*GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS **ISSUE DATED
14.06.2010** Volume
2 Part 12***
* *
*HIGH COURT** *
* *
*>> *High speed diesel oil falling under heading No. 2710.90 of Central
Excise Tariff Act, 1985 specifically excluded from purview of Modvat :
*Commissioner
of Central Excise, Meerut v. Amit Banaspati Co. Ltd. (All) . . . 844*
**
*>> *Adjudicating authority has no jurisdiction to review its own
order : *Commissioner
of Customs v. Millat Fibers (Guj) . . . 847*
**
*>> *Where goods illegally detained or harsh condition imposed for its
release, affected party can invoke jurisdiction of High Court even if cause
action had arisen only partly in territorial jurisdiction of court : *Kundan
Rice Mills Ltd. v. Union of India (P&H) . . . 852*
**
*>> *Exercise of power to confiscate under Customs Act, 1962 must be fair,
reasonable and consistent with principle of proportionality : *Kundan Rice
Mills Ltd. v. Union of India (P&H) . . . 852*
**
*>> *Where conditions imposed for provisional release of confiscated goods
harsh, conditions set aside : *Kundan Rice Mills Ltd. v. Union of India
(P&H) . . . 852*
**
*>> *Imported materials detained on ground of mis-declaration of value of
goods released subject to suitable conditions : *Atam Fibres (P) Ltd. v.
Union of India (P&H) . . . 867*
**
*>> *Where appeal to Appellate Tribunal would lie only on determination,
writ petition against provisional anti-dumping duty levied pending
determination by designated authority maintainable : *Meghani Organics Ltd.
v. Union of India (Guj) . . . 870*
**
*>> *In absence of knowledge of consequences, grounds, reasoning and
methodology adopted by designated authority to arrive at its decision to
levy of provisional anti-dumping duty, designated authority directed to
provide all necessary details of findings and permit petitioner to raise
objections : *Meghani Organics Ltd. v. Union of India (Guj) . . . 870*
**
*>> *Execution of indemnity bond equivalent to value of seized goods or bank
guarantee in respect of 10 per cent. of value as conditions for provisional
release of goods pending investigation, in interest of Department and not
illegal, arbitrary or unreasonable : *Kundan Rice Mills Ltd. (No. 2) v.
Union of India (P&H) . . 887*
*CESTAT ORDERS** *
**
*>> *Hard ground powder obtained by grinding broken pieces of asbestos
cement products which cannot be used as filtering material or as heat
insulation material cannot be classified under heading 68.05 of Central
Tariff Act, 1985 : *Eternit Everest Ltd. v. Commissioner of Central Excise .
. . 835*
**
*>> *Show-cause notice issued in January, 1998 demanding duty for period
from November 1992 to June 1994 time-barred : *Eternit Everest Ltd. v.
Commissioner of Central Excise . . . 835*
**
*>> *Question of liability is question of law and can be raised at stage of
appeal : *Eternit Everest Ltd. v. Commissioner of Central Excise . . . 835*
**
*>> *Manufacturer eligible to avail of Cenvat credit on customs house agent
services used for clearance of export goods at designated port : *Leela
Scottish Lace P. Ltd. v. Commissioner of Customs . . . 862*
*NEWS BRIEF** *
**
*>> Finance Minister asks export sector to explore new segments in external
markets and tap full potential of the domestic market*
The Finance Minister, after giving three stimulus packages of Rs. 1,85,000
crore in his Budget in the year 2009-2010, will focus on bringing the fiscal
deficit to 4.1 per cent. by 2012-13 in a phased manner. This was stated by
the Finance Minister while addressing 102nd Annual General Meeting of Indian
Merchants' Chamber of Commerce in Mumbai. The Finance Minister also said
that the purpose to achieve higher growth rate is to have inclusive growth
which means empowerment of people. In this regard, Finance Minister said
that the trickling down theory is more relevant and now it's time to empower
the people directly in order to give them power, access and reach through
legislation.
The Finance Minister also said that two major tax reforms are on the
priority of the Government. He mentioned that Direct Tax Code will be
introduced from the next financial year i.e., 2011-12. As far as GST is
concerned, the Empowered Committee of Finance Ministers is looking into this
aspect and since this requires substantial amendments, therefore, it may
take some time.
Following are the excerpts from the speech of the Finance Minister :
"I am very happy to address this august gathering at the Indian Merchants'
Chamber. The IMC would be legitimately proud of its rich and long-standing
legacy and also for the valuable role it has played over time in developing
and promoting the Indian industry and commerce. Hence, it is a privilege to
be in the Indian Merchants' Chamber. On a different note, sessions with the
representatives of trade and industry, evince great interest in me,
especially at the current juncture, when we are faced with divergent
economic realities-a buoyant industrial sector and reviving trade in goods
and services, amidst serious issues to be tackled in our farm sector.
Trade, both domestic and international, is the pivotal link connecting
production and consumption. Hence, traders and merchants have as important a
role in an economic system as producers and consumers do. I know that when I
speak about traders and merchants, they are a highly heterogeneous cross
section, operating at vastly diverse scales, regions and activities. Each
level, right from the village kirana shop keeper to the all-conquering
global conglomerates, is important on its own and has specific sets of
comparative advantages as well as operational difficulties. Suffice it to
say that the views of merchants and traders at different levels, regions and
scales are important to an economic administrator, who is at the helm of a
large and dynamic economy. From this point of view, the value of interactive
sessions like this gets magnified.
As you must have observed, the Indian economy experienced a change in its
structure, competitiveness and global identity in the last two decades,
which has resulted in rich growth dividends during the post-2000 period. The
economy posted an impressive average annual growth close to 9 per cent.
during the period 2003-04 to 2007-08. Agriculture grew at an average annual
rate close to 5 per cent., industry close to 10 per cent. and services at
around 10 per cent. during the period, indicating that the high growth
achieved was broad-based. This change was facilitated by a sharp rise in
investment rate in conjunction with robust consumption. The improvement in
important macro-economic co-ordinates has been evidenced by the facts that;
inflation remained moderate; fiscal consolidation proceeded apace; and
external sector remained robust during the period. Business and trade have
acted as an important facilitator in the process and also been a major
beneficiary of the improved outcome.
The global financial meltdown and the economic recession in developed
economies adversely affected the Indian economy. This resulted in a slowdown
in the rate of growth of the Indian economy from 9.2 per cent. in 2007-08 to
6.7 per cent. in 2008-09. The slowdown of the Indian economy was of no
surprise, with most of the world in deep recession. What was a surprise was
the speed and vibrancy with which the Indian economy turned around. As you
are aware, it is now widely recognized that India was not only one of the
economies least affected by the global growth slowdown, but also one among
the fastest to achieve a recovery from the economic slowdown. The turnaround
came in the second quarter of 2009-10 with a growth of 8.6 per cent.
According to the revised estimates, GDP at factor cost at constant prices in
the year 2009-10 has grown by 7.4 per cent., as against 7.2 per cent. in the
Advance Estimates. The upward revision in the GDP growth rate is mainly on
account of the extra-ordinary buoyancy shown by the industrial sector and
the better-than-anticipated performance of the farm sector. Trade and other
services picked up, precipitating the on-ongoing economic recovery.
With normal monsoon predicted for 2010-11, and with industrial recovery and
investment activity gaining momentum, it seems highly likely that the
economy is on course to accelerating economic growth in 2010-11. There are
other factors that emerged in the latter half of 2009-10, which augur well
for the Indian economy. The Indian exports started picking up from November
2009. Further, infrastructure services, including rail freight transport,
power, telecommunications and civil aviation, have shown a visible positive
change in 2009-10. The favourable capital market conditions with influx of
capital flows and improved business sentiments are also encouraging.
Further, factors like the expected demographic dividend, high rates of
saving and investment, depth of the domestic market and the increasing
presence of Indian corporates in the global market brighten the growth
prospects of the economy in the medium to long run.
The immediate task before us, as I mentioned in the budget speech, is to
quickly revert to the high GDP growth path of 9 per cent. and then find the
means to cross the 'double digit growth barrier'. Calibrating macroeconomic
policies to emerging contexts is a continuous process, and some of the
proposed fiscal initiatives like the goods and services tax and the changes
to direct taxes as envisaged in the Direct Tax Code are some of the
important measures towards promoting enterprise. While I feel that the
industrial sector has regained its momentum, more broad-based recovery
demands faster growth of the farm sector.
As for international trade, in April 2010-11, exports grew by 36.2 per cent.
compared to their level in April 2009-10. Exports witnessed a positive
growth for the sixth consecutive month since November 2009. Imports have
also picked up. In April 2010-11, Indian imports were 43.3 per cent. higher
than their level April in 2009-10. Non-oil, non-bullion imports, which
largely reflect the imports of capital goods needed for industrial activity
and imports needed for exports, were higher by 36.4 per cent. in April 2010,
compared to the corresponding period of the previous year. This, coupled
with the impressive growth in the domestic production of capital goods, and
the robust growth in capital formation in the recent quarters as evident
from the National Accounts, is indicative of the magnitude of capacity
addition taking place in the economy. Strong and sustained investment growth
is a pre-condition for sustained economic growth; so is the strength in the
growth in consumption, especially of the lower economic stratum.
On the consumption front, the National Accounts show that the growth in
Government consumption slowed down significantly in the second half of
2009-10. However, the growth in Government consumption appears robust for
the full year 2009-10, on the strength of its robust growth in the first
half of the year.
As we saw the recovery taking root in the second quarter of the previous
fiscal, the Budget for 2010-11 initiated a partial roll back of stimulus
measures and a resumption of the fiscal consolidation process with fiscal
deficit at 5.5 per cent. of GDP. The Medium Term Fiscal Policy Statement
2010-11 has provided the roadmap with fiscal deficit declining to 4.8 per
cent. of GDP in 2011-12 and further to 4.1 per cent. of GDP in 2012-13. The
Report of the Thirteenth Finance Commission lays down the roadmap for fiscal
consolidation for both the Centre and States for the next 5 years. A focus
on bringing down the level of public debt as envisaged in the Report and as
announced in the Budget for 2010-11 would anchor the fiscal consolidation
process in a sustainable debt framework. In a nutshell, the required
buoyancy in consumption has to emanate from private consumption, while the
Government consumption and fiscal adjustments will only work as an automatic
stabilizer in the different stages of economic cycles.
We would naturally be happy to see the world economy and India's major
destination markets revive. However, such a revival will be an exogenous
development. It is therefore necessary that the export sector on its part
explores new segments in external markets and also taps the full potential
of the domestic market. Fortunately, the size of the Indian market and the
unmet demand for products and services provides reasonable scope for doing
so. However, for this to happen, Indian enterprises will need to go the
extra mile and make conscious efforts to reach out to different segments of
the pyramid. I am sure that with its ingenuity and inherent strength, Indian
enterprises will respond to this challenge. Trade, as I mentioned earlier,
will have a significant role to play in this.
I understand that 'making India a strong economic nation' is the central
mission of the Indian Merchant's Chamber. At this point in time, this
mission statement assumes greater relevance than ever before. I would like
to once again thank the IMC for inviting me to speak on this occasion and
wish success in its endeavours." [*Sources : http://pib.nic.in June 08, 2010
*]
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