TMI Tax Updates - e-Newsletter
January 13, 2025

Case Laws in this Newsletter:

Articles

1. Examining the Denial of Input Tax Credit for Sales Promotional Goods under GST

   By: Kamal Aggarwal and Aditi Vishnoi

2. Practice support -Non-application of mind- some examples.

   By: DEVKUMAR KOTHARI

3. Benefits of Timely ESI Return Filing for Employers and Employees

   By: Ishita Ramani

4. OFFENCES AND PROSECUTION UNDER INCOME TAX ACT, 1961 – AN INTRODUCTION

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Advisory on Extension of Due Date w.r.t GSTR 1 and GSTR 3B

2. Govt to introduce bill on illegal immigration in budget session: Haryana CM Saini

3. UK seeks 'common ground' with China during Economic, Financial Dialogue visit

4. Indonesia, Japan promise deeper defence, economic ties as regional tensions spike

5. India Joins the UN Committee of Experts on Big Data and Data Science for Official Statistics

6. Union Minister of Commerce & Industry Shri Piyush Goyal launches Bharat Cleantech Manufacturing Platform

7. PRE-BUDGET MEMORANDUM – 2025 - DIRECT TAXES AND INTERNATIONAL TAXATION

8. NFRA releases the first part of Auditor-Audit Committee Interaction Series titled: Audit of Accounting Estimates and Judgments

9. India empowering tomorrow intelligently at World Economic Forum 2025

10. Union Minister of Commerce & Industry Shri Piyush Goyal sets $100 billion target of combined product exports for Food & Beverage, agri and marine industries in next five years

11. Britain's Treasury chief is heading to China to revive suspended economic, financial talks

12. Trump tax cuts, if made permanent, stand to benefit highest income earners: Treasury analysis

13. SC junks PIL alleging Kashmir separatist group's money exchange at RBI branch

Notifications

GST

1. 06/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-8 for the month of December, 2024

2. 05/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-7 for the month of December, 2024

3. 04/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-6 for the month of December, 2024

4. 03/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-5 for the month of December, 2024

5. 02/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-3B for the month of December, 2024 and the quarter of October to December, 2024

6. 01/2025 - dated 10-1-2025 - CGST

Seeks to extend the due date for furnishing FORM GSTR-1 for the month of December, 2024 and the quarter of October to December, 2024

GST - States

7. G.O.Ms.No. 1 - 09/2024 - STATE TAX (RATE) - dated 10-1-2025 - Telangana SGST

Amendment in Notification No. 13/2017- State Tax (Rate), issued in G.O. Ms No. 110, Revenue (CT-II) Department, Dt.29.06.2017

8. G.O.Ms.No. 1 - 08/2024 - STATE TAX (RATE) - dated 10-1-2025 - Telangana SGST

Amendment in Notification No. 12/2017- State Tax (Rate), issued in G.O. Ms No. 110, Revenue (CT-II) Department, Dt.29.06.2017

9. G.O.Ms.No. 1 - 07/2024 - STATE TAX (RATE) - dated 10-1-2025 - Telangana SGST

Amendment in Notification No. 11/2017- State Tax (Rate), issued in G.O.Ms.No.110, Revenue (CT-II) Department, Dt.29.06.2017,

10. G.O.Ms.No. 1 - 06/2024 - STATE TAX (RATE) - dated 10-1-2025 - Telangana SGST

Amendment in Notification No. 4/2017-State Tax (Rate), issued in G.O. Ms No. 110, Revenue (CT-II) Department, Dt. 29-06-2017

11. G.O.Ms.No. 1 - . 05/2024 - STATE TAX (RATE) - dated 10-1-2025 - Telangana SGST

Amendment in Notification No. 1/2017-StateTax (Rate), issued in G.O.Ms.No.110, Revenue(CT.II) Department, Dated:29.06.2017

SEZ

12. S.O. 157(E). - dated 7-1-2025 - SEZ

Amendment in Notification S.O. 4773(E) dated 10th November, 2021

Circulars / Instructions / Orders

IBC

1. IBBI/LIQ/81/2025 - dated 10-1-2025

Mandatory Use of eBKray Auction Platform for Liquidation Processes

2. IBBI/LIQ/80/2025 - dated 9-1-2025

Extension of time for filing Forms to monitor liquidation and voluntary liquidation processes under the Insolvency and Bankruptcy Code, 2016, and the regulations made thereunder.

Highlights / Catch Notes

GST

• Court Deems GST Registration Cancellation Unlawful Due to Lack of Notice, Violates Natural Justice Principles.

  Case-Laws - HC : Petitioner's registration cancelled for non-filing GST returns for six months without notice - violation of natural justice principles. HC held cancellation order passed on different ground of non-compliance with Rule 21A(2A) without notice to petitioner - grossly violating natural justice. Appellate order not on merits, hence doctrine of merger inapplicable. Cancellation order unsustainable, petition allowed.
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• High Court Invalidates Detention of Goods Under GST Act Due to Lack of Evidence on Tax Evasion Intent, Section 129(3.

  Case-Laws - HC : The HC held that the detention of petitioner's goods was unjustified as authorities failed to prove intent to evade tax payment, a mandatory requirement u/s 129(3) of the GST Act. The authorities seized the goods alleging they were mustard oil instead of R.B. Oil mentioned in documents, but did not draw samples or obtain expert reports to substantiate their claim. Without expert evidence contradicting the petitioner's documents, the authorities' view cannot be sustained. The HC concluded the proceedings initiated u/s 129(3) were vitiated due to lack of finding on intent to evade tax payment. The petition was allowed.
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• High Court Stays Circular on Corporate Guarantee; Not a "Supply" u/s 9 of CGST Act, 2017.

  Case-Laws - HC : The HC granted time to the respondents to file a reply challenging the circular dated 27.10.2023 and the petitioner's contention that providing a corporate guarantee by a holding company to its subsidiary does not constitute a "supply" or "supply of service" taxable u/s 9 of the CGST Act, 2017. The HC stayed the operation of the impugned circular dated 27.10.2023 regarding Item No. 2 until further orders.
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• Kerala High Court: Goods Can Be Provisionally Released Under GST Act Section 67(6) Even After Section 130 Proceedings Begin.

  Case-Laws - HC : The Kerala HC held that provisional release of goods is permissible u/s 67(6) of the GST Act even after initiation of proceedings u/s 130. The adjudication can proceed even if goods are released pending adjudication. Section 130(7) provides an option to pay fine in lieu of confiscation after adjudication, protecting revenue interest. Provisional release does not result in loss of absolute custody by the Department over seized goods as it retains constructive custody. The object is to secure the value of goods liable for confiscation, not confiscation itself.
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• Court Rules Export Services to US Parent Co. Not Intermediary; Qualifies as Export Under IGST Act Section 2(6.

  Case-Laws - HC : The HC held that the petitioner was providing export of services to its US parent company, not intermediary services. The petitioner assisted the parent in business consultancy by setting up meetings with experts/clients and providing advisory services. The payment terms showed the petitioner earned 8% markup, operating independently. Following Ernst & Young, since the recipient was outside India, the services qualified as export u/s 2(6) IGST Act. The HC set aside the orders treating it as intermediary service and directed processing of the refund claim as export of services filed within limitation.
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• Court Quashes GST Tax and Penalty Order Due to Lack of Notice and Natural Justice Violation; Allows Penalty Adjustment.

  Case-Laws - HC : HC quashed impugned order of demand of tax and penalty under GST for lack of merits. Order passed without prior notice violating natural justice. Penalty amount paid allowed to be adjusted towards petitioner's tax liability in regular returns.
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• Custom Transformers for Wind Turbines Not GST-Exempt, GAAR Rules; Aligns with CBIC and Ministry Clarifications.

  Case-Laws - AAR : The GAAR held that specially designed transformers for WOEG performing dual step-down and step-up functions, supplied by the appellant along with WOEG, cannot be treated as part of WOEG. This is based on CBIC's circular excluding transformers from WOEG parts as per Ministry of New and Renewable Energy's clarification. The appellant's reliance on popular meaning/common parlance principle and Enercon India Ltd's case was rejected as legally untenable. Consequently, such transformers are ineligible for exemption under Sr. No. 234 and 201A of Notification No. 1/2017-CT (Rate). The appeal was dismissed.
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• Transfer of Goods in FTWZ Non-Taxable; No ITC Reversal Needed Under CGST Act Schedule III, Para 8(a).

  Case-Laws - AAR : The transfer of title of goods by the Applicant to its customers or multiple transfers within the Free Trade Warehousing Zone (FTWZ) gets covered under para 8(a) of Schedule III of the CGST Act, 2017, and remains non-taxable. The Applicant is not required to reverse any ITC of common inputs/input services/capital goods, even when the activity/transaction is covered under para 8(a) of Schedule III of the CGST Act, 2017, as the value of exempt supplies relates only to supplies from 'Duty Free Shops' at arrival terminals in international airports to incoming passengers.
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Income Tax

• Supreme Court: Share Capital Reduction in Subsidiary is a Transfer u/s 2(47) of Income Tax Act.

  Case-Laws - SC : The SC held that the reduction in share capital of the subsidiary company and subsequent proportionate reduction in the shareholding of the assessee would be covered within the ambit of "sale, exchange or relinquishment of the asset" u/s 2(47) of the Income Tax Act, 1961. Relying on Anarkali Sarabhai case, it was observed that reduction of share capital or redemption of shares involves purchase of its own shares by the company and hence included within the meaning of transfer u/s 2(47). The matter was decided in favor of the assessee.
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• ITAT Rules Unexplained Cash Payment Can't Be Taxed Without Evidence; Assessee Denied Charges, No Cross-Examination Allowed.

  Case-Laws - AT : Assessee's addition of on-money paid in cash to developer for property purchase, source unexplained, was based on data from third party's search and third party's confession before Settlement Commission. ITAT held third party's data and confession alone insufficient to make addition against assessee without corroborative evidence, given assessee's complete denial. Assessee should have been given opportunity to cross-examine builder who admitted receiving on-money. Addition of on-money paid unsustainable, decided in assessee's favor.
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• ITAT Allows Foreign Tax Credit Despite Late Filing of Form 67; Rule 128 Deemed Procedural u/s 90.

  Case-Laws - AT : Assessee's claim for foreign tax credit u/s 90 allowed despite delay in filing Form No. 67 after due date of filing return u/s 139(1). Delay in filing Form 67 cannot deny vested right to claim foreign tax credit under DTAA. ITAT relied on Chiragkumar Nandalal Makadia ruling that late filing of Form 67 cannot be reason for denying foreign tax credit benefit. Rule 128 mandating Form 67 filing before return is procedural; non-compliance should not result in denial of foreign tax credit. Assessee's appeal allowed.
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• ITAT rules AO's rejection of books unjustified; accepts 25.38% gross profit rate as reasonable u/s 144.

  Case-Laws - AT : Assessee's appeal allowed. Rejection of books of accounts by AO not justified as no detailed findings given while estimating gross profit at 30%. AO adopted opening and closing balances from books. Assessee's declared gross profit rate of 25.38% reasonable and accepted by ITAT. AO cannot reject books solely on ground of non-maintenance of stock register when details available.
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• ITAT Rules on Section 80IC: Follow Past Precedents for Expense Allocation and Allow 30% Deduction Without Offsetting Losses.

  Case-Laws - AT : Deduction u/s 80IC - AO reallocated management fees and remuneration paid to managing director on gross profit basis. ITAT held allocation basis accepted by AO in past assessment years must be followed as per rule of consistency, directing AO to accept assessee's basis of allocation. Set off of loss of non-eligible unit against profit of eligible unit for computing deduction u/s 80IC - Following precedents, ITAT directed AO to allow deduction @30% on eligible unit's profit without setting off losses from other units, overriding provisions of sub-s. (7) of s. 80-IA prohibiting such set-off.
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• ITAT rules penalty u/s 271B not applicable; penalty u/s 271A relevant due to lack of accounts.

  Case-Laws - AT : Penalty u/s 271B for failure to get accounts audited as required u/s 44AB was not levied. The assessee argued that since no accounts were maintained, recourse u/s 271A could be taken. Following the Bisauli Tractor [2007 (5) TMI 181 - Allahabad HC] precedent, the ITAT held that Section 271B was not attracted as the assessee did not maintain books of account, and the assessee was liable u/s 271A. Consequently, the ITAT allowed the assessee's appeal and deleted the impugned penalty u/s 271B.
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• ITAT Rules Marketing Expenses as Revenue Expenditure, Orders AO to Remove Disallowances for NHPL Payments.

  Case-Laws - AT : ITAT allowed assessee's claim for deduction of marketing expenses paid to NHPL, treating them as revenue expenditure. The expenses related to sales personnel salaries, recruitment charges, and management fees. ITAT held these were towards sale of products, hence revenue in nature. ITAT directed AO to delete the disallowances made by treating marketing expenses as capital expenditure.
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• Luxembourg Firm Wins India Tax Treaty Benefits Despite Cayman Ties; ITAT Cites Valid Substance and MLI Compliance.

  Case-Laws - AT : The ITAT held that the assessee, a Luxembourg company, is entitled to India-Luxembourg tax treaty benefits. Despite being a subsidiary of Cayman Islands entities, the assessee proved its commercial substance in Luxembourg through valid tax residency certificate, filing tax returns, incurring operational expenses, and making investments beyond India. The revenue failed to establish the assessee was a mere conduit. Applying the Principal Purpose Test under MLI, obtaining treaty benefits cannot be considered the principal purpose when the assessee demonstrated economic activities and standalone existence. The ITAT directed granting treaty benefits to the assessee.
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• ITAT affirms tax exemption for trust u/s 11; no commercial activities, follows Section 10(23EC) precedent. Revenue appeal dismissed.

  Case-Laws - AT : The ITAT held that the assessee trust, created as per mandatory FMC/SEBI requirements for investors' benefit, is eligible for exemption u/s 11. It receives contributions from MCX based on guidelines forming part of its corpus, does not collect fees or render services, and lacks commercial/business angles in activities. The ITAT granted registration u/s 12A, holding the assessee as a charitable trust advancing general public utility. The AO failed to demonstrate how activities benefited persons covered u/s 13(3) r.w.s. 13(1)(c). Following NCDEX case, the contribution income is exempt u/s 10(23EC) as notified by the government. The Revenue's appeal is dismissed.
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• ITAT Upholds CIT(A) Decision Allowing Section 11 Deduction, Citing Consistency Despite Payments u/s 13(1)(c.

  Case-Laws - AT : The ITAT upheld the CIT(A)'s order allowing deduction u/s 11, following the 'Principle of Consistency'. Despite payments to specified persons u/s 13(1)(c), the Revenue had allowed exemption in earlier years without adverse remarks. Applying Radhasoami Satsang, the ITAT ruled that without a change in facts or the earlier order being arbitrary/perverse, the Revenue cannot deviate from its consistent stance in subsequent years. Certainty and finality are essential, mandating consistent treatment unless material differences exist. The DR failed to demonstrate any infirmity or factual changes, leading to the decision against the Revenue.
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• ITAT Rules No Penalty for Assessee u/s 271(1)(c) Due to Bona Fide Depreciation Claim Error.

  Case-Laws - AT : No penalty u/s 271(1)(c) was imposed on the assessee for disallowance of depreciation. The ITAT held that the assessee did not deliberately claim depreciation with an intention to make an inaccurate claim, as evidenced by the voluntary withdrawal of the ground before the CIT(A) and non-claiming of depreciation in subsequent years. The ITAT relied on the Supreme Court's decision in CIT vs. Pricewaterhouse Coopers Pvt. Ltd., which held that no penalty u/s 271(1)(c) would be imposed for a bona fide, inadvertent, or human error. The ITAT ruled in favor of the assessee.
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Customs

• CESTAT upholds Rs. 10,000 penalty for delayed document submission under Customs Act, overturns increased penalty by Commissioner.

  Case-Laws - AT : The appellant failed to submit requisite documents within stipulated time for provisional assessment under Customs Act, 1962 and Customs (Provisional Duty Assessment) Regulations, 2011 due to pending appeals on same issue. The adjudicating authority imposed Rs.10,000 penalty for procedural violations. CESTAT held Rs.10,000 penalty sufficient considering appellant's position and set aside Commissioner (Appeals)' order enhancing penalty to Rs.50,000 per Bill of Entry. Appeal allowed.
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• Customs Tribunal Classifies PTN Equipment Cards as 'Parts' Under CTH 8517, Aligns with Vodafone Idea Case Ruling.

  Case-Laws - AT : Hybrid/Pure Matrix Cards for PTN Equipment classifiable under CTH 8517 70 10 as 'parts' of goods and Small Form Factor Pluggable for PTN Equipment classifiable under CTH 8517 70 90. Subject goods cannot function independently without main equipment, become functional only when plugged into modular chassis. Not considered 'independent machine' under Heading 8517, satisfy twin tests of Vodafone Idea Limited for classification as 'parts'. Appeal allowed by CESTAT.
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Corporate Law

• NCLAT Approves Amalgamation Scheme Using DCF Method, Criticizes NCLT for Overruling Shareholders' Commercial Judgment Under Companies Act Sections 230-232.

  Case-Laws - AT : The NCLAT allowed the appeal and sanctioned the scheme of amalgamation u/ss 230-232 of the Companies Act, 2013. It held that the DCF method used for share valuation was a recognised method, and the valuers and amalgamating companies cannot be faulted for using it. No statutory or regulatory authority, except the Income Tax Department, raised objections. The NCLAT relied on the Supreme Court's decision in Miheer H. Mafatlal v. Mafatlal Industries Ltd., which stated that once the exchange ratio is determined by experts, courts should not substitute it if accepted by an overwhelming majority of shareholders acting bona fide. The NCLAT concluded that the NCLT erred in interfering with the scheme against the commercial wisdom of shareholders, creditors, and directors.
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IBC

• NCLAT Rules NCLT Cannot Evict Rent-Controlled Tenants; IBC Does Not Override Rent Control Act Rights.

  Case-Laws - AT : The NCLAT held that the NCLT lacks jurisdiction to order eviction of a tenant whose tenancy is protected under the rent control law. The IBC does not override tenancy rights safeguarded by the Rent Control Act. The NCLT's jurisdiction is confined to matters directly related to the insolvency resolution process. The appeal against the NCLT's eviction order was allowed, as ordering eviction of a statutorily protected tenant exceeds the NCLT's powers under the IBC.
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• NCLAT Confirms Corporate Guarantor's Liability; CIRP Proceedings Valid and Within Limitation; Natural Justice Principles Violated.

  Case-Laws - AT : The NCLAT held: 1) The guarantees executed by the guarantor were irrevocable, unconditional, and continuous, rendering the unilateral revocation invalid. 2) The liability of the surety is co-extensive with the principal debtor, unless contracted otherwise. 3) The CIRP proceedings against the guarantor were maintainable and filed within the limitation period. 4) The adverse observations against the Resolution Professional's conduct violated principles of natural justice as clarification was not sought, despite the disclaimer provided.
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• NCLAT rules Section 7 insolvency proceedings not time-barred due to debt acknowledgment in balance sheets and compromise memorandum.

  Case-Laws - AT : The NCLAT held that the proceedings u/s 7 of the I&B Code were not barred by limitation. The acknowledgment of debt in the balance sheets and the Memorandum of Compromise extended the limitation period, validating the Section 7 application. The appeal was dismissed.
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PMLA

• High Court Quashes Money Laundering Charges; Enforcement Directorate May Reinitiate Under PMLA Section 3 If New Charges Arise.

  Case-Laws - HC : The HC quashed the complaint, ECIR, prosecution complaint, and summoning order issued against the petitioner in a money laundering case before the Special Court (PMLA) Dharamshala. However, the Enforcement Directorate can initiate fresh proceedings u/s 3 of PMLA if charges are framed for scheduled offences by the Addl. Chief Judicial Magistrate, Una. The petition was disposed of.
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SEBI

• SEBI Updates Nomination Rules: Mandatory for Single Holdings, Optional for Joint; Up to 10 Nominees Allowed, Effective 2025.

  Circulars : SEBI issued a circular revising and revamping nomination facilities for demat accounts and mutual fund folios. Key points: Reiteration of Existing Norms: - Rule of survivorship for joint accounts upon demise of holders. - Simultaneous death of joint holders - assets transmitted to nominee(s) or legal heir(s). - Nomination mandatory for single holdings, optional for joint holdings. Revamped Norms: - Investors to provide nominee's personal identifiers like PAN/DL/Aadhaar and contact details. - Up to 10 nominees permitted. Nominee can operate incapacitated investor's account. - Simplified transmission to nominee(s) by submitting death certificate and nominee's KYC. - Nominee(s) to facilitate transfer to legal heir(s) of deceased investor. - Standardized nomination form and procedure for opting out. The circular aims to prevent unclaimed assets and streamline nomination and transmission processes in the securities market. It comes into effect from March 1, 2025.
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• SEBI Circular: Procedure for Waiving or Reducing Penalty Interest Outlined, Decisions Within 12 Months, Up to Rs. 2 Crore.

  Circulars : The circular provides the procedure for seeking waiver or reduction of interest levied on persons against whom recovery proceedings are initiated for failure to pay penalty under relevant securities laws. The key points are: SEBI has delegated power to waive/reduce interest to a panel of Executive Directors (for <Rs. 2 crore) or Whole-time Members. Waiver is not allowed for interest on fees payable to SEBI or disgorgement amounts. Application is to be made to the Recovery Officer along with supporting documents showing genuine hardship, circumstances beyond control, and cooperation in inquiries. The Competent Authority shall pass order within 12 months after giving opportunity of being heard.
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• SEBI Extends AMC Repo Clearing Limited's Recognition for One Year, Subject to Compliance with Specific Conditions.

  Notifications : SEBI granted renewal of recognition to AMC Repo Clearing Limited for one year commencing 17th January 2025 and ending 16th January 2026 under Securities Contracts (Regulation) Act 1956, subject to compliance with prescribed rules and conditions. AMC Repo Clearing Limited is restricted to clearing and settling transactions in repo and reverse repo in debt securities traded on recognized stock exchanges.
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VAT

• High Court Orders Reassessment of Tax; Immediate Hearing Required for Petitioner's Rectification Application; No Stay on Property Sale.

  Case-Laws - HC : The HC held that the assessment order was improperly applied, requiring reconsideration by the respondent authorities. The rectification application filed by the petitioner must be heard promptly, allowing the petitioner to produce necessary documents. However, the HC refused to grant a stay on the attachment notice or sale of the petitioner's attached property. The petition was disposed of accordingly.
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Service Tax

• CESTAT Rules Overseas Services Misclassified; Should Be 'Supply of Tangible Goods', Not 'Consulting Engineer' under Finance Act 1994.

  Case-Laws - AT : The CESTAT held that the services received by the appellant from an overseas supplier were incorrectly classified as 'Consulting Engineer Services' u/s 65(31) of the Finance Act, 1994. Instead, they should be classified as 'Supply of Tangible Goods Services'. The personnel provided by the supplier were operational staff and not consultants rendering advice or technical assistance. The dominant intention of the contract was to provide a drilling rig with personnel and related services for exploration activities, not consulting engineer services. Reimbursements for expenses are not subject to service tax, and the revenue failed to justify the tax claims and penalties.
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• CESTAT Rules Non-Disclosure Not Willful Suppression; Extended Limitation u/s 73(1) of Finance Act Inapplicable.

  Case-Laws - AT : Appellant challenged levy of service tax on commission paid to foreign agents for export of goods during Sep 2013-Sep 2014 under reverse charge, denial of CENVAT credit, and invocation of extended period of limitation. CESTAT held that mere non-disclosure doesn't amount to wilful suppression to invoke extended limitation period u/s 73(1) proviso of Finance Act. Suppression must be deliberate with intent to evade tax as per Supreme Court's ruling in Pushpam Pharmaceuticals case. Since appellant declared transactions in financial records and no positive act of wilful suppression was established by department, extended period couldn't be invoked. Appeal allowed.
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• Extended Limitation u/s 11A(4) Requires Intent to Evade Duty, Not Misclassification; Appeal Allowed.

  Case-Laws - AT : The CESTAT held that for invoking the extended period of limitation u/s 11A(4) of the Central Excise Act, there must be a deliberate attempt to evade payment of duty. Mere incorrect belief of the assessee regarding classification or valuation does not constitute suppression of facts. The Supreme Court precedents in Pushpam Pharmaceuticals and Easland Combines were relied upon. Since there was no suppression of facts by the assessee, the invocation of extended period of limitation was not tenable. Consequently, the appeal was allowed.
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• Indian Bank Not Liable for Service Tax on Foreign Bank Charges Under Reverse Charge Mechanism, CESTAT Rules.

  Case-Laws - AT : The CESTAT held that the appellant bank merely acted on behalf of the Indian exporter and facilitated the service. The appellant bank would not be liable to pay service tax under the reverse charge mechanism on 'foreign bank charges' paid to the foreign correspondent bank. The appeal of the revenue was dismissed.
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Central Excise

• High Court Confirms Section 11D for Duty Recovery; Allows CENVAT Offset, Orders Penalty Review.

  Case-Laws - HC : The HC affirmed the applicability of Section 11D of the Central Excise Act, 1944 for recovery of excess duty collected. The petitioner had filed Form SVLDRS-1, admitting tax liability, thereby attracting Section 11D(1). The challenge to the show cause notice's jurisdiction was rejected. The petitioner is liable to pay the self-assessed duty, having paid a partial amount. The petitioner is entitled to set off the tax liability through CENVAT credit u/r 3(1) of the CENVAT Credit Rules, 2004, subject to establishing input tax payment. The HC directed revisiting the penalty imposition. The benefit of CENVAT credit cannot be denied. The petition was disposed of.
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• CESTAT rules Undenatured Ethyl Alcohol non-excisable; no CENVAT credit or refund u/r 6(3) of CENVAT Credit Rules.

  Case-Laws - AT : The CESTAT held that Undenatured Ethyl Alcohol is not excisable. As the goods were non-excisable, they could not be considered exempt u/r 6(3) of CENVAT Credit Rules. Consequently, the Appellant was ineligible to claim credit and reversal of such inadmissible credit by payment did not entitle refund. The Appellant's refund claim was rejected as the goods were non-excisable.
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• Cenvat credit allowed for roadside assistance and demurrage charges; disallowed for market research. Interest and penalty set aside.

  Case-Laws - AT : Cenvat credit on Roadside Assistance Service allowable as post-sale customer facilitation service related to business. Credit on Market Research Study disallowed as unrelated to manufacturing or business activity. Credit on demurrage charges to Port Trust allowable being related to procurement of inputs. Interest demand on irregular credit taken set aside as credit not utilised. Penalty set aside due to interpretation issues without intent to evade. Assessee's appeal partly allowed.
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