01 January 0001

Tax Amicus: April 2016


'Ease of doing business' – A look at certain key Customs rulings -

'Ease of doing business' is the buzz-word today and with India going ahead with the WTO’s Trade Facilitation Agreement, conditions for doing business in India are bound to improve. Role of Indian judiciary including the Tribunal in this regard is also worth noting. The article in this issue analyses recent orders and judgments on Customs law and procedures like requirement of registration under Customs (IGCRDMEG) Rules, refund when the assessment is deemed as challenged, requirement of EDD and seizure of bank account. According to the author, though much work has been done recently to ease doing business in India, much needs to done so as to bring more clarity in certain provisions.


Refund – No recovery through SCN without review of refund order -

The Madras High Court in a recent judgment has held that refund granted by an authority cannot be proposed to be denied by way of issuance of Show Cause Notice (SCN) in cases where the order has not been subject to review as per the applicable statutory provisions. According to the author, the decision sets out the correct position of law. The judgment further gives a significant finding that when an authority exercises a power under a section, it must be presumed that it has been done in accordance with law and therefore, another authority in a parallel proceeding cannot act upon it on the premise that it is erroneous, unless a superior authority holds so.


Central Excise


  • Classification of Micronutrients, Multi-micronutrients, Plant Growth Regulators and Fertilizers – CBEC clarifies

Ratio decidendi

  • Valuation – Includibility of value of containers for supply of gases – Supreme Court 3 Judge Bench refers matter to Larger Bench on issue of interplay between Excise Sections 3 and 4
  • Valuation – Cost of process carried out at job-worker’s premises after clearance when not includible – Supreme Court
  • Cenvat credit on inputs – Word ‘includes’ in statutory definition generally used to enlarge meaning of preceding words – Supreme Court
  • Cenvat credit lying in balance does not lapse on conversion of DTA unit to EOU unit – CESTAT Mumbai
  • Exemption admissible on goods procured duty free for packing of export goods but such goods used for packing not exported – CESTAT Delhi
  • Chyawanprash classifiable as ayurvedic medicament and not as health supplement – CESTAT Kolkata




  • Demand – Proceedings to conclude for co-noticee where duty and interest paid by notice
  • 'Integrated Declaration' under the Indian Customs Single Window project – Some salient features
  • Wireless Microphone Sets are classifiable under Tariff Item 8518 10 00

Ratio decidendi

  • Refund cannot be rejected for not challenging assessment when error on account of EDI system – CESTAT Mumbai
  • Valuation – RSP cannot be redetermined based on contemporaneous RSP of imported goods – CESTAT Chennai
  • Project imports – Conditions notified after import cannot be pressed for denying benefits – CESTAT Mumbai
  • Exemption – Production of essentiality certificates merely a procedural infirmity – CESTAT Mumbai
  • Penalty - Simultaneous penalty on partner and partnership firm, under Customs Section 112(a) can be imposed – Larger Bench of Bombay High Court


Service Tax


  • Point of taxation when there is change in liability or extent of liability of person required to pay tax as service recipient, revised

Ratio decidendi

  • Procurement of services on behalf of group companies under cost sharing arrangement not covered under Business Support Service – CESTAT Mumbai
  • TDS borne by service recipient when tax paid under RCM, not liable to service tax – CESTAT Mumbai
  • Construction service under joint development agreement, prior to sale is service to self – CESTAT Delhi
  • Unjust enrichment - Adjustment by debit/credit notes can be sufficient proof – CESTAT Mumbai
  • Financial services availed by HO registered as ISD – Branch office can avail Cenvat credit – CESTAT Bangalore


Value Added Tax (VAT)


  • Bihar VAT and Chhatisgarh VAT – Residuary rate of tax increased to 14.5%
  • Tamil Nadu VAT – Restriction for availing Input Tax Credit - New sub-section inserted under Section 19 with retrospective effect

Ratio decidendi

  • Power to extend period for passing assessment order to be exercised within limitation period – Supreme Court
  • TFT/LCD/LED Monitors are classifiable as ‘Monitors’ under Delhi VAT Act


April, 2016/Issue-58 April, 2016/Issue-58

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