In - Direct Tax

Tax

Summary of recent case laws relevant for

May & November, 2014 CA Final Exams

Excise

Custom

Service
Tax

Compiled & Presented By:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

S.
No.

Issues

Decision

Case Law

(A) Central Excise

1

Does the process of removal of

foreign materials from iron ore for
concentration of such ore amount to
manufacture?

The Supreme Court held that removal of foreign

materials from iron ore, i.e., mining iron ore
from mines and then subjecting to process of
crushing, grinding, screening and washing with a
view to remove foreign materials to concentrate
such ores do not result in manufacture of
different commercial commodity. No Central
excise duty is liable on iron ore concentrate.

Commissioner
v.
Steel
Authority of India Ltd. 2012
(283) E.L.T. A112 (S.C.)

Whether the addition and mixing of

polymers and additives to base
bitumen results in the manufacture
of a new marketable commodity and
as such eligible to Excise duty?
Whether the metal scrap or waste
generated during the repair of his
worn out M/c/parts of cement
manufacturing
amts.
to
manufacture?
Are the physician sample excisable
goods in view of the fact that they
are statutorily prohibited from being
sold?
Whether assembling of the testing
equipment for testing the final
product in the factory amounts to
manufacture?
Does a product with a short shelf-life
satisfy the test of Marketability?

The Supreme Court thus concluded that the

process of mixing polymers and additives with
bitumen did not amount to manufacture.

CCE v. Osnar Chemical Pvt.

Ltd. 2012 (276) E.L.T. 162
(S.C.)

It held that generation of metal scrap or waste

during the repair of his worn out M/c/parts of
cement manufacturing plant does NOT amts. to
manufacture

Grasim Industries Ltd V. UOI

2011 (273) ELT 10 (SC)

The court inferred that the physician sample were

excisable goods and were liable to Excise Duty.

Medley Pharmaceuticals Ltd.

V. CCE & C., Daman 2011
(263) E.L.T. 641 (SC)

Such equipment was saleable & marketable. Hence,

the apex court held that duty was payable on such
testing equipment.

Usha Rectifier Corpn. (I)

Ltd. V. CCEx, New Delhi 2011
(263) E.L.T. 655 (SC)

Supreme court ruled that a product with shelf-life of

2 to 3 days was marketable & Hence Excisable.

Whether the theoretical possibility of

product being sold is sufficient to
establish the marketability of a
product?
Whether the M/c which is not
assimilated in permanent structure
would be considered to be moveable
so as to be dutiable under the
central excise Act?
Does the process of preparation of
tarpaulin made ups after cutting &
stitching the tarpaulin fabrics &
fixing the eye lets amts. to
manufacture?
Does the process of cutting &
embossing aluminum foil for packing
the
cigarettes
amounts
to
manufacture?

The mere theoretical possibility of the product being

sold is NOT sufficient but there shud be commercial
capability of being sold to prove marketability.

Nicholas Piramal India Ltd.

V. CCEx, Mumbai 2010 (260)
E.L.T. 338 (SC)
Bata India Ltd V. CCE 2010
(252) ELT 492 (SC)

10

11

Does the activity of packing of

imported compact discs in a jewel
box along with inlay card amts. to
manufacture?

12

In
case
of
specific
classification
viz--viz
classification based on material
used/composition of goods, which
one should be adopted?

Source:
Recent case law Module of ICAI

The Apex court held that the plant in Q. were NOT

immovable property so as to be immune from the
levy of excise duty. Consequently, duty would be
levied on them.

CCE V. Solid & Correct

Engineering works & ORS
2010 (252) ELT 481 (SC)

The Apex court opined that stitching of tarpaulin

sheets & making eyelets did NOT change the basis
characteristics of the raw material & end product, so
would NOT amts. to Manufacture.

CCE
V.
Tarpaulin
International 2010 (256) ELT
481 (SC)

There were no records to suggest that cut to

shape/embossing aluminum foils used for packing
cigarettes were distinct marketable commodity.
Hence process did NOT amount to manufacture as
per Section 2(F) of CE Act, 1944.
The court held that activities carried out by the
respondent did NOT amt. to manufacturing, since
the CD had been complete & finished when
imported by the assessee.

GTC Industries Ltd. V. CCEx

2011 (266) E.L.T. 160 (Bom.)

(Already asked in CA Finals Nov.,2011 attempt)

The assessees contention was that the appropriate

classification for their product was under Chapter
sub-heading No. 6807.10 of the Act while the
Department contended that the appropriate
classification was under Chapter sub-heading No.
6803.00 of the Act. This was the subject matter of
the appeal before the Supreme Court. Therefore,
the Court opined that the goods in issue were
appropriately classifiable under Sub- heading
6807.10 of the Tariff.

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

CCE
V.
Sony
Music
Entertainment (I) (P) Ltd
2010 (249) ELT 341 (Bom.)

Commissioner
of
Central
Excise, Bhopal v. Minwool
Rock Fibres Ltd. 2012 (278)
E.L.T.581 (S.C.)

Page 1 of 9

13

In case of a specific entry viz-a-viz a

residuary entry, which one should be
preferred for classification purpose?

14

Can the soft serve served at

McDonalds India be classified as ice
cream for the purpose of levying
E/duty?
Whether the price used for selling of
a product below the cost price for
penetration of market can be
considered as transaction value?

15

16

Can the Pre-delivery inspection

(PDI) & free after sales service
charges be included in the tranx
value when they are not charged by
the assesse to the buyer?

17

In case the testing is critical to

ensure
marketability
of
manufactured
product
i.e.
the
manufacture
is
not
complete
without testing; is CENVAT credit of
the testing material allowed?

18

The assesses claimed the CENVAT

credit on the duty paid on capital
goods which were later destroyed by
fire. The Insurance co. reimbursed
the amount incl. excise duty. Is the
CENVAT credit availed by the
assesses required to be reversed?
In case of combo pack of brought
out tooth brush sold along with tooth
paste manufactured by assesses; is
tooth brush eligible as input under
the CCR, 2004?
Whether penalty can be imposed on
the director of the co. for the wrong
CENVAT credit availed by the co.?

19

20

21

Can CENVAT credit be taken on the

basis of private challans?

22

Whether (i) technical testing &

analysis service availed by the
assesse for testing of clinical
samples prior to commencement of
commercial production & (ii) services
of commission agent are eligible
input service for claiming cenvat?
Will two units of a manufacturer
surrounded by a common boundary
wall be considered as one factory for
the purpose of cenvat credit, if they
have
separate
central
excise
registration?

23

Source:
Recent case law Module of ICAI

The assessees claim that the product is required

to be classified under Chapter sub-heading 3003
of the Tariff, whereas the Revenues stand was
that the products in question are detergents
and, therefore, to be classified under chapter
sub- heading 3402.90.Thus, on the basis of the
above observation by the Court the Revenues
appeal was rejected.
The apex court held that soft serve was classified
under heading 21.05 as ice cream & not under
heading 04.04 as other dairy produce.

CCE
v.
Wockhardt
Life
Sciences Ltd. 2012 (277)
E.L.T. 299 (S.C.)

The Department disputed that as the extra

commercial consideration was involved in this case
an additional consideration should be added to the
price for the purpose of duty. Thus, the Department
invoked Best Judgment Assessment. Supreme Court
in view of the above resorting to best judgment
assessment was proper.
The high court held that clause no. 7 of circular dt.
1 st July, 2002 & circular dt. 12 Dec., 2002 were not
in conformity with the prov. of sec. 4(1) (a) read
with sec. 4(3) (d) of CE act, 1944. Further as per
sec. 4(3) (d) the PDI & free after sales service
charges could be incl. in the tranx value only when
they were charged by the assesse to the buyer.

CCEx., Mumbai v. Fiat India

Pvt.Ltd. 2012 (283) E.L.T. 161
(S.C.)

The Supreme Court held that the process of

manufacture would not be complete if a product is
not saleable as it would not be marketable.
Thus, the duty of excise would not be leviable on
it.

Flex Engineering Ltd. v.

Commissioner
of
Central
Excise,
U.P.
2012
(276)
E.L.T. 153 (S.C.)

The high court therefore answered the substantial

question of law in favor of the assesses & against
the revenue.

Tata advanced Material Ltd.

V. CCEx 2011 (271) E.L.T. 62
(Kar.)

The High court upheld the Tribunals decision that

the credit was admissible in the case of assesses.

Prime Health Care Products

V. CCE 2011 (272) E.L.T. 54
(Guj.)

The court observed that CENVAT credit had been

availed by the co. & penalty U/R 13(1) was
imposable only on the person who had availed
CENVAT credit, who was a manufacture. The
petitioner director of the co. could NOT be said to be
manufacture availing CENVAT credit.
The court held that credit be taken on the strength
of private challans as the same were NOT found to
be fake & thr was a proper certificate that duty had
been paid.
The high court held that technical testing & analysis
service availed for testing of clinical samples prior to
commencement of commercial production were
directly related to the manufacture of the final
product & hence, were input service eligible for
cenvat credit.

Ashok Kumar Fulwadhya V.

UOI 2010 (251) ELT 336
(Bom.)

The high court held that credit could be availed on

eligible inputs utilized in the generation of electricity
only to the extent the same were used to produce
electricity within the factory registered for that
purpose & credit on input utilized to produce
electricity which was used for a factory registered as
a different unit would not be allowed.

Sintex industries Ltd. V.

CCEx 2013 (287) ELT 261
(Guj.)

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

CCE V. Connaught plaza

restaurant (P) Ltd. 2012
(286) ELT 321 (SC)

Tata Motors Ltd. V. UOI 2012

(286) ELT 161 (Bom.)

CCEx V. Stelko Strips Ltd

2010 (255) ELT 397 (P&H)

CCEx V. Cadila Healthcare

Ltd. 2013 (30) STR 3 (Guj.)

Page 2 of 9

24

25

26

27

28

29

30

31

32

Whether CENVAT credit can be

denied on the ground that the
weight of the inputs recorded on
receipt in the premises of the
manufacturer of the final products
shows a shortage as compared to
the weight recorded in the relevant
invoice?
Whether time-limit under section
11A of the central excise Act, 1944
is applicable to recovery of dues
under compound levy scheme?
Whether Additional Director General,
Directorate General of Central Excise
Intelligence can be considered a
central excise officer for the purpose
of issuing SCN?

Whether
non-disclosure
of
a
statutory requirement under law
would amt. to suppression for
invoking the larger period of
limitation u/s 11A?
In a case where the assesse has
been issued a show cause notice
regarding
confiscation,
is
it
necessary that only when such SCN
is
adjudicated,
can
the
SCN
regarding recovery of dues & penalty
be issued?
Is assessee required to pay interest
in case of voluntary payment of time
barred duty?
Can appellate authorities or courts
permit the assesse to pay reduced
penalty of 25% beyond the time
prescribed u/s 11AC?
In a case where the manufacturer
clandestinely removes the goods &
stores them with a firm for further
sales, can penalty u/r 25 of the CE
Rules, 2002 be imposed on such
firm?
Can a decision pronounced in the
open court in the presence of the
advocate of the assessee, be
deemed to be the service of the
order to the assessee?

33

If Revenue accepts judgment

the Commissioner (Appeals) on
issue for one period, can it
precluded to make an appeal on
same issue for another period?

of
an
be
the

34

Can the excess duty paid by the

seller be refunded on the basis of
the debit note issued by the buyer?

35

Merely bcoz assesses has sustained

loss more than the refund claim, is it
justifiable to hold that it is not a
case of unjust enrichment even
though the assesses failed to
establish non-inclusion of duty in the
cost of Prod.?

The Tribunal held that each case had to be decided

according to merit & NO hard & fast rule can be laid
down for dealing with different kinds of shortage.
Similarly, minor variation arising due to weighment
by different M/c will also have to be ignored if such
variations are within tolerance limits.

CCE
V.
Bhuwalka
Steel
Industries Ltd 2010 (249) ELT
218 (Tri-LB)

It was held that the time-limit under section 11A of

CE Act, 1944 is NOT applicable to recovery of dues
under compound levy scheme.

Hans Steel Rolling Mill V.

CCEx, chandigarh 2011 (265)
E.L.T. 321 (SC)

The Government submitted that the Board had

already issued notification dated 26-6-2001. In
this notification, Additional Director General,
Directorate General of Central Excise Intelligence
was specified as Commissioner of Central Excise.
Hence, he was fully competent to issue the
impugned show cause notice.
The High court held that non-disclosure of the said
fact on the part of the assessee would NOT amt. to
suppression so as to call for invocation of the
extended period of limitation.
The high court held that there was no
requiring authorities to first adjudicate
issued regarding confiscation &, only
issue show cause notice for recovery
penalty.

Raghunath
International
Ltd. v. Union of India, 2012
(280) E.L.T. 321 (All.)

CCEx & C v. Accrapac (I) (P)

Ltd 2010 (257) ELT 84 (Guj.)

legal prov.
the notice
therefore,
of dues &

Jay Kumar Lohani V. CCEx

2012 (28) STR 350 (MP)

The high court held that the assesse was not

required to pay interest in case of voluntary
payment of time barred duty.
The high court held that tribunal could not permit
the assesse to pay 25% penalty beyond the time
prescribed under the first & second prov. to
erstwhile sec. 11AC [now sec. 11AC (1) ]
However, high court concurred with the view of the
tribunal & concluded that rule 25 (1) would have
no appl. in the present case.

CCE & C. V. Gujarat Narmada

Fertilizers Co.

The high court held that when a decision is

pronounced in the presence of the advocate of the
assesse, who is the authorized agent of the
assessee within the meaning of sec. 37C, the dt. Of
pronouncement of order would be deemed to be the
dt. of service of order.
The Supreme Court observed that since the
Revenue had not questioned the correctness or
otherwise of the findings on the conclusion reached
by the first appellate authority, it may not be
open for the Revenue to contend this issue
further by issuing the impugned show cause notices
on the same issue for further periods.
The substantial Q. of law raised was answered in
favor of the assessees & against revenue.
Conseqtly. Dept. refunded the excess duty paid.

Nanumal Glass Works V.

CCEx Kanpur, 2012 (284) ELT
15 (All.)

CCEx V. Castrol India Ltd.

2012 (286) ELT 194 (Bom.)

CCEx V. Balaji Trading Co.

2013 (290) ELT 200 (Del.)

Commissioner of C. Ex.,
Mumbai-III v. Tikitar
Industries, 2012 (277)
E.L.T. 149 (S.C.)

Techno Rubber Industries

Pvt. Ltd. V. CCE 2011 (272)
E.L.T. 191 (Kar.)

(Already asked in CA Finals May,2012 attempt)

Source:
Recent case law Module of ICAI

The High court held that assesses could NOT be

granted relief since it had failed to establish that the
cost of the duty was NOT included while computing
the COP.

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

CCE V. Gem Properties (P)

Ltd 2010 (257) ELT 222
(Karn.)

Page 3 of 9

36

Whether doctrine of merger is

applicable when appeal dismissed
on the grounds of limitation and not
on merits?

37

Can re-appreciation of evidence by

CESTAT be considered to be
rectification of mistake apparent on
records under section 35C (2) of the
CE Act, 1944?

38

Is the CESTAT order disposing

appeal on a totally new ground
sustainable?

39

Whether the construction of prefabricated components at one site

to be used at different
interconnected metro construction sites
in Delhi would get covered under
exemption Notification No. 1/2011C.E.(N.T.)
dated 17-2-2011
exempting the goods manufactured
at the site of construction for use in
construction work at such site ?
Can the deposit of 50% of tax
amount be made a condition for
condoning the delay in filing of an
appeal?
Whether the exempted goods on
which duty has been paid by
mistake
by
the assessee and
refund thereof has also not been
claimed would be excluded while
computing turnover for preceding
year for claiming SSI exemption?

The Court observed that if for any reason an

appeal is dismissed on the ground of limitation and
not on merits that order would not merge with the
orders passed by the first appellate authority. Apex
Court opined that the High Court was justified in
rejecting the request made by the assessee for
directing the Revenue to state the case and also
the question of law for its consideration and
decision. In view of the above discussion, Supreme
Court rejected the appeal.
The court opined that CESTAT exceeded its power
under section 35C (2) of the CE Act, 1944. In
pursuance of a rectification application, it CANNOT
re-appreciate the evidence & reconsider its legal
view taken earlier.
Note: - section 35C (2) of the Act.
The appellate Tribunal may, at any time within 6
months from the date of order, with a view to
rectify any mistake apparent from the records,
amend any order passed by it under sub-section 1 &
shall make such amendment if the mistake is
brought to its notice by the commissioner of CE or
the other party.

Raja Mechanical Co. (P)

Ltd. v. Commissioner of C.
Ex., Delhi-I, 2012 (279)
E.L.T. 481 (S.C.)

RDC Concrete (I) Pvt. Ltd.

2011 (270) E.L.T. 625 (SC)

(Already asked in CA Finals Nov.,2012 attempt)

40

41

42

Whether an assessee can claim the

benefit of SSI exemption on the
brand name of another firm if its
proprietor is also a partner in such
other firm?

43

Whether the clearance of two firms

having common brand name, goods
being manufactured in the same
factory premises, having common
mgmt & a/cs etc can be clubbed for
the purposes of SSI exemption?

Source:
Recent case law Module of ICAI

The High court explained that CESTAT should have

remanded the matter back to the Adj. Auth.
However, it could NOT have assumed to itself the
jurisdiction to decide the appeal on a ground which
had NOT been urged before the lower authorities.
The Court held that keeping in view the facts of
the present case and that the construction was
done virtually all over Delhi and construction
sites
were
interconnected,
practically
prefabrication was done on construction site only.
Therefore, it allowed the appeal in the favor of
the respondent- assessee.

GujChem Distillers V. CCE

2011 (270) E.L.T. 338 (SC)

The high court held that the condt. of depositing

50% of tax amount for condoning the delay is illegal
& that the CESTAT ought not to have mixed the
issue with the separate appl. filed for stay.
The Supreme Court opined that SSI exemption
would be allowable to the assessee, as they meet
all the conditions thereof. The amount of
clearances in the SSI exemption notification needs
to be computed after excluding the value of
exempted goods.
The Court directed the adjudicating authority to
apply the SSI exemption notification in the
assessees case without taking into consideration
the excess duty paid by the assessee under the
other exemption notification.

Mihani Network V. CCus. &

CEx 2012 (285) ELT 182 (MP)

The Supreme Court held that the appellant was

eligible to claim benefit of the SSI exemption as the
proprietor of Elex Knitting Machinery Co. was one
of the partners in Elex Engineering Works. And
hence being the co-owner of the brand name of
Elex, he could not be said to have used the brand
name of another person, in the manufacture and
clearance of the goods in his individual capacity.
The High court held that the clearance of the
common goods under the same brand name
manufactured by both had been rightly clubbed.

Commissioner v. Elex Knitting

Machinery Co. 2012 (283)
E.LT. A18 (S.C.)

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

Commissioner of Central Excise

v. Rajendra Narayan 2012
(281) E.L.T. 38 (Del.)

Bonanzo Engg. & Chemical

P. Ltd. v. CCEx. 2012 (277)
E.L.T. 145 (S.C.)

CCE V. Deora Engineering

Work 2010 (255) ELT 184
(P&H)

Page 4 of 9

44

Whether the manufacture & sale of

specified goods, not physically
bearing a brand name, from branded
sale outlet would disentitle an
assessee to avail the benefit of small
scale exemption?

45

Whether a circular necessarily needs

to be issued u/s 37B, in order to be
binding on the dept.?

46

Can the Settlement Commission

decline to grant immunity from
prosecution
after confirming the
demand and imposing the penalty?
Whether a consolidated return filed
by the assessees after obtaining
registration, but for the period prior
to obtaining registration, could be
treated as a return under clause (a)
of the first proviso to sec. 32E (1)?
Is the settlement comm. Empowered
to grant the benefit under the
proviso to sec. 11AC in cases of
settlement?

47

48

The SC held that it is not necessary for goods to be

stamped with a trade or brand name to be
considered as branded goods for the purpose of SSI
exemption.
A
scrutiny
of
the
surrounding
circumstances is not only permissible, but necessary
to decipher the some; the most important of these
factors being the specific outlets from which the
goods is sold. However such factors would carry
different hues in different scenarios. There can be
no single formula to determine if a good is branded
or not, such determination would vary from case to
case.
The high court observed that any classification
issued by the board is binding upon the central
excise officers who are duty bound to observe &
follow such circulars. Whether sec. 37B is referred
to in such circular or not, is not relevant.
The C o ur t s e t aside the order relating to nongrant of immunity for prosecution and resultantly,
the assessee was granted immunity from being
prosecuted.
The court held that, it rejected the submission of
the petitioner that filing of consolidated return
coving all the past period would serve the purpose.

CCEx Vs. Australian Foods India

Pvt. Ltd. 2013 (287) ELT 385
(SC)

The court ruled that benefit under the proviso to

sec. 11AC could NOT be granted by the settlement
comm.. in cases of settlement.

Ashwani Tobacca Co. (P) Ltd

V. UOI 2010 (251) ELT 162
(Del.)

Darshan Boardlam Ltd. V.

UOI 2013 (287) ELT 401 (Guj.)

Maruthi T ex Print & P r

ocessors P. Ltd. v. C . & C.
Ex.
Sett.Comm.,
Chennai
2012(281) E.L.T. 509 (Mad.)
Icon Industries V. UOI 2011
(273) ELT 487 (Del.)

(B) Service Tax

49

Whether the service tax liability

created under
law
can
be
shifted by a clause entered in
the contract?

50

Is the service tax & excise liability

mutually exclusive?

51

In case whr rooms have been rented

out by municipality, can it pass the
burden of S/tax to service receiver ie
tenant?
Were services provided to the
pilgrims taxable under short term
accommodation service?

Supreme Court held that service tax is indirect tax

which may be passed on. Thus, assessee can
contract to shift their liability. There is nothing
in law to prevent them from entering into
agreement regarding burden of tax arising under
contract between them.
The high court held that the excise duty is levied on
the aspect of manufacture & S/Tax is levied on the
aspect of service rendered. Hence, it would NOT
amount to payment of tax twice & the assesses
would be liable to pay S/tax on the value of
services.

Rashtriya Ispat Nigam Ltd.

v. Dewan Chand Ram Saran
2012 (26) S.T.R. 289 (S.C.)

The court held that municipality can pass the

burden of S/tax on service receiver.

Kishore K. S.
V. cherthala
Municipality 2011 (24) STR 538
(Kar.)

The Andhra Pradesh High Court held that the

petitioner was religious and charitable institution
and was running guest houses by whatever name
they were called, whether it was a shelter for
pilgrims or any other name for a considerable
time and thus was liable to get itself
registered under Short term accommodation
service and pay service tax on the same.
The High court reiterated that software is goods as
per article 366 (12) of the constitution. Further, the
court was of the view that such tranx taking place
betw. members of ISODA & its customer, the
software is NOT sold as such, but only the content
of the data stored in the software are sold which
would only amts. to service & NOT Sale.
The court held that the storage of specific quantity
of free sale sugar could NOT be treated as Providing
storage & W/H services to GOI.

Tirumala
Tirupati
Devasthanams, Tirupati
V.
Superintendent of Customs,
Central Excise, Service Tax
(2012-TIOL-97-HC-AP-ST)

Lincoln helios (I) Ltd. V.

Commissioner of S/Tax 2011
(23) S.T.R. 112 (Kar.)

(Already asked in CA Finals May,2012 attempt)

52

53

Can a software be treated as goods

& if so, whether its supply to a
customer as per an End User
License Agreement (EULA) would
be treated as sale or service?

54

Whether S/tax is chargeable on the

buffer subsidy provided by the Govt.
for storage of free sale sugar, under
the category of storage & W/H
services?

Source:
Recent case law Module of ICAI

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

Infotech Software Dealers

Association (ISODA) V. UOI
2010 (20) STR 289 (Mad.)

CCE V. Nahar
Enterprises Ltd
STR 166 (P&H)

Industrial
2010 (19)

Page 5 of 9

55

A society running renowned school

allows other schools to use a specific
name, its logo & motto and receives
a non-refundable amount & annual
fee as a consideration. Whether this
amounts to a taxable service?

56

Whether filing of declaration of

description, value etc. of input
service used in providing IT enabled
service (call Centre / BPO service)
exported outside india, after the
date of export of service will
disentitle an exporter from rebate of
service tax paid on such input
service?
Whether expenditure like travel,
hotel stay, transportation & the like
incurred by service provider in
course of providing taxable service
should be treated as consideration
for taxable service & incl. in value
for charging s/tax?
Whether the penalty is payable
even
when
service
tax
and
interest has been paid before issue
of show cause notice?

57

58

59

Will service tax paid mistakenly

arouse service tax liability?

60

In a case whr the assesse has acted

bona fide; can penalty be imposed
for the delay in payment of s/tax
arising on account of confusion
regarding tax liability & divergent
views due to conflicting court
decision?

61

Can appeal be filled to high court for

deciding the Q. related to the
taxability of S/Tax?

62

In case no statutory definition is

provided under law, can the opinion
of expert in trade who deals in those
goods be considered?

The high court held that when the petitioner

permitted other schools to use their name, logo as
also motto, it clearly tantamounted to providing
franchise service to the said schools & if the
petitioner realized the franchise or collaboration
fees from the franchise schools, the petitioner was
duty bound to pay s/tax to the dept.
The high court, therefore, allowed the rebate claims
filed by the appellants & held that the condt. of the
notification must be capable of being complied with
as if it could not be complied with, there would be
no purpose behind it.

Mayo
College
General
Council V. CCEx (Appeal) 2012
(28) STR 225 (Raj.)

The high court, therefore, held that rule 5 (1) of the

rules runs counter & is repugnant to sec. 66 & 67 of
the act & to that extent it is ultra-virus the Finance
Act, 1994.

Intercontinental Consultant
& Technocrats Pvt. Ltd. V.
UOI 2013 (29) STR 9 (Del.)

The Karnataka High Court held that the

authorities
had
no authority to initiate
proceedings for recovery of penalty under section
76 of the Act when the tax payer paid service tax
along with interest for delayed payments
promptly. If the notices were issued contrary to
this section, the person who had issued notice
should be punishable and not the person to whom
it was issued.
The
Honble
High
Court
of
Karnataka,
distinguishing the landmark judgment by Supreme
Court in the case of Mafatlal Industries v. UOI
1997 (89) E.L.T. 247 (S.C.) relating to refund of
duty/tax, held that service tax paid mistakenly
under
construction service although actually
exempt, is payment made without authority of law.
Mere payment of amount would not make it
service tax payable by the respondents. In view of
the above, it was held that refund of an amount
mistakenly paid as service tax could not
be
rejected on ground of limitation under Section 11B
of the Central Excise Act, 1944.
The HC held that even if the appellant were aware
of the levy of s/tax & were not paying the amount
on the ground of dispute with the ONGC, there could
be justification in levying the penalty in absence of
any fraud, misrepresentation, collusion or willful
mis-statement or suppression. Moreover, when the
entire issue for levying of the tax was debatable,
that also would surely provide legitimate grounds
not to impose the penalty.
The high court held that the Q. as to whether the
assesses is liable to pay S/Tax falls squarely within
the exception carved cut in section 35G of CE Act,
1944?
(Already asked in CA Finals May,2012 attempt)

Wipro Ltd. V. UOI 2013 (29)

STR 545 (Del.)

CCE & ST v. Adecco Flexione

Workforce Solutions Ltd.
2012 (26) S.T.R 3 (Kar)

CCE (A) v. KVR Construction

2012 (26) STR 195 (Kar.)

Ankleshwar Taluka ONGC

Land Loosers Travellers Co.
OP V. CCE, surat II 2013 (29)
STR 352 (Guj.)

Volvo India Ltd. V. CCEx & ST

2011 (24) S.T.R. 25 (Kar.)

(C) Custom

Source:
Recent case law Module of ICAI

The Supreme Court on referring to the case of

Collector of Customs v. Swastic Woollens (P) Ltd.
1988 (37) E.L.T. 474 (S.C.), held that when no
statutory definition was provided in respect of an
item in the Customs Act or the Central Excise Act,
the trade understanding, i.e. the understanding in
the opinion of those who deal with the goods in
question was the safest guide.

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

Commissioner of
Customs
(Import), Mumbai v. Konkan
Synthetic
Fibres
2012
(278) E.L.T. 37 (S.C.)

Page 6 of 9

63

Are the clearances of goods from

DTA to SEZ chargeable to export
duty under the SEZ Act, 2005 or the
custom Act, 1962?

64

Whether remission of duty is

permissible u/s 23 of the custom
Act, 1962 when the remission
application is filled after the expiry
of W/H period (Incl. extended
warehousing period)?
Where a classification (under a
Customs Tariff head) is recognized
by the Government in a notification
any point of time, can the same
be made applicable in a previous
classification in the absence of any
conscious modification in the Tariff?

65

66

Whether classification of imported

product changes if it undergoes a
change after importation & before
being actually used?

67

Will the description of the goods as

per the doc. Submitted along with
the shipping bill be a relevant
criterion
for
the
purpose
of
classification,
if
not
otherwise
disputed on the basis of any
technical opinion or test? Whether a
separate notice is req. to be issued
for payment of intt. which is
mandatory & automatically applies
for recovery of excess drawback?
Whether subsequent increase in
the market price of the imported
goods due to inflation would lead
to increase in customs duty
although
the
contract
price
between the parties has not
increased accordingly?

68

69

70

71

72

Can the time limit prescribed u/s 48

of the custom act, 1962 for
clearance of the goods within 30
days be read as time limit for filing
of bill of entry u/s 46 of the act?
Whether the issue of the imported
goods warehoused in the premises
of
100%
EOU
for
manufacture/production/processing
in 100% EOU would amts. to
clearance for home consumption?
Can tribunal condone the delay in
filing of an appl. consequent to
review by the committee of chief
comm. if it is satisfied that there was
sufficient cause for not presenting
the appl. within the prescribed
period?
Whether ext. period of limitation for
demand of customs duty can be
invoked in a case whr the assesse
had sought a clarification about
exemption from a wrong authority?

Source:
Recent case law Module of ICAI

The high court inferred that the clearance of goods

from DTA to SEZ is NOT liable to export duty either
under the SEZ Act, 2005 or under custom Act,
1962.
(Already asked in CA Finals May,2012 attempt)
The High court held that when the goods are NOT
cleared within the period or extended period as
given by the authorities, their continuances in the
W/H will NOT attract sec. 23 of the Act.

The Apex Court observed that the Central

Government has issued a exemption notification
dated 1-3-2002 and in the said notification it
has classified the Electronic Automatic Regulators
under Chapter sub-heading 9032.89. Since the
Revenue itself has classified the goods in dispute
under Chapter sub-heading 9032.89 from 1-32002, the said classification need to be accepted.
The court noted that it was the use of the product
that had to be considered in the instant case. If a
product undergoes some changes after importation
& before being actually used, it is immaterial,
provided it remains the same product & it is used
for the purpose specified in the classification.
The High court held that the description of the
goods as per the doc. Submitted along with the
shipping bill be a relevant criterion for the purpose
of classification & NO notice need to be issued
separately as the payment of intt. becomes
automatic, once it is held that excess drawback has
to be repaid.

It is true that the commodity involved had

volatile
fluctuations
in
its
price
in
the
international market, but having delayed the
shipment; the supplier did not increase the price
of the commodity even after the increase in its
price in the international market. There was no
allegation of the supplier and importer being in
collusion. Thus, the appeal was allowed in the
favour of the respondent- assessee.
The high court however held that the time limit
prescribed u/s 48 for clearance of the goods within
30 days cannot be read into section 46 & it cannot
be inferred that sec. 46 prescribes any time limit for
filing of BOE.
The Tribunal held that imported goods warehoused
in the premises of a 100% EOU (which is licensed as
a custom bonded W/H) & used for the purpose of
manufacturing in bond as authorized u/s 65 of the
custom Act, 1962, CANNOT be treated to have been
removed for home consumption.
The HC ruled that the tribunal was competent to
invoke sec. 129 A (5) whr an appl. u/s 129D (4) had
not made within the prescribed time & condone the
delay in making such appl. if it was satisfied that thr
was sufficient cause for not presenting the appl.
within the prescribed period.
The SC held that mere non-payment of duties could
not
be
equated
with
collusion
or
willful
misstatement or suppression of facts as then thr
would be no form of non-payment which would
amount to ordinary defaults. The apex court opined
that something more must be shown to construe the
acts of the assesse as fit for the appl. of the proviso.

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

Tirupati Udyog Ltd. V. UOI

2011 (272) E.L.T. 209 (AP)

CCE V. Decorative Laminates

(I) (P) Ltd 2010 (257) E.L.T.
61 (Kar.)

Keihin
Penalfa
Ltd.
v.
Commissioner of Customs 2012
(278) E.L.T. 578 (S.C.)

Atherton Engineering Co.

(P) Ltd V. UOI 2010 (256)
E.L.T. 358 (Cal.)

M/s CPS Textiles (P) Ltd V.

Joint Secretary 2010 (255)
E.L.T. 228 (Mad.)

Commissioner
of
Cus.,
Vishakhapatnam
v.
Aggarwal Industries Ltd.
2011 E.L.T. 641 (S.C.)

CCUs V. Shreeji Overseas

(India) Pvt. Ltd. 2013 (289)
ELT 401 (Guj.)

Paras Fab International V.

CCE 2010 (256) E.L.T. 556 (TriLB)

Thakker Shipping Pvt. Ltd.

V. comm. of custom (General)
2012 (285) ELT 321 (SC)

Uniworth Textile Ltd. V.

CCEx 2013 (288) ELT 161 (SC)

Page 7 of 9

73

Whether non filing of additional doc.

Despite several opportunities being
given to the assesse to produce the
same, could be a sufficient grand for
passing a non-speaking order?
Whether
Chartered
Accountants
certificate
alone
is
sufficient
evidence to rule out the unjust
enrichment under custom?
Can the assessees be denied the
refund claim only on the basis of
contention that he had produced the
attested copy of TR-6 challan & not
the original of the TR-6 challan?

The HC decided the petition in favor of the assesse,

& set aside the order of the adjudicating authority.

DBOI Global Service Pvt.

Ltd. V. UOI 2013 (29) STR 117
(Bom.)

The respondent could NOT be granted refund merely

on the basis of the said certificate. Thus, the High
court overruling the Tribunals decision, answered
the Q. of law in favor of revenue.
The High court held that the petitioner could NOT be
denied the refund claim & attested copy of TR-6
challan would suffice for processing the refund
application.

BPL Ltd. V. CCus.,Chennai

2010 (259) E.L.T. 526 (Mad.)

76

Whether the benefit of exemption

meant for imported goods can also
be given to the smuggled goods?

M. Ambalal & Co. V. CCus.

(Prev.), Mumbai 2010 (260)
E.L.T. 487 (SC)

77

Whether discharge of liability on

indicated value would still make
the assesse liable for confiscation
of goods if he has initially made
a mis-declaration of the value
thereof?
Is it mandatory for the revenue
officer to make available the copies
of the seized documents to the
person from whose custody such
doc. Were seized?
Under what circumstance can the
penalty be imposed in term of sec.
112(a) (ii) of the C/Act, 1962?

The Apex court held that the smuggled goods could

NOT be considered as Imported Goods for the
purpose of benefit of the exemption notification.
(Already asked in CA Finals May,2012 attempt)
The High Court was thus convinced that there
was clear mis-declaration of value by the
appellant and as per section 111(m) of the
Customs Act,
the revenue was asked to
confiscate the goods so imported.
The High court directed the revenue to make
available the copies of the document asked for by
the assessee, which was seized during the course of
the seizure action.
(Already asked in CA Finals May,2012 attempt)
The High court inferred that UNLESS it is
established that a person has, by his omission or
commission, led to a situation where duty is sought
to be evaded, there CANNOT be an imposition of
penalty in terms of section 112(a) (ii) of the custom
Act, 1962.
The high court held that for the purpose of imposing
penalty, the Adj. Auth. Under custom Act, 1962
might in an appropriate case, impose a penalty both
upon a partnership firm as well as on its partner.
(Already asked in CA Finals Nov.,2012 attempt)
The High court held that in a case of confiscation of
goods bcoz of this under valuation, tribunal could
NOT cancel the confiscation order for the want of
evidence from foreign supplier.
The Government noted that the passenger had
grossly mis- declared the goods with intention to
evade duty and smuggle the goods into India. So
the re-export of said goods cannot be allowed
under Section 80 of Customs Act.
The court opined that the appellant could NOT be
permitted to dissect the settlement comm.s order
with a view to accept what is favorable to them &
reject what is not
The High court held that the settlement comm. has
jurisdiction to deal with the Q. relating to the
recovery of drawback erroneously paid by the
revenue.
(Already asked in CA Finals Nov.,2012 attempt)
The court held that thr was no prov. in the custom
act, 1962 corresponding to sec. 179 of the IT acts,
1961 or sec. 18 of the CST, 1956 which might
enable the revenue authorities to proceeds against
director of co. who were not the defaulters.

Manish Lalit kumar Bavishi

V. Addl. DIR General, DRI 2011
(272) E.L.T. 42 (Bom.)

74

75

78

79

80

81

82

83

84

85

Can separate penalty under section

112 of the custom Act be imposed
on the partner when the same has
already
been
imposed
on
partnership firm?
Is the want of evidence from foreign
supplier enough to cancel the
confiscation
order
of
goods
undervalued?
Whether the smuggled goods can
be re-exported from the customs
area without formally getting them
release from confiscation?
In case of a settlement comm.s
order, can the assessee be permitted
to accept what is favorable to them
& reject what is not?
Does the settlement comm. have
jurisdiction to settle cases relating to
the
recovery
of
drawback
erroneously paid by the revenue?
Can a former director of a co. be
held liable for the recovery of the
customs dues of such company?

Narayan Nambiar Meloths V.

CCus 2010 (251) E.L.T. 57
(ker.)

Wringley India Pvt.Ltd. v.

Commr.of
Cus.(Imports),
Chennai 2011 (274) E.L.T.
172 (Mad.)

O. T. Enasu V. UOI 2011 (272)

E.L.T. 51 (Kar.)

Textoplast industries V. Addl.

Comm. Of custom 2011 (272)
E.L.T. 513 (Bom.)

CCus. V. Jaya Singh Vijaya

Jhaveri 2010 (251) E.L.T. 38
(Ker.)
Hemal K. Shah 2012 (275)
ELT 266 (GOI)

Sanghvi Reconditioners (P)

Ltd V. UOI 2010 (251) E.L.T. 3
(SC)
UOI
V. Cus. & C. Ex
Settlement commission 2010
(258) E.L.T. 476 (Bom.)

Anita Grover V. CCEx 2013

(288) ELT 63 (Del.)

Note: - Refer to Module of ICAI for more clarity, its only meant for quick revision.
Once counter check each case laws decision at your end too.

All d Best & Gud-luck 4 ur xam

Source:
Recent case law Module of ICAI

Compiler:

CA Siddharth Jain
Email: ursiddharthjain@gmail.com

Page 8 of 9