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GLANCE AT BURNIG LEGAL ISSUES TO SET OFF IN THIS BUDGET!

Central Excise - By: - Pradeep Jain - Dated:- 24-2-2016 - With the budget round the corner, the consultants are busy making representations whether it be related to rectification of apparent mistakes in the notifications or whether it be related to amendments desired in particular sectors. There is a huge wish-list of assessees operating in respective sectors but whether the pleas of the assessees will be heard by the Modi-led government or not is the talk of the town. We make an attempt to high .....

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eciated. Moreover, the option to conclude the proceedings where short-payment or non-payments have arisen for reasons other than fraud by paying the tax along with interest within 30 days from the date of issuance of show cause notice and by paying 15% penalty within 30 days from date of communication of show cause notice in cases where fraud is being alleged was highly welcomed by the assessees. But, the beneficial provisions issued in the interests of assessees are rarely implemented in true s .....

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e fact that assessees want to conclude proceedings, they are unable to do so because the show cause notice also proposes penalties under other sections/rules which cannot be concluded in light of the amended provisions. Consequently, there is drafting lacunae on the part of the government to include conclusion provisions in penalty sections and rather such provisions should be incorporated in recovery sections under which show cause notices are issued. The impact of amended penalty provisions is .....

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troduced in Central Excise, Customs and Service Tax with a view to reduce the work load of quasi-judicial authorities like Commissioner Appeals, Tribunals so that practice of filing stay applications is being dispensed with. However, the amendment did not explain the manner of computation of such pre-deposit in satisfactory manner. Thereafter, circular no. 984/08/2014-CX dated 16.09.2014 was issued wherein it was clarified that payment made during the course of audit or investigation is to be co .....

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e notice. Say for example, the show cause notice proposes demand of ₹ 10 Lakhs out of which assessee has already paid 8 lakhs as per its own assessment. However, while passing order, the differential demand of ₹ 2 Lakhs is only confirmed and there is no mention of appropriation of tax already paid amounting to ₹ 8 lakhs. In such cases, assessees are compelled to pay 7.5% of ₹ 2 Lakhs for filing appeal to Commissioner Appeals inspite of the fact that they have already paid .....

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is absolute exemption on a product by invoking provisions of section 5A of the Central Excise Act, 1944:- The provisions of section 5A of the Central Excise Act, 1944 mandates that if there is absolute exemption on any excisable goods, the manufacturer shall not pay excise duty on such goods. However, if due to oversight, the excise duty is charged and paid by such manufacturer, the cenvat credit to the bonafide buyer of goods is being denied by invoking the provisions of section 5A (1A) of the .....

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credit of service tax availed by them if service tax not required to be paid. Such, show cause notices are clear violation of the ratio pronounced by Apex Court in COMMISSIONER OF CENTRAL EXCISE & CUSTOMS VERSUS MDS SWITCHGEAR LTD. [2008 (8) TMI 37 - SUPREME COURT ] wherein it was concluded that assessment of duty by supplier cannot be contested at recipient end and credit cannot be denied. When tax has been paid, although not required to be paid, where is the need to deny the cenvat credit .....

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s for interest paid by them on investments made and the subsidy is calculated on the basis interest paid on additional capital borrowed by the assessees. This interest subsidy is granted by allowing assessees to retain a part of sales tax collected by them. However, the Central Excise Authorities are raising excise duty demands on the portion of sales tax collected and retained by the assessees on the ground that under the concept of transaction value, the deduction is available only of service .....

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TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

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TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

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TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

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Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

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Highlight: Deduction u/s 10B - initial AY - Mere authorization to enable the Assessee to import material or export produce in the earlier date would not ipso facto tantamount to commencement of substantial activity of ‘manufacture’/’production’.

Circular: Sub:- Procedure to be followed for Import under DEEC/EPCG Scheme- reg.



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