*GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS **ISSUE DATED 7.6.2010** *
*Volume 2 Part 11*** * * * * *SUPREME COURT * >> Snakes and ladders, Monopoly and Scrabble/upwords are classifiable under heading 95.04 of Central Excise Tariff Act, 1985 : *Commissioner of Central Excise v. Funskool (India) Ltd. . . . 769* * * *HIGH COURT * *>> *Where dispute between parties covered by Cenvat Credit Rules, 2004 issue of show-cause notice by Department to assessee under section 11A of Central Excise Act, 1944 mandatory : *Sanghi Polyesters Ltd. v. Superintendent of Central Excise . . 757* *>> *On failure to follow mandatory procedure prescribed under statute, writ jurisdiction can be invoked despite existence of alternative remedy : *Sanghi Polyesters Ltd. v. Superintendent of Central Excise . . . 757* *>> *Assessee entitled to Modvat cedit on capital goods imported by its supplier, where bill of entry was endorsed in assessee's favour by supplier : *Commissioner of Central Excise v. PEPSI Foods Ltd. (Snack Food Division) . . . 766* *>> *Party acquiring REP licence by way of transfer also bound by conditions of licence : Goods imported covered by licence but not for use in manufacture of exportable goods for which licences originally granted liable to be confiscated : *Mewati and Co. v. Commissioner of Customs . . . 776* *>> *Application for waiver of pre-deposit must be considered on test of undue hardship : *CEAT LTD. v. Union of India . . . 795* *>> *Penalty imposed under Central Excise Rules, 2002 cannot be recovered from sick industrial company ; Pre-deposit waived : *Goradia Special Steels Ltd. v. Union of India . . . 809* *>> *Production or processing of goods on behalf of clients included in definition of "business auxiliary service" with effect from September 10, 2004 : Assessee engaged in applying epoxy coating material on re-inforced steel bars excluded from tax liability prior to that date : *Commissioner of Central Excise & Customs v. P. S. L. Corrosion Control Services Ltd. . . . 819* *>> *Bona fide litigation regarding taxability of service is reasonable cause for failure to pay tax and penalty imposed set aside : *Commissioner of Central Excise & Customs v. P. S. L. Corrosion Control Services Ltd. . . . 819* *>> *Penal provision for mandatory penalty not applicable to periods prior to its enforcement : *Commissioner of Central Excise v. Otis Elevator Co. (I) Ltd. . . . 824* *>> *Where conditions imposed for provisional release of imported car pending adjudication proceedings found to be harsh, conditions modified : *Ashish Puravankara v. Commissioner of Customs (Import) . . . 829* * * *CESTAT ORDERS * *>> *Where goods cleared without payment of duty returned to factory premises in same month and intimation regarding receipt of goods at factory premises submitted to authorities ; demand for duty with interest and imposition of penalty not sustainable- *Akay Cosmetics P. LTD. v. Commissioner of Central Excise . . . 753* *>> *Benefit of exemption from duty cannot be extended unless there is statutory provision to do so : *Rimtex Industries v. Commissioner of Central Excise . . . 770* *>> *Where inputs procured for manufacture of goods exported to Nepal imported without following procedure prescribed under Notification No. 45/2001-CE(NT) not followed, levy of excise duty and penalty justified : *Ahuja Traders v. Commissioner of Central Excise . . . 788* *>> *Tour operator service : Concession provided for under Notification No. 40 of 1997 should not be denied on assessee who provided service of booking accommodation, merely on ground that bill was not in assessee's name : *Wanderlust Travels (P) Ltd. v. Commissioner of Central Excise . . . 791* *>> *Mere mention of a wrong provision of law would not amount to dropping of a show-cause notice : *ISMT Ltd. v. Commissioner of Central Excise . . . 804* *>> *Where no proof of intention to evade payment of duty, penalty cannot be imposed : *ISMT Ltd. v. Commissioner of Central Excise . . . 804* *>> *Assessee not challenging denial of cenvat credit nor raising issue of limitation before authorities below cannot raise the issue at appellate stage: *ISMT Ltd. v. Commissioner of Central Excise . . . 804* *>> *To invoke rule 25 of the Central Excise Rules, 2002, Department should necessarily allege the facts required for invoking the provision : Where requisite facts not mentioned in show-cause notice, imposition of penalty set aside : *Glaxo Smithkline Pharmaceuticals Ltd.* *v. Commissioner of Central Excise . . . 816* *NEWS BRIEF * *>> **BoT to review euro crisis impact on exports in June* The Board of Trade, headed by Commerce and Industry Minister, will review on June 14 the impact of European debt crisis on the Indian exports. The Board of Trade (BoT), which also comprises leading industrialists, business chambers and trade bodies, would discuss the changing rupee-euro equation, as the euro zone currency has been hit by the Greek crisis. Wipro Chairman Azim H Premji, SBI Chairman O P Bhatt, Biocon CMD Kiran Mazumdar Shaw, Apollo Tyres CMD Onkar S Kanwar, Hero Honda MD Pawan Munjal, Unitech CMD Ramesh Chandra and Dr Reddy's Lab MD K Satish Reddy are members of the BoT. The European crisis comes at a time when Indian exports emerged out of the crisis following recession in leading world markets. Exports, which account for about 17 per cent. of the country's total economic activities, had contracted by over 39 per cent. in May 2009. Exports to Europe account for 20 per cent. of the country's exports. This would be the second meeting after the BoT was reconstituted by Sharma in July last year. Its first meeting was held in August 2009. The BoT advises the government on policy measures connected to global trade. [*http://economictimes.indiatimes.com, May 30, 2010*] *>> **Commerce Ministry seeks interest sop for all struggling exporters* Citing the likelihood of rising interest rates, the Commerce Ministry wants the Finance Ministry to extend the interest subsidy of 2 per cent. on pre and post-shipment export credit to all the struggling export sectors. The Commerce and Industry Minister, will meet the Finance Minister, shortly in this regard. The Commerce secretary said that talks with the Finance Ministry would be on the fiscal payout, adding, "We have to estimate the interest subsidy cost and pass it on to banks as a subsidy from the Government. If we take an executive decision to expand coverage, there is a commensurate decision to find the money in the Budget to create a subsidy pool from which to pass it on. Banks give interest subsidy to exporters on the understanding that the Government will refund them." Given the high inflation, it is unlikely that the RBI will step away from the monetary tightening trajectory. The Federation of Indian Export Organisations (FIEO) President, said the base rate should not be applicable to exporters, adding the Government should ensure concessional export credit even when the base rate becomes operational. This is because the credit available to exporters in India is at a higher rate than what the competitors in other countries get, he said, adding, the demand in traditional markets such as Europe and US is still poor. The Parliamentary Standing Committee on Commerce had recommended that the Government should consider extending interest subvention to all the sectors till March 31, 2011. [*www.thehindubusinessline.com, May 31, 2010*] *>> **Computerisation of FIU data to help real time analysis* The country's financial intelligence will now be on a comprehensive digital platform to help enforcement agencies gain real time access to critical information and faster analysis of suspicious transactions. Finance Ministry sources said the computerisation of the Financial Intelligence Unit (FIU-IND), which investigates and disseminates sensitive information between financial and law enforcement agencies for identification of suspicious money laundering, is already on. "Financial Intelligence Network will be a major reform initiated by the Ministry. All the banks are already connected to us but the new network will enable electronic data entry and analysis on a real time basis of suspicious transactions," the sources said. They said the new technology has been introduced because of the changing dynamics of financial crimes and the need for a faster scrutiny of all available inputs. The platform is being prepared by software giant Wipro and will be called FINnet. Last year over 4,000 suspicious financial transactions relating to crime, terror and others were analysed by the FIU-IND. In an effort to identify patterns of money laundering, terrorist financing and other economic crimes, the government also scanned about 55,11,150 cash transactions of at least Rs. 55,111.5 crore. Each cash transaction that was monitored and reported to the FIU-IND, a Government agency to investigate and disseminate information between financial and law enforcement agencies for identification of suspicious money laundering, had at least Rs. 10 lakh in it, the sources said. The Government also received 69 requests of information from foreign financial intelligence units, while it sent 17 such requests to other countries. [*www.business-standard.com, June 01, 2010*] *>> **Government considering import parity price for domestic coal* The government, today, said it is considering to price domestic coal on par with global rates, a move which may increase the cost of the raw material and lead to a rise in power tariff. Both the Coal Ministry and the Planning Commission have favoured using imported coal price as benchmark for domestic coal. The domestic thermal coal, consumed by power companies to produce power, are as much as 50 per cent. cheaper than the imported coal. Globally, coal prices start from $45 (nearly Rs. 2,000) per tonne. The Government had hiked coal prices by an average 11 per cent. last year to Rs. 448-2,500 a tonne. Coal is the primary source of energy and the power sector alone consumes 85 per cent. of the 500 million tonne produced in the country. Other consumers include cement and steel makers. Planning Commission Deputy Chairman Montek Singh Ahluwalia termed the need for parity in prices as unavoidable in the wake of the country's increasing coal import needs. "I would say that (import price parity) is also necessary ...If you are surplus...You can subsidise...But we are coal importers ...Our assessment shows that in the XII Plan import of coal would increase substantially. So I think linking (coal prices with global prices) is unavoidable," he said. Earlier this month, Power Minister had said that power tariff could go up by about Re 1 per unit (kwh) owing to the Government's decision to more than double gas prices to $4.20 per mmBtu. State-owned CIL, which meets over 80 per cent. dry fuel requirement of the country, produced 431.5 million tonnes of coal in the last fiscal. Still the demand-supply gap in the country is pegged at around 100 million tonnes. [ www.business-standard.com, June 01, 2010] *>> **Export growth positive for sixth month running* "Export growth indicates increasing competitiveness of Indian exports. It is also largely due to the low base of the previous year coupled with some recovery in world economy." Exports recorded positive growth for the sixth successive month with shipments increasing by 36.2 per cent. to $16.88 billion in April, according to official data released on Tuesday. Exports had fallen by 30 per cent. to $12.4 billion in April 2009 due to the financial crisis. Imports witnessed huge growth with the April figures showing 43.3 per cent. increase to $27.3 billion from $19 billion in April, 2009. Oil imports were $8 billion, 70.5 per cent. higher than $4.7 billion in April 2009. Indicating strong industrial recovery, non-oil imports, including capital goods, were worth $19.23 billion, 34.3 per cent. higher than $14.3 billion in April, 2009. The Commerce Ministry had expressed concern over the Euro zone debt crisis and the US slow economic recovery as Europe and the US are traditional markets for Indian exports. President, Federation of Indian Export Organisations, said, "We need to regularly review our strategy in view of the set back in Euro zone. We hope the debt crisis won't spread." Exports had contracted for 13 consecutive months starting October 2008. It turned positive in November 2009. The Government has set an export target of $200 billion for 2010-11, a 13 per cent. growth over $176.5 billion in 2009-10. [*www.thehindubusinessline.com, June 01, 2010*] -- Me on net : > >>>>>>>>>>>>>>>>>>>>> http://rajkumaratthenet.blogspot.com/ http://itronline.blogspot.com/ Virus Warning: Although the I have taken reasonable precautions to ensure no viruses are present in his email, sender (I) cannot accept responsibility for any loss or damage arising from the use of this email or attachment." -- You received this message because you are subscribed to the Google Groups "Skorydov MyTaxAssistant Member Group" group. To post to this group, send email to skorydovmytaxassist...@googlegroups.com. To unsubscribe from this group, send email to skorydovmytaxassistant+unsubscr...@googlegroups.com. For more options, visit this group at http://groups.google.com/group/skorydovmytaxassistant?hl=en.
