Indirect Tax Newsletter April 1, 2013

Author:Mr Amit Kapur
Profession:JSA Advocates & Solicitors

Customs Notification No. 17/2013-Cus. dated March 26, 2013 Amends Notification No. 69/2011-Cus. dated July 29, 2011 to reduce basic customs duty on import of specified goods from Japan. Notification No. 18/2013-Cus. dated March 26, 2013 Exemption to import of pulses from payment of custom duties extended upto April 1, 2014. CENTRAL EXCISE, SERVICE TAX, VAT & GST Central Excise Ambuja Cements Ltd. Vs. CCE [2013-TIOL- 466-CESTAT-MUM] The Tribunal observed that captive power plants and manufacturing units are treatable as integrated units. Therefore, assessee is prima-facie entitled to take Cenvat credit of duty paid on inputs/ capital goods and input services received in captive power plant for manufacture of electricity which is further used in the manufacture of cement which is cleared on payment of duty. Accordingly, pre-deposit of duty, interest and penalty is waived. LSR Speciality Oils Pvt. Ltd. Vs. CCE [2013- TIOL-491-CESTAT-MUM] The Tribunal held that as per explanation to Rule 2(k) of the Cenvat Credit Rules, 2004 ("the Credit Rules") storage tanks have been specified as capital goods and, therefore, inputs such as M.S. angle and H.R. Sheet which are used in manufacture of storage tank are also eligible for Cenvat credit. Cenvat credit Oil & Natural Gas Corporation Ltd. Vs. CCE [2013-VIL-26-BOM] The High Court of Bombay held that expression "directly or indirectly" employed in definition of 'input service' with regard to use of input service in or in relation to manufacture of final products has a very wide import. Accordingly, Cenvat credit of input service used by ONGC Mumbai Offshore in manufacture of crude oil which is exempted goods would be available as crude oil is subjected to further process of manufacture at Uran plant of ONGC for production of dutiable final products. Production of these dutiable products is possible only on continuous supply of crude oil. However, as ONGC manufactures both dutiable and exempted goods, it would be required to comply with Rule 6 of the Credit Rules and would be entitled to take Cenvat credit only on that quantity of input service which is used in manufacture of dutiable products. CCE Vs. Paras Motors Mfg. Co. [2013-TIOL- 525-CESTAT-AHM] Relying on judgment of High Court of Ahmadabad in CCE Vs. Cadila Healthcare Ltd. [2013-TIOL-12-HC-AHM-ST] wherein it has been ruled that service of various agents cannot be stated to be a service used directly or indirectly in or in relation to manufacture of...

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