Notifications and Recent Caselaws summary in Indirect Taxes in India

 Service TAX

Notifications/Circulars     

Ø   Seed testing and all ancillary activities thereto are not liable to Service tax – CBEC clarifies

It came to the notice of the CBEC that certain field formations have taken a view that all activities incidental to seed testing are leviable to Service tax and only the activity in so far it relates to actual testing has been exempted in the Negative List.

After elaborate interpretation of the words in the Statute, the CBEC vide Circular No. 189/8/2015-Service Tax dated November 26, 2015 has issued clarification that all testing and ancillary activities to testing such as seed certification, technical inspection, technical testing, analysis, tagging of seeds, rendered during testing of seeds, are covered within the meaning of ‘testing’ as mentioned in sub-clause (i) of clause (d) of Section 66D of the Finance Act. Therefore, such services are not liable to Service tax under Section 66B of the Finance Act.

RECENT CASE LAWS

 Ø  

Transit Sale – Dealer Registration is not mandatory

Transit Sale – Dealer Registration is not mandatory

THE Central Government has issued Notification No. 08/2015-CE(NT) dated 01-03-

2015, which is effective from the date of issue, has inter alia, inserted the following 3rd

proviso in Rule 11(2) of Central Excise Rules, 2002 (CER, 2002) 

“Provided also that if the goods are directly sent to any person on the direction of the registered 

dealer, the invoice shall also contain the details of the registered dealer as the buyer and the 

person as the consignee, and that person shall take CENVAT credit on the basis of the registered 

dealer's invoice” 

It has created a lot of confusion and worry in the minds of those manufacturers and 

dealers who receive goods directly, as consignee, from manufacturer through 

unregistered dealer (as buyer) and avail cenvat credit on the strength of invoice of 

supplier manufacturer. The proviso has also perplexed a large number of unregistered 

dealers who are being advised/ instructed by their customers and others to obtain 

central excise Dealer Registration if they wish to validly pass on the cenvat credit to 

customers. They are wondering why they are being forced to take mandatory 

registration when the same would become redundant very soon after the 

implementation of GST, which the Government has committed to bring from 01-04-

2016. 

In my view, the amendment has been made to facilitate trade and industry in view of 

the new policy of ‘Ease of doing Business’ as announced by our Prime Minister Shri 

Narendra Modi. Earlier, many registered dealers used to bring the goods in their 

registered premises simply for issuing cenvatable invoice in case of transit sale. The 

amendment has facilitated such registered dealers, who need not physically bring the 

goods at their godown/depot and can directly dispatch the same from the 

factory/depot of the supplier manufacturer. This facility, which seems to be given to 

the registered dealers to reduce unnecessary transportation cost, cannot be 

interpreted to mean that purchase through unregistered dealer is not permitted. Also, 

the manufacturer or provider of output service receiving goods directly as consignee 

from supplier manufacturer though unregistered dealer can continue to avail cenvat 

credit on inputs as earlier. The reasons for my said view are as below: 

1. The amendment is a beneficial provision given to First Stage Dealer and Second 

Stage Dealer. Rule 9(1) of Cenvat Credit Rules, 2004 (CCR) prescribes the 

eligible documents on the basis of which cenvat credit can be availed by 

manufacturer or provider of output service. One of the many eligible documents 

is the invoice issued by manufacturer. Rule 9(2) ibid provides that the document 

(i.e. invoice in our case) should contain all the particulars as per CER, 2002. 

2. Rule 11(1) of CER, 2002 provides that no excisable goods shall be removed from a 

factory or a warehouse except under an invoice signed by the owner of the 

factory or his authorized agent. Rule 11(2) ibid specifies the particulars that 

must be contained in any cenvatable invoice. The relevant portion is extracted 

below: 

“(2) The invoice shall be serially numbered and shall contain the registration number, address of 

the concerned Central Excise, name of the consignee, description, classification, time and date of 

removal, mode of transport and vehicle registration number, rate of duty, quantity and value, of 

goods and the duty payable thereon... 

. 

Provided also that if the goods are directly sent to any person on the direction of the registered 

dealer, the invoice shall also contain the details of the registered dealer as the buyer and the 

person as the consignee, and that person shall take CENVAT credit on the basis of the registered 

dealer’s invoice”...

3. It is clear from plain reading that the name of the consignee must be mentioned 

in the cenvatable invoice and so the consignee is the person entitled to avail 

cenvat credit and not the ‘buyer of goods’. To provide an exemption to this rule, 

the 3rd proviso has been inserted to provide that in case of transit sale, the 

details of ‘registered dealer’ as ‘buyer’ should also be mentioned in the 

cenvatable invoice. 

4. The proviso is very specific and has limited application only for ‘registered 

dealers’. If an unregistered dealer is doing transit sale, he can continue to issue 

commercial invoice as earlier, as the proviso is applicable only when the goods are 

sent to any person on the direction of the registered dealer, which he is not. 

5. In case of transit sale/E1 sale where the buyer is an unregistered dealer, the 

customer/end user can continue to avail cenvat credit on the basis of supplier 

manufacturer’s invoice, as earlier, if the invoice contains it’s name as consignee 

as provided in the sub rule 2. The manufacturers invoice showing recipient name 

as consignee is also a valid document for Cenvat as has been clarified in Circular 

No 96/7/95-CX dated 13-02-1995. The earlier procedure and law is still valid. 


6. In addition to the ‘consignee’, the Central Government intended to allow ‘buyer’ 

to take credit by sending materials directly to consignee. Hence the newly 

inserted 3rd proviso to Rule 11(2) of CER, 2002 has provided an additional method 

for availing cenvat credit to BUYER, who should be a REGISTERED DEALER. 

The Hon’ble Rajasthan High Court had ruled that merely providing an alternative 

method or additional method for availing Cenvat Credit does not take away the 

entitlement to avail Cenvat credit on the basis of original document and the 

judgement has also been recently followed by Hon’ble Gujarat High Court. 

Further, in my view, the last line in the 3rd proviso, which says “and that person shall 

take CENVAT credit on the basis of the registered dealer’s invoice” seems to be ultra 

vires the Central Excise Act, 1944 or the rules thereunder and if challenged, may be 

struck down by the judiciary. In my view, if any trader, whether registered dealer or 

not, instruct his supplier to directly dispatch the excisable goods to the consignee, 

without first physically bringing the goods in his godown/depot, then such trader cannot 

issue valid cenvatable invoice even when he is a registered dealer. In view of the various 

issues involved, the Central Government should immediately issue necessary amendment 

or clarification to bring certainty and peace of mind to the trade and industry. 

*** 

Author : Manoj Agarwal 

Address : Opp. Mandir, Lal Building Road, Rourkela – 769012, ODISHA 

Contact : +91-9937041788 

E:mail : ServiceTaxExpert@yahoo.com

Kindly give your valuable feedback and contact for further clarifications, if any.

Disclaimer: This article is the property of the author and is for information purpose. No one shall print, 

publish, copy, reproduce or use it in any manner, except for personal, non-commercial use, without the 

permission of the author. The author shall not be responsible or liable for anything done or omitted to be 

done on the basis of this article.

India Finance Budget 2015 Highlights

Excise rate 12.5% w.e.f. 01.03.15. Ed.cess abolished.  
Ser.Tax 14% ... effective date to be notified later.
Time limit for taking Cenvat credit ..one year.
Manpower service 100% service tax liability on corporate entities if services provided by Proprietary, partnership, HUF.

Amendments in EXCISE in Budget 2014

                                  EXCISE
                AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944:
 
1) The Central Excise Act, 1944 or Finance Act, 1994 is being amended so that a reference in that Act to a Chief Commissioner of Central Excise or a Commissioner of Central Excise may also include a reference to the Principal
Chief Commissioner of Central Excise or the Principal Commissioner of Central Excise, as the case may be. It also seeks to provide for consequential amendments in the Act. [Clause 88]
2) Section 2(b) is being amended so as to provide for inclusion of Principal Chief Commissioner of Central Excise and Principal Commissioner of Central Excise in the definition of the Central Excise Officer. [Clause 89]
3) Section 15A is being inserted so as to empower the Central Government to prescribe an authority or agency to whom the information return shall be filed by the specified persons such as Income Tax Authorities, State Electricity Boards, VAT or Sales Tax Authorities, Registrar of Companies. Information can be collected for the purposes of the Act, such as, to identify tax evaders or recover confirmed dues. It is also proposed to insert a new section 15B which provides for imposition of penalty if the information return is not submitted. [Clause 90]
4) Section 31(g) and section 32(1) is being amended to change the name of the ‘Customs and Central Excise Settlement Commission’ to the ‘Customs, Central Excise and Service Tax Settlement Commission’ as the scope of the functioning
of the Customs and Central Excise Settlement Commission was expanded in the year 2012 so as to include settlement of Service Tax matters as well. [Clause 91, 92]
5) Section 32E(1) is being amended to replace the reference to section 11AB with a reference to section 11AA since section 11AB has been omitted by the Finance Act, 2011. [Clause 93]
6) Section 32E(1) is also being amended to allow filing of applications of settlement before the Settlement Commission in cases where the applicant has not filed the returns after recording reasons for the same. [Clause 93]
7) Section 32E is being amended to omit sub-section (2) since the same is redundant. [Clause 93]
8) Section 32O(1) is being amended so as to insert an Explanation that the concealment of particulars of duty liability relates to any such concealment made from the officer of central excise and not from the Settlement Commission.[Clause 94]
9) Section 35B(1) is being amended so as to increase the discretionary powers of the Tribunal to refuse admission of appeal from the existing Rs.50,000 to Rs.2 lakh. [Clause 95]
10) Section 35B(1B) is being amended to substitute the words “by notification in the official gazette” with “by order” so as to enable the Board to constitute a Review Committee by way of an order instead of by way of a notification.
[Clause 95]
11) Section 35C(2A) is being amended to omit the first, second and third proviso in view of substitution of section 35F with a new section. [Clause 96]
12) Section 35E is being amended to insert a proviso in sub-section (3) to vest the Board with powers to condone delay for a period upto 30 days for review by the Committee of Chief Commissioners of the orders in original passed by the
Commissioner of Central Excise. [Clause 97]
13) Section 35F is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (Appeals) or the Tribunal at the first stage and 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs. 10 crores. [Clause 98]
14) Section 35L is being amended so as to clarify that determination of disputes relating to taxability or excisability of goods is covered under the term ‘determination of any question having a relation to rate of duty’ and hence, appeal against
Tribunal orders in such matters would lie before the Supreme Court. [Clause 99]
15) Section 35R is being amended so as to enable the Commissioner (Appeal) to take into consideration the fact that a particular order being cited as a precedent decision on the issue has not been appealed against for reasons of low amount. [Clause 100]
16) The Third Schedule to the Central Excise Act, 1944 is being aligned with noti fication No. 49/2008-CE (NT) dated 24.12.2008 which specifies goods liable for assessment based on Retail Sale Price (RSP). [Clause 104]
The change at para 16) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

AMENDMENTS IN THE FIRST SCHEDULE TO THE CENTRAL EXCISE TARIFF ACT, 1985:1) Excise duty on cigarettes is being increased by 72% for cigarettes of length not exceeding 65 mm and by 11% to 21% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.
2) Basic excise duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and chewing tobacco.
3) Tariff item 2402 20 60 is being omitted.
4) The entry 2403 19 occurring against the description “Other than paper rolled biris, manufactured without the aid of machine” is being substituted with 2403 19 21.
5) The unit quantity code against certain entries is being changed. [Clause 105]
The changes at 1) to 4) will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

RETROSPECTIVE AMENDMENT TO RULES:
1) Rule 8 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 is being amended with retrospective effect from 13.04.2010 to provide that where a manufacturer manufactures pouches of
different RSPs on a single machine, the duty liability for that month would be the duty applicable to the highest of the RSP so manufactured. This will align the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 with the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 with regard to manufacture of pouches of different RSPs on a single machine under the compounded levy scheme. [Clause 101]

RETROSPECTIVE EXEMPTIONS:
1) Un-branded articles of precious metals are being exempted from excise duty for the period 01.03.2011 to 16.03.2012 so as to remove the unintended levy of excise duty on un-branded articles of precious metals for the said period.
[Clause 102]
2) Excise duty on Polyester Staple Fiber (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 08.05.2012) is being exempted retrospectively w.e.f. 29.06.2010 to 07.05.2012 and intermediate product ‘Tow’ arising during the course of manufacture of such PSF/PFY is being exempted retrospectively w.e.f. 29.06.2010 to 10.07.2014 so as to provide relief to the manufacturers of such PSF/PFY and to rectify the unintended levy of central excise duty on tow (an intermediate product) arising during the course of manufacture of such PSF/PFY. [Clause 102, 103]
3) Full exemption from Central Excise duty is being provided to Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to Non-Domestic Exempted Category (NDEC)
customers by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum
Corporation Limited retrospectively from 08.02.2013 so as to treat NDEC customers, such as, hospitals, government canteens, BSF/CISF mess, etc., at par with domestic customers for the purposes of supply of LPG. [Clause 103]
 
Proposals involving changes in rates of duty:
I. AGRICULTURE/AGRO PROCESSING/PLANTATION SECTOR:1) Excise duty on machinery for the preparation of meat, poultry, fruits, nuts or vegetables, and on presses, crushers and similar machinery used in the manufacture of wine, cider, fruit juices or similar beverages and on packaging machinery is being reduced from 10% to 6%.
II. AUTOMOBILES:
1) Excise duty is being exempted on parts of tractors removed from one or more factories of a tractor manufacturer to another factory of the same manufacturer for manufacture of tractors.
III. METALS:
1) Excise duty on winding wires of copper is being increased from 10% to 12%.
IV. PRECIOUS METALS
1) Un-branded articles of precious metals are being exempted from excise duty for the period 01.03.2011 to 16.03.2012.
V. TEXTILES:
1) Excise duty on Polyester Staple Fiber (PSF) and Polyester Filament Yarn (PFY) manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles (which is already exempt w.e.f. 08.05.2012) is being exempted retrospectively w.e.f. 29.06.2010 to 07.05.2012 and intermediate product ‘Tow’ arising during the course of manufacture of such PSF/PFY is being exempted retrospectively w.e.f. 29.06.2010 to 10.07.2014.
2) Excise duty at the rate of 2% (without CENVAT) or 6% (with CENVAT) is being imposed on Polyester Staple Fiber and Polyester Filament Yarn manufactured from plastic waste or scrap or plastic waste including waste polyethylene terephthalate (PET) bottles w.e.f. 11th July, 2014.
VI. HEALTH:
1) Full exemption from excise duty is being provided to DDT manufactured by Hindustan Insecticides Limited for supply to the National Vector Borne Diseases Control Programme (NVBDCP) of the Ministry of Health & Family Welfare.
2) Full exemption from excise duty is being provided for HIV/AIDS drugs and diagnostic kits supplied under National AIDS Control Programme (NACP) funded by the Global Fund to Fight AIDS, TB and Malaria (GFATM).
3) Excise duty on cigarettes is being increased by 72% for cigarettes of length not exceeding 65 mm and by 11% to 21% for cigarettes of other lengths. Similar increases are proposed on cigars, cheroots and cigarillos.
4) Basic excise duty is being increased from 12% to 16% on pan masala, from 50% to 55% on unmanufactured tobacco and from 60% to 70% on jarda scented tobacco, gutkha and chewing tobacco.
VII. ELECTRONICS/HARDWARE:
1) Excise duty on recorded smart cards is being increased from 2% without CENVAT and 6% with CENVAT to a uniform rate of 12%.
2) Full exemption from Excise Duty is being provided to reverse osmosis (RO) membrane element used in water filtration or purification equipment (other than household type filter). Excise duty on RO membrane element used in household
type filters is being reduced from 12%/10% to 6%.
3) Excise duty on Metal Core PCB and LED driver for use in the manufacture of LED lights and fixtures and LED lamps, is being reduced from 12%/10% to 6%.
VIII. RENEWABLE ENERGY
1) Excise duty is being reduced from 12% to Nil on forged steel rings used in the manufacture of bearings of wind operated electricity generators.
2) Full exemption from excise duty is being provided for solar tempered glass used in the manufacture of solar photovoltaic cells/modules, solar power generating equipment/system, and flat plate solar collectors.
3) Full exemption from excise duty is being granted in respect of machinery, equipments, etc. required for setting up of solar energy production projects.
4) Full exemption from excise duty is being provided to backsheet and EVA sheet used in the manufacture of photovoltaic cells/modules and specified raw materials used in their manufacture.
5) Full exemption from excise duty is being provided to parts consumed within the factory of production for the manufacture of non-conventional energy devices [Sl.No.332 of notification No.12/2012-CE, dated 17.03.2012].
6) Full exemption from Excise Duty is being provided on flat copper wire used in the manufacture of PV ribbons (tinned copper interconnect) for use in the manufacture of solar cells/modules.
7) Full exemption from excise duty is being provided on machinery, equipments, etc. required for setting up of compressed biogas plant (Bio-CNG).
IX. CONSUMER GOODS
1) The scope of the phrase “not mixed with any other ingredient” in the context of excise duty exemption on “heena powder or paste, not mixed with any other ingredient” is being clarified so as to provide that the exemption is available to heena powder mixed with a liquid, so far that the liquid is a medium to change the form of heena powder into paste but excludes products like heena dye and such other products which are cosmetics and have no ceremonial or traditional value.
2) Excise duty is being reduced from 12% to 6% on footwear of retail price exceeding Rs.500 per pair but not exceeding Rs.1,000 per pair. Footwear of retail price upto Rs.500 per pair will continue to remain exempted.
3) Excise duty on hand operated sewing machine (2% without CENVAT / 6% with CENVAT) is being rationalized by levying concessional excise duty on sewing machines other than those operated with electric motors (whether in-built or attachable to the body)
4) Semi- mechanized units manufacturing safety matches, which attract concessional excise duty of 6%, are being allowed to carry out the processes of ‘Pasting of labels’ and ‘Packing’ with the aid of power.
5) Concessional excise duty of 2% without CENVAT credit and 6% with CENVAT credit is being extended to gloves specially designed for use in sports.
6) An additional duty of excise is being levied at the rate of 5% ad valorem on aerated waters containing added sugar.
X. ENERGY SECTOR
1) Central Excise duty on Branded Petrol is being reduced from Rs.7.50 per litre to Rs. 2.35 per litre.
2) Full exemption from Central Excise duty is being provided to Liquefied Propane and Butane mixture, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to Non-Domestic Exempted Category (NDEC)
customers by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited retrospectively from 08.02.2013.
3) The rate of Clean Energy Cess levied on coal, lignite and peat is being increased from Rs.50 per tonne to Rs. 100 per tonne.
XI. SECURITY AND STRATEGIC PURPOSES:
1) Full exemption from Excise Duty is being provided to goods supplied to National Technical Research Organisation (NTRO).
2) Full exemption from excise duty is being provided for security threads and security fibre supplied to Security Paper Mill Corporation of India Limited (SPMCIL) and Bank Note Paper Mill India Private Limited (BNPMIPL).
XII. MISCELLANEOUS
1) Optional excise duty of 2% (without CENVAT)/6% (with CENVAT) on writing and printing paper for printing of educational textbooks is being withdrawn and instead a uniform excise duty of 6% with CENVAT is being levied.
2) Intermediate goods manufactured and consumed captively for further manufacture of matches is being fully exempted.
3) The scope of the Excise Duty exemption to “all goods supplied against International Competitive Bidding” is being clarified to the effect that the said exemption is also available to sub-contractors for manufacture and supply of goods to the main contractor (who has won the bid for the project through ICB) for execution of the said project.
4) Full exemption from Excise duty is being provided on plastic materials reprocessed out of the scrap or waste and cleared into the DTA by an EOU.
5) Education cess and secondary & higher education cess (customs component) is being exempted on goods cleared by an EOU into the DTA.
6) A clarification is being issued that the exemption from education cess and secondary & higher education cess under notifications No.28/2010-CE and No.29/2010-CE, both dated 22.06.2010 is applicable only in respect of the clean
energy cess leviable on coal and not in respect of excise duty leviable on coal.
7) It is being clarified that all goods falling under headings 8601 to 8606 (except 8604) attract 6% excise duty with CENVAT benefit.
MISCELLANEOUS
1) The Seventh Schedule to the Finance Act, 2001 dealing with National Calamity Contingent Duty is being amended to omit the tariff item 2402 20 60 as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act.
This change will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
[Clause 107]
2) The Seventh Schedule to the Finance Act, 2005 dealing with Additional Excise Duty is being amended so as to:
(a) impose an additional duty of excise at the rate of 5% ad valorem on aerated waters containing added sugar.(b) omit the tariff item 2402 20 60 as a consequential change to amendment in the First Schedule to the Central Excise Tariff Act.
These changes will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.
[Clause 110]
3) The Tenth Schedule to the Finance Act, 2010 dealing with Clean Energy Cess is being amended so as to expand the scope of purposes of levy of the said cess to include clean environment initiatives and funding research in the area of
clean environment. [Clause 111]

Indian Budget 2014 highlights

INCOME TAX
Individual tax exemption limit for individual raised to 2,50,000

Senior citizen basic exemption limit raised to Rs. 3,00,000

Sec 80C limit raised from 1 Lac to 1.50 lacs.

Deduction of Housing Loan interest raised from 1.5 lacs to 2 Lacs

No change in surcharge

Cess continues @3%

Advance rulings extended to residents as well!

Investment in mf 36months is long term capital gain. Tax @20%

CUSTOMS & EXCISE :
Lcd led tvs basic customs duty 10% to nil

Baggage rules Limit raised 35to45k

Solar sheet exempt from excise.

Cigarette excise from 11% to 72%

Gist of recent important tax caselaws

Below are the recent important tax caselaws related to Income tax, Service tax, Excise in brief. The citation is made available for your benefit :

INCOME TAX

SECTION 2(15)

CHARITABLE PURPOSE

Medical relief : Where assessee, a non-profit making company entered into agreement with State Government in terms of which assessee had to provide Emergency Medical Transport Services to patients free of cost, it was to be concluded that assessee was incorporated for charitable purpose of providing medical relief and, thus, its application seeking registration under section 12AA was to be allowed - GVK EMRI (UP) v. Director of Income-tax (Exemption), Hyderabad (2014) 45 taxmann.com 90 (Hyderabad - Trib.)     SECTION 37(1) BUSINESS EXPENDITURE - ALLOWABILITY OF Education expenses : Where expenditure on higher education of employee had an intimate and direct connection with assessee's business, it would be appropriately deductible, even though such an employee was son of a director - Kostub Investment Ltd. v. Commissioner of Income-tax (2014) 45 taxmann.com 123 (Delhi)       SECTION 40A(2) BUSINESS DISALLOWANCE - EXCESSIVE OR UNREASONABLE PAYMENTS Commission : Where revenue authorities disallowed payment of sales commission made by assessee to its agents by invoking provisions of section 40A (2), in view of fact that those agents were house wives were not in a position to offer any professional advice on matters relating to production, market survey or procurement of orders, impugned disallowance was to be confirmed - Luxco Electronics v. Commissioner of Income-tax (2014) 45 taxmann.com 122 (Allahabad)       SECTION 92 Comparables and adjustments/CUP Method/TNMM : Where assessee had to incur additional cost in relation to services rendered by it to unrelated parties as compared to similar services rendered to related parties, assessee should have been allowed relief on account of functions performed, risk assumed and asset employed in services rendered by it to related and unrelated parties - J.P. Morgan India (P.) Ltd. v. Assistant Commissioner of Income-tax (2014) 44 taxmann.com 466 (Mumbai - Trib.)       Comparables and adjustments : Where comparable was a big company in all respects including range of turnover, same should be excluded from list of comparables to small companies which were captive service providers having considerably low turnover - United Online Software Development (India) (P.) Ltd. v. Income-tax Officer (2014) 44 taxmann.com 424 (Hyderabad - Trib.)     CENTRAL EXCISE ACT SECTION 11B REFUND – GENERAL Refund has to claim only as per section 11B of Central Excise Act, 1944 and no civil suit cannot be instituted for refund of claim based on discovery of mistake of law - Union of India v. Rajasthan Spinning & Weaving Mills Ltd. (2014) 45 taxmann.com 2 (Rajasthan) SECTION 14 SUMMONS - RETRACTION OF STATEMENT Onus lies on Department to prove that there was clandestine removal by assessee; and for that purpose, department must put forth evidence and conduct examination of witnesses and buyers to prove the charge - Commissioner of Central Excise, Ahmedabad v. Gopi Synthetics (P.) Ltd. (2014) 45 taxmann.com 57 (Gujarat)

Gist of recent important tax caselaws and judgements

Below are the recent important tax caselaws related to Income tax, Service tax, Excise in brief. The citation is made available for your benefit :

 INCOME TAX

SECTION 10(22)

EDUCATIONAL INSTITUTIONS

Misutilization of funds by trustee : Where genuineness of trust and objects of trust being charitable had not been disputed even if trustees had mismanaged or misutilised funds, exemption under section10(22) could not be denied - Anil Kumar Tantia v. Income-tax Officer (2013) 40 taxmann.com 333 (Jodhpur - Trib.)     SECTION 143 ASSESSMENT Natural justice : Where pursuant to search proceedings, assessee filed an application seeking copy of impounded documents so as to file revised return of income and Assessing Officer passed assessment order on basis of original return without supplying said copies, order so passed by Assessing Officer was not sustainable - Purvesh Mansukhbhai Shah v. Additional Commissioner of Income-tax (2013) 40 taxmann.com 425 (Gujarat)       SECTION 158BFA BLOCK ASSESSMENT - INTEREST/PENALTIES, LEVY OF Penalty order passed on deceased person : Where Assessing Officer passed penalty order under section 158BFA(2) in name of deceased assessee and son of deceased was never impleaded as a legal heir of his father, said penalty order was null and void - Chandrakant A. Gandhi v. Assistant Commissioner of Income-tax (2013) 40 taxmann.com 432 (Ahmedabad - Trib.) SECTION 158BG BLOCK ASSESSMENT IN SEARCH CASES - AUTHORITY COMPETENT TO MAKE Previous approval : Where Assessing Officer as a result of search conducted under section 132 upon one 'D' on 6-2-1996 passed block assessment order on one 'S', who was related to 'D', and Joint Commissioner had previously approved said order, as per proviso to section 158BG it was Commissioner who should have previously approved order of assessment - Commissioner of Income-tax v. Sri D.S. Srinivasa Rao & Brothers (2014) 41 taxmann.com 194 (Karnataka) SECTION 272A PENALTY - FOR FAILURE TO ANSWER QUESTION, SIGN STATEMENTS ETC. Failure to issue Form 16A to deductees : Where assessee was prevented by sufficient cause in not issuing Form 16A within prescribed time to persons from whom tax was deducted as PANs of deductees were not available with him, penalty order passed under section 272A(2)(g) in respect of default committed under section 203 was to be set aside - Commissioner of Income-tax (TDS) v. Collector, Land Acquisition, Department of Industrial & Commerce (2013) 40 taxmann.com 483 (Punjab & Haryana)       CENTRAL EXCISE ACT SECTION 11A RECOVERY - OF DUTY OR TAX NOT LEVIED/PAID OR SHORT-LEVIED/PAID OR ERRONEOUSLY REFUNDED Where CESTAT had directed pre-deposit without considering judgment of Commissioner (Appeals) in favour of assessee on merits, matter was remanded back to Tribunal to consider matter afresh in light of judgment of Commissioner (Appeals) - Chopra Steel Strips v. Commissioner of Central Excise and Service Tax (2014) 41 taxmann.com 131 (Punjab & Haryana)