Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Dept. Can’t Classify Product as Zarda Scented Tobacco After Repeatedly Approving It As Chewing Tobacco: CESTAT *  Mere Uploading Of GST Order On Portal Is Not “Valid” Service: Tripura HC *  CGST Can Proceed Even If SGST Closed Similar Case Earlier: Delhi HC *  SC upholds 28% GST on online gaming with retrospective effect. *  West Bengal Govt cuts E-way Bill Threshold limit to Rs. 50,000 for intra-state goods movement. *  Criminal Prosecution Under Central Excise Act Can’t Continue After CESTAT Sets Aside Duty Demand on Merits: Punjab & Haryana High Court. *  Madras High Court Quashes GST Assessment Orders for Denial of Personal Hearing; Remands Matter Subject to 10% Deposit *  Ex Parte GST Order: Madras High Court Directs Immediate Removal of Bank/ITC Attachment Upon 25% Deposit *  J.K. Cement Receives GST Demand Order of Rs 8,02,113/- from Ahmedabad Tax Authority *  Delhi Police EOW Busts Alleged Rs. 128 Crore GST Fake Invoice Network. *  REPLY TO SCN CAN’T BE TREATED AS “EMPTY FORMALITY”: ORISSA HIGH COURT QUASHES GST DEMAND OF RS. 57.30 LAKH *  Challenge to CGST Provisions restricting ITC to Bonafide Purchasers : Allahabad HC issues notice *  CBIC Notifies Revised Customs Tariff Values for Edible Oils, Gold, Silver, Brass Scrap and Areca Nuts *  Delhi HC Orders Removal of GST Attachment After Statutory 1 Year Period Expired *  GSTAT Extends Relaxed Appeal Filing Guidelines till December 31, 2026 *  AO fails to Provide Import - Export Data from DGFT to Taxpayer for Reconciliation *  Gold, Silver Imports To Get Costlier As Govt Raises Customs Duty To 10%  *  GSTAT Enables Pre-Payment Access to Document Upload and Checklist for GST Appeal Filing *  GST Portal Restrictions Can’t Override Statute: Gujarat HC Allows Cross-State Transfer Of CGST ITC After Amalgamation *  Centre Revises HS Codes for Large Diameter Steel Pipes Used in Oil & Gas Pipelines *  Customs Duty Liability Arises On Warehouse Clearance Date: Supreme Court *  Government lifts export ban on de-oiled rice bran *  CESTAT Grants 12% Interest on Pre-Deposit for Investigation from Date of Deposit till Refund and Denies Interest on Interest. *  Government Overhauls GST Classification Framework for Non-Alcoholic Beverages; Fruit Juice Drinks, Milk-Based Beverages and Caffeinated Drinks to Attract Revised 5% and 40% GST Rates from May 1, 2026 *  India’s gross GST collections hit a record Rs 2.42 lakh crore in April, up 8.7% *  Customs clearance stalled, revenue hit over MRP dispute *  Shipping Corporation explores Middle East routes as Hormuz tensions disrupt cargo movement *  India, Kenya signs MoU for exchange of pre-arrival customs information *  No demand of Taxes under Reverse Charge if Tax Already Discharged by Service Provider under forward charge *  The India-New Zealand Free Trade Agreement, signed "once-in-a-generation" deal that eliminates tariffs on 100% of Indian exports to New Zealand
Subject News *  Consignment Sales Can’t Be Reclassified as Inter-State Sales Based on Pre-Agreement Evidence: CESTAT *  Exporter Can’t Be Denied Advance Authorization Benefit Due To ICEGATE Technical Glitch: Delhi High Court *  No GST Demand For Mere Wrong Set-Off Of IGST Credit Under CGST And SGST Heads: Kerala HC. *  Cenvat Credit Can’t Be Denied on Input Services Having Nexus With Manufacturing Activities: CESTAT *  Pending Proceedings Can’t Survive Without Saving Clause: Calcutta High Court Quashes GST Demand of Rs. 6.28 Crore After Omission of Rule 96(10) *  Madras HC Quashes GST Demands on TASMAC (Tamil Nadu State Marketing Corporation) Bar Licence Fee *  GST Proceedings Cannot Survive Omitted Rule Without Saving Clause: Calcutta HC *  Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT *  Businesses Should Not Be Kept Outside GST Regime Without Due Process: Gauhati High Court *  Punjab & Haryana HC Directs Reconsideration of Contractors’ Claim for Additional GST Payment After Tax Rate Hike From 12% to 18% *  S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT *  Bombay High Court Frames Key Questions on Mandatory Distribution of ITC U/s 20 CGST Act *  Filing of Annexure-B for Refund Applications involving Accumulated ITC using the offline utility in GST portal: GSTN *  No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT  *  Calcutta High Court Upholds GST Classification of Polypropylene Leno Bags as Plastic Products *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  GSTAT Issues Major Bench Allocation Framework; All Appeals to First Go Before Division Bench *  ITC Blocking Without Reasoned Order Violates Rule 86A; Punjab & Haryana HC Directs Release of Credit *  Allahabad HC Refuses Bail to CGST Superintendent In Rs. 70 Lakh Bribery Case *  S.130 Can’t Be Invoked Without Prior Tax Determination U/s 73/74: Allahabad High Court Quashes GST Confiscation Proceedings *  SC grants Bail to Rs 54cr GST case  *  Karnataka HC Sets Aside Duplicate GST Orders, Orders Fresh Hearing on GSTIN Cancellation *  DRC-01 Summary Can’t Replace Mandatory SCN: Gauhati High Court *  Transfer Of Unutilized ITC After Amalgamation - Supreme Court Issues Notice *  PUNJAB & HARYANA HC QUASHES GST CANCELLATION NOTICE FOR FAILURE TO PROVIDE CBIC ENQUIRY REPORT *  LICENSE FEE, TECHNICAL ASSISTANCE CHARGES NOT INCLUDIBLE IN CUSTOMS VALUE UNLESS THEY ARE A CONDITION OF SALE: CESTAT *  DELHI HC ORDERS REMOVAL OF GST ATTACHMENT AFTER STATUTORY 1 YEAR PERIOD EXPIRED *  CUSTOMS BROKER CAN’T BE FAULTED JUST BECAUSE EXPORTER’S GST REGISTRATION WAS PREVIOUSLY CANCELLED: CESTAT   *  Supreme Court Dismisses Review Plea Against Delhi HC Ruling Holding Real Operator Behind Fake GST Firms Liable As ‘Taxable Person  *  GST Appeal Can’t Be Rejected Merely Because DRC-07 Was Not Uploaded On Portal: Bombay High Court  

Comments

Print   |    |  Comment

PJ/Case Law/2013-14/2052

Whether intermediate goods supplied to projects funded by UN eligible for exemption retrospectively ?

Case:- MAHINDRA & MAHINDRA LTD. Vs COMMISSIONER OF C. EX., NASHIK
 
Citation
:- 2013 (296) E.L.T. 62 (Tri. - Mumbai)

Brief facts:- The appellants, M/s. Mahindra & Mahindra Ltd., were manufacturing motor vehicles and motor vehicle parts, etc., and supplying to their regional sales offices, who in turn sold to the dealers. By a Notification No. 108/95, dated 28-8-1995, all goods falling under the Schedule to the Central Excise Tariff Act, 1985 were exempted from the whole of the duty of excise when supplied for the official use of United Nations or International Organization or for the projects funded by United Nations or an International Organization and approved by the Govt. of India.

Rule 57C of the Central Excise Rules, 1944 prevailing during February, 1997 provided for disallowance of Modvat credit only when final product was exempted from duty. However, exemption was made in respect of supplies made in terms of Notification No. 108/95, dated 28-8-1995. The appellants were, therefore, entitled for Modvat credit of duty paid on the components used in the manufacture of motor vehicles supplied to United Nations or International Organizations; whereas Notification No. 67/95, dated 16-3-1995 did not mention about clearances of the final product to the International Organizations, whom the appellants were supplying. Later on, an amendment came by virtue of Notification No. 11/97 with effect from 1-3-1997, including these International organizations. Therefore, the dispute pertains to one month period i.e. February, 1997, during which the supplies were made to the International Organizations by the appellants, wherein the Department demanded the duty on the intermediate products utilized in the final product. The appellants claim that the subsequent amendment was to be given effect retrospectively even for the month of February, 1997 also. This position was made clear in case of CCE v. M/s. Premier Tyres Ltd. reported in 1992 (62)E.L.T.104 (Tribunal)and further contention was that the situation of Revenue neutral. The Commissioner (Appeals) had rejected the contention of the appellants and confirmed the duty demand of Rs. 1,03,707/-.
 
Appellant’s contentions:- The ld. Counsel for the appellants submitted that the Notification No. 11/97, dated 1-3-1997 was clarificatory in nature to the Notification No. 108/95, dated 28-8-1995. To support this contention, he placed reliance on the decision of the Tribunal in the case of CCE v. M/s. Premier Tyres Ltd. reported in 1992 (62)E.L.T.104 (Tribunal) which was confirmed by the Hon’ble Kerala High Court reported in 2001 (130)E.L.T.417 (Ker.).He further submitted that the similar issue came up before this Tribunal in the case of Indian Aluminium Co. Ltd. v. Collector of Central Excise, Cochin reported in 1995 (79)E.L.T.111 (Tribunal). In alternate, he submitted that it was a Revenue Neutral situation and therefore the appeal should be allowed.
 
Respondent’s contentions:- On the other hand the ld. Additional Commissioner (A.R.) appearing on behalf of the Revenue reiterated the impugned order and submitted that the Notification No. 11/97 could not have retrospective effect, therefore appeal be dismissed.
 
Reasoning of judgment:- Considering the submissions made by both sides and after examining the issue before them the Bench found that as per Rule 57C, the credit of duty was not allowed if final product were exempted.
They further found that as per Notification No. 108/95-C.E., dated 28-8-1995 the goods were exempted which were supplied to the United Nations or an International Organization for their official use. They further found that as there was an anomaly in the Rule; to plug that anomaly Notification No. 11/97-C.E., dated 1-3-1997 came into effect. The issue came before this Tribunal in the case of Indian Aluminium Co. Ltd.(supra) wherein that case the final product namely Aluminium Extrusions were dutiable and the appellant had paid duty on all such clearances, made to Export Units, as duty to such units was exempted by different notifications issued under Rule 13, which were for export obligations. No bond was executed in these cases, as they fell within the category of export units where taking of bond was not obligatory and such non-execution was only a procedural lapse and for such lapse, the benefit of the exemption could not be denied. As admittedly the final product had been utilized by export units, hence such clearance of the final products, do not attract the proviso to the Notification. In that case this Tribunal held that as Aluminium billets used in manufacture of Aluminium extrusions, which were cleared to export unit products so cleared to export units whether cleared under bond or not, not treatable as goods wholly exempt or chargeable to nil rate of duty. Benefit of exemption in respect of intermediate product was available under Notification No. 217/86-C.E., dated 2-4-1986. In the case in hand before tribunal also, the parts assembles to the motor vehicle which was the final product supplied to unit. Therefore, the intermediate product of the parts assembled, the benefit of Notification No. 67/95 read with Notification No. 108/95 was available to the appellants. Accordingly, the impugned order was set aside and the appeal was allowed with consequential relief if any.

Decision:- Impugned order was set aside and the appeal was allowed.

Comment:- The analogy drawn from the case is that the intermediate products supplied for the projects funded by International Organisations have been given exemption vide notification no. 11/97-C.E., dated 1-3-1997 and this exemption is clarificatory in nature as it removed the loophole in the Rule. Accordingly, this notification was held to be retrospectively applicable in view of the decision given in the case of Indian Aluminium Co. Ltd. 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com