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March 2009
No: 758A ,Mount Chambers,
Anna Salai,
Chennai- 600 002. Indirect Tax Alert
Phone no : + 91 44 2858 2011/ 13
Fax no : + 91 44 2858 2012
Important Notifications and Circulars
SEZ - Exemption from Union Government granted conditional exemption to
Service Tax - Modified units located in SEZ or developers of SEZ from Service
Exemption allowed Tax, whereby service provider shall not be exempt from
payment of service tax. Instead service provider has to
through refund mode
pay service tax at appropriate rate on the taxable services
provided by him to the units located in SEZ or developer
of SEZ. The units located in SEZ or developers of SEZ
are entitled to claim exemption by filing refund claim of
Service Tax paid by the provider of service tax.
Earlier notification No. 4/2004 ST dated 31.03.2004
which granted exemption hitherto is withdrawn.
Source : Notification No. 9/2009 ST dated 03.03.2009
Filing of claim for refund Notification No. 41/2007-ST, dated 6/10/2007 allows
of Service Tax paid under refund of service tax paid on specified services used for
notification No. 41/2007-ST export of goods. Innumerable procedural difficulties
were faced by exporters in claiming the said refund of
dated 6/10/2007 - reg.
Service Tax. Board has earlier issued circulars No.
101/4/2008-ST, dated 12.5.2008 and No. 106/9/2008-ST
dated 11.12.2008. Another clarificatory Circular was
issued by the board on various issues raised on the
aspect of filing of refund claim of Service Tax in
accordance with the Notification.
Source : Circular No.112/06/2009 dated 12.03.2009
Indirect Tax Alert
March 2009
DGFT issued Notification No. 95 (RE-2008)/2004-2009
DGFT Notification No.95
dated 13.03.2009 amending Foreign Trade Policy
(RE-2008)/2004-2009 dated whereby applications for conversion into an
13.03.2009 EOU/EHTP/ STP/BTP unit from existing DTA units,
having an investment of Rs. 50 crores and above in plant
and machinery or exporting Rs. 50 crores and above
annually, shall be placed before Board of Approval for a
decision.
Source : DGFT Notification No. 95 (RE-2008)/2004-2009
dated 13.03.2009
Format for Service Tax The Government has yet again modified the format for
Return ST-3 modified yet Service Tax half-yearly Return ST-3 Form to include
again details of the newly introduced Service Tax Return
Preparer (STRP). Consequently, the half-yearly return to
be submitted for the period ending 31.03.2009 has to be
filed in the new format.
Source : Notification No.10/2009-Service Tax dated
17.03.2009
Export Warehousing CBEC extended the facility of export warehousing by
facility extended to inclusion of Thiruvallur District in the state of Tamil
Thiruvallur District, TN – Nadu in the list of places eligible. Kanpur included
earlier, but omitted subsequently has also been added to
Kanpur also included
the list of eligible places.
Source : Circular No. 884 / 04/2009-CX dated 26.03.2009
Important CESTAT Decisions
Utilisation of Cenvat credit The assessee took credit of Service tax paid by its sub-
contractors who were involved in Installation and
Commissioning services. Revenue rejected the said credit on
the ground that such sub-contractors were not liable for
Service tax and the liability was of the main contractor. On
appeal,the Tribunal held that since the liability had been
discharged the credit taken by the assessee cannot be denied.
Koch-Glitsch India Ltd. Vs. CCE & C,Vadodara.
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Indirect Tax Alert
March 2009
Classification of Taxable The appellant was a manufacturer of Iron and Steel products.
service - Management On rare cases, it has also provided advisory service to clients
on investment in shares and securities and charged for it.
Consultant
Services tax was demanded from the assessee under the
category of 'Management consultant'.The Tribunal dismissed
the demand that giving advices in stray cases will not bring
the assessee in that particular category unless it is known as
such.
CCE Vs Chandan Metal Products (P.) Ltd.
Availment of Cenvat Credit Assessee had a Cement plant which used welding electrodes
on Maintenance and repair for maintenance and repair of machineries. It availed Cenvat
credit of duty paid on the said electrodes as 'inputs'.Revenue
machineries
contended that the electrodes were not 'inputs' and the credit
availed was not legal. It was held that use of welding
electrodes in repair and maintenance of machineries was in
relation to manufacture of final products and hence entitled
for Cenvat credit as 'inputs'.
CCE Vs. Vasavadatta Cement
Classification of Taxable The appellant was a commission agent receiving commission
service - Clearing and from manufacturers for procuring orders. The authorities
demanded service tax classifying it as Clearing & Forwarding
Forwarding agent
agent. But it had not received or handed over goods or
provided warehousing facilities. It was also not concerned
with preparation of invoices on behalf of principal and receipt
of value for goods. As such,the order was set aside and the
appeal was allowed.
Pinex Steel Industries (P.) Ltd. Vs. CST
Claim for refund of Duty The assessee was engaged in production of TV
serials/programmes for various TV channels. It had wrongly
paid Service tax under the category of 'Video production
agency' service for a specific period .Subsequently ,it filed a
refund claim. Deputy Commissioner rejected the refund on
merit as well as on the ground of unjust enrichment. On
appeal,it was held that the said activity were not chargeable
to service tax and rejected the refund claim on the ground of
unjust enrichment.
Meditech (P.) Ltd Vs. CST(Appeals) (New Delhi–Cestat)
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Indirect Tax Alert
March 2009
Interest on delayed payment Revenue demanded interest from the Assessee for payment of
of Service Tax Service tax belatedly for a relevant period . Assessee's case
was that short payment of Service tax was on account of an
error in calculation and not by way of suppression and the
same was paid as soon as the error was detected, and
therefore interest could not be demanded. On appeal, it was
held that liability under Section 75 is a civil liability which is
inescapable and the same was dismissed.
General Manager, BSNL Vs. CCE,Mumbai
Important High Court Decisions
Wrong availment of Modvat Show cause notice was issued to the assessees clearly
Credit establishing that the parties had fraudulently / wrongly
availed Modvat credit,which is not admissible and there was
evasion of Excise duty. The facts recorded by the
Commissioner regarding suppression of facts was not
disputed but the issue raised was the extended period of
limitation. The appeals were disposed in favour of the
Revenue.
CCE Vs. Vardhaman India Products
Rejection of Appeal by The Commissioner (Appeals) empowered to hear
Commissioner (Appeals) and appeals under Section 35 cannot be treated as forum
the question of applicability functioning as a court nor the said authority can be said
of the Limitation Act, 1963 to have trappings of the Court. Hence in the appeal
preferred by the present petitioner under Section 35
beyond 30 days after the expiry of statutory period of 60
days, the Commissioner (Appeals) could not to be said
to have committed any error in not entertaining the
appeals as barred by limitation prescribed under the
relevant Section 35.
Therefore Section 29(2) of the Limitation Act, 1963 is not
attracted to the appeals preferred under Section 35 and,
consequently, Section 5 of the Limitation Act is not
applicable to such appeals in view of the fact that the
forum cannot be treated as Court.
Navinon Ltd Vs. Union of India (Bom)
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Indirect Tax Alert
March 2009
Important Sales Tax / VAT Decisions
Delivery within State for Supreme Court while deciding on the determination of
assigned territories outside nature of sale between a supplier and his purchasing
the State will attract CST dealers for their assigned territories outside the State
under a contract for the purpose of Central Sales Tax
Act, 1956 held that the delivery within the State would
not take away the transaction from the category of Inter-
State Sales
DCM Ltd. Vs. CST, Delhi (Civil Appeal No.1323 of 2009
dated 27.02.2009) (SC)
Disclaimer :
The information contained herein is of a general nature and is not
intended to address the circumstances of any particular individual
or entity. Although we endeavour to provide accurate and timely
information, there can be no guarantee that such information is
accurate as of the date it is received or that it will continue to be
accurate in the future. No one should act on such information
without appropriate professional advice after a thorough
examination of the particular situation.
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