01 January 0001

Tax Amicus: January 2016


'Place of removal' – The debate continues

Determination of ‘place of removal’ for the purpose of inclusion of freight and insurance charges in assessable value, under Central Excise Law is one issue which keeps evolving and at the same time baffles not just the assessee but also the Department, Tribunal and Courts. Article in this issue hence attempts to trace the legislative and judicial journey of ‘place of removal’. According to the authors, the existing legal position, appears to be that there can be exceptions, depending upon the facts of the case, to the thumb rule laid down by the Supreme Court in the case of Ispat Industries that buyer’s premises cannot be a ‘place of removal’ under Section 4. As the Union Budget 2016 is just a month away, the authors say it is right time that the government extends an olive branch to the industry by appropriately amending the provisions besides clarifying the attendant issues.


Central Excise


  • Central Board of Excise & Customs has prescribed guidelines detailing the procedure to be followed for e-payment of refund or rebate.

Ratio decidendi

  • Rebate on goods supplied to SEZ – Appeals against orders relating to rebate on goods supplied from DTA to SEZ does not lie to the Tribunal – CESTAT Larger Bench
  • Personal penalty under Central Excise Rules is not imposable in the case of dummy companies where the transactions are only book entries – CESTAT Delhi
  • Refund – Unjust enrichment does not arise when scrap sold by job worker, and principal does not have direct interaction with buyer – CESTAT Mumbai
  • Valuation – Cost of additional copies of drawings given to the customers on specific request cannot form a part of the assessable value – CESTAT Mumbai
  • Valuation – CESTAT Mumbai order on 50L pack of lubricating oil when liable to be assessed based on MRP



Notification & Circular

  • Pharmaceuticals and drugs exports – DGFT has postponed implementation of track and trace system
  • CBEC instructs its officers to review all pending appeals and withdraw those covered by Supreme Court decision and accepted by the Department

Ratio decidendi

  • Order denying provisional release of seized goods is appealable before Tribunal – CESTAT Larger Bench
  • Valuation – No extra duty deposit beyond 1% to be made till finalisation of SVB Order – CESTAT Chennai
  • Customs duty on electrical energy produced in SEZ and supplied in DTA – Supreme Court dismisses Department’s petition against Gujarat High Court decision quashing Customs notifications exempting duty in excess of 16% ad valorem on such electrical energy
  • Term ‘required for purposes of ....’ not to mean that goods should actually be used for such purposes – CESTAT Ahmedabad
  • Provisional clearance before actual issue of EPCG licence is not adverse – Madras High Court


Service Tax

Ratio decidendi

  • Input services received at unregistered premises – CESTAT Mumbai allows refund of Cenvat credit in case of exports – CESTAT Delhi also holds that address of person receiving taxable service need not be registered premises
  • Planting of trees is not garden maintenance – CESTAT Chennai allows Cenvat credit
  • Penalty not imposable for failure by assessee to register new activity – CESTAT Chennai
  • Service tax is not payable on salary paid by Indian company to personnel deputed by overseas group company – Authority for Advance Rulings
  • Health care service for factory workers and Personal group insurance of employees – CESTAT Chennai allows Cenvat credit
  • Payment of commission in INR made by Indian buyer on behalf of foreign supplier could deemed to be paid in foreign exchange – CESTAT Delhi


Value Added Tax


  • Odisha VAT – Residuary rate of tax increased

Ratio decidendi

  • Meal Vouchers are not “goods” and not liable for either Octroi or Local Body Tax – Supreme Court
  • Multifunction network printers qualify as computer peripheral – Madras High Court
  • Belated claim of refund of Input Tax Credit can be condoned – Madras High Court


January, 2016/Issue-55 January, 2016/Issue-55

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