Indirect Taxes Weekly Flashback for the period 16 December 2024 to 22 December 2024.
Delhi High Court
Vivo To Pay Customs Duty On Import Of MEMS Microphones : Delhi High Court
Case Title: Vivo Mobile India Private Limited Versus Customs Authority For Advance Rulings & Anr.
The Delhi High Court has dismissed the appeal filed by Vivo and held that no customs duty exemption is available on the import of Integrated Circuit Micro Electro Mechanical System (MEMS) Microphones.
The bench of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma has observed that where the machine (i.e. product in question – microphone) consists of individual components (such as MEMS sensors, ASIC, etc.) which are interconnected, and are intended to contribute together to a clearly defined function – that is conversion of sound signals to electrical signal and thus act as a microphone – the product should be classified in the CTH which is appropriate to such function i.e. CTH 8518, and more particularly Tariff Item 8518 10 00.
Erroneous Interpretation Of Foreign Trade Policy : Delhi High Court Issues Notice To DGFT
Case Title: Intertek India Pvt. Ltd Versus DGFT & Ors.
The Delhi High Court bench of Justice Sanjeev Narula has issued a notice to the Union of India (UOI)/Directorate General of Foreign Trade (DGFT) concerning the computation of Net Foreign Exchange Earnings (NFE) and petition claiming erroneous interpretation of foreign trade policy.
Agreements For Helicopter Use Doesn’t Constitute ‘Transfer Of Right To Use’ : Delhi High Court Quashes Rs. 176 Crore VAT Demand On Pawan Hans
Case Details: M/S Pawan Hans Limited (Formerly Known As Pawan Hans Helicopters Limited) V/S Commissioner Of Trade And Taxes
The Delhi High Court has quashed the VAT demand of Rs. 176 Crore on Pawan Hans and held that agreements for helicopter use does not constitute “transfer of right to use”.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has quashed the ruling of the Value Added Tax Appellate Tribunal by which it was held that Pawan Hans had transferred effective control and possession and qualifying the precepts of a transfer of right to use goods as contemplated under Section 2(g)(vi) of the CST Act and Section 2(zc)(vi) of the DVAT Act.
Delhi High Court Allows Service Tax Refund On Ocean Freight
Case Title: Tavrur Oils And Fats Pvt Ltd Versus Commissioner Central Goods And Service Tax & Anr.
The Delhi High Court has allowed the service tax refund on ocean freight, as the levy of service tax on ocean freight was declared unconstitutional.
The bench of Justice Yashwant Varma and Justice Dharmesh Sharma has observed that where the refund is claimed consequent to a declaration of invalidity having been rendered, it would clearly fall outside the purview of the principal enactment and could be claimed either by way of suit or by way of a writ petition.
Bombay High Court
Bombay High Court Upholds Penalty Against Importer For Availing Inadmissible Cenvat Credit
Case Title: M/s. Visen Industries Limited Versus Commissioner of Central Excise, Thane
The Bombay High Court upheld the penalty against importer for availing inadmissible cenvat credit.
The bench of Justice M. S. Sonak and Justice Jitendra Jain has observed that the Appellant cleared the said Vinyl Acetate Monomer to their customers directly from the said Custom BondedWarehouse but maintained the records in such a manner that the said raw material was received in the factory and subsequently cleared from the factory without bringing the said goods into the factory. It was done to take Cenvat Credit of the admissible duties and issue a central excise invoice to clear the same to their customers by debiting the Cenvat Credit account and passing on the credit to their customers.
Customs Dept. Can’t Indefinitely Avoid Compliance CESTAT’s Order On Pretext Of Drawing Sample Of Seized Goods : Bombay High Court
Case Title: Shri Anmol Singh Sethi Versus Union of India and ors.
The Bombay High Court has held that the customs dept. can’t indefinitely avoid compliance orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the pretext of drawing sample of seized goods.
The bench of Justice M.S. Sonak and Justice Jitendra Jain observed that the consignment was seized on 06 November 2023. Necessary samples were taken and analysed. The insistence upon drawing a sample at this late stage is not warranted in the facts of the present case. In all probabilities, this is nothing but buying some time and avoiding compliance with the Tribunal’s judgment and order dated 01 July 2024.
Excise Duty Paid On Exempted Goods, CENVAT Credit Can’t Be Denied Citing Excise Duty Exemption : Bombay High Court
Case Title: Commissioner of CGST & Central Excise Versus Huhtamaki PPL Ltd.
The Bombay High Court has held that the even if excise duty is not payable on the product for any reason, but the Assessee has paid the excise duty and payment is not challenged or questioned then no question can be raised as regards availment of the CENVAT credit by the recipients of goods.
Taxability Of Performance Linked Incentives Covered Under Rare Case : Bombay High Court Waives Pre-Deposit
Case Title: Just Click Travels Private Limited Versus UOI
The Bombay High Court has waived the pre-deposit considering the fact that taxability performance linked incentives/commission covered under rare cases.
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that the petitioner appears to have a strong prima facie case and that the test of “likelihood of success” is liable to be answered in its favour.
Andhra Pradesh High Court
MOOWR | Andhra Pradesh High Court Provisionally Allows Installation Of Equipment & Generate Solar Power For Home Consumption
Case Title: M/s Greenko versus CBIC
The Andhra Pradesh High Court has provisionally allowed installation of equipment and generated solar power to supply for home consumption.
The bench of Justice G.Narendar and Justice T.C.D.Sekhar has observed that the applicability of Section 65 of the Act and the prohibition contained under the Manufacturing and Other Operations in a Customs Bonded Warehouse (MOOWR Regulations) has been the subject matter of the decision.
Chhattisgarh High Court
Case Title: Bharat Sanchar Nigam Limited Versus Commissioner, Central Excise & Customs
The Chhattisgarh High Court has allowed CENVAT Credit to Bharat Sanchar Nigam Limited (BSNL) on the tower and prefabricated buildings used for providing mobile telecommunication services.
The bench of Justice Sanjay K. Agrawal and Justice Amitendra Kishore Prasad has relied on the decision of Supreme Court in the case of Bharti Airtel Ltd. versus Commissioner of Central Excise, Pune observed that the tower and pre- fabricated buildings (PFBs) are “goods” and not immovable property and since these goods are used for providing mobile telecommunication services, the inescapable conclusion is that they would also qualify as ‘inputs’ under Rule 2(k) for the purpose of credit benefits under the CENVAT Rules.
CESTAT
No Service Tax On Foreign Consultancy Income Received From Foreign Universities For Promoting Business In India: CESTAT
Case Title: TC Global India Pvt. Ltd. Versus Additional Director General, DGCEI, New Delhi
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on foreign consultancy income received from foreign universities for promoting business in India.
The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that Foreign universities, the service recipient, are located outside the taxable territory. Therefore, the place of provision of Foreign Consultancy Service is outside the taxable territory.
MRP Based On Section 4A Value Can’t Be Used For Calculating CVD : CESTAT
Case Title: M/s. Microgen Hygiene Private Limited Versus Commissioner of Customs
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the MRP based on value under Section 4A of the Central Excise Act 1944 cannot be used for calculating the additional duty of Customs (CVD).
