where specified Kg 3% 6.5 3% 6.5

8708068 Identifiable ready touse machined parts /

components made wholly or predominantly of

Stainless Steel (not less than 90% by weight)

manufactured through Forging process, not

else wheres pecified Kg 3% 14.4 3% 14.4

8708069 Cast articles including parts/components of

Aluminium, not else where specified 2% 2%

8708070 Alloy Steel Forgings (Machined) Kg 3% 6.5 3% 6.5

8708099 Others 2% 2%

8709 Works trucks, self-propelled, not fitted with

lifting or handling equipment, of the type used

infactories, warehouses, dockareas or airports

for short distance transport of goods; tractors

of the type usedon railway station platforms;

parts of the foregoing vehicles 2% 2%

87100000 Tanks and other armoured fighting vehicles,

motorized, whether or notfitted with weapons,

and parts of such vehicles Nil Nil

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

1 4


871102 Automotive Steel Wheel Rims14"- 16"

(Excluding Wire Wheels) Kg 7.2% 14.2 2% 3.9

871103 Scooter (in CKD/SKD/CBU condition) 2% 2%

871104 Motor Cycle (inCKD/SKD/CBU condition) 2% 2%

871105 Moped (in CKD/SKD/CBU condition) 2% 2%

871199 Others 2% 2%

8712 Bicycles and other cycles (including delivery

tricycles), not motorized

871201 Complete Bicycle singlespeed 1 No. 11.7% 439.5 2% 75.1

871202 Complete Bicycle having multi- Speed

chain wheel and crank with multi-speed

freewheel 1 No. 13.3% 608 4.3% 196.6

871203 Multi-speed complete bicycle with geared hubs 1 No. 13.3% 608 4.3% 196.6

871299 Others 2% 2%

8713 Carriages for disabled persons, whether or not

motorised or otherwise mechanically propelled 2% 2%

8714 Partsandaccessoriesofvehicles of headings

8711 to 8713

871401 BB axle 100 11.4% 351 2% 61.6

Pcs

871402 BBCup set of 3 1 Set 11% 2.7 2% 0.5

871403 Deleted

871404 Brakeset 1 Set 11.4% 10.9 2% 1.9

871405 Chain 100 11% 661 2% 120.2

Pcs

871406 Chain Adjuster Per 11% 0.5 2% 0.1

pair

871407 Single speed Chain wheel and Crank

(Crank madeof steel) 1 Set 11% 17.3 2% 3.1

871408 Cotter pin-Set of 2 1 Set 11% 0.6 2% 0.1

871409 FramemadeofsteelwithoutB.B. cup and axle Per 8% 53 2% 13.2

piece

871410 Fork 100 11.4% 1658.7 2% 291

Pcs.

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

1 5


871411 ForkFitting 1 Set 10.5% 3.8 2% 0.7

871412 Freewheel single speed 100 10.5% 472.5 2% 90

Pcs.

871413 Handle bar madeof steel 1 Set 10.5% 23.7 2% 4.5

871414 Handle stem madeof steel 100 11.4% 345 2% 60.5

Pcs.

871415 Hub (front orrear)madeofsteel 100 10.5% 672 2% 128

Pcs.

871416 Lamp bracket 100 11.4% 135.7 2% 23.8

Pcs.

871417 Mudguard (pair) Per 11.4% 22.4 2% 3.9

Pcs.

871418 Pedal (pair) Per 11.4% 8.2 2% 1.4

Pcs.

871419 Rim(pair)madeof steel Per 11.4% 37.2 2% 6.5

Pcs.

871420 Saddle 100 11.4% 2297 2% 403

Pcs

871421 Seat Pillar 100 11.4% 169.8 2% 29.8

Pcs

871422 Spokes set of144 pieces 1 Set 11.4% 13.7 2% 2.4

871423 Single speed Chain wheel and Crank

(Crank made of aluminium) Kg 10% 25.8 2% 5.1

871424 Cranks madeout of aluminium Kg 10% 45 2% 9

871425 Triplechainwheelandcrank set 1 Set 10% 29.1 2% 5.8

871426 Handle Bar Switch Per 10% 29.1 3% 8.7

piece

871427 Half Collets for engine valves Per 10% 6.8 2% 1.3

piece

871428 Industrial Roller Chain/Motor cycles including

Moped Chain/Automotive Timing Chains

(all types includings pares) Kg 10% 25.8 2% 5.1

871429 Chain wheel Per

piece 10% 51.6 2% 10.3

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.

1 6


871430 Multispeed freewheel Per

piece 10% 34.3 2% 6.8

871499 Others Kg 10% 17.1 2% 3.4

8715 Baby carriages and parts thereof Kg 7.2% 14.2 2% 3.9

8716 Trailers and semi-trailers; other vehicles,

not mechanically propelled; parts thereof

871601 Truck and Trailer Wheels Kg 7.2% 14.2 2% 3.9

871602 Earth Moving Wheel Components, namely,

Bead Seat Ring, Gutter Band Fixed Flange

and Lock Ring Kg 7.2% 14.2 2% 3.9

871603 Others 2% 2%

TariffItem



not been availed


availed

DrawbackRate

Drawbackcap per

unit in Rs.

DrawbackRate

Drawbackcap per

unit in Rs.


a) against Tariff item 950304, in column 3, the

entry "Kg" shall be inserted;

b) against Tariff item 950304, for the entry in

column 4, the entry "4.7%" shall be

substituted;

c) against Tariff item 950304, in column 5, the

entry "26.9" shall be inserted;

d) against Tariff item 950304, in column 7, the


e) against Tariff item 950305, in column 3, the

entry "Kg" shall be inserted;

f) against Tariff item 950305, for the entry in

column 4, the entry "4.7%" shall be

substituted;

g) against Tariff item 950305, in column 5, the


h) against Tariff item 950305, in column 7, the


i) against Tariff item 95069962, for the entry

in column 3, the entry "set" shall be

substituted;

j) against Tariff item 95069962, for the entry

in column 4, the entry "7.2%" shall

besubstituted;

k) against Tariff item 95069962, for the entry

in column 5, the entry "470" shall be

substituted;

l) against Tariff item 95069962, for the entry

in column 7, the entry "111" shall be

substituted;

[Notification No. 05/2014-Cus (N.T) Dated 21-

01-2014]

• Prohibition for import of goods from Bhutan will

not be applicable in case of import of machinery

and equipment, which were exported to Bhutan

from countries other than India through an Indian

place of entry subject to condition notified.

[Notification No. 07/2014-Cus (N.T) Dated 28-

01-2014]

• Tariff value of following items has been revised:

Sr. Chapter / heading / Description Tariff value US $No. sub-heading / of goods (Per Metric

tariff item Tonne)

1 1511 10 00 Crude Palm Oil 857

2 1511 90 10 RBD Palm Oil 880

3 1511 90 90 Others - Palm Oil 869

4 1511 10 00 Crude Palmolein 896

5 1511 90 20 RBD Palmolein 899

6 1511 90 90 Others - Palmolein 898

1 7


7 1507 10 00 Crude Soyabean Oil 917

8 7404 00 22 Brass Scrap 3959

(all grades)

9 1207 91 00 Poppy seeds 3195

10 71 or 98 Gold, in any form, in 404 per 10respect of which the gramsbenefit of entries atserial number 321and 323 of the Notifi-cation No. 12/2012-Customs dated17.03.2012 is availed

11 71 or 98 Silver, in any form, in 635 perrespect of which the kilogrambenefit of entries atserial number 322and 324 of the Notifi-cation No. 12/2012-Customs dated

17.03.2012 is availed

12 080280 Areca nuts 1816"

[Notification No. 08/2014-Cus (N.T) Dated

31-01-2014]

Safeguards

No new notifications!!

Anti Dumping Duty

• Name of producer/exporter "Grodno

Khimvolokno" has been substituted by "JSC

Grodno Azot" for anti-dumping duties on import

of Nylon Tyre Cord Fabric Notification No. 121/

2009-Cus dated 30-10-2009, against serial no.

1 & 2. [Notification No. 01/2014-Cus (ADD)

Dated 03-01-2014]

• Anti-dumping duty on imports of Compact

Fluorescent Lamps originating in or exported

from China PR was imposed vide Notification No.

55/2009-Cus dated 26-05-2009 without any time

limit. Explanation has been added to the above

said notification as - anti-dumping duty imposed

against serial nos. 1 to 28 shall remain in force

up to and inclusive of the 20-11-2014.

[Notification No. 02/2014-Cus (ADD) Dated

03-01-2014]

• Anti-dumping duty on Caustic Soda, falling under

Chapter 28, originating in, or exported from

People's Republic of China, imposed vide

Notification No. 137/2008-Cus dated 26-12-2008

valid till date 25-12-2013 has been further

extended by 1 year to date 25-12-2014.


16-01-2014]

• Anti-dumping duty on Caustic Soda, falling under

Chapter 28, originating in, or exported from

Korea RP, imposed vide Notification No. 95/

2011-Cus dated 03-11-2011 valid till date 25-

12-2013 has been further extended by 1 year to

date 25-12-2014. [Notification No. 04/2014-

Cus (ADD) Dated 16-01-2014]

• Anti-dumping duty on imports of Nonyl Phenol

(falling 29071300) originating in or exported from

Chinese Taipei, imposed vide Notification No. 94/

2007-Cus dated 22-08-2007 valid till date 21-

08-2013 has been imposed further for another

5 years from the date of publication of this

notification in the Official Gazette. [Notification

No. 05/2014-Cus (ADD) Dated 16-01-2014]

• Anti-dumping duty on Acrylonitrile Butadiene

Rubber, originating in, or exported from Korea

RP, imposed vide Notification No. 01/2009-Cus

dated 02-01-2009 valid till date 01-01-2014 has

been further extended by 1 year to date 01-01-

2015. [Notification No. 06/2014-Cus (ADD)

Dated 23-01-2014]

• Anti-dumping duty on imports of Float Glass of

thickness 2 mm to 12 mm (both inclusive) of clear

as well as tinted variety (other than green glass)

but not including reflective glass, processed glass

meant for decorative, industrial or automotive

purposes falling under heading 7005, originating

in, or exported from, China PR and Indonesia

imposed vide Notification No. 04/2009-Cus dated

06-01-2009 valid till date 05-01-2014 has been

further extended by 1 year till date 05-01-2015.


23-01-2014]

• Anti-dumping duty on imports of Hexamine falling

under tariff item 2921/2910, originating in or

exported from the Saudi Arabia and Russia,

imposedvide Notification No. 89/2007-Cus dated

25-07-2007 valid till date 24-07-2013 has been

imposed further for another 5 years from the date

1 8


of publication of this notification in the Official

Gazette. [Notification No. 08/2014-Cus (ADD)

Dated 23-01-2014]

• Anti-dumping duty has been imposed on imports

of Diamino Stilbene , Disulphonic Acid (DASDA)

falling under Chapter 29, originating in, or

exported from the People's Republic of Chinafor

a period of 5 Years from the date of publication

of this notification in the Official Gazette.


23-01-2014]

• Anti-dumping duty on imports of Phosphoric Acid

- Technical Grade and Food Grade(including

Industrial Grade), falling under Sub-heading

280920 originating in, or exported from People's

Republic of China, imposed vide Notification No.

17/2008-Cus dated 19-02-2008 has been

imposed further for another 5 years from the date

of publication of this notification in the Official

Gazette. [Notification No. 33/2013-Cus (ADD)

Dated 31-12-2013]

• Anti-dumping duty on imports of Recordable

Digital Versatile Disc (DVD) of all kinds originating

in or exported from Vietnam, imposed vide

Notification No. 98/2010-Cus dated 28-09-2010

has been amended to modify the quantum of

anti-dumping duty. [Notification No. 34/2013-

Cus (ADD) Dated 31-12-2013]

CENTRAL EXCISE

Notifications

Tariff

• The excise duties on Pan Masala and Pan

Masala containing tobacco classified under 2106

90 20 and 2403 99 90 has been increased in the

range of 5% to 8% in case of Pan Masala and

around 28% in case of Pan Masala containing

tobacco. Accordingly apportionment of total

excise duties into Central Excise duties, National

Calamity Contingent duties, ED Cess and SHE

cess has also been changed. [Notification no.

01/2014-CE dated the 24/01/2014]

• The excise duties on Chewing tobacco classified

under tariff item 2403 99 10, unmanufactured

tobacco classified under Heading 2401 and

Jarda scented tobacco classified under 2403 99

30, notified under section 3A is being enhanced.

[Notification No.02/2014-CE dated the 24/01/

2014]

Non-Tariff

• Cenvat Credit Rules has been amended w.r.t.

remission of duties on finished goods. Now

Cenvat Credit availed on input and input services

also will be required to be reversed. However

the procedure to identify the input services is not

been specified in the rules, this will lead to

confusion. Moreover, there will be a conflict of

Cenvat Credit reversal required under sub rule

3(A) of Rule 6 of Cenvat Credit Rules 2004 vis-

à-vis reversal of cenvat on input service required

for remission. The formula of how to arrive

reversal of input services has not been defined

and therefore there will be always disputes and

permission of remission may be denied.

[Notification No. 01/2014 - Central Excise

(N.T.) dated 08/01/2014]

• Confusion created by audit team w.r.t. date of

payment of duty for removal of input as such and

capital goods after use has been clarified and

the same has been aligned with payment of duty

on finished goods i.e. on or before 5th of the

following month except for the month of March

which is on 31st March [Notification No. 01/

2014 - Central Excise (N.T.) dated 08/01/2014]

• Recovery provision of Cenvat Credit in

accordance with Rule 14 of Cenvat Credit Rules

2004 has been extended to recovery / reversal

of duties in case of remission of the duties under

Rule 21 of Central Excise Rules, 2004.


(N.T.) dated 08/01/2014]

• Omission of inclusion of notification 1/2010 has

been corrected so as to include the said

notification in the Rule 12 of CCR Rules 2004,

which grants special dispersion to inputs

manufactured in factories located in specified

areas like north east region, Kutch district of

Gujarat, J&K & Sikkim. Now Cenvat credit of

duties paid input and capital goods will be allowed

even in case such goods are manufactured by a

Unit located in Jammu & Kashmir and claiming

1 9


exemption under notification 1/2010-CE.


(N.T.) dated

20/01/2014]

• Deemed number of pouches per operating

packing machine per month has also been

revised to higher side under Pan Masala packing

machine (capacity determination and collection

of duty) Rules 2008. The form for submission of

return has been revised in line with

apportionment of excise duties as mentioned in

tariff notification. [Notification No. 03/2014 -

Central Excise (N.T.) dated 24/01/2014]

• Deemed Capacity of production per packing

machine per month for chewing tobacco

(including Filter Khaini) ,unmanufactured tobacco

and Jarda scented tobacco (number of pouches)

has been revised on higher side under Chewing

Tobacco & Unmanufactured tobacco packing

machine (capacity determination and collection

of duty) Rules 2010. [Notification No. 04/2014

- Central Excise (N.T.) dated 24/01/2014]

Circular

• Education Cess and the Secondary and Higher

Education Cess are not to be calculated on

cesses which are levied under Acts administered

by Department/Ministries other than Ministry of

Finance (Department of Revenue) but are only

collected by the Department of Revenue in terms

of those Acts. Necessary instruction has been

issued to departmental officer to clear all pending

assessment may be finalized accordingly.

[Circular No. 978/02/2014-CX dated

07/01/2014]

• Guidelines have been issued to Departmental

Officer while applying the Supreme Court

Judgement in case of Fiat India. Some of the

guidelines are as under,

a) No general inference should be taken from

the judgement that duties will arise in case

the manufacturer has sold goods at a price

lower than manufacturing cost. Hon'ble

Supreme Court has cited two instances

where a manufacturer may sell goods at a

price lower than the cost of manufacture and

profit when the company wants to switch

over its business or where a manufacturer

has goods which could not be sold within a

reasonable time. The Hon'ble Court has

further held that these examples are not

exhaustive. Therefore, mere sale of goods

below the manufacturing cost and profit

cannot be taken as the sole basis for

rejecting the transaction value.

b) Calculations of manufacturing cost may be

carried out using CAS-4 standards.

Information submitted by the manufacturer,

duly certified by a Chartered or Cost

Accountant should normally be accepted.

Only where a decision to investigate a case

has been taken at the level of the

Commissioner and it is considered

necessary in the interest of investigation,

steps such as ordering Cost Audit of the Unit

or summoning of the Costing data should

be undertaken.

c) Aspects such as the percentage of loss at

which sale has taken place , the period for

which such loss making price has prevailed,

reasons for sale at such loss making price,

whether such sales are contrary to the

standard and accepted business practices,

and whether such sale is leading to erosion

of capital of the company, may be looked

into. In addition, due care may be taken at

the level of the Commissioner to see

whether the case at hand is similar to the

facts and circumstances of the FIAT case.

d) For the period prior to the date of the

judgment, in cases where a show cause

notice has been issued on the grounds of

the FIAT judgment alone, there may not be

a case for invoking the extended period of

limitation. In such cases, only the normal

period of limitation will apply.

e) For the period after the date of the

judgment, i.e. from 29- 8-2012 onwards, if

there is a sale in the circumstances similar

to the case of M/s FIAT and yet transaction

value of goods is declared as the correct

assessable value, then such declaration

would amount to wilful misstatement of the

2 0


assessable value and accordingly extended

period will be applicable.

[Circular No. 979/03/2014-CX dated 15/1/2014]

• It has been clarified that the duties on Pan

Masala is determined based on deemed

production with respect to the number of

operating packing machines in the factory during

the month and the Retail Sale Price printed on

the pouches and not on the basis of actual

production by a unit. Therefore duty cannot be

re-determined on the basis of the speed of the

packing machine and actual production thereof,

which may be higher / lower than the deemed

production [Circular No. 980/04/2014-CX dated

24/01/2014]

Instructions

• No new instructions

SERVICE TAX

Notifications• Service tax exemption has been granted to

services by way of sponsorship of sporting events

organised by a national sports federation, or its

affiliated federations, where the participating

teams or individuals represent country. Earlier

this exemption was restricted to "district, State

or zone". [Notification No. 1/2014-ST Dated

10-01-2014]

• The definition of Government Authority has been

redrafted. Earlier in order to be fit into the

government authority, the authority needs to

satisfy both the conditions i.e. set-up by act of

the Parliament or a State Legislature and to be

established by Government. Now the new

definition states that the authority can be either

set-up by act of the Parliament / State Legislature

or established by Government. [Notification No.

2/2014-ST Dated 30-01-2014]

• Service providers providing services to the

member of a recognized association or a

registered association, in relation to a forward

contract will not be required to pay service tax

for the services rendered for the period 10-Sep.

2004 to 30-Jun. 2012. This is in accordance with

the practice prevalent during the said period and

power of the Government under Sec 11C Central

Excise Act, 1934. [Notification No. 3/2014-ST

Dated 3-02-2014]

Circulars:

• Following clarification have been issued in

case services provided by a Resident Welfare

Sr.No.

Doubt Clarification

1 (i) In a residential complex,

monthly contribution collected

from members is used by the

RWA for the purpose of mak-

ing payments to the third par-

ties, in respect of commonly

used services or goods [Ex-

ample: for providing security

service for the residential com-

plex, maintenance or upkeep

of common area and common

facilities like lift, water sump,

health and fitness centre, swim-

ming pool, payment of electric-

ity Bill for the common area

and lift, etc.]. Is service tax levi-

able?

(ii) If the contribution of a mem-

ber/s of a RWA exceeds five

thousand rupees per month,

how should the service tax li-

ability be calculated?

Exemption at Sl. No. 28 (c) in

notification No. 25/2012-ST is

provided specifically with ref-

erence to service provided by

an unincorporated body or a

non-profit entity registered

under any law for the time be-

ing in force such as RWAs, to

its own members.

However, a monetary ceiling

has been prescribed for this

exemption, calculated in the

form of five thousand rupees

per month per member con-

tribution to the RWA, for sourc-

ing of goods or services from

third person for the common

use of its members.

If per month per member con-

tribution of any or some mem-

bers of a RWA exceeds five

thousand rupees, the entire

contribution of such members

whose per month contribution

exceeds five thousand rupees

would be ineligible for the ex-

emption under the said notifi-

cation. Service tax would then

be leviable on the aggregate

amount of monthly contribution

of such members.

2 (i) Is threshold exemption un-

der notification No. 33/2012-

ST available to RWA?

(ii) Does 'aggregate value' for

the purpose of threshold ex-

emption, include the value of

exempt service?

Threshold exemption available

under notification No. 33/2012-

ST is applicable to a RWA,

subject to conditions prescribed

in the notification. Under this

notification, taxable services of

aggregate value not exceed

2 1


Association (RWA) to its own members:

• Clarification regarding issue of Discharge

Certificate under VCES and availment of

CENVAT credit thereof:As per Section 108 (2)

of the Finance Act, 2013, a declaration made

under Section 107 (1) shall become conclusive

only upon issuance of acknowledgement of

discharge under Section 107 (7). Thus Cenvat

credit can be availed only after payment of tax

dues in full and receipt of Acknowledgement of

Discharge in form VCES-3. [Circular 176/02/

2014-ST Dated 20-01-2014]

FOREIGN TRADE POLICY

Notifications• Export of commodities like cotton, jute, cotton

yarn and other commodities subject to obtaining

of registration certificate from respective Export

Promotion Council. The procedure of obtaining

Registration Certificate has been relaxed and

submission of hard copies has been dispensed

with and only online application needs to be done.

[Notification No. 63 (RE - 2013)/2009-2014

dated 03/01/2014]

• SHIS, SFIS and AIIS scrip's cannot be used for

payment of Custom duty for shortfall in EO in

Advance Authorisation or DFIA (i.e. default in EO

for authorisation issued under Chapter 4 of

Foreign Trade Policy. This is in line with policy

for utilisation of this scrip's which allows only

import of capital goods against these scrip's. In

other words scrip's cannot be utilised for payment

of duties in case of defaults / shortfall in export

obligation, except for EPCG. However scrip's can

be utilised for payment of composition fees.


dated 06/01/2014]

• An earlier condition has been relaxed for import

of customised cars and motor cars and parts

thereof required for race events. [Notification

No. 65 (RE - 2013) / 2009-2014 dated 8/1/2014]

• Export of Cotton Yarn is made eligible for benefits

under Incremental Export Incentivisation

Scheme for the entire financial year 2013-14.


dated 23/01/2014]

Sr.No.

Doubt Clarification

ing ten lakh rupees in any fi-nancial year is exempted fromservice tax. As per the defini-tion of 'aggregate value' pro-vided in Explanation B of thenotification, aggregate valuedoes not include the value ofservices which are exemptfrom service tax.

3 In Rule 5(2) of the Service Tax(Determination of Value) Rules,2006, it is provided that expen-diture or costs incurred by aservice provider as a pureagent of the recipient of ser-vice shall be excluded from thevalue of taxable service, sub-ject to the conditions specifiedin the Rule.

For illustration, where the pay-ment for an electricity bill raisedby an electricity transmissionor distribution utility in the nameof the owner of an apartmentin respect of electricity con-sumed thereon, is collectedand paid by the RWA to theutility, without charging anycommission or a considerationby any other name, the RWAis acting as a pure agent andhence exclusion from the valueof taxable service would beavailable. However, in the caseof electricity bills issued in thename of RWA, in respect ofelectricity consumed for com-mon use of lifts, motor pumpsfor water supply, lights in com-mon area, etc., since there isno agent involved in thesetransactions, the exclusionfrom the value of taxable ser-vice would not be available.

If a RWA provides certain ser-

vices such as payment of elec-

tricity or water bill issued by

third person, in the name of its

members, acting as a 'pure

agent' of its members, is ex-

clusion from value of taxable

service available for the pur-

poses of exemptions provided

in Notification 33/2012-ST or

25/2012-ST ?

4 Is CENVAT credit available to

RWA for payment of service

tax?

RWA may avail cenvat credit

and use the same for payment

of service tax, in accordance

with the Cenvat Credit Rules.

[Circular No. 175/01/2014-ST Dated 10-01-2014]

2 2


Public Notices

• The Standard Input Output Norms (SION) for

export product under Sr.No. A-1730, has been

modified as under:

Export Qty. Sr. Import Qty.

Product No. Product Allowed

Ambre- 1 kg 1 Trimethyl Orthoformate 0.1.724 kg

ttolide

2 Britol 1.020 kg

(Paraffinic Mineral Oil)

3 Glycerine 3.053 Kg

4 Seedlac 12.757 Kg

[Public Notice No. 45 (RE: 2013)/2009-2014

dated 06/01/2014]

• Now manufacturer exporter or other exports

exporting through third party may be also able

to claim the benefits under EDI systems provided

third party exporter do not claim such benefits.

9.14 For claiming benefits under EDI system in

respect of Third Party exports the process will

be initiated by the First party who will link shipping

bills and BRCs to repository. If the First Party

chooses not to claim benefit for a particular

shipping bill item/s, it may authorize Third Party

to claim benefit for such shipping bill item/s. After

such authorization by First party, Third Party will

be able to utilize the shipping bill item/s in its

application".

Guidelines for adopting currencies for claiming

such benefits have been notified.

9.15 (a) Currencies, where Exchange rates are

notified by CBEC

The foreign exchange realized (as mentioned by

bank in the EBRC) is converted to Indian Rupee

(INR) using the monthly exchange rates

published by CBEC.

(b) Currencies, where Exchange rates are not

notified by CBEC

In such cases, total realized value in INR (as

mentioned by bank in the EBRC), will be

converted into US$ by using the US$ /INR

exchange rate prevailing on the date of

realization as published by CBEC."


dated 08/01/2014]

• Procedure for processing of claims in respect of

realization of export proceeds through insurance

agency is being introduced. After para 2.25.2 of

HBP (Vol. I) two new sub para 2.25.2 (a) & (b)

are being added.

"2.25.2 (a) An applicant realizing export proceeds

through Insurance Agency will approach the

concerned RA with the proof of payment issued

by the concerned Insurance Agency. RA after

satisfying itself of the bona fide of the claim will

obtain approval of Additional DGFT (EDI) and

then will upload the value (in lieu of EBRC value)

in EDI system of DGFT for processing of the case.

"2.25.2 (b) If the proof of payment issued by the

Insurance Agency mentions claim value both in

foreign exchange and INR, RA will use the foreign

exchange value for processing. If the claim value

is mentioned only in equivalent INR, RA will

convert this INR value in equivalent US$ using

the exchange rate (published by CBEC)

applicable on the date of settlement of insurance

claim"


dated 08/01/2014]

• Installation of capital goods under EPCG scheme

is required in six months however it can be

extended maximum upto 18 months from the

date of completion of imports by regional

authorities. This clarification will avoid lot of

difficulties faced by the exporters and importers

.[Public Notice No. 48 (RE: 2013)/2009-2014

dated 10/01/2014]

• Nine new Pre Shipment Inspection Agencies

(PSIA) have been notified in following Areas:

Malaysia, UAE, Singapore, Tanzania, Mexico,

Namibia, Thailand, Gabon, Congo, Latvija,

Australia, Lebanon, Saudi Arabia, Jordan,

Bahrain, Angola, Vietnam & Thailand as one

territory, Russia, South America with Brazil as

head office. [Public Notice No. 49 (RE: 2013)/

2009-2014 dated 31/01/2014]

Policy Circulars

• The list of the countries from which the list of

International accredited agencies for issuance

of type Approval Certificate / COP as notified by

2 3


United Nations Economic and Social Council has

been notified. [Policy Circular No. 12 (RE-

2013)/2009-14 dated 15/01/2014]

INCOME TAX

Notification• Central Government has specified the officer of

the rank of Secretary who is responsible for

implementation of National Food Security Act,

2013 on behalf of respective government.

[Notification 1/2014 dated 6th Jan 2014]

• Government of Republic of India & the Council

of Ministers of Republic Albenia has entered into

Avoidance of Double Taxation and respective

Articles for DTAA have been issued.

[Notification 2/2014 dated 7th Jan 2014]

• The Government of the Republic of India and

the Government of Belize has entered into

agreement to facilitate the exchange of

information with respect to taxes. [Notification

3/2014 dated 7th Jan 2014]

• Central government has notified Orissa State

AIDS Control Society, a body constituted by the

Government of Orissa for the income arising to

that society namely "amount received in the form

of grants-in-aid from the Central Government"

for claiming exemption u/s 10(46) of Income Tax

act, 1961. [Notification 4/2014 dated 10th Jan

2014]

• Government has notified Contributory Health

Service Scheme of the Department of Space for

the purposes of claiming deduction under section

80D of Income Tax Act, 1962. [Notification 6/

2014 dated 15th Jan 2014]

• For the purpose of taxation of FII from securities

or CG arising from their transfer (Sec 155 AD),

government has specified Foreign Portfolio

Investors registered under SEBI Regulations,

2014 as FII. [Notification 9/2014 dated 22nd

Jan 2014]

Circular

• Clarification has been issued for non deduction

of TDS on the service tax component in case

the service tax has been separately charged.

[Circular 1/2014 dated 13th Jan 2014]

• Now Department has realised the need to issue

explanatory notes to the provision of the Finance

Act, 2013 subsequent to enactment of the Act.

[Circular 3/2014 dated 24th Jan 2014]

Maharashtra VAT

Notification1. Determination of sales price and purchase price

in respect of sale of transfer of property in India

involved in the execution of works contract under

Rule 58 of MVAT Rules 2005 has been modified

to the extent of note inserted with effect from

20.06.2006 when separate accounts are not

maintained. Now cost of the land also to be

deducted from the total quantum of contract value

so as to arrive amount to be deducted as

specified in the table. However onus of proving

the value of land so deducted will be on assessee

subject to providing that value of land is higher

as per authorities including Town Planning, Ready

Reckoner rate adopted for payment of stamp

duty. And if land cost so deducted is lower than

that of such rates refund application can be

made.

2. If such value cannot be determined or assessee

choses the option not to determine than while

determination of value of works contract for the

purpose of VAT valuation should be done in

accordance with the following table and

accordingly rule 1(B)(a) has been inserted.

S No. Stage during which the developer enters Amount to be

into a contract with purchaser deducted as

value of goods

involved in WC

1 Before issue of commencement certificate 100%

2 From commencement certificate to

completion of plinth level 95%

3 After completion of plinth level to

completion of 100% RCC framework 85%

4 After completion of 100% RCC frame

work to Occupancy Certificate 55%

5 After the Occupancy Certificate NIL

[Vat Notification 1513/CR-147/Taxation dated

29th Jan 2014]

2 4


Trade Circulars

• Date of submission of VAT audit report in form

704 has been extended with respect to

imposition of penalty for dealers opting for

composition scheme if filed within one month from

the due date i.e. on or before 15th Feb 2014.

[Trade Circular 2T dated 7th Jan 2014]

• Special Amnesty Scheme 2013 declared by the

Department of Industries. Amnesty scheme is

made applicable for the units not in operation

and not able to rehabilitation only. Such units

should fulfil the conditions under earlier state

government package scheme and now obtains

such certificate for their eligibility under the

scheme from Ministry of Industry. The scheme

will be valid up to 31.03.2014. Amnesty Scheme

exempts interest and penalty provided pending

dues is paid in one instalment only. Such units

needs to make in application in prescribed form

to Assistant Commissioner VAT or Jt

Commissioner (Recovery) Mazgaon as the case

may be along with following documents

1. Eligibility Certificate as mentioned above

2. Challan of payment of such type of dues

3. Withdrawal of appeal if any from competent

authority

4. Declaration by the transferor if any

5. Acceptance of transferee for the dues of

future along with interest and penalty

No application can be processed of which

payment has not been made on or before

31.03.2014. And after submission of application

and verification of same no due certificate to be

obtained. [Trade Circular 3T dated 24-01-2014]

• Registered Dealers will be relieved from the pains

of obtaining C forms since online procedure has

been introduced. The new procedure prescribed

will substantially reduce human interference and

eligible cases shall receive electronic forms on

email, detailed trade circular is as follows.

1. Procedure to be followed by the applicants:

a. Digital CST declarations in non-editable

PDF Format shall be issued in case of all

the applications made on or after 01 Feb

2014, The procedure for filling on-line

application i.e. Statement of Requirement,

has been revised and shall come in to force

from 1 February 2014.

b. The requisite utility for the said purpose has

been made available on the sales tax

Department's website www.mahavat.gov.in

c. The new proposed SOR is slightly changed

over the existing SOR so as to contain the

invoice vise purchase annexure. Three

separate Annexure(s) have been prescribed

for each of the forms / Declarations viz,

i. Declarations/certificates in both Form

C and F,

ii. Certificates in Form H.

iii. Declarations/certificates in Form E-I

and E-II

d. Before making an application for the CST

declarations the applicant shall ensure that

the turnover of interstate transactions for

which the application is being made is within

the limits of the turnover of interstate

transactions shown by him in the return

covering the period of transactions. If the

turnover of interstate transactions shown in

the return is less than the turnover of

interstate transactions mentioned in the

SORs filed by the dealer then the applicant

shall file the revised return, admit the

additional turnover and then apply for the

CST declarations.

e. The applicant dealer shall neither be

required to upload any document as an

attachment nor submit any physical

documents in respect of the SOR.

f. The applicants with six monthly periodicity

are presently unable to make quarterly

applications for the CST declarations. Such

applicants, at the beginning of the year, have

an option of changing their periodicity to the

quarterly and apply for the CST declarations

on quarterly basis,

g. The applicant shall first down load the

requisite template of the SOR from the

appropriate link on the web site, fill in the

requisite details and validate the template

of the SOR. If such validations throw any

2 5


errors then the same shall be corrected by

the applicant. In case of error free template

a rem.txt file of the SOR shall get generated.

h. The SOR shall mandatorily contain email

address and contact mobile telephone

number (10 digit) of the applicant for the

SDM (Service delivery purpose). The action

taken by the department in respect of said

SOR will be communicated on aforesaid e-

mail address and the mobile telephone

number.

i. The applicant shall upload the rem.txt file

of the SOR on the appropriate link on the

wwww.mahavat.gov.in. After the successful

uploading an acknowledgement will be

generated and shall be available to the

applicant through his access on the web site.

j. All the SORs uploaded till 6 p.m. on any day

shall be processed overnight and the same

will be further processed by Central

Repository Officer on the next working day,

k. The applicant dealer may withdraw the SOR

till 6 p.m. of the day of uploading of SOR,

2. Online validation checks at the time of

uploading of the SOR.

a. The system will check for the validity of the

TIN of the applicant i.e, unless the applicant

holds a valid TIN under the CST Act 1956

as issued by the Maharashtra Sales Tax

department the SOR will not get uploaded.

b. The system will check the validity of the TIN

under the CST Act 1956 of the selling

dealer. Unless the selling dealer holds a

valid 11 digit TIN, the SOR will not get

uploaded. However, this validation does not

apply to the SORs wherein the applicant

requires CST forms/declarations in respect

of the purchases from the state of Tamil

Nadu and union territory of Daman.

c. The dealer whose registration is cancelled

may apply online for the CST declarations

pertaining to the period of validity of their

registration under the CST Act, 1956.

d. The system will not allow the dealers who

have been identified by the department as

suspicious to upload the SOR.

e. The system will not allow the dealers to

upload more than two SORs for a particular

period covered by the return. However, the

3rd SOR in respect of a particular period

covered by the return can be uploaded only

with the permission from the Additional CST

of the concerned location.

3. Internal verifications by the system after

the SOR is uploaded:

After the SOR is uploaded the system will verify

the following four things and the results thereof

will be available to the concerned CR officer in

the verification report.

a. Whether the applicant dealer has filed all

the returns for earlier periods.

b. Whether the turn-over of within state and

inter-State sales/ purchases or, as the case

may be, branch transfer/consignment

transfer has been disclosed appropriately

in the return for the period vis-a-vis the said

turn-over mentioned in the SOR.

c. Whether the applicant dealer has any

outstanding dues under MVAT Act 2002,

CST Act 1956 or any other allied Act

administered by the Sales Tax Department

or/and has any return related dues.

d. Whether the applicant dealer (if he is liable

to file Audit Report in Form No. 704 as

provided under section 61 of the MVAT Act

2002} has filed Audit Report in Form 704

for all the periods starting from 1.4.2008 till

the period for which due date for submission

of Audit Report is over.

4. Verifications to be done by the Central

Repository Officer:

The SOR filed by the dealers get allocated to

CR officers on random basis. The CR officer with

the help of MAHAVIKAS shall verify the following

aspects:

a. In case of requisitions of Form F - Whether

the address and TIN/CST Registration No.

of Branch / Branches outside the

Maharashtra State are incorporated in the

registration record of the applicant.

b. In case of requisitions of all the CST

2 6


declarations - Whether the applicant dealer

fulfils all the conditions /restrictions in

respect of the commodity stated in the SOR

and commodity details available in

MAHAVIKAS. (Refer to Trade Circular No,

22T of 2012 issued on 26th November

2012).

5. Applications to be kept on hold and

the issuance of Defect Notice:

a. If the verification by the system and the CR

officer results into finding of defects, the

concerned Central Repository Officer shall

inform the same to the applicant through

an e-mail. The applicant dealer shall be

required to correct these defects within 15

days from the date of receipt of said e-mail.

During the intervening period the application

shall be kept on hold.

b. The concerned officer may also hold the

application if he is of the opinion that further

verification is necessary before issuance of

declaration.

c. If the applicant does not comply with

requirements of the Defect notice within 15

days then the relevant application (SOR)

shall be automatically rejected.

d. In case the said compliance is either not

accepted by the Officer concerned or is

rejected by the MAHAVIKAS System then,

the Officer concerned will communicate such

rejection to the applicant dealer.

e. If dealer submits the compliance in

pursuance to the defect memo so issued

and proves to the satisfaction of the CR

officer that the defects have been complied

with then the CR officer shall approve the

application.

f. In case the applicant is pointed out to be a

short filer of return but the applicant is in a

position to prove it otherwise then the

applicant shall first approach the concerned

returns branch for correction in the

Mahavikas. After such correction the

Mahavikas data shall get corrected

automatically and the defect shall also get

closed automatically.

However, this needs to happen within 15 days

allowed for the compliance of the defect notice

issued to the applicant.

6. Electronic issuance of statutory declarations

/ forms under the CST Act 1956:

In case of applications (SORs) successfully

uploaded and verified for no defects by the CR

officer and in other cases after the defects have

been rectified, the statutory declarations/forms

under the CST Act 1956 shall be electronically

issued to the applicant through an email. The

applicant is therefore needed to furnish the

correct and authentic email address in the SOR.

7. Procedure for cancellation of

the declarations issued :

The existing system of online application for the

CST declarations shall be deactivated with effect

from 31.01.2014. In case of rectification/

cancellation of the declarations/certificates

issued on or before 31.01.2014, the applicant

shall submit manual application to the concerned

authority as per the existing procedure. The

officer in-charge shall rectify/deface the

declarations submitted along with such

applications as they case may be.

8. Procedure in case of the lost declarations:

In case of the lost declarations there is no change

in the procedure except that after completion of

requisite procedure, the Officer in-charge shall

cancel the lost declarations/certificates.

Wherever necessary the dealer shall upload the

application on e-CST system and shall get digital

forms in lieu of such lost declarations/certificates.

9. Procedure for the applications pending for

disposal as on 31.01.2014:

a) The new system of electronic issuance of

declarations/certificates under CST Act shall

come into force from 01.02.2014. All the

applications made up to 31.01.2014 shall

be processed by the department as per the

existing system unless the applicant dealer

desires to withdraw his pending application

and apply afresh for the e CST declarations.

b) Any applicant who desires to withdraw any

application i.e. Statement of Requirement

(SOR) made up to 31.01.2014 shall submit

his request for withdrawal of the said

2 7


application (as per concerned existing

system) to the e mail id of concerned desk.

The e-mail so send shall specify the

transaction id in respect of such SOR i.e.

the application which is to be cancelled. After

receiving the request for withdrawal of the

application through e mail the application

related to the transaction id mentioned by

the applicant shall be rejected. This will not

apply to the SORs for which the CST

declarations/certificates have already been

printed.

c) All the applications made up to 31.01.2014

for which the applicants have not preferred

withdrawal shall be processed for issuance

of printed CST forms as per the existing

system. The dealers who have applied for

CST forms up to 31.01.2014 shall ensure

that they do not apply under the new

system of e CST forms for the same

transactions as per the SORs uploaded upto

31.01.2014 unless they apply for the

cancellation of SOR as per the existent

system.

10. Help Desks and assistance from

the department:

The procedure of obtaining CST declaration is

self-explanatory. The same is made available on

the Web site of the Department. Help desks are

being created at every Central Repository

locations. In case of any difficulty, the dealers

are requested to approach to the concerned

Central Repository officers. This new procedure

for issuance of declaration is available online for

the declarations pertaining to period from

01.04.2008 onwards only. [Trade Circular 4T

dated 28th Jan 2014]

COMPANY LAW

Notifications• No new notifications!!

Circular

• It has been instructed that Regional Directors

(RDs) before filling report under section 394A of

Companies Act, 1956 in response to the notice

issued to the Central Government where ever

cases involving arrangement / compromise

(under section 391) or reconstruction /

amalgamation (under section 394), should invite

specific comments from Income Tax Department

within 15 days of receipt of notice. Similar

feedback must also be obtained from other

sectoral regulator on cases where it is required.

[General Circular No. 01 /2014, dated :

15/01/2014]

Circular NumberDate of

IssueDepartment Subject Meant for

RBI CIRCULARS - JANUARY 2014

RBI/2013-2014/478Ref: DBOD.No.Ret.BC.93/12.01.001/2013-14

31.1.2014 Department ofBanking

Operations andDevelopment

Section 42(1) of the ReserveBank of India Act, 1934 andSection 24 of the BankingRegulation Act, 1949 - FCNR(B)/NRE deposits - Exemptionfrom Maintenance of CRR/SLRand Exclusion from ANBC forPriority Sector Lending

All Scheduled Commer-cial Banks (ExcludingRegional Rural Banks)

RBI/2013-2014/477DBOD.No.Dir.BC.92/

13.03.00/2013-14



Interest Rates on FCNR (B)Deposits

All Scheduled Commer-cial Banks (ExcludingRRBs)

RBI/2013-2014/475RPCD.CO.RRB.RCB.BC.No. 82/03.05.33/2013-14

29.1.2014 Rural Planningand Credit

Department

Bank Rate The Chairmen/Chief Ex-ecutive Officers, All Re-gional Rural Banks /State and Central Co-operative Banks

FEMA / RBI

2 8




RBI/2013-2014/474RPCD.CO RRB.BC.No./

81/03.05.100/2013-14


Department

Inclusion in/exclusion from theSecond Schedule to the Re-serve Bank of India Act, 1934-Regional Rural Banks (RRBs)

All Regional Rural Banks

RBI/2013-2014/473A.P.(DIR Series)

Circular No.99

29.1.2014 Foreign ExchangeDepartment

Foreign investment in India bySEBI registered Long term in-vestors in Government datedSecurities

All Authorised Persons

RBI/2013-2014/472RPCD.RRB.RCB.BC.No.

80/07.51.014/2013-14


Department

Collection of Account PayeeCheques - Prohibition on Cred-iting Proceeds to Third PartyAccount

The Chairmen / CEOs ofAll Regional Rural Banks/State and Central Co-operative Banks

RBI/2013-2014/471FMD.MOAG. No.

97/01.18.001/2013-14

28.1.2014 Financial MarketsDepartment

Marginal Standing Facility All Scheduled Commer-cial Banks (excludingRRBs)

RBI/2013-2014/469UBD.BPD.(PCB).Cir.No.

46/16.11.00/2013-14

28.1.2014 Urban BanksDepartment

Revision in Bank Rate All Primary (Urban) Co-operative Banks

RBI/2013-2014/468DBOD.No.Ret.BC.

88/12.01.001/2013-14



Bank Rate All Scheduled Commer-cial Banks & Local AreaBanks

RBI/2013-2014/466RPCD.CO.RRB.RCB.BC.No.79/03.05.33/2013-14


Department

Legal Guardianship CertificatesIssued under the Mental HealthAct, 1987 and National Trustfor the Welfare of Persons withAutism, Cerebral Palsy, Men-tal Retardation and MultipleDisabilities Act, 1999

The Chairmen/Chief Ex-ecutive Officers, All Re-gional Rural Banks /State and Central Co-operative Banks

RBI/2013-2014/465UBD.BPD.(PCB).Cir.No.

45/13.05.000/2013-14


Housing Sector: New Sub-Sec-tor CRE-Residential Housing(CRE-RH) Segment within CRESector & Rationalisation of Pro-visioning and Risk Weight

The Chief Executive Of-ficers of All Primary (Ur-ban) Co-operativeBanks

RBI/2013-2014/470FMD.MOAG. No.

96/01.01.001/2013-14


Liquidity Adjustment Facility -Repo and Reverse Repo

All Scheduled Commer-cial Banks (excludingRRBs) and StandalonePrimary Dealers

RBI/2013-2014/467DCM(Plg) No.G-17/

3231/10.27.00/2013-14

28.1.2014 Department ofCurrency

Management

Withdrawal of all old series ofBanknotes issued prior to 2005

The Chairman / Manag-ing Director/ Chief Ex-ecutive Officer AllScheduled CommercialBanks Primary(Urban)Co-operative Banks/RRBs

2 9




RBI/2013-2014/464REF.No.MPD.BC. 371/

07.01.279/2013-14

28.1.2014 Monetary PolicyDepartment

Standing Liquidity Facilities forBanks and Primary Dealers

All Scheduled Banks [ex-cluding Regional RuralBanks(RRBs)] and Pri-mary Dealers

RBI/2013-2014/462A.P. (DIR Series)

Circular No. 98


Exim Bank's Line of Credit ofUSD 19.50 million to the Gov-ernment of the Socialist Re-public of Vietnam

All Category - IAuthorised Dealer banks

RBI/2013-2014/461DNBS(PD).CC. No 368 /

03.10.01 /2013-14

24.1.2014 Department ofNon BankingSupervision

Prepaid Payment Instrumentsissued by Non-Banking Institu-tions

All Non Banking Finan-cial Companies

RBI/2013-2014/459DNBS.CO. PD. No. 367/

03.10.01/2013-14


Review of Guidelines on Re-structuring of Advances byNBFCs

All NBFCs excludingPrimary Dealers

RBI/2013-2014/458DBOD.BP.BC.No. 87/

21.01.001/2013-14



Collection of Account PayeeCheques - Prohibition on Cred-iting Proceeds to Third PartyAccount

The Chairmen / ChiefExecutives of All Sched-uled Commercial Banks(excluding RRBs)

RBI/2013-2014/458ARPCD.CO.RRB.BC.No.78/

03.05.33/2013-14


Department

Ensuring Reasonableness ofBank Charges and ChargesLevied for Sending SMS Alertsby Regional Rural Banks(RRBs)

The Chairmen All Re-gional Rural Banks

RBI/2013-2014/457DPSS.CO.EPPDNo.1583/04.03.01/

2013-14

22.1.2014 Department ofPayment andSettlement

System

NEFT - Customer Service andCharges - Adherence to Proce-dural Guidelines and Circulars

The Chairman and Man-aging Director / ChiefExecutive Officer ofmember banks partici-pating in NEFT

RBI/2013-2014/456UBD.BPD.(PCB) CIR

No.44/13.01.000 /2013-14


Legal Guardianship CertificatesIssued under the Mental HealthAct, 1987 and National Trustfor the Welfare of Persons withAutism, Cerebral Palsy, Men-tal Retardation and MultipleDisabilities Act, 1999

The Chief Executive Of-ficers of All Primary (Ur-ban) Co-operativeBanks


Circular No.97


Know Your Customer (KYC)norms/Anti-Money Laundering(AML) standards / Combatingthe Financing of TerrorismMoney changing activities

All Authorised Persons

RBI/2013-2014/460DNBS (PD) CC. No.35/SCRC/26.03.001/

2013-2014


Conversion of debt into shares,consent level of security en-forcement actions and permis-sion to acquire debt from otherSC/RCs

The Chairman/ManagingDirector/Chief ExecutiveOfficer All registeredSecuritisation Compa-nies/ReconstructionCompanies

3 0




(CFT) Obligation of AuthorisedPersons under Prevention ofMoney Laundering Act,(PMLA), 2002, as amended byPrevention of Money Launder-ing (Amendment) Act, 2009


Circular No. 96


Facilities for Persons Residentoutside India - Clarification

All Category - IAuthorised DealerBanks

RBI/2013-2014/453DBOD.BP.BC.No.86/21.01.023 /2013-14



Lending against Gold Jewellery All Scheduled Commer-cial Banks (excludingRRBs)


Circular No.95


Merchanting Trade Transac-tions


RBI/2013-2014/451FMD.MOAG. No.95/01.01.001/2013-14


Liquidity Adjustment Facility-Reverse Repo

All Scheduled Commer-cial Banks (excludingRRBs) and StandalonePrimary Dealers

RBI/2013-2014/450DCM (CC) No.G-16/

03.39.01/2013-14

16.1.2014 Department ofCurrency

Management

Distribution of Banknotes &Coins - Review of Incentives& Penalties

The Chairman & Manag-ing Directors/Chief Ex-ecutive Officers AllScheduled CommercialBanks(Including RRBs,UCBs, State Coopera-tive Bank & District Cen-tral Cooperative Banks)


Circular No. 94


Conversion of External Com-mercial Borrowing andLumpsum Fee/Royalty intoEquity



Circular No. 92


Risk Management and InterBank Dealings


RBI/2013-2014/448DBOD.No.BP.BC.

85 /21.06.200/2013-14



Capital and Provisioning Re-quirements for Exposures toentities with Unhedged ForeignCurrency Exposure

The Chairman and Man-aging Director/Chief Ex-ecutive Officer AllScheduled CommercialBanks (Excluding RRBsand LABs)


Circular No.93


Clarification- Establishment ofLiaison Office/ Branch Office/Project Office in India by For-eign Entities- General Permis-sion

All Authorised DealerCategory - I Banks

RBI/2013-2014/445A.P.(DIR Series)Circular No. 91


Exim Bank's Line of Credit ofUSD 125 million to the Govern-ment of the Republic of Sudan


3 1




RBI/2013-2014/444DBOD.No.Leg.BC.84/

09.07.005/2013-14

13.1.2014 Department ofBanking Opera-tions and Devel-opment

Legal Guardianship CertificatesIssued under the Mental HealthAct, 1987and National Trust forthe Welfare of Persons withAutism, Cerebral Palsy, Men-tal Retardation and MultipleDisabilities Act, 1999

All Scheduled Commer-cial Banks (excludingRRBs)

RBI/2013-2014/443DNBS(PD).CC. No 366/

03.10.42/2013-14


Implementation of Section 51-A of UAPA, 1967 -Updates ofthe UNSCR 1267 (1999) /1989(2011) Committee's Al QaidaSanctions List and Consoli-dated List

All Non Banking Finan-cial Companies / Re-siduary Non BankingCompanies

RBI/2013-2014/442Ref.DBOD.No.Ret.BC /83/12.06.097/2013-14



Alteration in the name of "De-velopment Credit Bank Lim-ited" to "DCB Bank Limited" inthe Second Schedule to theReserve Bank of India Act,1934

All Scheduled Commer-cial Banks

RBI/2013-2014/441RPCD. RRB. RCB.

AML. BC. No.75/07.51.018/2013-14


Department

Know Your Customer (KYC)Norms /Anti-Money Laundering(AML) Standards/ Combatingof Financing of Terrorism(CFT)/Obligation of banks un-der Prevention of Money Laun-dering Act (PMLA), 2002 -Amendment to Section 13(2)

The Chairmen / CEOs ofall Regional Rural Banks/State and Central Co-operative Banks


Circular No. 90


Provisions under section 6 (4)of Foreign Exchange Manage-ment Act, 1999 - Clarifications

All Category- IAuthorised DealerBanks and AuthorisedBanks


Circular No. 89


Exim Bank's Line of Credit ofUSD 42.61 million to the Gov-ernment of the Republic ofBenin


RBI/2013-2014/438A. P.(DIR Series)

Circular No. 88


Memorandum of Instructionsfor Opening and Maintenanceof Rupee / Foreign CurrencyVostro Accounts of Non-resi-dent Exchange Houses

All Authorised DealerCategory - I Banks



Resident Bank account main-tained by residents in India -Joint holder - liberalization

All Banks Authorised todeal in Foreign Ex-change



Foreign Direct Investment-Pricing Guidelines for FDI in-struments with optionalityclauses


RBI/2013-2014/435DNBS.CC.PD.No.

365/03.10.01/2013-14


Lending Against Security ofSingle Product - Gold Jewellery

All NBFCs (excludingPDs)

3 2




RBI/2013-2014/434RPCD. CO. RRB. BC.

No. 74/03.05.33/2013-14


Department

Guidelines for Classificationand Valuation of Investments

The Chairmen All Re-gional Rural Banks

RBI/2013-2014/433RPCD.RCB.BC.73/07.51.012/2013-14


Department

Application of Minimum Capi-tal Adequacy Norms to Stateand Central Cooperative Banks(StCBs/CCBs)

The Chairman / Manag-ing Director All Stateand Central CooperativeBanks

RBI/2013-2014/432DPSS. CO. AD. No.1502 / 02.27.005 /

2013-14


System

Implementation of Section 51-A of UAPA, 1967 - Updates ofthe UNSCR 1267 (1999) /1989(2011) Committee's AlQaida Sanctions List and Con-solidated List

CEOs of all the Pay-ment System OperatorsAuthorised under thePSS Act, 2007

RBI/2013-2014/431DPSS. CO. AD. No.

1503/02.27.005/2013-14


System

Anti- Money Laundering (AML)/ Combating of Financing ofTerrorism (CFT) - Standards

Chief Executive Officersof All the Payment Sys-tem OperatorsAuthorised under thePSS Act, 2007

RBI/2013-2014/430DBOD.No.BP.BC.82/

21.06.217/2013-14



Banks' Exposure to CentralCounterparties (CCPs) - InterimArrangements

The Chairman and Man-aging Director/ ChiefExecutive Officer of AllScheduled CommercialBanks (Excluding Re-gional Rural Banks)


Circular No. 85


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Circular No.84


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Circular No. 83


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RBI/2013-2014/426DNBS(PD).CC. No 364/

03.10.42/2013-14


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All Non Banking Finan-cial Companies exclud-ing Residuary Non Bank-ing Companies

RBI/2013-2014/425DNBS.PD.363 /

03.10.38/2013-14


Advances guaranteed by CreditRisk Guarantee Fund Trust forLow Income Housing(CRGFTLIH) - Risk Weightsand Provisioning

All NBFC-MFIs

RBI/ 2013-14/476DBOD. No .Dir. BC.90/13.03.00/ 2013-14



Deregulation of Interest Rateson Non-Resident (External)Rupee (NRE) Deposits

All Scheduled Commer-cial Banks (ExcludingRRBs)

3 3


CBEC Notified Exchange Rate for Conversion of Foreign Currency w. e. f.7th February 2014 [Notification No. 09/2014-Customs (N.T) dated 06-02-14]

SCHEDULE - I

S.No. Foreign Currency

Rate of exchange of one unit of foreign currency

equivalent to Indian rupees

(For Imported Goods) (For Export Goods)

1. Australian Dollar 56.65 55.25

2. Bahrain Dinar 170.35 161.05

3. Canadian Dollar 57.10 55.80

4. Danish Kroner 11.50 11.15

5. EURO 85.45 83.45

6. Hong Kong Dollar 8.10 8.00

7. Kuwait Dinar 227.35 214.40

8. New Zealand Dollar 52.10 50.80

9. Norwegian Kroner 10.15 9.85

10. Pound Sterling 102.90 100.65

11. Singapore Dollar 49.75 48.55

12. South African Rand 5.80 5.45

13. Saudi Arabian Riyal 17.15 16.20

14. Swedish Kroner 9.70 9.40

15. Swiss Franc 69.95 68.05

16. UAE Dirham 17.50 16.55

17. US Dollar 62.95 61.95

S.No. Foreign Currency

Rate of exchange of 100 units of foreign currency

equivalent to Indian rupees

SCHEDULE-II

(For Imported Goods) (For Export Goods)

1. Japanese Yen 62.25 60.75

2. Kenya Shilling 74.60 70.45

3 4


INPUT SERVICES & INPUT SERVICE

DISTRIBUTION UNDER CENVAT CREDIT

RULES 2004By CMA Ashok B. Nawal

Input Service is defined in Rule 2 (l) of Cenvat Credit

Rules 2004 and it has been revised in the year 2008

and subsequent to that in 2011. It is very important to

Earlier definition was amended wide notification No.

10/2008 CE(NT) dtd.1st March 2008 replacing the

word "from the place of removal" to "upto the place of

removal".

However, the number of litigations were made by the

department disputing cenvat credit on output services

on the grounds that manufacture and clearance of

the goods upto the place of removal is only entitled

for cenvat credit. However, it has been held in number

of decisions and also held by held by Hon Tribunal in

the case of in the case of COMMISSIONER OF CUS.

& C. EX., HYDERABAD-IV Vs POKARNA LTD. 2013

(292) E.L.T. 316 (Tri. - Bang.) wherein it has been

held that

understand the difference and the rationale of the

change of the definition.

Quote :

7. I have carefully considered the submissions.

(i) Whether the respondents were entitled to

claim CENVAT credit on GTA service/CHA

service availed for export of excisable goods

during the relevant period.

It has been argued on behalf of the appellant that the

definition of 'place of removal' is applicable only to

valuation of excisable goods for the purpose of levy

of duty. In this connection, reliance has been placed

on the Hon'ble Karnataka High Court's decision in the

case of Commissioner v. ABB Ltd. (supra). I find that

clause (t) of Rule 2 of the CENVAT Credit Rules, 2004

was not taken into account by the Hon'ble Karnataka

Definition of Input Service prior todated 01.03.2008

Definition of Input Service afterdated 01.03.2008 but prior to 20.06.2012

(l) "input service" means any service,

(i) used by a provider of taxable service for providing an

output service; or

(ii) used by the manufacturer, whether directly or

indirectly, in or in relation to the manufacture of final

products and clearance of final products from the place

of removal,

and includes services used in relation to setting up,

modernization, renovation or repairs of a factory, premises

of provider of output service or an office relating to such

factory or premises, advertisement or sales promotion,

market research, storage upto the place of removal,

procurement of inputs, activities relating to business, such

as accounting, auditing, financing, recruitment and quality

control, coaching and training, computer networking, credit

rating, share registry, and security, inward transportation

of inputs or capital goods and outward transportation upto

the place of removal;

(i) "input service" means any service,


output service; or



products and clearance of final products upto the place

of removal,


modernization, renovation or repairs of a factory, premises

of provider of output service or an office relating to such

factory or premises, advertisement or sales promotion,

market research, storage upto the place of removal,

procurement of inputs, activities relating to business, such

as accounting, auditing, financing, recruitment and quality

control, coaching and training, computer networking, credit

rating, share registry, and security, inward transportation

of inputs or capital goods and outward transportation upto

the place of removal;

3 5


High Court while holding that the definition of 'place

of removal' was applicable only to valuation of

excisable goods. As per Rule 2(t), words and

expressions used in these rules and not defined but

defined in the Excise Act shall have the meanings

respectively assigned to them in the said Act. It would

follow that the definition of 'place of removal' given

under Section 4(3) of the Central Excise Act would

be applicable to cases arising under the CENVAT

Credit Rules, 2004 also as there is no separate

definition of 'place of removal' under these Rules. The

expression 'place of removal' was examined by a

division bench of this Tribunal in the case of Kuntal

Granites (supra). The full text of the Tribunal's order

reads as follows :

Both these appeals raises common question of law

and facts pertaining to the same assessee and hence

they are taken up together for disposal as per law. By

O-I-O No. 1/05, dated 21-4-2005, the Commissioner

has rejected the application filed by the appellant

seeking revision of Central Excise duty under Rule

21 with regard to the goods dispatched to the lorry

which met with an accident resulting in spillage of 51

pieces of granite slabs meant for export leading it its

destruction. As a result of this rejection, the revenue

has confirmed the demand of duty by Order-in-Appeal

No. 5/06, dated 10-1-2006 on the ground that

assessee is required to discharge duty on the quantity

of polished granite slabs which were destroyed in the

accident as their prayer for remission of duty has been

rejected by the Commissioner. The appellants

contention is that in terms of Rule 21 of C.E. Rules

they are entitled to claim remission if the goods were

destroyed due to unavoidable accident at any time

before removal of the goods. It is the submission of

the assessee that the place of removal has been

defined under Section 4(3)(c) of the Central Excise

Act, 1944 which is as under :-

"a depot, premises of a consignment agent or any

other place or premises from where the excisable

goods are to be sold after their clearance from the

factory."

In this connection learned Counsel draws our attention

to the provisions in Central Sales Tax Act. He refers

to Section 5 of the Act which is noted herein below :-

"When is a sale or purchase of goods said to take

place in the course of import or export.

(1) A sale or purchase of goods shall be deemed to

take place in the course of export of the goods out of

the territory of India only if the sale or purchase either

occasions such export or is effected by a transfer of

documents of title to the goods after the goods have

crossed the Customs frontiers of India."

He points out that in respect of export goods, place

of removal will be only when the documents are

presented to the Customs Officers for export. The

finding given by the authorities that the place of

removal is factory is not correct in respect of export

goods as the sale comes into effect only when the

documents of title to the goods are presented at the

Customs office in the form of presentation of shipping

bills. He submits that when clearances are made

under bond, are deemed to be under overall customs

control. This has been so held by the Tribunal in the

case of Sangita Printers & Exporters v. CCE,

Allahabad [1994 (73) E.L.T. 182 (T)]. He also submits

that the Apex Court in the case of M.J. Exports Ltd. v.

CEGAT [1992 (60) E.L.T. 161 (S.C.)] has explained

the expression, for "home consumption" vis-à-vis

expression "warehousing". He also refers to the ruling

rendered by this Bench in the case of Koeleman India

Pvt. Ltd. v. CC, Bangalore [2005 (192) E.L.T. 866

(T-Bang.)] which has clearly held that when the goods

are damaged during transportation from factory to

the port of export, and due to reasons beyond the

control of appellants then, it has to be held that there

is no diversion for home consumption and demands

were set aside. He points out to another ruling of the

Mumbai Bench in the case Associated Capsules Pvt.

Ltd. v. CCE, Pune [2007 (207) E.L.T. 613 (Tribunal)

= 2006-TIOL-1497- CESTAT-Mum.] on the same

point which is in his favour. He submits that the

Revenue's reliance on the Northern Bench reliance

in the case of Ginni Filaments Ltd. v. CCE, Lucknow

[2005 (188) E.L.T. 45 (Tri.-Del.)] is sub silentio to the

provisions of Rule 4(3). However, Section 4(3) (c) of

the C.E. Act defines the "place of removal" to be read

with Section 5 of the Central Excise Act. Therefore

the Single Member Bench ruling in the case of Ginni

Filaments has no bearing in the matter.

2. Learned DR relies on the Single Member Bench

ruling rendered in the case of Ginni Filaments

Ltd.

3 6


3. We have considered the submissions and agree

with learned Counsel on the legal point. The SMB

in the case of Ginni Filaments has not examined

the provisions of Section 4(3)(12) of Central

Excise Act read with Rule 21 of Central Excise

Rules and Section 5 of the Central Excise Act.

When the goods are removed from the factory

for export purposes and the goods are destroyed

due to unavoidable reasons, accident caused to

the lorry, then in such a circumstances the goods

are not deemed to have been removed from the

factory gate in terms of Section 5 of the Central

Sales Tax Act as sale has not been completed.

Section 4(3)(c) of C.E. Act clearly explains that

the place of removal is the premises from where

excisable goods are to be sold after their

clearance from the factory. In the present case,

the goods were exported and when export

documents are presented to the Customs office,

then that is the place of removal as per Section

5 of C.E. Act. The same finding has been

rendered by this bench in the case of Koeleman

India Pvt. Ltd. v. CC Bangalore [2005 (192) E.L.T.

866 (T-Bang.)]. There is no reason to take a

different view from the same. The finding

recorded by SMB in Ginni Filaments Ltd., is sub

silentio without due consideration to the

provisions of law. Hence both the orders are set

aside by allowing the appeal with consequential

relief if any."

The learned Superintendent (AR) made an attempt

to distinguish the above case by submitting that the

above decision was rendered in respect of remission

of duty and not in respect of CENVAT credit. This

distinction is inconsequential in as much as there is

only one definition of 'place of removal' under the

Central Excise Act or the Rules framed thereunder -

whether for the purpose of valuation of excisable

goods or for the purpose of determination of claim of

CENVAT credit or for any other purpose whatsoever.

The question whether the port of export could be

considered to be 'place of removal' of excisable goods

was examined by the division bench in the above

case, with reference to the definition of 'place of

removal' under Section 4(3) of the Central Excise Act

as also to Section 5 of the Central Sales Tax Act. On

a harmonious construction of the provisions, it was

held that, in respect of the excisable goods cleared

from factory for export and subsequently shipped from

the port, the port of export could be held to be the

'place of removal'. In view of this decision, it has to be

held that the respondents were entitled to treat CHA

service/GTA service as 'input services' under Rule

2(1) of the CENVAT Credit Rules, 2004 as these

services were used for clearance of excisable goods

from the 'place of removal'.

It was submitted by the learned Superintendent (AR)

that the decision in Kuntal Granites case was

appealed against by the department. However, it was

not claimed that the Tribunal's decision was stayed

by the appellate court. The outcome of department's

appeal in Kuntal Granites case is also not available.

Hence the decision in Kuntal Granites case will be a

valid precedent for the present cases.

UnQuote :

Similarly, it was held in the case of M.P. BISCUITS

PVT. LTD. Versus COMMISSIONER OF C. EX.,

ALLAHABAD 2012 (282) E.L.T. 563 (Tri.- Del.), that :

Quote :

10. Input service is defined under Rule [2(l)(ii)] of

Cenvat Credit Rules, 2004 which reads thus :-

(ii) used by the manufacturer, whether directly

or indirectly, in or in relation to the

manufacture of final products and clearance

of final products from the place of removal,"

11. Reading of above provision clearly show that

outward transportation of the manufactured

product up to the place of removal falls within

the definition of input service. The appellant has

placed on record the authorization letter dated

15-3-2005 addressed by PBPL to Assistant/

Deputy Commissioner, Central Excise, Varanasi

authorising the appellant to manufacture biscuit

on their behalf. Further perusal of the terms and

conditions mutually agreed upon between PBPL

and the appellant would show that as per the job

work contract the appellant were required to

process and manufacture biscuit, carry out

inspection, packing and delivery to various depots

of PBPL located all over the country as directed

by PBPL. From the above stipulation in the

contract, appellants were under obligation to

transport biscuits to various depots of PBPL as

3 7


such obviously the place of removal was/were

depots where the appellant was required to

supply manufactured biscuit as per direction of

the appellant. Admittedly, the appellants have

transported the goods to the depots/premises

of the principal manufacturer and paid

transportation charges including the Service tax.

In this regard, the appellant have placed on

record photocopies of Form TR-6 for payment

of Service tax in respect of the period in question.

Thus, it is apparent that the appellant has paid

Service tax in respect of the input service i.e. the

outward transportation of the biscuits to the place

of removal. As such, in view of Rule 3 of Cenvat

Credit Rules the appellant has rightly availed

Cenvat credit.

12. Result of the above discussion is that the

impugned orders denying Cenvat credit to the

appellant is not sustainable. Appeal is, therefore,

accepted and the impugned order also order-in-

original are set aside.

Unquote :

Similarly, it was held in the case of COMMR. OF C.

EX., BANGALORE-III Versus TRIVENI ENGINEERING

& INDUS. LTD. 2012 (282) E.L.T. 223 (Kar.), wherein

it has been held, "If Service tax is paid on

transportation charges it fell within the phrase

"clearance of final products from the place of removal"

and assessee is entitled to Cenvat credit - Issue

squarely covered by decision of Division Bench of High

Court dated 23-3-2011 - Sections 65(50b) and

65(105)(zzp) of Finance Act, 1994".

CBEC has issued Circular No. 97/8/2007 dtd. 23rd

August, 2007, wherein it has been clarified that

ISSUE: Up to what stage a manufacturer/consignor

can take credit on the service tax paid on goods

transport by road?

COMMENTS: This issue has been examined in great

detail by the CESTAT in the case of M/s Gujarat

Ambuja Cements Ltd. vs CCE, Ludhiana [2007 (006)

STR 0249 Tri-D]. In this case, CESTAT has made

the following observations:-

"the post sale transport of manufactured goods is not

an input for the manufacturer/consignor. The two

clauses in the definition of 'input services' take care

to circumscribe input credit by stating that service

used in relation to the clearance from the place of

removal and service used for outward transportation

upto the place of removal are to be treated as input

service. The first clause does not mention transport

service in particular. The second clause restricts

transport service credit upto the place of removal.

When these two clauses are read together, it

becomes clear that transport service credit cannot

go beyond transport upto the place of removal. The

two clauses, the one dealing with general provision

and other dealing with a specific item, are not to be

read disjunctively so as to bring about conflict to defeat

the laws' scheme. The purpose of interpretation is to

find harmony and reconciliation among the various

provisions".

Similarly, in the case of M/s Ultratech Cements Ltd vs

CCE Bhavnagar 2007-TOIL-429-CESTAT-AHM, it

was held that after the final products are cleared from

the place of removal, there will be no scope of

subsequent use of service to be treated as input. The

above observations and views explain the scope of

the relevant provisions clearly, correctly and in

accordance with the legal provisions. In conclusion,

a manufacturer / consignor can take credit on the

service tax paid on outward transport of goods up to

the place of removal and not beyond that.

8.2 In this connection, the phrase 'place of removal'

needs determination taking into account the facts of

an individual case and the applicable provisions. The

phrase 'place of removal' has not been defined in

CENVAT Credit Rules. In terms of sub-rule (t) of rule

2 of the said rules, if any words or expressions are

used in the CENVAT Credit Rules, 2004 and are not

defined therein but are defined in the Central Excise

Act, 1944 or the Finance Act, 1994, they shall have

the same meaning for the CENVAT Credit Rules as

assigned to them in those Acts. The phrase 'place of

removal' is defined under section 4 of the Central

Excise Act, 1944. It states that,-

"place of removal" means-

I. a factory or any other place or premises of

production or manufacture of the excisable

goods;

II. a warehouse or any other place or premises

wherein the excisable goods have been

permitted to be stored without payment of duty ;

3 8


III. a depot, premises of a consignment agent or any

other place or premises from where the excisable

goods are to be sold after their clearance from

the factory; from where such goods are

removed."

It is, therefore, clear that for a manufacturer /

consignor, the eligibility to avail credit of the service

tax paid on the transportation during removal of

excisable goods would depend upon the place of

removal as per the definition. In case of a factory gate

sale, sale from a non-duty paid warehouse, or from a

duty paid depot (from where the excisable goods are

sold, after their clearance from the factory), the

determination of the 'place of removal' does not pose

much problem. However, there may be situations

where the manufacturer /consignor may claim that

the sale has taken place at the destination point

because in terms of the sale contract /agreement (i)

the ownership of goods and the property in the goods

remained with the seller of the goods till the delivery

of the goods in acceptable condition to the purchaser

at his door step; (ii) the seller bore the risk of loss of

or damage to the goods during transit to the

destination; and (iii) the freight charges were an

integral part of the price of goods. In such cases, the

credit of the service tax paid on the transportation up

to such place of sale would be admissible if it can be

established by the claimant of such credit that the

sale and the transfer of property in goods (in terms of

the definition as under section 2 of the Central Excise

Act, 1944 as also in terms of the provisions under the

Sale of Goods Act, 1930) occurred at the said place.

8.3 A doubt has been raised regarding admissibility

of CENVAT credit on service tax paid in respect of

mobile phones. In the Service Tax Credit Rules, 2002,

it was prescribed that credit of service tax was

admissible only on telephone connection installed in

the business premises. A clarification to this effect

was also issued vide circular No. 59/8/2003-ST, dated

20.6.2003, in the context of the Service Tax Credit

Rules, 2002. However, in the CENVAT Credit Rules,

2004 no such condition has been prescribed.

Therefore, w.e.f. 10.9.2004, credit of service tax paid

in respect of mobile telephone service is admissible,

provided the mobile phone is used for providing output

service or used in or in relation to manufacture of

finished goods considering the different decisions,

need was find to amend the law and allow the credit

upto the place of removal.

Hon. Tribunal has held in the case of M/s Ultratech

Cement Ltd V/s. CCE vide which the availability of

Cenvat Credit on Transportation charges ( GTA ) paid

on goods sold from factory gate to the customers place

/ Depot / premises of consignment agent has been

dealt with and the definition on place of removal is

explained /linked with the valuation of goods under

section 4 and section 4A. In terms of the said decision

now the matter has become more complicated as

TRIBUNAL held that, where the duty is chargeable at

specific rates or at the value determined under Section

4A and not at ad-valorem rates under Section 4, the

definition of 'place of removal' as given in Section

4(3)(c) of the Central Excise Act, 1944 would not be

applicable and as such the 'place of removal' will be

the factory gate. Therefore, in such cases, Cenvat

Credit cannot be availed with respect to service tax

paid on transportation of final products beyond the

factory gate.

In view of number of decisions as given below

following those services involved in relation to the

activities integrally connected with business of

assessee were allowed to avail cenvat credit.

Input Service

Favorable Judicial Decisions

GTA Service AMBUJA CEMENTS LTD.

Versus UNION OF INDIA; 2009 (236) E.L.T. 431 (P & H)

COMMISSIONER OF C. EX. & S.T., LTU, BANGALORE

Versus ABB LIMITED; 2011 (23) S.T.R. 97 (Kar.)

COMMISSIONER OF CUS. & C. EX., HYDERABAD-IV

Versus POKARNA LTD.;2013 (292) E.L.T. 316 (Tri. - Bang.)

DALMIA CEMENTS (BHARAT) LTD. Versus

COMMISSIONER OF C. EX., NEW DELHI; 2012 (284) E.L.T. 65 (Tri. - Del.)

3 9


PALCO METALS LTD. Versus COMMISSIONER OF C. EX., AHMEDABAD;

2012 (280) E.L.T. 299 (Tri. - Ahmd.)

INOX AIR PRODUCTS LTD. Versus COMMR. OF C. EX. & CUSTOMS,

NAGPUR; 2012 (277) E.L.T. 181 (Tri. - Mumbai)

SEMCO ELECTRIC PVT. LTD. Versus COMMISSIONER OF CENTRAL

EXCISE, PUNE-I; 2013 (30) S.T.R. 572 (Tri. - Mumbai)

Catering Service COMMISSIONER OF C. EX., NAGPUR

Versus ULTRATECH CEMENT LTD.; 2010 (260) E.L.T. 369 (Bom.)

PARAMOUNT COMMUNICATION LTD.

Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR; 2013 (287) E.L.T.

70 (Tri. - Del.)

COMMR. OF C. EX., MEERUT-II Versus HINDUSTAN COCO COLA

BEVERAGES LTD.; 2011 (274) E.L.T. 196 (Tri. - Del.)





Rent-a-cab Service DALMIA CEMENTS (BHARAT) LTD. Versus

COMMISSIONER OF C. EX., NEW DELHI; 2012 (284) E.L.T. 65 (Tri. - Del.)

PARAMOUNT COMMUNICATION LTD. Versus COMMISSIONER OF

CENTRAL EXCISE, JAIPUR; 2013 (287) E.L.T. 70 (Tri. - Del.)

COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II Versus J.K. CEMENT

WORKS; 2012 (277) E.L.T. 194 (Tri. - Del.)

COMMR. OF CUS. & C. EX., GUNTUR Versus CHOLAYIL (P) LTD.; 2013

(31) S.T.R. 29 (Tri. - Bang.)

Air Travel Agent Service COMMISSIONER OF C. EX., AHMEDABAD Versus FINE CARE

BIOSYSTEMS; 2009 (244) E.L.T. 372 (Tri. - Ahmd.)

GOODLUCK STEEL TUBES LTD. Versus COMMISSIONER OF C. EX.,

NOIDA; 2013 (32) S.T.R. 123 (Tri. - Del.)

EMCON TECHNOLOGIES INDIA PVT. LTD. Versus COMMR. OF C. EX.,

BANGALORE; 2013 (31) S.T.R. 441 (Tri. - Bang.)

COMMR. OF CUS. & C. EX., GUNTUR Versus CHOLAYIL (P) LTD.; 2013

(31) S.T.R. 29 (Tri. - Bang.)

Courier services PIRAMAL GLASS LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

SURAT; 2012 (286) E.L.T. 414 (Tri. - Ahmd.)

COMMISSIONER OF C. EX. & SERVICE TAX (LTU) Versus LUPIN LTD.;

2012 (285) E.L.T. 221 (Tri. - Mumbai)

Input Service Favorable Judicial Decisions

4 0


KODAK INDIA PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

INDORE; 2012 (280) E.L.T. 453 (Tri. - Del.)

COMMISSIONER OF CENTRAL EXCISE, VAPI Versus PARLE

INTERNATIONAL PVT. LTD.; 2012 (278) E.L.T. 625 (Tri. - Ahmd.)

TUFROPES PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

VAPI; 2012 (277) E.L.T. 359 (Tri. - Ahmd.)

Security Agency service COMMISSIONER OF CENTRAL EXCISE, SURAT Versus HEUBACH

COLOUR PVT. LTD.; 2013 (288) E.L.T. 281 (Tri. - Ahmd.)

DALMIA CEMENTS (BHARAT) LTD. Versus COMMISSIONER OF C. EX.,

NEW DELHI; 2012 (284) E.L.T. 65 (Tri. - Del.)

C. CUBED SOLUTIONS PVT. LTD. Versus COMMISSIONER OF C. EX.,

BANGALORE; 2013 (293) E.L.T. 398 (Tri. - Bang.)

C.J. GELATINE PRODUCTS LTD. Versus COMMISSIONER OF C. EX.,

BHOPAL; 2012 (25) S.T.R. 109 (Tri. - Del.)

Insurance U.G. SUGAR & INDUSTRIES LTD. Versus COMMISSIONER OF C. EX.,

MEERUT-II; 2013 (287) E.L.T. 355 (Tri. - Del.)

SUNDARAM CLAYTON LTD. Versus COMMISSIONER OF C. EX., CHENNAI;

2012 (25) S.T.R. 172 (Tri. - Chennai)

CHA Service COMMISSIONER OF CUS. & C. EX., HYDERABAD-IV Versus POKARNA

LTD.;2013 (292) E.L.T. 316 (Tri. - Bang.)

COMMISSIONER OF C. EX., RAJKOT Versus ADANI PHARMACHEM P.

LTD.; 2008 (232) E.L.T. 804 (Tri. - Ahmd.)

COMMISSIONER OF C. EX., RAJKOT Versus ROLEX RINGS P. LTD.; 2008

(230) E.L.T. 569 (Tri. - Ahmd.)

RAJDHANI CRAFTS Versus COMMISSIONER OF CENTRAL EXCISE,

JAIPUR; 2013 (32) S.T.R. 607 (Tri. - Del.)

Canteen Service ADC INDIA COMMUNICATIONS LTD. Versus COMMR. OF C. EX.,


BNY MELLON INTERNATIONAL OPERATIONS (I) P. LTD. Versus C.C.E.

(A), PUNE-III; 2013 (30) S.T.R. 567 (Tri. - Mumbai)

COMMR. OF C. EX. & S. T., LTU, BANGALORE Versus ACE DESIGNERS

LTD.; 2012 (26) S.T.R. 193 (Kar.)

Manpower Recruitment HINDUSTAN ZINC LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

Agency Service JAIPUR; 2013 (288) E.L.T. 406 (Tri. - Del.)


2012 (28) S.T.R. 291 (Tri. - Mumbai)

JBM AUTO SYSTEM PVT. LTD. Versus COMMISSIONER OF C. EX.,

CHENNAI; 2012 (27) S.T.R. 170 (Tri. - Chennai)


4 1



Commission on domestic WADPACK PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

Agent and foreign Agent BANGALORE; 2013 (293) E.L.T. 400 (Tri. - Bang.)

VISHAL PIPES LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

NOIDA; 2013 (293) E.L.T. 386 (Tri. - Del.)

COMMISSIONER OF CUS. & C. EX., HYDERABAD-IV Versus POKARNA

LTD.; 2013 (292) E.L.T. 316 (Tri. - Bang.)

BIRLA CORPORATION LTD. Versus COMMISSIONER OF C. EX.,

LUCKNOW; 2013 (288) E.L.T. 427 (Tri. - Del.)

Chartered Accountant C. CUBED SOLUTIONS PVT. LTD. Versus COMMISSIONER OF

Service C. EX., BANGALORE; 2013 (293) E.L.T. 398 (Tri. - Bang.)

Advertisement C. CUBED SOLUTIONS PVT. LTD. Versus COMMISSIONER OF C. EX.,


COMMISSIONER OF C. EX. & SERVICE TAX (LTU) Versus LUPIN

LTD.;2012 (285) E.L.T. 221 (Tri. - Mumbai)

Housekeeping services C. CUBED SOLUTIONS PVT. LTD. Versus COMMISSIONER OF C. EX.,


BALKRISHNA INDUSTRIES LTD. Versus COMMR. OF C. EX.,

AURANGABAD; 2010 (254) E.L.T. 301 (Tri. - Mumbai)

Clearing & Forwarding C. CUBED SOLUTIONS PVT. LTD. Versus COMMISSIONER OF C. EX.,

Service BANGALORE; 2013 (293) E.L.T. 398 (Tri. - Bang.)

ASHIRVAD PIPES PVT. LTD. Versus COMMISSIONER OF C. EX.,

BANGALORE-I; 2012 (31) S.T.R. 693 (Tri. - Bang.)

Repair & Maintenance CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

Service VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

G.H.C.L. LTD. Versus COMMISSIONER OF CENTRAL EXCISE,

BHAVNAGAR; 2009 (242) E.L.T. 468 (Tri. - Ahmd.)



Management and CASTROL INDIA LIMITED

Consultancy services, Versus COMMISSIONER OF CENTRAL EXCISE, VAPI; 2013 (291) E.L.T.

469 (Tri. - Ahmd.)



Online Information and CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

Data Base Access service, VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

Port service CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

COMMR. OF C. EX. & CUS. Versus MUNDRA PORT & SPECIAL ECONOMIC

ZONE LTD.; 2011 (21) S.T.R. 361 (Guj.)

4 2


Storage and CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

Warehousing service VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

COMMR. OF C. EX. & CUS. Versus MUNDRA PORT & SPECIAL

ECONOMIC ZONE LTD.; 2011 (21) S.T.R. 361 (Guj.)

Event Management CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

Service VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

ONE ADVERTISING & COMMUNICATION SERVICES LTD. Versus

C.S.T.,AHMEDABAD; 2012 (27) S.T.R. 344 (Tri. - Ahmd.)

Technical Inspection CASTROL INDIA LIMITED Versus COMMISSIONER OF CENTRAL EXCISE,

services VAPI; 2013 (291) E.L.T. 469 (Tri. - Ahmd.)

COMMISSIONER OF C. EX., AHMEDABAD-II Versus CADILA HEALTHCARE

LTD; 2013 (30) S.T.R. 3 (Guj.)

Pest control ADC INDIA COMMUNICATIONS LTD. Versus COMMR. OF C. EX.,


NIRMA LTD. Versus COMMISSIONER OF C. EX. & S.T., VADODARA-I; 2013

(32) S.T.R. 622 (Tri. - Ahmd.)


2012 (25) S.T.R. 172 (Tri. - Chennai)

AMC for plant ADC INDIA COMMUNICATIONS LTD. Versus COMMR. OF C. EX.,



2012 (25) S.T.R. 172 (Tri. - Chennai)

Maintenance & Repair SEMCO ELECTRIC PVT. LTD. Versus COMMISSIONER OF CENTRAL

of garden EXCISE, PUNE-I; 2012 (276) E.L.T. 94 (Tri. - Mumbai)

NIRMA LTD. Versus COMMISSIONER OF C. EX. & S.T., VADODARA-I; 2013

(32) S.T.R. 622 (Tri. - Ahmd.)

Renting on immovable ORACLE GRANITO LTD. Versus COMMISSIONER OF C. EX., 2013 (30)

property S.T.R. 357 (Tri. - Ahmd.)

ETP Services ANAR CHEMICALS PVT. LTD. Versus COMMISSIONER OF C. EX.,

AHMEDABAD; 2011 (24) S.T.R. 32 (Tri. - Ahmd.)


2012 (28) S.T.R. 291 (Tri. - Mumbai)


It can be appreciated from the above that Input of

services which are related to business and also relates

to manufacturing operations are entitle for availment

of cenvat credit.

Subsequently, definition which was revised in 2008

was further revised vide. Notification 3/2011 C.E.

(N.T.) - dated 01-03-2011, whereby comparison is

given below :

4 3


Definition of Input Service after dtd. 01.03.2008but prior to 20.06.2012

Definition of Input Service as amended upto01.03.2011

(l) "input service" means any service,-


output service; or



products and clearance of final products upto the place

of removal,


modernization, renovation or repairs of a factory,

premises of provider of output service or an office

relating to such factory or premises, advertisement

or sales promotion, market research, storage upto the

place of removal, procurement of inputs, activities

relating to business, such as accounting, auditing,

financing, recruitment and quality control, coaching

and training, computer networking, credit rating, share

registry, and security, inward transportation of inputs

or capital goods and outward transportation upto the

place of removal;

(l) "input service" means any service, -


output service; or

(ii) used by a manufacturer, whether directly or indirectly,

in or in relation to the manufacture of final products

and clearance of final products upto the place of

removal, and includes services used in relation to

modernization, renovation or repairs of a factory,

premises of provider of output service or an office

relating to such factory or premises, advertisement

or sales promotion, market research, storage upto the

place of removal, procurement of inputs, accounting,

auditing, financing, recruitment and quality control,

coaching and training, computer networking, credit

rating, share registry, security, business exhibition,

legal services, inward transportation of inputs or

capital goods and outward transportation upto the

place of removal; but excludes services,-

(A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq),

(zzzh) and (zzzza) of clause (105) of section 65 of

the Finance Act (hereinafter referred as specified

services), in so far as they are used for-

(a) construction of a building or a civil structure or a

part thereof; or

(b) laying of foundation or making of structures for

support of capital goods, except for the provision

of one or more of the specified services; or

(B) specified in sub-clauses (d), (o), (zo) and (zzzzj) of

clause (105) of section 65 of the Finance Act, in so

far as they relate to a motor vehicle except when used

for the provision of taxable services for which the credit

on motor vehicle is available as capital goods; or

(C) such as those provided in relation to outdoor catering,

beauty treatment, health services, cosmetic and

plastic surgery, membership of a club, health and

fitness centre, life insurance,

It is important to note the change in definition and

input service definition, which was earlier more broader

on account of wording which was included "activities

relating to business, such as". Numbers of disputes

were raised by the department disallowing the cenvat

credit on number of services on account of not relating

to manufacture and clearance of finished products.

Therefore larger view was taken by the judicial

authorities that any services which is relating to

business and linkage has been established w.r.t.

business Cenvat Credit was allowed by the judicial

authorities considering "Such as" is the illustrative and

not specific. Definition was amended to restrict the

same and therefore "activities relating to business,

such as" has been deleted and also certain exclusions

were added.

Further, Input Service definition as stands now after

incorporating all amendments is given below :

4 4


"Input service" means any service :

(i) used by a provider of "output service" for

providing an output service; or

(ii) used by a manufacturer, whether directly or

indirectly, in or in relation to the manufacture of

final products and clearance of final products upto

the place of removal, and includes services used

in relation to modernisation, renovation or repairs

of a factory, premises of provider of output

service or an office relating to such factory or

premises, advertisement or sales promotion,

market research, storage upto the place of

removal, procurement of inputs, accounting,

auditing, financing, recruitment and quality

control, coaching and training, computer

networking, credit rating, share registry, security,

business exhibition, legal services, inward

transportation of inputs or capital goods and

outward transportation upto the place of

removal;

but excludes :

(A) service portion in the execution of a works

contract and construction services including

service listed under clause (b) of section 66E of

the Finance Act (hereinafter referred as specified

services) in so far as they are used for

(a) construction or execution of works contract

of a building or a civil structure or a part

thereof; or

(b) laying of foundation or making of structures

for support of capital goods, except for the

provision of one or more of the specified

services; or";

(B) specified in sub-clauses (o) and (zzzzj) of clause

(105) of section 65 of the Finance Act, in so far

as they relate to a motor vehicle which is not a

capital goods; or

specified in sub-clauses (d) and (zo) of

clause (105) of section 65 of the Finance Act,

in so far as they relate to a motor vehicle

which is not a capital goods except when used

by -

(a) a manufacturer of a motor vehicle in respect

of a motor vehicle manufactured by him; or

(b) a provider of output service as specified in

sub-clause (d) of clause (105) of section 65

of the Finance Act, in respect of a motor

vehicle insured or reinsured by him; or.

(C) such as those provided in relation to outdoor

catering, beauty treatment, health services,

cosmetic and plastic surgery, membership of a

club, health and fitness centre, life insurance,

health insurance and travel benefits extended

to employees on vacation such as Leave or

Home Travel Concession, when such services

are used primarily for personal use or

consumption of any employee"

In view of the above, Input Services relating to

manufacture and upto the place of removal and those

services which are related to specific functions as

specified in the definition are entitled for cenvat credit

to the manufacturer or output service provider.

Similarly, input service is utilized at the place of

manufacture i.e. factory or the place from which

service/s are provided. However, services are utilized

at various places of the business and therefore

concept of Input Service Distributor was brought in.

(m) "Input Service Distributor" means an office of

the manufacturer or producer of final products or

provider of output service, which receives invoices

issued under rule 4A of the Service Tax Rules, 1994

towards purchases of input services and issues

invoice, bill or, as the case may be, challan for the

purposes of distributing the credit of service tax paid

on the said services to such manufacturer or producer

or provider, as he case may be;

Office includes Registered Office, Corporate Office,

Head Office, Marketing Offices, Warehouses or any

other premises where manufacturer of final product

or providers of output service is receiving the services

from service providers. Registration also needs to be

obtained either at each location or centralized

registration can be obtained from where centralized

billing or accounting is done.

Manner of distribution of credit has been specified in

Rule 7 of Cenvat Credit Rules 2004 prior to

17.03.2012, the provisions were as follows:

Manner of distribution of credit by input service

distributor: The input service distributor may

distribute the cenvat credit in respect of the service

tax paid on the input service to its manufacturing units

4 5


or units providing output service, subject to the

following condition namely:

a. The credit distributed against a document

referred to in rule 9 does not exceed the amount

of service tax paid thereon or.

b. Credit of service tax attributable to service use

in a unit exclusively engaged in manufacture of

exempted goods or providing of exempted

services shall not be distributed.

Methodology of distribution was so simple and left to

assessee to distribute the credit wherever it is required

without putting any restriction except for not to transfer

the cenvat credit of the services which were exclusively

for exempted goods or services and distribution

should not be more than cenvat credit.

It is very important to note decisions in the case of

following :

COMMISSIONER OF C. EX., BANGALORE-I Versus

ECOF INDUSTRIES PVT. LTD. 2013 (29) S.T.R. 107

(Kar.)

Cenvat credit of Service tax - Restriction regarding

distribution of credit - Assessee is entitled to distribute

the Cenvat credit on input services on its

manufacturing unit or other units providing the output

services - View taken in the order-in-appeal that the

distribution of credit is for advertisement of the

product, which is not at all manufactured at Malur unit

cannot be accepted - Finding that assessee is entitled

to take credit only in the unit where the product is

manufactured is not the mandate of Rule 7 of Cenvat

Credit Rules, 2004. [paras 4, 5]

VALCO INDUSTRIES LTD. Versus COMMISSIONER

OF C. EX., CHANDIGARH 2012 (28) S.T.R. 457 (Tri.

- Del.)

Cenvat credit - Input service - Bills received at

Headquarters transferred to one factory - It does not

amount to distribution of service - Credit could be

taken by the factory based on duty paying documents

addressed to main office, without assessee getting

registered as 'input service distributor' - It was more

so in view of proviso to Rule 9(2) of Cenvat Credit

Rules, 2004. [para 10]

Thereafter, the methodology was changed w.e.f.

01.04.2012 vide Notification no. 18/2012 CE (NT) dtd.

17.03.2012, whereby changes were made and

methodology to be adopted is given below:

7. Manner of distribution of credit by input service

distributor. - The input service distributor may

distribute the CENVAT credit in respect of the service

tax paid on the input service to its manufacturing units

or units providing output service, subject to the

following conditions, namely:-

(a) the credit distributed against a document referred

to in rule 9 does not exceed the amount of

service tax paid thereon;

(b) credit of service tax attributable to service used

in a unit exclusively engaged in manufacture of

exempted goods or providing of exempted

services shall not be distributed;

(c) credit of service tax attributable to service used

wholly in a unit shall be distributed only to that

unit; and

(d) credit of service tax attributable to service used

in more than one unit shall be distributed prorata

on the basis of the turnover of the concerned

unit to the sum total of the turnover of all the

units to which the service relates.

Explanation 1.- For the purposes of this rule, unit

includes the premises of a provider of output service

and the premises of a manufacturer including the

factory, whether registered or otherwise.

Explanation 2.- For the purposes of this rule, the total

turnover shall be determined in the same manner as

determined under rule 5.

One more composition was imposed vide notification

no. 28/2012 CE(NT) dtd. 20.06.2012 made w.e.f.

1.07.2012 which is given below:

(d) Credit of service tax attributable to service used

in more than one unit shall be distributed pro

rata on the basis of the turnover during the

relevant period of the concerned unit to the sum

total of the turnover of all the units to which the

service relates during the same period.

Explanation 3. - (a) the relevant period shall be the

month previous to the month during which the

CENVAT credit is distributed.

(b) In case if any of its unit pays tax or duty on

quarterly basis as provided in rule 6 of Service

Tax Rules, 1994 or rule 8 of Central Excise Rules,

4 6


2002 then the relevant period shall be the quarter

previous to the quarter during which the CENVAT

credit is distributed.

(c) In case of an assessee who does not have any

total turnover in the said period, the input service

distributor shall distribute any credit only after

the end of such relevant period wherein the total

turnover of its units is available.

The impact of the above are as follows:

1. Distribution of service tax should not be more

than actual service tax paid

2. Service tax amount needs to be distributed to

such unit where services were exclusively to be

used

3. No service tax to be distributed to exempted unit

or exempted output service provider

4. The service tax needs to be distributed based

on the turnover of respective unit

5. Total turnover means sum total of the value of -

• all excisable goods cleared during the

relevant period including exempted goods,

dutiable goods and excisable goods

exported;

• export turnover of services determined in

terms of clause (D) of sub-rule (1) above

and the value of all other services, during

the relevant period; and

• all inputs removed as such under sub-rule

(5) of rule 3 against an invoice, during the

period for which the claim is filed.

6. Service tax to be distributed in the proportion of

previous months total turnover.

Value to be determined of exempted services

especially for trading services is a difficult

exercise since purchase value and sales value

of such goods needs to be tracked and difference

of the same needs to be considered as value of

exempted service and not as total trading

turnover otherwise there will be a loss of cenvat

credit.

Conclusion:

1. There is no time limit for availing the cenvat

credit, but it should be taken immediately in

accordance with the law subject to

entitlement in accordance with the definition

of the "Input Service"

2. Service tax in relation to specified functions

in the inclusive part of definition may not

need one to one relationship of

manufacturing activity.

3. Service tax can be availed subsequent to

registration even pertaining to prior period.

4. Distribution of service tax should be strictly

on monthly basis and therefore

determination of turnover as stated above is

must including that of ascertaining of value

of trading services.

5. Minor defects on the invoices which are

curable in nature will not be hurdle for

availing cenvat credit, however defects to be

removed.

6. Since there are number of changes in the

definition of input services and manner in

which service tax can be distributed, proper

care needs to be taken to avail the cenvat

credit based on such entitlement at the time

of availing services and taking cenvat credit

subsequently, since there is no time limit.

7. Jurisdiction to decide entitlement of cenvat

credit of input services will be at the place

where service tax is availed, however

jurisdiction of deciding entitlement of input

service tax credit distributed will be at the

place where ISD registration is taken and not

at different places where credit has been

distributed.

4 7


BACKGROUND:

The Companies Act 2013 ushered in the concept of

class action suits formally to India for the first time. In

order to understand the implications of this path

breaking legal process it is necessary to know what

class action suits are all about. Under the Indian laws

if and when you have a cause of action against anyone

it is always a personal right against someone or other.

Accordingly it has always been and still is an individual

right which you alone can exercise against someone

else. To some extent this personal right is allowed to

be exercised collectively in some of the labour laws

in the country where a duly constituted and authorised

trade union could exercise such rights on behalf of all

its members where the goal of the members

collectively happen to be the same.

DEFINITION:

A class action is a procedural device that permits one

or more plaintiffs to file and prosecute a lawsuit on

behalf of a large group - also known as "class".

One can get the nature and rationale of class action

suits from the preamble of the Class Action Fairness

Act 2005 passed by the United States Congress thus:

"Class-action lawsuits are an important and valuable

part of the legal system when they permit the fair and

efficient resolution of legitimate claims of numerous

parties by allowing the claims to be aggregated into a

single action against a defendant that has allegedly

caused harm".

In a fight between David and Goliath the odds are

naturally against the former. But all Davids put

together could become a Goliath to fight a Goliath.

That is the essence of class action suit. A class for

the purpose of this nature of dispute can be

employees, creditors, debtors, customers and what

have you all of whom collectively suffer from a

common enemy.

ADVANTAGES:

There are some distinct advantages in collectively

taking up the causes of various persons or entities.

Some of them are:

1. The biggest advantage of a class action suit is

that aggregation of litigation improves the

efficiency of legal process and reduces the costs

of such litigations.

2. A litigant for small recoveries may fight shy of

approaching the courts however justified he may

be.

3. A class action suit is more equitable as all those

who file the suit gets proportionate sums unlike

in the case where the proceeds are enjoyed by

the first litigants on the basis of 'first-come-first-

served' where the funds provided as relief is are

limited.

4. One other important advantage of class action

suits is that no incompatible standards are set

by different courts ruling differently.

THE INTERNATIONAL SCENE:

Let us now look at how other countries around world

are dealing with class action suits, if at all. United

States has a well evolved system of this category of

litigation. Austrian laws permit class action suits to be

filed on behalf of consumer organisations. Canada

like the US allows class actions. Under the French

law an association can represent the collective interest

of the consumers with the caveat that all individual

claimants must be named in the suit. Germany permits

what is called sample proceedings arising from mass

capital market transactions and for nothing else. Italy

has a class action legislation written into law. The Dutch

law allows class action for associations and

foundations wherever their bye laws permit such

action. Spanish law permits nominated consumer

associations to take such collective action. The

Switzerland law does not allow any form of class

CLASS ACTION SUITS AND

THE COMPANIES ACT 2013 - A PRIMERBy Venkat R Venkitachalam

Company Secretary,

Article No. 5

4 8


action. From 1999 after the enactment of the Civil

Procedure Rules in UK collective actions are permitted

under limited circumstances.

THE INDIAN SCENE:

As far as India is concerned it may not be true to say

that class action suits are completely alien. Indian

jurisprudence has evolved, perhaps better than many

other countries if we take into account the Public

Interest Litigations (PIL). By loosening the locus standi

requirement the Supreme Court of India has allowed

suits to be filed on behalf of deprived sections of the

society by individuals, NGOs and the like. Though not

codified strictly as class action suit, PILs are essentially

that - Class Action Suits. In India an acute need for

codified provisions for class action suits was felt at

the time of Bhopal Gas tragedy. In the case of Bhopal

tragedy the legal procedures required by the US

system prevented a class action suit from being

brought against Union Carbide by the victims.

However, the Government of India sought to

represent the victims and negotiated with Union

Carbide under the supervision of the Supreme Court

of India deploying what is called the doctrine of parans

patriae (the inherent power of the State to protect

persons who are legally unable to act on their own

behalf). Recently Indians got to learn about class

action suits when the Satyam scam broke out and

investors in the US filed class action suits against the

company and its auditors. Indian investors on the

other hand could not have any effective legal recourse

against the company.

Now with the enactment of The Companies Act 2013

class action suits have found a place in the statute

books duly codified.

ESSENTIAL CONDITIONS:

The subject or point of litigation of a class action suit

could be different and varied; but two factors are

almost always present in a class action suit. They are:

1. The issues in question or subject matter of dispute

are common to all members of the class.

2. The persons affected are so large that it is

impracticable to bring them all together before

the judicial authority.

TYPICAL CLASS ACTION:

1. Employees who are subjected to racial or gender

discrimination by their employers.

2. Residents affected in a neighbourhood by a toxic

spill in the environment.

3. Consumers who are sold the same or similarly

defective goods by a company.

4. Patients given same medicines with side-effects.

5. Investors are cheated by fraud in the purchase

of shares or stocks.

THE COMPANIES ACT 2013:

Section 245 of the Companies Act 2013 and the Rules

made under this Section deal with class action suits

which are summarised below for general

understanding:

1. Eligibility: The following are entitled to initiate a

class action suit:

a. 100 or more Members of the company or

those who represent 10% or more of the

share capital of the company.

b. 100 or more Depositors of the company or

those who represent 10 % or more of the

Deposit in the company.

c. The Central Government in whose opinion

the affairs of the company are managed in

such a manner prejudicial to public interest.

2. Authority: An application for class action has to

be filed before the National Company Law

Tribunal (NCLT).

3. Redressal: Members or Depositors may file

class action suits when they are of the opinion

that the affairs of the company are being

conducted in a manner prejudicial to the

company or to seek following restraining orders:

a. to restrain the company from committing an

act which is ultra vires the Memorandum and

Articles of Association of the company;

b. to restrain the company from committing any

breach of any of the provisions of the

Memorandum and Articles of Association of

the company;

c. to declare a resolution earlier passed by

suppression of material facts or through

misstatement of facts for altering the

Memorandum and Articles;

4 9


d. to restrain the company and its directors

from acting on such resolutions;

e. to restrain the company from doing an act

which is contrary to any provisions of the

Companies Act or any other law which is in

force;

f. to restrain the company from taking any

action contrary to any resolution passed by

members;

g. to claim damages and compensation or

demand any suitable action from or against

the company or its directors for fraudulent,

unlawful and wrongful acts, against the

auditor/s for fraudulent or misleading

statements in audit report or against any

expert/advisor/consultant for wrongful

statements and misleading particulars;

h. to seek any other remedy as the NCLT may

deem fit to award.

4. Parties: Class action suits can be filed against

the company, any of its directors, its auditor/s or

any expert/advisor/consultant.

5. Procedure:

A. On receipt of an application for a class action

suit NCLT shall examine the following before

admitting the same:

a. whether the member/depositor is acting in

good faith;

b. whether any evidence is produced showing

involvement of other persons other than the

directors or officers;

c. whether the cause of action could be

pursued by the complainant other than as

a class action suit;

d. whether there exists any evidence as to the

views of other members/depositors of their

personal interest;

e. whether the company can authorise the

action before it occurs or ratify it if it occurs

thereafter;

f. whether the cause of action which has

already occurred can be ratified by the

company.

B. NCLT on admitting the application shall:

a. issue public notice to all the members of the

class within seven days;

b. require the company to put a public notice

on its website;

c. consolidate all similar applications, if any,

lying in all jurisdictions into a single

application;

d. not allow two applications to survive for the

same cause of action.

C. A copy of every application filed shall be served

on the Regional Director or Registrar of

Companies.

D. NCLT will give notice to the Central Government

of the application for its say, if any.

E. NCLT can order damages not exceeding Rupees

One Lakh to the other party if is found that the

application is frivolous or vexatious.

6. Order: An order passed by NCLT shall be binding

on the company, its members, depositors,

auditors and consultants. The cost of publication

of the public notice shall be borne by the party

responsible for the oppressive act. It is important

to note here that relating to class action suit are

not applicable to banking companies.

CONCLUSION:

Finally the concept of class action suit is here. Whether

it is here to stay in a litigious society like ours and

how it would pan out remains to be seen. Having

brought in the concept through a procedure

dominated legislation like the Companies Act the

chances of it getting implemented well are pretty high.

It would be worthwhile to remember that this piece of

innovative legislation has not come one day too soon.

Investors, particularly the smaller ones have suffered

enough. One has to keep in mind that only members

and depositors can resort to class action suits and

not bankers, creditors, debtors, consumers, etc. at

present under the Act. Be that may, there is some

light at the end of the tunnel. One thing can be said

with certainty. Class action is bound to usher in more

responsible management practices to corporate

India.

5 0


"For all of its uncertainty, we cannot flee the

future." – Barbara Jordan

Treasury management is a treacherous task, at best.

Treacherous not only for the corporate but also for

the management team, who might end up second-

guessing each decision. With currency markets as

volatile as a sea during a storm, oftentimes, there is

no perfect solution. Like disaster management,

treasury management is all about hoping for the best,

but being prepared for the worst-case scenario at all

times. Hence, the requirement for impeccable financial

controls has touched virtually every area of a

company's business.

It is commonly observed that most corporates manage

their currency exposures by taking a subjective view

on market variables and accordingly take decisions

on hedging or otherwise. In the manner, it has been

experienced that the risk management process has

become rather arbitrary and entirely view driven. Thus,

if the view on market variables were to hold well, the

corporate would end up making forex gains. But, if

the view were to go wrong, there would be losses.

Another drawback of this system of Risk Management

is that corporates are unable to quantify the profits or

losses which they are running on their open positions.

Consequently, the corporate would be unable to

estimate whether its anticipated product profits have

been protected or are being diluted by forex

fluctuations. The main short-coming of the current

system is that at the time of decision making, the

treasury team has no benchmarks to protect and no

targets to achieve. Consequently, there is a lot of

subjectivity and there are no inbuilt checks and

controls to stop losses or to freeze profits.

A well-defined forex policy would help address some

of the above issues. It would ensure that the decision

making process acquires a far more objective flavor

and will also be predominantly system-driven. There

is also an accurate quantification of profits or losses

of the treasury function. A strict adherence of the

policy would go a long way towards ensuring that

business profits are not only protected but also

improved upon due to scientific decision making and

losses, if any, are within predetermined levels of

acceptance.

New RBI circulars and corporate governance

requirements have made it mandatory for corporates

to have a Foreign Exchange Risk Management Policy

in place.

The broad contours of an FX Policy could be:

• To identify the FX risks the company is exposed

to due to the nature of its business activity

• To decide the process of management of these

risks through a variety of risk management tools

• To establish processes to monitor and control

the risks as per these processes

• To create an efficient process for reporting the

key parameters measuring the risks and the

performance of the Risk Management Tools

Due to the nature of this document, no two FX Policies

would ever be the same. As each company has a

unique treasury set-up, the FX Policy must be tailor-

made to meet the requirements of each corporate.

But, in most cases, a common work-flow exoskeleton

can be followed to better strengthen the basic structure

of the FX Policy. The main topics to consider are:

1. Define Policy Objectives

This first step is to establish a framework for the

policy. It outlines the principal business lines and

overall corporate objectives and stipulates those

areas where the company is either willing or not

willing to take risks. In most cases, companies

do state their intention to offset their FX risks

since it is not an area in which the company has

a competitive advantage.

2. Identify & Quantify Exposures

The next step involves identification &

quantification of major exposures. Generally,

these exposures are grouped under the nature

Foreign Exchange Policy - A Map

in the LabyrinthBy Adwait V.

5 1


of exposures: translational, transactional and

economic.

• Translational exposures would relate to

protecting the value of overseas

investments and reported income.

• Transactional exposures would relate to

buying or selling in any foreign currency.

• Economic exposures might be the most

difficult to capture because they relate to

issues that usually arise from foreign

competition.

Some companies may use sophisticated

modeling techniques such as value-at-risk to

measure exposures. Equally valid approaches

are simpler and rely upon measuring recent

historical changes of currency relationships and

their impact on exposures.Whatever the

approach, the objective is to define which

exposures are significant. Any hedging activity

should be proportional to the exposure.

3. Define Risk Management Policies

This step includes allocation of specific actions

and responsibilities. Exposures that present

significant risks to the company are identified and

designated for hedging. The chain of

responsibility for making decisions and executing

them is formally established. Ranges of

acceptable hedging activity should also be

established. For example, a company might elect

to hedge no less than 50% but no more than

70% of foreign sales forecast over a specified

time period. Each exposure must be

systematically addressed. This step will

necessarily be complex as it represents the heart

of any hedging policy. Most companies include

in this section an explicit statement that

speculative activities should not be undertaken

under any circumstances. Speculative activities

would include any action that would add to, rather

than reduce, the financial risks of the company.

4. Identify & Execute strategies

In this step, derivative strategies to manage risks

are explicitly identified. Approved derivatives will

reflect the procedures established in Step Three.

In order to provide additional flexibility, most

companies will specify a range of approved

derivatives, including forward contracts,

purchased options, and forward-equivalent

option-combination strategies. The specific

hedging technique selected will depend on the

circumstances of each exposure. For example,

if certainty of an outcome is the main objective,

forwards are likely to be the required derivative.

Alternatively, for competitive reasons, a company

may need upside potential from currency

movements. In this case, authorizing purchased

options and option-combination strategies will

provide the desired trade-off of protection against

adverse market moves while preserving upside

potential from the underlying exposure. It is

advisable to provide a broad choice of hedging

instruments at the outset itself since amending

the policy later to include more choices is usually

administratively burdensome.

5. Monitor executed Strategies

Once risk management actions have been taken,

the process does not end there. Monitoring must

become a standard practice. The hedge actions

need to be monitored for performance to ensure

validity in dynamic market conditions. The

underlying exposures must be monitored on an

on-going basis to ensure that the position does

not become over or under hedged and escalation

procedure should be in place if there is ever any

evidence of an erroneous outcome or

impropriety.

6. Review performance

Risk management should be a process of

continuous improvement. The policy itself should

be viewed as a living document. Within the policy,

there should be an explicit commitment to review

the policy on a periodical basis to confirm that it

is meeting its compliance objectives of risk

reduction and enabling the company to reach its

financial goals. This process should be

documented, reviewed, approved and signed so

that the mandated officers can attest to the

integrity of the system on an on-going basis.

To sum up, the purpose of the FX policy is to

provide clear guidances on the foreign currency

management functions and the importance of

corporate treasury department in the foreign

currency management process, as well as the

responsibilities of affiliate and subsidiary

personnel involved.

5 2


CENTRAL EXCISE:v Cenvat credit allowable when duty has been

paid: Assessee is the holder of Advance Licence/

Advance Authorization. Since, Assessee was not

in a position to follow the procedure prescribed

under Notification No. 44/2001-CE dated

26.06.2001 for duty free procurement of the

goods, duty has been paid and availed the credit.

Department has denied the cenvat credit on the

ground that Assessee was entitled to clear the

goods duty free after following the procedure

under Not. 44/2001 supra, hence duty paid by

them has to be considered as deposit with Govt.

Hon'ble CESTAT has observed that there is no

specific provision under Central Excise Law or

Rules requiring assessee to clear the goods

under Not. No. 44/2001 Supra and there is no

loss to Department if credit taken of duty paid

amount. Cenvat Credit allowed. [2014(299)

E.L.T.91(Tri.Mumbai)]

v Allegation w.r.t. clandestine removal of

goods to be proved by producing

corroborative evidences: Department's

allegation was that Assessee has removed

finished goods clandestinely without payment of

duty and availed ineligible Cenvat credit of the

products the quantity of which was short received

in their factory. Allegation was made only on the

basis of overwriting made by the Assessee in

their records which was done as by the Assessee

as objection was taken by the Auditors of the

ISO hence, it is not a reliable evidence unless

corroborated by any other incriminating

evidences such as discrepancy in raw material

used and clearance of finished goods. Hence,

Demand is not sustainable. [2014(299) E.L.T.65

(Tri.Ahmd.)]

v Appeal before Hon'ble High Court: Appeal

before Hon'ble High Court can be filed against

interim orders passed by the Hon'ble Tribunal,

as per sub section (2) of the 35G of the Central

Excise Act, 1944. Once pre-deposit/interim order

is passed, it is for party aggrieved to decide,

whether to comply the Order or to file appeal

before Hon'ble High Court. While passing order

for waiving pre-deposit, CESTAT goes into prima

facie case and based on such factual

consideration, taking note of hardship pleaded/

proved by assessee and considering interests

of Revenue. Whether substantial question of law

would arise in such cases would depend upon

facts and circumstances of each case.

Further, it has been also held that legislative

intent has to be gathered from plain language of

particular provision of law when there is no

ambiguity in reading it. When lower Courts take

aid from the decisions of Superior Courts, while

interpreting particular word or phrase in

enactment, such exercise cannot be faulted

unless express restriction is made in said

decision itself. [2014(299)E.L.T.3(Mad. H.C.)]

v Liberal interpretation can be given to a

beneficial Notification in favour of Assessee

and not against them: Assessee is

manufacturer of Refined Rice Bran Oil and for

meeting the standards as laid down in the Food

Regulations, they have removed the impurities

from Rice Bran Oil in the form of Gums/Waxes

and recovered oil and further cleared them

without payment of duty claiming exemption

under Not. No. 89/95-CE dated 18.05.95 which

exempts waste arising in the course of

manufacture of exempted goods. Department

has denied the benefit on the ground that cleared

goods are neither waste nor scrap, as they have

marketability. Since said Notification not

mentioning waste of 'Nil' value nor restricts its

application to SSI Units or expressly excludes

5 3


'by-product' from ambit of 'waste', exemption

cannot be denied to the Assessee. [2014(299)

E.L.T.116(Tri.Mum)]

v Once Duty of final product accepted by Dept.,

Cenvat Credit need not be reversed: Whether

particular activity carried out by a person amount

to manufacture or not or it is only a process in a

series of activity, will depend on the facts and

circumstances of each case. In the present case,

Assessee receives the chassis. After inspection

of the same, he sent to the job worker who

undertake the body building activities. These

activities of the Assessee would not be

considered Assessee as manufacturer of motor

vehicle and hence, cenvat credit is not admissible

to them. But in view of the judgement of Ajinkya

Enterprises [2013(294)E.L.T.203(Bom.) once

duty of final product accepted by Dept., Cenvat

Credit need not be reversed even if said activity

not amounting to manufacture. [2014(299)

E.L.T.49 (Tri.Mum)]

v Settlement Commission attracts severe

strictures from Delhi High Court for letting

off clandestine removal case by ignoring

evidence: Assesse has not produced

documents like ledgers, GR receipts, third party

documents before Adjudicating Authority in the

matter of allegation of clandestine removal, but

produced all documents two years later before

Commissioner (Investigation) appointed by

Settlement Commission, who gave them clean

chit. In this matter Hon'ble High Court has held

that such evidences could not be accepted by

the Settlement Commission. If assessee had

those documents in its factory, most natural thing

to do was to place them before Adjudicating

Authority to clear themselves of charge of

clandestine manufacture of goods. Where

complex issues of fact and law are involved for

which a detailed inquiry is necessary, Settlement

proceedings cannot act as substitute for a

Adjudication proceedings and they should refer

matter back to Adjudicating Officer. [2013(298)

E.L.T.653 (Del.H.C.)]

v Gift items supplied to whole sellers/

showrooms/retailers and amount recovered

towards advertising expenses: Assesee has

supplied gift items to wholesalers, showrooms

and retailers for sale promotion of their products

and recovered part of the amounts towards

advertisement expenses. Department has failed

to establish that how part recovery of cash of gift

items depressed the value of clearance of

excisable goods. Since there is no nexus

between gifts and the goods cleared, demand

not sustainable. [2013(298)E.L.T.739(Tri.Del.)]

v Vacation of Stay Order when delay in

disposal of appeal by more than 6 months:

Under Section 35C(2A) of the Central Excise Act,

1944, appeal required to be disposed of within

three years from the date of filling and within 180

days from date of Stay Order 'where it is possible

to do so.' Section 35C(2A) ibid introduced to

ensure disposal of pending appeals within

reasonable time and curtail delays, but not to

legislative intent to curtail/withdraw powers of

Tribunal to grant stay beyond six months in

appropriate cases. In the present case, there is

no evidence that delay on account of dilatory

tactics adopted by Assessee, and no time period

mentioned in the Stay Order, hence its duration

to be treated as co-terminus with disposal of

appeal. [2013(298)E.L.T.749(Tri.Del.)]

v Department is bound by its own Circular:

Appeal has been filed by the Department before

Hon'ble High Court prior to the issuance of

C.B.E.C Instruction File No. 390/Misc./163/2010-

JC dated 20.10.10 which was regarding fixing

monetary limits below which appeal shall not be

filed in the Tribunal, High Court and in the

Supreme Court, but the said appeal was

admitted after the said Circular was in force. In

the present case, amount involved was less than

prescribed in the said Circular and Department

has not brought to the notice of the Hon'ble High

at the time of admission of the appeal, appeal

filed by the Department has been dismissed.

[2013(298)E.L.T699(Guj.H.C.)]

v Area based exemption: Assessee has takeover

business and unit of Axles India Limited and

sought to continue to avail exemption under

Notification No. 50/2003-CE dated 10.06.2003.

Assessee has also filed declaration with

Jurisdictional Authorities before availing of the

5 4


benefit of the exemption Notification. Further,

Circular No.960/3/2012-Cx dt. 17.02.12 has

clarified that when there is change in the

ownership of a Unit already availing of the benefit

of an area- based exemption, would not

jeopardise the admissibility of exemption for the

remaining part of the 10 years, subject to the

condition that, the new owner exercises his option

in writing to avail of the benefit of the exemption

Notification before effecting the first clearance,

Assessee is entitled to exemption. [2013(298)

E.L.T.710 (Uttarakhand H.C.)]

v Strictures against CESTAT Registry for

improper maintenance of appeal files: In the

CESTAT, New Delhi, it is experienced that

second folder of the Appeal set does not contain

copies of the Order sheets which was available

in first file. Further, it was also noticed that bundle

of papers were kept inside second folder instead

of in different folders for easy handling of files. It

was also experienced that names of certain

Advocates appears in Cause List whose

Vakalatnama is not available on record and name

of the Advocate does not appear in Cause List

in spite of Vakalatnama filed. Such working sends

bad messages to the Society that records of

Tribunal are not maintained properly and some

Advocates controls the Registry causing

determinant to the interest of Justice. Hence,

Registrar directed to submit report within a month

for passing appropriate order against erring

officials. [2014(299)E.L.T.205(Tri.Del.)]

v Admissibility of Cenvat credit on the

underground telephone cables used in the

factory for the purpose of providing

communication within the factory: Assessee

has availed the Cenvat credit on the Telephone

Cables which were used in factory for the

purpose of providing communication within the

factory premises between different locations.

Department has rejected the cenvat credit on the

ground that the capital goods should have nexus

to the final product. Since the Telephone cables

falls under Heading 85.44 of the Central Excise

Tariff Act, 1985 and not under the excluded item

as per definition of the 'Capital Goods', Assessee

was entitled for the Cenvat Credit. [2014(299)

E.L.T.176(Mad.HC.)

v Penalty not imposable when issue involve

legal dispute: Goods were manufactured on job

work basis. Supplier has supplied raw material

and paid Job work charges. Since valuation of

the goods to be done with reference to Central

Excise Act, 1944 and Central Excise Valuation

(Determination of Price of Excisable Goods)

Rules, 2000, value of raw materials plus value

of job work charges plus manufacturing profit and

manufacturing expenses to be considered.

Traders loss cannot result in reduction of

assessable value of the goods then their profit

also cannot form part of the assessable value.

Penalty is also not imposable as issue involved

of legal interpretation. [2014(299) E.L.T.249

(Tri.Chennai.)]

v Scope of Section 35F of the Central Excise

Act, 1944: Section 35F of the Central Excise Act,

1944 makes it mandatory to Hon'ble Tribunal to

impose necessary conditions to safeguard

interest of Revenue in case it is of view that Pre-

deposit would cause undue hardship to the

Assessee. In the said section, payment of duty

confirmed is a precondition prescribed for

entertaining the statutory appeal. Burden is on

the Assessee to show that payment of duty or

penalty would cause undue hardship to them.

Undue hardship cannot be decided without

consideration of Prima facie and without

safeguarding the interest of Revenue.

[2014(299) E.L.T.199(Mad.H.C.)]

v Recovery of Government Dues: Assessee's

appeal was pending before Hon'ble CESTAT due

to non-reconstitution of Bench and not lapse on

the part of the Assessee. In such situation,

Revenue ought to have refrained from issuing

any demand notice of recovery of dues till the

stay application was considered by Hon'ble

CESTAT. In view of the pendency of the large

number of the matters, Hon'ble High Court has

issued mandamus to Union of India to constitute

as many as Benches as required for Southern

States for speedy disposal of appeals.

[2014(299) E.L.T.197(Kar.H.C.)]

5 5


v Cutting of carpet rolls into smaller sizes- not

amount to manufacture: In present matter issue

involved was, whether the process of cutting of

carpet matting in rolls and stitching the edges

and providing a lining to the cut sizes to facilitate

to use it as floor mats amounts to manufacture

or not. This activity does not alter the basic

characteristic of the raw material and end product

and the process do not bring into existence any

new and distinct product. Therefore the

impugned process does not amount to

manufacture. [2014(299)E.L.T.206(Tri-LB-

Chennai)]

v When the position of law is settled as a result

of decision of Larger Bench then there

cannot be allegation of suppression: Hon'ble

Tribunal's Larger Bench in the matter of

Mahindra & Mahindra [2005(190)E.L.T.301(Tri-

LB) has resolved the issue by holding that

structures or parts thereof mentioned in Chapter

Heading 73.08 of Central Excise Tariff in their

movable state will be subject to Excise duty

notwithstanding the fact that they are

permanently fixed in the structures. In the

Assessee's case issue involved was same then,

Department cannot made allegation of

suppression of fact on the part of the Assessee,

merely on the ground that Assessee had not

applied for a license and has not paid the duty.

Priam facie case made out for grant of complete

waiver of Pre-deposit of duty, matter remanded

to Hon'ble Tribunal for final disposal. [2014(299)

E.L.T.171(Bom.)]

v When the facts are established with adequate

evidence and Authorities are satisfied then,

Rules of procedure cannot be used to deny

the benefit of Rules: Assessee has received

back their goods sold to various purchasers due

to various reasons, such as goods were not as

per their specification or not as per their

requirements. After receipt of such goods back

in their unit, Assessee has used these goods in

its re-manufacturing process to enable to claim

the refund of duty paid by them on such returned

goods. Assessee has proved the fact that they

actually received the goods from their respective

purchasers and same were then actually used

in remixing in their manufacturing process.

Revenue was not able to dispute the factual

position hence, Assessee's refund claim cannot

be rejected. [2014(299)E.L.T.164 (Chhatisgarh

H.C.)]

CUSTOMSv Whether MMRDA is a Road Construction

Corporation body or not, to avail benefit of

Notification No. 21/2002-Cus: Assessee has

imported machines after taking benefit of

Notification No. 21/2002-Cus and claimed that,

they have complied with the condition No. 40 of

the said Notification, as goods imported under

Contract with MMRDA is Road Construction

Corporation body as per decision in the case of

Patel Eng. Ltd. (2013(295) E.L.T.243].

Department has denied the benefit of Not. No.

21/2002 on the ground that Assessee has not

complied with the condition No. 40 of the said

Notification, as MMRDA is not a Road

Construction Corporation as per decision in case

of Shreeji Construction. Due to divergent views

of the Hon'ble Tribunal on the same issue,

present matter has been referred to a President

for constitution of Larger Bench to decide

whether MMRDA is a Road Construction

Corporation or not. [2014(299)E.L.T.81(Tri.

Mumbai)]

v Demand cannot be made on the basis of

presumption and assumption: Evidences

produced by the Department to show

undervaluation and basis of enhancement of

transaction value of the goods was not proper.

Demand of differential duty has been made on

the basis of computer printouts, statement of

partner which was retracted later,

contemporaneous import and LME price.

Department has worked out demand without

considering the provisions of Customs Valuation

Rules for contemporary import and relied on the

evidences retrieved from computer printouts.

Further, Report prepared by the assessee of

comparative data of contemporaneous import of

aluminium scrap at various port in India not

considered by the Department. Hence, matter

remanded back to the Adjudicating Authority.

[2014(299) E.L.T.83(Tri.Mumbai)]

5 6


v CESTAT being final fact-findings forum,

should consider documents- It is not

sufficient to merely indicate page numbers

of the documents in the appeal paper book:

There was delay on the part of the assessee for

conversion of duty free shipping bills into DEEC

shipping bills and assessee's justification that

delay was detected at later point of time was

rejected by the Adjudicating Authority on the

ground that contemporaneous documentary

evidences has been not produced by the

Assessee. Further Hon'ble CESTAT has allowed

conversion on the ground that contemporaneous

documents were in existence at time of goods

were exported without indicating how those

documents proved contemporaneous nature of

transaction. CESTAT being final forum for facts,

its order should contain factual finding supported

by reason. [2013(298)E.L.T.698(Mad.H.C.)]

v Drawback when goods for exports procured

from traders in open market: Drawback was

disallowed to the Petitioner on the ground that

Petitioner has procured the goods for export from

traders in open market and not from a

manufacturer - exporter or got the garments

manufactured under job work. Hon'ble Delhi High

Court in their earlier decision in the matter of

Kultar Export [2013(288)E.L.T.187(Del.)] has

held that Rule 3 of the Customs, Central Excise

Duties and Service Tax Drawback Rules, 1995

did not make any distinction between

manufacture/job work exporter on one hand and

traders or merchant- exporter on other. Further,

there was no any suppression of facts, fraud on

the part of the Petitioner. Hence, Department is

not entitled to recover the drawback amount

which was paid to the Petitioner. [2013(298)

E.L.T.649(Del.)]

v CESTAT cannot transfer appeal to another

Authority when appeal is not maintainable:

Appeal filed before Hon'ble Tribunal involving

issue of rejection of duty drawback claim, was

not maintainable before Tribunal as per Section

129A(1) of the Customs Act, 1962. Hon'ble

Tribunal has transferred the appeal to the Joint

Secretary, GOI for further action. Since, Tribunal

in terms of Clause (c) to the proviso to sub

section(1) of the Section 129A of the Customs

Act, 1962, has no jurisdiction to entertain the

appeal then the Tribunal could not have

exercised any of powers specified in sub-section

(1) of Section 129B of the Custom Act. Only option

was to reject such appeal as being not

maintainable or return the papers back to

assessee for presentation before appropriate

forum. [2014(299) E.L.T.180(Guj.H.C.)]

v Statement of co-accused recorded under

Section 108 of Customs Act, 1962 can be

used against co-accused: When there is

Statement of co-accused revealing all facts of

the case and admission on his part then such

statement can be used against co-accused in

that case. Further it was also held that, as per

Section 87 of the Code of Criminal Procedure,

1973 there should be some genuine ground to

issue a non-bailable warrant against the accused

in first instance, where normally a summon

should be issued and if the accused does not

respond to the Summon, in that event a warrant

may be issued which may be bailable or not.

[2014(299)E.L.T.151(All. H.C.)]

v Enhancement of transaction price of

imported goods from related persons:

Assessee has imported auto spare parts at

higher prices than original equipment parts for

manufacture of vehicles imported from related

group of companies. Thereafter loading of 10%

on transaction value declared by the Assessee

on auto spare parts was enhanced further 10%

by the Department. Issue before Hon'ble Tribunal

was that whether there can be two prices for

import of the same goods for manufacture or as

spare parts. In the matter of Volvo India Pvt. Ltd.

[2005(180)E.L.T.489(Tri.)] and in South India

Television [2007(214)E.L.T.3(S.C.)] held that just

because spare parts cost much more than

original equipments, one cannot enhance value

of original equipment for assessment purpose.

Transaction price cannot be enhanced unless

established by the Department that relationship

between importer and supplier influenced

transaction price or if said transaction value

higher than that of contemporaneous imports.

In the instant case, Department has not produced

5 7


any evidence on record to support that

transaction value influenced by import from

related person or any other evidence warranting

rejection of transaction value. Hence, Order set

aside. [2014(299)E.L.T.209(Tri. Mumbai)]

SERVICE TAX:v Applicability of Notification No.17/2009-S.T.

Dated 07.07.2009 for exports made prior to

issuance of the said Notification: Refund

claim filed for exports made prior to issuance of

Not. No. 17/2009-ST in the said Notification

instead of fill ing under old Notification.

Department has rejected the refund claims on

the ground that Refund claims should have been

filed under old Notification No. 41/2004-ST dated

06.10.2007. Board Circular No. 354/256/2009-

TRU dated 01.01.2010 clarified that New

Notification No. 17/2009-ST does not bar

applicability to exports prior to issuance and

therefore, refund claim filed within one year under

said Notification No.17/2009-S.T. Dated

07.07.2009 cannot be rejected. [2013(32)

S.T.R.668 (Tri.Del.)]

v Abatement of duty: Assessee's abatement

claim of duty filed under Rule 10 of the Chewing

Tobacco and Unmanufactured Tobacco Packing

Machines (Capacity Determination and Collection

of duty, Rules, 2010 was rejected by the

Department on the ground that, in the month of

December, 2011 the unit was closed for a period

less than 15 days hence, abatement cannot be

allowed. But Rule 10 ibid does not provide that

the period should be confined to any calender

month and period of 15 days may fall within a

month or more than one month provided that it

should be continuous. Since factory was closed

continuously for a period from 21.12.2011 to

20.02.2012 which is more than 15 days, hence

benefit of abatement granted by the appellate

authority was right. [20139298) E.L.T.484

(All.H.C.)]

v Notional interest earn on the security deposit

not includible in value of Renting Service:

Department has made demand of the service

tax on the security deposit received by the

Assessee while renting of their immovable

property. The security deposit has no nexus with

the area of the property and it cannot be said

that the notional interest has influenced the

consideration received for the Renting of

Immovable Property Service. Therefore, the ratio

of Hon'ble Supreme Court's decision in the matter

of CCE, Mumbai-III V. ISPL Industries Ltd.

2003(154)E.L.T.3(SC) is applicable wherein held

that notional interest on the advances taken by

the Assessee, from the buyers cannot be added

to the Assessable Value of the goods cleared.

Unconditional waiver from pre-deposit granted

to the Assessee. [2014(33)(S.T.R.)53

(Tri.Mumbai)

v Export of Service - Promotion and Marketing

of products of Foreign entities in India:

Assessee has provided Marketing and Sales

Support Services to the Tandus US and Tandus

China for their products to be sold in the India.

Inconsideration of the Services to be provided

by it, the assessee will receive service fees in

freely convertible foreign Exchange from them.

Assessee's location is within taxable territory and

service recipients are located in Abroad. The

service proposed to be provided does not figure

in the Negative List specified in Section 66D of

the Finance Act, 1994. Since, the case meets all

the requirements of Rule 6A of the Service Tax

Rules, 1994 the provision of Service by the

Assessee to the two recipients will amount to

export of service. [2014(33)S.T.R.33(A.A.R)]

v Co-oprative Society form to help cultivators

and providing common marketing platforms,

not treatable as clearing and forwarding

agency: Co-operatives Societies are formed for

improvement of tapioca cultivation and sago,

starch industry and economic condition of

cultivators. Consignment of sale brought directly

by Principal to the premises of the Society for

Auction and Society did not clear consignments

from their premises. Handling goods on receipt

raising invoices on sale or maintaining of records

as to stock availability showed Society only as

offering storage facility, which could not be

convert the transaction as that of Clearing and

Forwarding Agency. Essential predominant

character of activity of Society was one of

5 8


facilitating sale of products, apart from providing

storage facilities. [2014(33)S.T.R.16(Mad. HC)]

v Admissibility of Cenvat Credit in case of

amalgamation of companies: Assessee is the

brand name owner of 'Ghari Detergent Cake and

Powder' and they allowed M/s. Rohit Surfactants

Pvt. Ltd. to use their Brand name and further

service tax has been paid on the same franchise

service. Department after noting that the

appellant had filed an amalgamation scheme

before the Hon'ble High Court for amalgamation

of appellant and M/s. Rohit Surfactants Pvt. Ltd.

denied the Service Tax credit on the ground that

both the entities have become one. In this case,

Hon'ble CESTAT Delhi held that when service

tax has been paid, service receiver is entitled to

credit of service tax and High Court allowing

amalgamation will not effect assessee's

entitlement to credit of service tax. [2014(33)

S.T.R.30 (Tri.Del.)]

v Assessee cannot claim that they have

voluntarily paid Service Tax and then asked

for Refund: Show Cause Cum Demand Notice

was issued to the Assessee asking to produce

evidences in support of their defense and

whether they wanted to be heard in person and

liberty to submit their reply to SCN. Also, show

cause notice was not issued by the Authority who

had to decide and pass Order-In-Original. Hence,

Assessee's plea that show cause notice revealed

that Adjudicating Authority has already formed

opinion and decided the issue, is rejected by the

Hon'ble Delhi High Court. Further, Assessee

cannot claim that they had voluntarily paid

Service Tax and then ask for refund of the same

as it is self contradictory claim. [2014(33)

S.T.R.12(Del.)]

v Service tax collected but not deposited -

Criminal Court alone competent to try these

offence punishable under Section 89 of the

Finance Act, 1994: Assessee has collected

Service Tax from the client but not deposited with

Government. This offence has been defined and

penalty has been provided under Section 89 of

the Finance Act, 1994. But in absence of any

specific provision in the Finance Act, 1994 for

trial of the offence or authority to try the offence

under Section 89, only Criminal Courts are

competent to try the offences punishable under

Section 89 in accordance with the Code of

Criminal Procedure, 1973 and not by the

Commissioner or Officers of the Central Excise

Department. Further it is also held that

Opportunity to be given to the accused when he

offers to meet his tax liability [2014(33)STR 7

(Chattisgarh)]

v Freezing of Bank Accounts when not

sustainable: After issuing Show Cause Notice,

without deciding the matter finally and without

calling for any hearing, Department has issued

Order invoking power under Section 87 of the

Finance Act, 1994 and frizzed all the Bank

accounts of the Assessee. Under Section 87 of

the F.A. 1994 any amount payable means that

amount adjudged after hearing the show cause

notice and Section 87 of F.A. 1994 is one of the

methods of recovery of amount due and payable

after adjudication is done. Hence, order of

freezing the bank accounts is not sustainable in

eye of the law having been passed without any

jurisdiction. [2014(33) S.T.R.23 (Uttarakhand)]

v Value of taxable service is gross amount

charged by Service Provider: Assessee is

engaged by I.B.P. Company and IOC as

contractors, for running outlets for retail sale of

petroleum products and to render other services

at the said premises. Assessee's contention is

that expenses incurred by them on behalf of

I.B.P./IOC like Tea, Coffee, consumable salary

of employees, handling losses generator set

expenditure, Bank Charges, Electricity charges

are reimbursed by the I.B.P. Company and IOC

and therefore, not liable to Service Tax. Value of

taxable service is gross amount charged by

Service Provider and it does not provide for any

deduction therefrom. Hence, Assessee's plea

that no service tax was payable on reimbursable

expenses borne by them, is rejected.

[2014(33)S.T.R.60 (Tri.Del.)]

v Construction of residential complex service:

Assessee has engaged by NGO for doing

construction of residential unit Fisherman.

Assessee's contention was that houses

constructed were for personal use of fisherman

5 9


and hence will not fall within the definition of

'residential complex'. Hon'ble CESTAT has

considered that if the property in the residential

unit is transferred to another person then

residential unit may not be considered to be for

a personal use even if such transfer is done

without any consideration. This activity of

construction of residential complex was covered

by Section 65(105)(zzzh) of the Finance Act,

1994 and taxable w.e.f. 16.06.2005, Assesse has

directed to pre-deposit of Rs. 10 lakhs.

[2014(33)S.T.R.36(Tri.Chennai)]

v Edit and Data fee service: Assessee has

provided edit and data fee services and

marketing and other support services to their

sister concern situated in U.K. In this case it is

undisputed fact that assessee has received the

consideration in convertible foreign exchange and

rendered the services from India, therefore

services would merit classification as 'export of

services and hence service tax liability will not

attract. [2014(33)S.T.R.83(Tri.Mumbai)]

v When no suppression on part of the

Assessee, penalty not imposable: Assessee

has made short payment of service tax on

'Cleaning Service and 'Manpower Recruitment

and Supply Agency Service. After disclosure of

difference between gross taxable value shown

in ST-3 Returns vis-à-vis Bank statement,

Assessee has deposited service tax with interest.

The fact that the receipt has been disclosed in

the invoices and the amounts were also shown

in the invoices as well as in Bank Statements,

itself indicates that assessee has been bonafide.

Hence Penalty under Section 78 of the Finance

Act, 1994 has been set aside. [2014(33) S.T.R.94

(Tri.Kolkata)]

v Sport Stadium is non commercial

construction and not liable to service tax:

Assessee has constructed a Sports Stadium

Complex for Government of Maharashtra, which

is now known as 'Shiv Chhatrapati Sports

Complex'. In this case issue involved was that

whether the said complex constructed for the

purpose of holding games can be considered as

commercial or industrial construction merely on

the ground that the stadium is allowed to be used

by the public and others on payment of user

charges. The Sport Stadium is public facility for

the recreation of the public and does not come

under the category of commercial and industrial

construction and hence not liable to service tax.

[2014(33)S.T.R.77(Tri.Mumbai)]

INCOME TAXv When the Books of accounts are not rejected by

the Assessing Officers and accepted the sales,

no addition can be made u/s 68 or 69 of the

Income Tax Act, 1961 merely on the basis that

the notices sent to debtors were returned

unserved without appreciating that the assessee

specifically requested to issue summons after

giving correct addresses of debtors. [INCOME

TAX OFFICER WARD-1(1), MUZAFFAR

NAGAR Vs MANISH KUMAR PROP M/s

MANISH KUMAR & COMPANY]

v In case, an assessee has not produced books

of accounts neither before the Assessing Officers

nor before the Commissioner of Income Tax, its

gross profit can be calculated on estimation

basis. After such estimation any further addition

cannot be made on account of shortage of any

unexplained liability. [INCOME TAX OFFICER

WARD-1, HALDIABASUDEVPUR Vs PRAVATI

DEY VILL & P O BOYAL]

v If Assessee has no further or additional

evidences to produce before the Commissioner

of Income Tax (Appeals), then remand of the

case to the same authority is a futile exercise. In

such scenario, Tribunal can decide the issue on

the basis of existing evidences only. Case

remanded to the Hon'ble Tribunal to decide the

issue on the basis of existing material.

[GUJARAT STATE FERTILISERS AND

CHEMICALS LTD Vs DEPUTY COMMISSIONER

OF INCOME TAX]

v Deduction u/s 10B is to be calculated without

setting off of carried forward business loss

and unabsorbed depreciation: Deduction u/s

10B is to be calculated without setting off of

carried forward business loss and unabsorbed

depreciation. The assessee is entitled to

deduction u/s 10B, provided the other conditions

6 0


mentioned under the section are satisfied. [M/s

MINDTREE LTD Vs ASSTT COMMISSIONER

OF INCOME TAX (LTU) BANGALORE]

EXPORT ORIENTED UNITv Duty liability on the Cotton waste arises

during manufacture of Cotton Yarn: Assessee

is 100% EOU and has cleared cotton waste

without payment of duty under exemption

Notification No. 6/97-CE dated 01.03.97 and 23/

2003-CE dated 31.03.03. Department was of the

view that, Assessee was required to pay customs/

excise duty in respect of imported/indigenous

procured raw material. As per Notification No.

52/2003-Cus and 23/2003-C.E to avail the

benefit of these Notifications, rejects, waste etc.

arising out of processing should be cleared to

the DTA on payment of applicable duty of excise.

Since, both Notification No. 6/97-CE dated

01.03.97 and 23/2003-CE dated 31.03.03

exempts cotton waste when manufactured by

EOU and allowed to be sold in India. Thus

assessee has made prima facie case for

complete waiver of pre-deposit. [2013(298)

E.L.T.721(Tri-Mumbai)

CST / M VATv Classification of goods under VAT- It is

immaterial how product is advertised/

marketed under what name and title: Usability

of product is not sole factor to decide

classification of product. Most important and

paraamount test of fixing classification is whether

impugned product is distinct marketable

commodity. Commodity should be

distinguishable from its mother product in its

character, ingredients, nature, form, look, use,

pack etc. and as recognized as independent

separate commodity in market. Marketable

connotes that product is salable in market and

establish its own identity as commodity in eyes

of consumer. Usability of a product cannot be a

sole factor to decide its classification. [2014(299)

E.L.T.38(Bom. H.C.)]

6 1


v CESTAT, Mumbai declares near bankruptcy and stops sending hearing notices, Orders and

communications to the Parties/Advocates as Postal Department stopped services to CESTAT, Mumbai

for default of payment. Electricity and Telephone Department also likely to strike soon.

v Custom Department has issued 'Traveller's Guide' for Travellers explaining Baggage Rules

v Cenvat credit not to be reversed if raw material sent to Job Worker

v Finance Ministry has clarified that Supreme Court judgment in the Fiat Case would not be blindly applied

to all cases

v Capital goods removed after use for more than 2 years not treatable as clearance "as such"

v Government okays 18,000 additional posts in Indirect Tax Wing

v International Customs Day: 16 Customs officials to receive WCO Certificate of Merit

v IMF projects only 4.6% growth in current fiscal

v Growing smuggling into India: Pakistan bans gold imports for second time in six months

v Global unemployment rose by 5 mn in 2013; likely to grow to 13 mn by 2018

v India, Korea sign MoU for Digital Signature to facilitate trade

v NO TDS on Service Tax - CBDT Clarifies

v Deconstructing Confusion on Works Contract Tax

v Central Excise mop-up down by 4.5% in 9 months; Total stands at Rs 3.55 lakh crore

v Seven IRS officers posted as Under Secretary with CBEC

v India, UK sign MoU for skill development and employment services

v India has 13.6 lakh companies registered with RoC but 1.4 lakh have filed no returns for last three years;

about 3 lakh closed down

v CBI to create specialised cell to probe sports frauds

v Income tax withdraws exemption granted to four Cricket Associations - Baroda + Maharashtra + Saurashtra

+ Kerala - on charges of commercial activities

v Foreign Tourist Arrivals: December logs negative growth in Dollar terms

v Growing gold smuggling worries North Block; Govt may consider reducing import tariff to cut premium on

smuggling

v CBI books NTPC officials & others for supply of poor quality imported coal

v National Archives: India joins hands with Turkey and Oman

v Govt finalises criteria for giving Arjuna Award to Sports Persons

v FM hints at increasing number of subsidised LPG cylinders

v PARAM Supercomputer rated as one of most power efficient systems in world

v Govt extends deadline for subscription of Inflation Indexed National Savings Securities till March 31,

2014

v AP High Court grants Stays on Audit by CAG of private Company

6 2


v Charges framed against former Punjab and Haryana High Court Judge Mirmal Yadav in Cash-at Judge's

door scam.

v ST- Arrest - Applicant accused of collecting and not paying ST of Rs 2.17 Cr - Conditional bail granted on

undertaking that entire amount will be paid in three months

v Chennai Service Tax arrests hotelier for tax evasion of Rs 1.4 Cr

v Kolkata Service Tax Commissionerate arrests Mining Services entrepreneur for alleged tax evasion of

Rs 13 Cr; Assessee had opted for VCES but did not pay tax

v Bangalore Service Tax Commissionerate arrests MD of M/s Entask Consultancy for alleged tax evasion

of Rs 1.16 crore; Same firm was also booked in past for alleged duty evasion of Rs 1.44 Cr

v Neemuch CBN seized over 2 kg heroin; nabs Chennai-based smuggler having Lankan links

v Trichy Airport Customs seizes gold worth Rs 60 lakhs from pax coming from Kuala Lumpur

v Lucknow Airport Customs seizes 6 gold biscuits from pax coming from Oman & gold worth Rs 23 lakh,

concealed as metallic part of suitcase

v Delhi Service Tax arrests CFO of helicopter chartering company for tax evasion of above Rs one crore

and fraudulent availment of Cenvat Credit of Rs 30 lakh

v The Week after VCES - 50% not paid - Assessee arrested

v IGI Airport Customs seizes US Dollar worth Rs 1.23 Crore from pax heading for Dubai; 18 bundles of

1000 Dollar denomination found concealed in books

v Ahmedabad DRI detects Rs 200 Cr duty evasion racket involving zero duty EPCG Scheme

v CBDT issues transfer order of NINE CITs; R K Choubey goes as ADG, NADT

v Kolkata Airport Customs seizes 53 kg Red Sanders + gold bars worth Rs 11 from two different pax

v Income tax - Whether claim of assessee based on seized material can be ignored merely because

confirmations collected during assessment proceedings are faulty

v CBI arrests Email alleged hacker for hacking over 900 email accounts

v MD of Vigneshwara Developers arrested by service tax for not paying 50 per cent of tax dues of Rs 6.5

Crore declared under VCES

v CIT Sanjay Srivastava sentenced to jail for contempt by Delhi HC

v Rajen Dhruv, Partner of Orbit Enterprises & Director of Midcity Infrastructures arrested by service tax in

Mumbai for evading service tax of Rs. 3 Crore

v Director of Oxygen Infrastructure & Developers arrested by Service Tax in Noida for evading service tax

of Rs 1.5 Crore

6 3


Programmer to Team Leader

"We can't do this proposed project. **CAN NOT**. It will involve a

major design change and no one in our team knows the design

of this legacy system.

And above that, nobody in our company knows the language in

which this application has been written. So even if somebody

wants to work on it, they can't. If you ask my personal opinion, the

company should never take these type of projects."

Team Leader to Project Manager :

"This project will involve a design change. Currently, we don't have any staff that has

experience in this type of work.

Also, the language is unfamiliar to us, so we will have to arrange for some training if we take

this project. In my personal opinion, we are not ready to take on a project of this nature."

Project Manager to 1st Level Manager :

"This project involves a design change in the system and we don't have much experience in

that area. Also, not many people in our company are appropriately trained for it.

In my personal opinion, we might be able to do the project but we would need more time

than usual to complete it."

1st Level Manager to Senior Level Manager :

"This project involves design re-engineering. We have some people who have worked in

this area and others who know the implementation language. So they can train other people.

In my personal opinion we should take this project, but with caution."

Senior Level Manager to CEO :

"This project will demonstrate to the industry our capabilities in remodeling the design of a

complete legacy system. We have all the necessary skills and people to execute this project

successfully. Some people have already given in house training in this area to other staff

members.

In my personal opinion, we should not let this project slip by us under any circumstances."

CEO to Client :

"This is the type of project in which our company specializes. We have executed many

projects of the same nature for many large clients. Trust me when I say that we are the

most competent firm in the industry for doing this kind of work.

It is my personal opinion that we can execute this project successfully and well within the

given time frame.

6 4


Bizsolindia provides consultancy in the following areas through

associate companies and professional firms of the Directors

Bizsolindia Services Private Limited Consultancy & Audit in the area of

• Strategic Management Consultancy

• Direct Taxation including Domestic and International Transfer Pricing

• Indirect Taxation(Customs, Central Excise, Service Tax, VAT/ CST, LBT)

• FEMA

• Foreign Trade Policy (Export Promotional Schemes, EPCG, Advance

Authorization, DFIA, Duty Drawback, Brand Rate Fixation)

• EOU / EHTP / STP /BTP

• SEZ

• Project Consultancy (Industrial Parks, Clusters , Agro Economic Zone, Food

Park, etc)

• New Business Set up in India

• Valuation including Business Valuation

• Internal Audit

• Corporate Law & Procedures

Bizsolindia Outsourcing Pvt. Ltd. Knowledge Process Outsourcing in the area of

• Indirect Taxation

• Accounts

• Inventory management

• Fixed Assets Management

• Implementation of Company Law Matters

Bizsolindia IT Services Private Limited Specialized IT consulting and Solutions / modules along with ERP Integration

and following areas

• Specialized Software for EOUs and SEZs

• Expert in Application programming using Java and ERP Connectivity

• Data Migration

• Offers bucket of Add On Products for EXIM related solutions for the

• Complete industry needs

• ERP Consulting / Implementation

Bizsolindia Forex Services Pvt. Ltd. Forex Services dealing with :

• Treasury Audit

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• Advisory Services

• Policy Consulting

• Treasury Outsourcing

• Interest Rates Advisory

• Treasury Operations Training

• Banking Advisory Services

• International Syndication

Bizsolindia HR Services Private Limited Strategic Consultancy in the area of HR & Soft skills Training

Bhagwati Shipping Private Limited Custom House Agent (11/578), Custom Clearance of Export and Import

consignments

A.B. Nawal & Associates, Cost Accountants Practicing Cost Accountant, Cost Audit, Central Excise, Adjudication matters

up to CESTAT, VAT Audit.

Behede Joshi & Associates, Practicing Chartered Accountants, Statutory Audit & Tax Audit, VAT Audit,

Chartered Accountant Transfer Pricing.

R. Venkitachalam, Company Secretary Practicing Company Secretary.

Nawal & Sonaje Associates, Cost Accountants Practicing Cost accountants, Cost Audit

Bizsol Projects & Infrastructure Solutions LLP Infrastructure Consultancy, Project Management Services in respect of Real

Estate solution for Industrial, Residential, Trade & Commerce & Consultancy

related to Finance & Investments

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