TIOL-DDT 2718 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2718</font><br> 04 11 2015<br> Wednesday</strong></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Recent Supreme Court Judgements </font></em></strong></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F8A061" span="span"><strong>CENTRAL</strong> Excise - SSI Exemption - Exemption for own goods and duty payment with CENVAT Credit for branded goods - Permissible </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Supreme Court was whether availing the benefit of MODVAT /CENVAT credit in respect of branded goods of third parties manufactured by the assessees on job work basis, disentitles them from availing the benefit of the SSI Notifications? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held that clearances bearing the brand name or trade name of third parties are concerned, they are kept outside the scheme inasmuch as: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) they are not to be included for the purposes of determining the aggregate value of the clearances for home consumption; and </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) such products bearing brand names or trade names of third parties, even if manufactured by the SSI Unit, are not eligible for any exemption and excise duty thereupon has to be paid. </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once we understand the scheme of the Notifications in this perspective, which according to us is the only manner in which it has to be understood, it becomes apparent that so far as manufacture of branded goods of third party on job work basis by the SSI Unit is concerned, they are to be dealt with differently in the sense that they do not come within the ambit of exemption on which normally excise duty, as per the provisions of the Act, is payable. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a sequitur, it also follows that once excise duty is paid by the manufacturer on such branded goods manufactured, the brand name whereof belongs to another person, on job work basis, the SSI Unit would be entitled to CENVAT/ MODVAT credit on the inputs which were used for manufacture of such goods as on those inputs also excise duty was paid. To put it otherwise, these branded goods manufactured by the SSI Units meant for third parties are regulated by the normal provisions of excise law and will have no bearing or relevance insofar as availing the benefit of the SSI exemption notifications in respect of its own products manufactured by the SSI Units is concerned . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25121" target="_blank">Breaking News</a></strong> and <em>Commissioner of Central Excise, Chennai Vs Nebulae Health Care Ltd </em>- <em><strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4MDgx" target="_blank">2015-TIOL-261-SC-CX</a></strong></em></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F8A061" span="span">Central Excise - EOU - Concessional rate to goods cleared to DTA, when manufactured from indigenous raw material - Imported wax used in manufacture of cotton yarn - not eligible for exemption </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 8/97-CE dated 1-3-1997, there is a concessional rate of duty for clearances of goods from EOUs to DTA, if the goods are manufactured by the EOU using indigenous raw material only. In this case, imported wax was used in the manufacture of cotton yarn. The Commissioner found that Wax disc acted as a lubricant and facilitated processing and use in the manufacturing process and remained a temporary coat and allowed the exemption. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held that a particular item, though required for a manufacturing process or participates in the said process would be treated as '<em>consumable</em>', if it does not form part of end product and instead it gets substantially or totally consumed during the manufacturing process. In contrast, if any materials or goods are required for the manufacturing process, such materials or goods would be treated as the <em>'raw material'</em>, whether they have actually been previously manufactured or are processed or are still in a raw or natural state. The wax coating is found to be essential for lubrication of the yarn and was allowed to remain on the yarn in order to facilitate its winding on cones and its use in knitting hosiery. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court ruled against the assessee. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25123" target="_blank">Breaking News</a></strong> and <em>Meridian Industries Ltd Vs Commissioner of Central Excise - </em><strong><em> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4MDgy" target="_blank">2015-TIOL-262-SC-CX</a></em></strong></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F8A061" span="span">Customs - Conversion of free shipping bills into drawback shipping bills - Conversion permissible only when claim for duty drawback was beyond the control of the exporter - Drawback on AIR can be considered without converting the Shipping Bill </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner (Customs) after hearing the appellant rejected the request for conversion. The CESTAT vide its final order dated 23.12.2009 set aside the order of the Commissioner(Customs) holding that the appellant was entitled to get the bills converted from free shipping bills to duty drawback bills in terms of Rule 12(1)(a) of the Rules, ingredients whereof are satisfied by the appellant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department challenged the aforesaid order in the High Court in which the Department has succeeded. Exporter is before the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held that conversion is permissible only when the exporter is able to satisfy the Commissioner that "for reasons beyond his control" drawback was not claimed. In the instant case, a finding of fact is arrived at by the Commissioner (Customs), which has been accepted by the High Court also, that no case was made out by the appellant to suggest that claim for duty drawback was beyond the control of the appellant. It is rightly pointed out that merely because the appellant was not aware of the correct legal position would not afford any such ground that it was beyond his control. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However the Supreme Court held that drawback on All Industry Rate can be granted even without converting the shipping bill. So, the matter is remanded to the Commissioner to consider that issue afresh. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=25122" target="_blank">Breaking News</a></strong> and <em>Cargill India Pvt Ltd Vs Commissioner of Customs and Central Excise, Visakhapatnam-II - </em> <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4MDgz" target="_blank"><em>2015-TIOL-263-SC-CUS</em></a></strong></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F8A061" span="span">Central Excise - Exemption Notification No. 38/2003-CE dated 30.04.2003 - Subject to process subsequent to purchase </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A bare reading of the Notification makes it clear that the benefit thereof is given to those assessees when, at their hands, article of apparel or clothing accessories is subjected to any one or more of the processes, which are mentioned. However, any of such process as mentioned is to be carried out by the assessee </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">"<em>subsequent to purchase</em>" </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of the article of apparel or clothing accessories in question. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The only question is as to whether such process was undertaken by these assessees after the purchase of material. The submission of the Department in this behalf is that since it is the assessees who had assigned the work, that is fabrication of the apparel etc. to the job workers with the supply of material as well, and the job workers after undertaking the job had supplied the said material back to the assessees, this does not amount to purchase. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Supreme Court judgement in <em> Ujagar Prints, etc. etc. vs. Union of India & Ors. - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-03-SC-CX-CB.htm" target="_blank"><strong>2002-TIOL-03-SC-CX-CB</strong></a></em>, for the purpose of arriving at the value of the jobwork at the hands of job workers, factory gate is treated as "<em>deemed</em>" factory gate as if the processed fabric was sold by the assessee. It cannot be disputed that the fact situation in these cases is identical where the job workers had paid the excise duty at the time of supply of these processed fabric to the respondent assessees. Once that could be treated as sale, the necessary corollary is that so far as the assessees are concerned, they had purchased processed fabric from the job workers and, therefore, would satisfy the condition of "subsequent purchase" contained in Notification No. 38/2003. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal was dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <em>Commissioner of Central Excise and Service Tax Vs Aditya Birla Nuvo Ltd - </em><strong><em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4MDgw" target="_blank">2015-TIOL-260-SC-CX</a></em></strong><em><strong>. </strong></em></font></p> <p align="justify"><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#F8A061" span="span">Central Excise: Manufacture - No manufacturing process involved in by-products: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue involved in these appeals is regarding the confirmation of duty on the aluminium dross and aluminium ash that arises during the manufacture of die-casting of aluminium parts. The appellants herein supplied aluminium ingots to job worker and the job worker manufactured the parts, by melting this aluminium and die-casting the same. This factual position is undisputed. During the course of such die-casting of items/parts of aluminium, ash and dross arises. It is the contention of the Revenue that such aluminium ash and dross are liable for payment of excise duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For a future period, the CESTAT has held that during the manufacture of die-casting of aluminium parts, dross and ash emerge as by-products and, therefore, insofar as these by-products are concerned, no manufacturing process is involved and on that basis, it has held that no excise duty shall be payable thereupon. And this decision has been accepted by the Revenue.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal was allowed in favour of the assessee.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <em>Bajaj Auto Ltd Vs Commissioner of Central Excise and Customs - </em> <em><strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA4MDg0" target="_blank">2015-TIOL-264-SC-CX</a></strong></em> </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">CBEC - Please enable assessees to view NSDL challan report </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> DDT had carried a request from a Netizen to provide a facility to view excise and service tax challans (just like Form 26 AS in case of Income Tax). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are happy to report that DG, Systems has already taken up the matter and a new feature to view list of challan numbers of the assessee for a given period is being proposed in the EASIEST website. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We thank the DG, Systems for this ‘ease of doing business' and hope that this will become a reality soon. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">CBDT cautions about phishing emails </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has requested taxpayers not to respond to any email or any type of communication sent to them requesting them to furnish their personal particulars such as bank account details, passwords, one-time password etc purported to be from the Income Tax department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax department does not seek any such information through email or any other mode of communication from the taxpayers. the advisory said. <br> <br> If you have received any such fraud mails, kindly do not respond and register a complaint by forwarding the actual phishing email as per procedure and details given in <a href="http://www.incometaxindia.gov.in/pages/report-phishing.Aspx" target="_blank"><strong>http://www.Incometaxindia.Gov.In/pages/report-phishing.Aspx</strong> </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">The Advisory: If you receive an e-mail from someone claiming to be the authorized by Income Tax Department or directing you to an Income Tax website: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Do not reply. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Do not open any attachments. Attachments may contain malicious code that will infect your computer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website then do not enter confidential information like bank account, credit card details. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Do not cut and paste the link from the message into your browsers, phishers can make link look like real, but it actually send you to different websites. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Use anti-virus software, anti spyware, and a firewall and keep them updated. Some phishing e-mails contain software that can harm your computer or track your activities on the internet without your knowledge. Anti-virus & Anti-spyware software and firewall can protect you from inadvertently accepting such unwanted files. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Reporting: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• If you receive an e-mail or find a website you think is pretending to be of Income Tax Department, forward the e-mail or website URL to <a href="mailto:phishing@incometax.gov.in">phishing@incometax.gov.in </a>. A copy may also be forwarded to <a href="mailto:incident@cert-in.org.in">incident@cert-in.org.in </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• You may forward the message as received or provide the Internet header of the e-mail. The Internet header has additional information to help us locate the sender. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• After you forward the e-mail or header information, delete the message. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• If you receive a phishing mail not pertaining to the Income Tax Department, forward the same to <strong> <a href="mailto:incident@cert-in.org.in" target="_blank">incident@cert-in.org.in</a></strong><a href="mailto:incident@cert-in.org.in"> </a>??? </font></p> </blockquote> <p align="center"><font size="3"><strong><em><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif">Customs Brokers cautions US Customs on ACE </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ACS </strong>- 'Automated Commercial System' is used by CBP (US Customs and Border Protection) to track, control, and process all goods imported into the United States.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A key component is the <strong>Automated Broker Interface </strong>(ABI), which allows qualified participants to electronically file required import data with Customs. CBP is currently working to transition cargo processing to the <strong>Automated Commercial Environment</strong> (ACE). ACE is being developed as the primary, modernized system through which the U.S. government will track, control and process all imported and exported goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The National Customs Brokers and Forwarders Association of America - NCBFAA, has urged CBP to exercise caution as it approaches February 28, 2016, when it plans to replace ACS with ACE. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The rollout of new technology is always fraught with uncertainty but when international commerce is concerned extra steps must be taken to minimize that uncertainty. The NCBFAA pointed to CBP's recently released functionality allowing air carriers to file their import manifests with CBP in ACE. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“It did not work properly and created havoc with air shipments, resulting in an inability to move shipments, lost business for importers, and significant additional costs for everyone in the supply chain,” the NCBFAA said. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was reminded of the catastrophe to trade occasioned by Australia's launch of its own new system in 2005 that was driven by a similar approach. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our GSTN should consider this while they go out for their ambitious plan to link GST components. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">China Customs Seize Live Ants </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE </strong>Chinese Customs has recently seized over 1200 live ants being smuggled into the country. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_2718_ants.jpg" alt="" width="488" height="276" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ants were harvester ants, which are among the largest ants in the world and are usually kept as pets. Each ant was shipped in its own 10-cm-long test tube filled with honeydew melon. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These ants reproduce quickly, with ant queens laying as many as 2,000 eggs per day. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></p> <p><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in </strong></a></font></p> </body> </html>