01 January 0001

Tax Amicus: June 2016


GST – A turning point for India

India is now poised to launch the next generation reform on the indirect tax front and this momentous change is being heralded as GST. As the country gets closer to implementation of this new levy, the article in this issue of Amicus takes a look at the plus points of this method of levy and collection of tax on goods and services. Discussing features like national common market, full tax neutrality, significant reduction in transaction time and compliance cost thereby enhancing international competitiveness of Indian goods and services, the author is of the view that introduction of GST can truly be the turning point for India, its people and its future.


Central Excise

Notification & Circular

  • First Stage Dealer & Importers – Double registration not required
  • Excise duty on readymade garments – CBEC clarifies when retail outlet not be liable to pay excise duty

Ratio decidendi

  • No interest when Cenvat credit wrongly availed but not utilized – CESTAT, Chennai
  • Cenvat credit cannot be reduced on account of damages received from supplier of capital goods – CESTAT Kolkata
  • No provision to deny de-registration when duty demand pending – CESTAT Mumbai
  • Refund - Absence of TR-6 Challan evidencing payment of duty is not fatal – CESTAT Mumbai
  • Demand - Limitation - Non disclosure when not mala fide – CESTAT Delhi
  • Provisional assessment - Unjust enrichment not to be examined in case of adjustment of excess paid duty with duty short paid – CESTAT Delhi
  • Valuation - Joint Plant Committee (JPC) charges - Department cannot calculate a figure to add to the assessable value on their own – CESTAT Kolkata
  • Disposable syringe and needles are not parts - Exemption under Notification No. 10/2003-CE available – CESTAT Delhi
  • Dry concrete mixture is not classifiable as ready mix concrete – CESTAT Delhi




  • Malaysian imports – Rate of duty on specified imports from Malaysia further reduced
  • Drawback on gold and silver jewellery/articles increased
  • Milk and milk products from China – Import prohibition extended

Ratio decidendi

  • SFIS - Transferability of goods - Notification No. 91/2009-Cus. restricting transfer/sale of goods imported using the SFIS is in violation of FTP – Delhi High Court
  • Bank account to be de-freezed on receipt of favourable order from CESTAT – Delhi High Court
  • Date of release relevant and not date of import for purpose of reckoning standards – Kerala High Court
  • Refund of excess duty paid when assessment not challenged – CESTAT Chennai
  • Self-navigating ocean-going vessel having crane fitted to it not classifiable a floating crane – CESTAT Mumbai
  • Refund claim in case of short shipment – Limitation under Section 27 applicable – CESTAT Mumbai


Service Tax


  • Krishi Kalyan Cess not payable on invoices issued and services completed on or before 31-5-2016
  • Transportation of goods by a vessel from outside India – Exemption in specified cases

Ratio decidendi

  • Departmental officers not authorised to conduct audit – Delhi High Court
  • Branch office not liable under RCM when head office makes payment to third party for services used – CESTAT Mumbai
  • Salary paid to director not exigible to Service tax – CESTAT Mumbai
  • Adjustment of excess tax paid in subsequent months instead of succeeding month, not improper – CESTAT Chennai
  • Incidental receipt of incentives or volume discount not exigible to Service tax – Authority for Advance Rulings


Value Added Tax (VAT)


  • Jammu and Kashmir VAT – Rate increase kept in abeyance
  • Haryana Amnesty Scheme, 2016 for dealers affected during reservation agitation, notified

Ratio decidendi

  • Printed banners and hoardings not covered under Entry 71 of Third Schedule to Karnataka VAT – Karnataka High Court
  • Customs department auctioning confiscated goods is ‘dealer’ and liable to tax – Patna High Court


May, 2016/Issue-59 June, 2016/Issue-60

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