TIOL-DDT 2776
01 02 2016
Monday

THE assessee is a Bank. The dispute is about reversal of CENVAT Credit on input services used for providing dutiable and exempted services. At the material period, there was a rule which allowed full credit on certain input services (rule 6(5)), though they are used for exempted services and another rule which stipulated that the assessee is entitled to utilize credit only to the extent of 20% of their output tax liability. It is the case of the revenue that the assessee had utilized credit in excess of 20% limit and also irregularly classified certain services to take the benefit of full credit.

When the matter reached Tribunal, vide its order reported in 2014-TIOL-1945-CESTAT-BANG, CESTAT held that as per the details furnished by the appellant and certified by the Chartered Accountant, the appellant had not availed CENVAT Credit in excess of 20% and also the entire demand is barred by limitation. On the second issue, the Tribunal, though thought of remanding the case, made a suggestion to the counsel for the assessee that, if the appellant pays the amount due for the normal period, the matter can be closed even though in Tribunal's opinion appellant did have a case in their favour. Accordingly, the assessee came forward to pay RsRs.3,71,501/- and interest of Rs.4,025/ which was accepted by the Tribunal. While disposing the case, the Tribunal observed:

We also agree that the sentiment expressed in the letter even though they do not agree with the contention of the Department, in order to cooperate with the Department and buy peace and to bring an end to the litigation which involves very small amount, the appellant has chosen to pay the same.

Aggrieved by the above, revenue filed appeal before the High Court and the High Court remanded the matter to the original authority with the observation that “the Tribunal proceeded to pass the order based on sentiments which is uncalled for, particularly, while adjudicating the revenue matters”.

It will be interesting to see if the revenue can finally get more than the amount confirmed by the CESTAT or even lose that.

Please see Breaking News

Service Tax - EBIZ MD gets bail

ON Friday, DDT carried the case of the arrest of EBIZ MD. The bail application of the MD as reported came up for hearing on Friday. The MD is said to be a citizen of Canada holding a Canadian passport but is a resident of India.

The case of the prosecution is that a specific intelligence was received by the DGCEI officers that M/s e-Biz.com Pvt Ltd were selling their e-educational packages to their customers to be accessed online by using login and password, however, in order to enjoy exemption of90% available to tour operators, they rechristened their e-educational package as ‘eBiz Holiday Accommodation Packages'. Both the packages i.e eBiz educational package or eBiz Holiday Accommodation Packages were available at a fixed price of Rs 10,880/- (inclusive of all taxes), however, they were not at all in tour operating business. The investigation revealed that the company had shown more than40% of its business from holiday packages, on which they were taking abatement of 90% under the category of ‘Tour Operator', whereas, they were not providing any service covered under ‘touroperator'. As per the case of the prosecution the service tax collected by the company but not paid/deposited is more than Rs 17 crores.The applicant is stated to be the MD of the company.

The Additional Sessions Judge court observed,

It is an admitted fact that at this stage, the applicant is in custody in this case since 20 01.2016 and his statement u/s 14 of the Central Excise Act, 1944 dated 20.01.2016 has already been recorded The above said company has without prejudice to the rights and contentions has also voluntarily deposited Rs. 17 crores towards the Service Tax (copy of receipts have been filed on record in that regard) i.e has deposited the entire alleged evaded service tax amount of Rs. 17 crores. The issue whether the said company could have claimed the said exemption under the Notification dated 20.06.2012 is under dispute between the parties, however still the said company to show its bona fides has deposited the said alleged evaded amount of Rs 17 crores with the Service Tax department.

The applicant at this stage does not seem to be required for any further investigation and is stated to be in custody in this case since 20.01.2016.  

In view of the totality of the facts and circumstances of the case, period of custody, as the applicant does not seem to be required for further inquiry / investigation and the said company has voluntarily deposited the alleged evaded amount of Rs. 17 crores with the Service Tax department, therefore, no fruitful purpose would be served by keeping the applicant in further custody.

The applicant accused Pawan Malhan is thus admitted to bail on furnishing a personal bond in the sum of Rs 1 lakh with one surety of the like amount subject to the following conditions:

(1) That the applicant / accused shall join the inquiry investigation as and when required or directed by the IO,

(2) That the applicant / accused shall as stated by the ld counsel for the applicant deposit his passport with the trial court at the rime of furnishing bail bonds and

(3) That the applicant/ accused shall not leave India without the prior permission of the trial court.

It is heard that DGCEI is now investigating Amazon.com in a 200 crore evasion case.

Reduction in Government Litigation - Withdrawal of Cases

RECENTLY the Board had increased the monetary limits for the Department filing appeal in the High Court to Rs. 15 lakhs and the CESTAT to Rs. 10 lakhs. The Board wanted the Chief Commissioners to withdraw cases below the above limits.

The CBEC finds that the reports sent from the field and the data available in the Board do not match as to the number of appeals to be withdrawn.

So the Board wants the Chief Commissioners to re-examine the cases and submit fresh reports to the Board.

As per the Board's data,there are 7355 cases pending in CESTAT in which the amount involved is less than Rs. 10 lakhs. There are 3537 cases pending in High Courts where the amount involved is less than Rs. 15 lakhs. The fact is that no Commissionerate has any reliable data on the number of cases pending in various appellate forums.

CBEC Member's D.O.F No. 390/Misc/163/2010-JC., Dated: January 28, 2016

FTP - IEC Code - Ease of Doing Business

To get an Importer-Exporter Code (IEC)following are the requisite details/documents (scanned copies) to be submitted/ uploaded along with the application for IEC:

(i) Details of the entity seeking the IEC:

(1) PAN of the business entity in whose name Import/Export would be done (Applicant individual in case of Proprietorship firms).

(2) Address Proof of the applicant entity.

(3) LLPIN /CIN/ Registration Certification Number (whichever is applicable).

(4) Bank account details of the entity. Cancelled cheque bearing entity's pre- printed name or Bank certificate in prescribed format ANF-2A (I).

(ii) Details of the Proprietor/ Partners/ Directors/ Secretary or Chief Executive of the Society/ Managing Trustee of the entity:

(1) PAN (for all categories)

(2) DIN/DPIN (in case of Company /LLP firm)

(iii) Details of the signatory applicant:

(1) Identity proof

(2) PAN

(3) Digital photograph

The Government has amended the Foreign Trade Policy to stipulate that only the following are required to be uploaded along with the application for IEC with immediate effect:

(1) Digital photograph of the signatory applicant;

(2) Copy of the PAN card of the business entity in whose name Import/Export would be done (Applicant individual in case of Proprietorship firms);

(3) Cancelled cheque bearing entity's pre-printed name or Bank certificate in prescribed format ANF-2A(I)

And from 1.4.2016 only online application for IEC /modification in IEC can be made by applicants through digital signature.

DGFT Notification No. 34/2015-2020 , Dated: January 29, 2016

Excise Duty on Petrol and Diesel hiked

GOVERNMENT  has again hiked the excise duty on petrol and diesel with effect from 31st January 2016

Notification No. 4/2016-CE., Dated: January 30, 2016

Anti Dumping - Government amends a Non Existing entry in Notification

GOVERNMENT had imposed anti dumping duty on Rubber Chemical PX-13 with effect from 5.5.2008, by Notification No. 133/2008, dated 12.12.2008. Sl. No. 4 of the table to the Notification was:

By Notification No. 93/2011-Cus, dated 20.9.2011, the above entry No. 4 was omitted.

Now, the Government has amended the amount Rs. 10.35 to Rs. 5.90 in the omitted Sl. No 4 above.

So, perhaps, no one will complain!

Can they amend an entry they deleted in 2011?

The Notification states that it would be effective from 5.5.2008 to 19.9.2011.

Does this amendment have something to do with the decision reported as 2014-TIOL-1130-HC-DEL-AD?

Maybe the Board can seriously consider amending the Statutes retrospectively without going to Parliament.

Notification No. 4/2016- Customs (ADD)., Dated: January 29 2016

Slight Changes in Tariff Value

GOVERNMENT has decreased the Tariff value of brass scrap and poppy seeds, increased that of gold and reduced silver's. Oils also see minor changes in tariff values.

Notification No. 16/2016-Customs (NT), Dated: January 29, 2016

Until Tomorrow with more DDT

Have a nice day.

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