SUGGESTED SOLUTION. Head Office : Shraddha, 3 rd Floor, Near Chinai College, Andheri (E), Mumbai 69. Tel : (022) (Date : 05 May, 2014)

Transcription

1 SUGGESTED SOLUTION (Date : 05 May, 2014) Head Office : Shraddha, 3 rd Floor, Near Chinai College, Andheri (E), Mumbai 69. Tel : (022) P a g e

2 Ans. 1 (a) The excise duty payable by M/s. Raliance Ltd. during the financial year is as follows (`): Clearances of finished goods made during the year 2,50,00,000 Less: Exemption off `150 lakhs 1,50,00,000 Dutiable clearances 1,00,00, % [A] 12,36,000 CENVAT credit available on inputs used in the manufacture of dutiable clearances (No CENVAT credit available in respect of exempt clearances): Final products cleared during the year (in Kgs.) [WN-1] 15,000 Uniform Transaction Value (`250 lakhs Kg.) (`) 1,667 No. of units comprised in dutiable clearances (`150 lakhs `1667 6,000 approx) Inputs consumed in manufacture of dutiable clearances (Kg.) 6,000 CENVAT credit attributable to 6000 Kg. of inputs ( ) [B] 6,67,440 (Alternative Computation: Since 40% of clearances are dutiable, therefore, 40% of inputs are eligible for CENVAT credit. Hence, CENVAT credit = `1,51,68,600 40% = `6,67,440) CENVAT credit availed on capital goods (100% of 44,94, ) [C] [WN-2&3] 4,94,400 Duty payable [A B C] 74,160 Working Notes: (1) Since there is neither any processing loss nor inventory of input and output, it implies that all goods manufactured have been sold and entire quantity of inputs has been used in manufacturing these goods. (2) In respect of units availing SSI exemption, no CENVAT credit is available on inputs consumed in exempt clearances of `150 lakh. (3) In respect of units availing SSI exemption, CENVAT credit on capital goods can be availed but utilized only after clearances of `150 lakh. Further, entire credit on capital goods can be taken in the same financial year by such units. (b) Computation of maximum refund eligible u/s 5 of the CENVAT Credit Rules, 2004: (`) (I). NET CENVAT Credit taken = CENVAT credit on inputs and input services - Credit reversed under Rule 3(5C) (Note that credit of capital goods is not included) 2,80,000 (II). Export Turnover of goods (only goods cleared without payment of duty are included) 6,00,000 (III). Export turnover of services (advance received towards services to be provided/exported after the current relevant period shall not be included, hence: ` 2,50,000- ` 50,000) 2,00,000 (IV). Total Turnover: Total of all excisable goods (exports + exempted + dutiable) ` 26,00,000 Export turnover of services (as computed above) + Value of ` 4,00,000 other services Value of inputs removed as such under Rule 3(5) ` 30,000 30,30,000 (V). Maximum refund = [(Item (ii) + Item (iii)) Item (iv)] Item(i) 73,927 (c) The service tax payable by M/s. Boss Tours Co., assuming that it opts for abatement under Notification No. 1/2006-ST and complies with the conditions there under, is as follows: (Amounts in `): Particulars Gross %of Net value Tour 1 - April: In case of package tours, an abatement of 75% of gross amount charged is available. It has been assumed that the bill issued for this purpose indicates that it is inclusive of charges for such a tour. Tour 2 - October : Since, this tour package includes only transportation and accommodation for stay, it is value abatement 35,00,000 75% 8,75,000 65,00,000 60% 26,00,000 2 P a g e

3 not a package tour as per Notification No. 26/2012-ST, dated Hence, it is eligible for abatement under option (c) i.e. in case of services provided in relation to a tour other than in relation to a package tour or accommodation tour, an abatement of 60% of the gross amount charged is available. It has been assumed that the bill issued for this purpose indicates that the amount charged in the bill is the gross amount charged for such a tour. Tour 3 December: The abatement of 90% of the gross amount charged will not be available because the bills issued to clients do not indicate that the charges are solely for arranging the accommodation for stay. However, it is eligible for general abatement of 60%, assuming that the bill indicates that the amount charged in the bill is the gross amount charged for such a tour. Tour 4 - January: Since charges are inclusive of the charges of stay and the invoice issued to the clients mentions it clearly that the charges are solely for arranging the accommodation for stay, hence, it will be eligible for 90% abatement. 40,00,000 60% 16,00,000 50,00,000 90% 5,00,000 Total 1,90,00,000 55,75,000 Service tax 12.36% 6,89,070 (d) The relevant computations are shown below (amount in `)- (1) VAT/CST on sales: VAT CST Sale of output within the State (` 15 lakh 15%) 2,25,000 - Sale in the course of inter-state sale CST = `3 lakh 2%) - 6,000 (2) VAT on purchases: Purchases of input within the State (`48 lakh 5%) `2,40,000 (Utilised to the extend of output VAT and balance for payment of CST 2,25,000 6,000 Balance Credit available to be carried forward 9,000 (`2,40,000 `2,25,000 `6,000) (e) The following points are to be taken note of- (1) The question clearly states that only basic customs duty, EC and SHEC thereon and antidumping duty are leviable on the goods in question and no other duty viz. additional duty of customs u/s 3(1) or special additional duty of customs u/s 3(5) is leviable. (2) For the purposes of the notifications imposing anti-dumping duty, "landed value" means the assessable. Value as determined under the Customs Act, 1962 and includes all duties of customs except duties levied under sections 3, SB, 9 and 9A of the said Customs Tariff Act, (3) No EC and SHEC is imposable on anti-dumping duty. Keeping in mind the aforesaid, the relevant computations are as under (amounts in `)- CIF Value of the consignment (in Indian `) [US $ 25,000 `50] 12,50,000 Add: Landing 1% 12,500 Assessable Value 12,62,500 Add: Basic Customs 20% 2,52,500 Add: EC and 3% on Basic Customs Duty 7,575 Landed Value/Cost of the goods [A] 15,22,575 Cost of commodity for the purposes of anti-dumping notification (500 Kg. x [B] US$ 70 per Kg. x `50 per dollar) 17,50,000 Anti-dumping duty [B - A] 2,27,425 3 P a g e

4 Ans. 2 (a) Computation of excise duty liability (amounts in`): (A) Eye Ointment - Duty under section 4: Price (`43 1,00,000 units) 43,00,000 Less: Sales Tax [ (`43,00,000 x 2) 102] Price inclusive of excise duty 84,314 42,15,686 Excise 12.36% (`42,15, ) 4,63,740 (B) Skin Ointment - Duty under section 4A: MRP (`33 1,50,000 units) 49,50,000 less: 40% Abatement Assessable value 19,80,000 29,70,000 Excise 12.36% on `29,70,000 3,67,092 (b) Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) : The Finance Act, 2013 has introduced an amnesty scheme for service tax assesses known as 'Service Tax Voluntary Compliance Encouragement Scheme', to encourage the service providers as well as service receivers - liable to pay service tax under reverse charge - who are either stop filers, non-filers or non-registrants or who have not disclosed their true liability in the returns filed by them, to pay their tax dues without payment of interest and penalty. The salient features of the scheme are: (1) Any person who is liable to pay tax for the period to , but has not paid the same till would be eligible for claiming the benefit of this scheme. However, the following persons would not be allowed to declare their tax dues under VCES: I. a person to whom any notice or order has been issued before II. a person who has filed the returns disclosing his true liability and not discharged the service tax amount shown in the same. III. a person whose tax dues pertain to a issue for which a notice has been served or an order has been passed in the previous period. IV. a person against whom an inquiry or investigation in respect of non/short levy or non/short- payment of service tax has been initiated by way of search of premises or summons or requiring production of accounts, documents or other evidences and such inquiry/investigation is pending as on V. a person against whom an audit has been initiated and such audit is pending as on (2) The defaulter is required to make a truthful declaration of all his pending tax dues (from October 1,2007 to December 31, 2012) on or before However, if the Commissioner has reasons to believe that the declaration made by a declarant under VCES was substantially false, he may serve a show cause notice within one year from the date of declaration. (3) At least half of the declared tax dues need to be paid by The remaining half can be paid by: I without interest; or II. by with 18% from onwards. The amount so paid would be non-refundable. (4) On compliance with all the prescribed requirements, the declarant will be granted immunity from interest (as specified), penalties and other proceedings. The proceeding under VCES would be final and cannot be reopened by any forum. (5) If the declared tax dues are not paid either in part or in full, such dues will be recovered along with interest as per the provisions of section 87. (6) The tax-payers will need to settle their dues for the period after , as per the provisions applicable under the present law. [The CBEC clarifications as regards the scope and applicability of the Scheme are given in the Annexure.] 4 P a g e

5 Ans. 3 (c) (1) Assessment includes provisional assessment, self assessment, reassessment and any assessment in which the duty assessed is nil. It is a procedure adopted for fixing the duty liability of particular goods by correctly determining the classification of goods and correctly ascertaining the value of goods. The concept of self assessment has been introduced in Customs also. (2) Bill of Entry means a bill of entry referred to in section 46. Bill of entry is the basic document for assessment of customs duty. The importer has to present bill of entry for clearance of imported goods. (3) "Customs area" means- I. The area of a customs station; and II. Includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. (a) The provisions relating to captive consumption are discussed as under (1) Meaning of Captive consumption : As per Cost Accounting Standard 4 issued by the Institute of Cost Accountants of India, "captive consumption" means consumption of goods manufactured by one division or unit and consumed by another division or unit of same organisation or related undertaking for manufacturing another product(s). For example, Clinkers produced from lime stone is consumed within the factory of production for production of cement, such type of consumption is known as captive consumption. (2) Intermediate goods liable to duty only if moveable and marketable : Intermediate goods which are captively consumed shall be liable to excise duty only if such goods are moveable and marketable or deemed marketable in the condition in which the department wants to levy excise duty. Therefore articles captively consumed shall be liable to excise duty when they have reached the stage where they can be identified as goods i.e. if they are marketable and moveable. The Supreme Court in Moti Laminates Pvt. Ltd v. CCEx. [1995] 76 ELT 241 (SC) has held that Articles in crude and elementary form are not dutiable, as they are merely intermediate products, not marketable in that condition. (3) Valuation in case of intermediate goods : Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be 110% of the cost of production or manufacture of such goods. (4) Date for determination of rate of duty: As per rule 5 of the Central Excise Rules, 2002 the applicable rate of duty is of that date when the excisable goods are removed from a factory or a warehouse, as the case may be. If any excisable goods are used within the factory, 'the date of removal of such goods' shall mean the date on which the goods are issued for such use. Hence, captively consumed goods are liable to excise duty at the rate in force on the date on which they are issued for such consumption. (5) Exemption notification in respect of intermediate goods : At present, there are exemption notifications in force exempting intermediate products from excise duty, if.the final products are chargeable to duty. If the final product is wholly exempt or chargeable to NIL rate of duty, the intermediate products shall not be exempt; the same shall be chargeable to duty. (6) Payment of duty where more than one process involved : Where more than one process are carried out on goods, each process independently amounting to manufacture, the duty may be paid after completion of the last stage of such processes i.e. at the final stage. - CCEx. v. Textile Corpn. Maratkzvada Ltd. [2008] 231 ELT 195 (SC) (b) Value of taxable service `25 lakhs 100/ = `22.25 lakhs. Service tax - `22.25 x 12.36% = `2.75 lakhs. In this case, the service relating to supply of manpower is provided by partnership firm to a company. Hence the person liable to pay service tax are as follows: Service receiver i.e XYZ Ltd. `2.75 lakhs 75% = ` 2.06 lakhs. Service provider i.e M/s. ABC - ` 2.75 lakhs 25% = ` 0.69 lakhs. 5 P a g e

6 (c) Advantages of composition scheme: The advantages to dealers opting for composition scheme are - (1) Saves a lot of time, labour and money in maintenance of records; (2) Simplifies calculation of tax liability of a dealer; (3) Reduces the amount of tax payable. (4) A single return may cover longer period, which saves time and cost of preparing bulky returns. (d) Mr. Bajaj, aged 30 years, stayed abroad for more than 3 days, hence as per Rule 3, the following general free allowances are allowed to him- (1) Used personal effects without any limit, and (2) Articles, other than those mentioned in Annexure I, upto a value of `35,000. Therefore, the duty payable by Mr. B shall be (Amount in `) (1) Personal effects like clothes etc. Nil (2) Wine upto 2 litre can be accommodated in General Free Allowance. 5,000 (3) Digital Camera 35,000 (4) Mobile 15,000 Total dutiable goods imported 55,000 Less: General Free Allowance under Rule 3 35,000 Balance Goods on which duty is payable 20,000 Customs Duty 36.05% 7,210 Ans. 4 (a) Facts of the case: The assessee, a company incorporated under the Companies Act, 1956, had two divisions namely, textile division and plastic division situated adjacent to each other on a common ground and surrounded by a common boundary wall. Both the units had separate central excise registrations but the assessee, a single entity, had a common PAN under the Income-tax Act. In order to receive continuous and uninterrupted supply of electricity, the assessee installed DG sets/electricity generation plant to be used in the factory of the textile division and it used furnace oil as fuel in the generation of electricity. The assessee availed CENVAT credit on furnace oil, used as fuel for the generation of electricity, which was used for captive consumption in its own factory. When the assessee's other unit required electricity, the assessee supplied part of the electricity so generated to its other unit. The contention of the Revenue was that the assessee ought to reverse the credit taken on furnace oil used in the generation of electricity and supplied to the other unit. However, the assessee contended that since both the units were situated within a common boundary wall, the electricity supplied to the other unit could not be treated as being supplied to a different entity but within its own factory. The assessee further contended that separate registration of the plastic unit would not make it a different factory. Observations of the Court: The High Court observed that though both the separately registered factories/divisions are situated within a common boundary wall, it could not be said that the other division is also within the factory of the assessee wherein the electricity is generated. The reason given by the High Court for such an observation was that the assessee itself had described the factory of its other division as a separate place of business by applying for separate central excise registration and had obtained such separate registration. Decision of the case: The High Court held that credit could be availed on eligible inputs utilized in the generation of electricity only to the extent the same were used to produce electricity within the factory registered for that purpose (textile division). However, credit on inputs utilized to produce electricity which was supplied to a factory registered as a different unit (plastic division) would not be allowed. The High Court rejected the contention of the assessee that separate registration of two units situated within a common boundary wall would not make them two different factories 6 P a g e

7 Ans. 5 (b) Fact of the Case: Expenditure/costs, such as travel, hotel stay, transportation, etc. incurred by service provider in course of providing taxable service has to be treated as consideration for taxable service and included in value for charging service tax. Analysis & Provision: The High Court observed that since section 67(1) of Finance Act, 1994 is subject to provisions of Chapter V - which includes section 66 (now section 66B) the value of taxable services has to be in consonance with section 66 which levies tax only on taxable service. Thus, there is an inbuilt mechanism to ensure that only taxable service are evaluated under section 67 which provides that value of taxable service is the gross amount charged by service provider for such service. The High Court, therefore, opined that it is only the consideration for the taxable service which is chargeable to tax under the relevant Sections. However, rule 5(1) goes far beyond the charging provisions as it includes the expenditure and costs - which are incurred by the service provider in the course of providing taxable service - in the value of the taxable service. Conclusion: The High Court elaborated that power to make rules could not exceed or go beyond the section which provides for charge or collection of service tax. The High Court clarified that even though section 94 prescribes to lay every rule framed by Central Government before each House of Parliament, which have power to modify them; the same cannot add any greater force to the Rules than what they ordinarily have as species of subordinate legislation. (c) Facts of the Case: On 26th June 2001, assessee entered into a contract with foreign suppliers for import of crude sunflower seed oil at the rate of US $ 435 CIF/metric ton. Under the contract, the consignment was to be shipped in the month of July However, the mutually agreed time for shipment was extended to mid August 2001.Thus, the goods were actually shipped on 5th August, 2001 at the price prevailing at the contract date. Point of Dispute: The Revenue contended that when actual shipment took place, after the expiry of the original shipment period, the international market price of crude sunflower seed oil had increased drastically, and, therefore, the contract price could not be accepted as the transaction value in terms of rule 4 of the erstwhile Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 [now rule 3 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007]. Therefore the duty should be imposed on the increased prices. Decision of the Case: The Supreme Court held that in the instant case, the contract for supply of crude sunflower seed US $ 435 CIF/ metric ton was entered into on 26 th June It could not be performed on time because of which extension of time for shipment was agreed between the contracting parties. It was true that the commodity involved had volatile fluctuations in its price in the international market, but having delayed the shipment; the supplier did not increase the price of the commodity even after the increase in its price in the international market. There was no allegation of the supplier and the assessee being in collusion. Thus, the increased price cannot be considered for valuation of crude sunflower seed oil. Consequently, the appeal was allowed in the favour of the respondent- assessee. (a) Maruthi Tex Print & Processors P. Ltd. v. C. & C. Ex. Sett.Comm., Chennai 2012 (281) E.L.T. 509 (Mad.) Facts of the Case: M/s. Arjun Tex Print & Processors Pvt. Limited, Hyderabad, was a concern registered with the Excise Department for manufacture of man-made fabrics (MMF) and also for manufacture of cotton fabrics. During the course of business, search was carried out at various places, including the factory, registered office premises, their godown and dealers premises, which resulted in recovery of certain records relating to delivery of processed fabrics, and seizure of certain quantities of grey and processed fabrics. The Department issued SCN confirming demand at the higher rate of duty and interest and penalty thereon and seized goods also. However, there was no clear evidence to hold that the fabrics mentioned in all delivery challans were attracting higher rate of duty. The assessee approached the Settlement Commission. The Settlement Commission confirmed the entire demand, penalty, seizure and denied the immunity from the prosecution. The assessee approached the High Court against the order of the Settlement Commission. Point of Dispute: Can the Settlement Commission decline to grant immunity from prosecution after confirming the demand and imposing the penalty? 7 P a g e

8 Decision of the Court: The High Court held that when an allegation of clandestine manufacture and clearances is made, the person making the allegation should establish the complete charge including the nature of the goods and its value involved for determining the appropriate demand of duty. The Court noted that out of four members of the Settlement Commission, minority view showed that there was no clear evidence to hold that all the fabrics mentioned in the delivery challans were manmade fabrics attracting higher rate of duty. Further, the High Court stated that if a person, who suffered a show cause notice on the charge of evasion of duty, finally wants to settle the matter (before Settlement Commission), by making full disclosure admitting certain omissions/commissions, the Settlement Commission, should decide the matter only after placing the burden on the Department to prove the nature of goods cleared without payment of duty. However, in the present case, the Settlement Commission confirmed the demand on the assessee without placing the burden on the Department to prove their case. The High Court was of the view that the Settlement Commission should not have refused the benefit of immunity from prosecution and accordingly set aside the order relating to non-grant of immunity from prosecution. However, it did not interfere with the Commission s order relating to the demand and penalty. (b) Facts of the Case: Kishan Construction was a construction company rendering services under category of construction of residential complex service and were paying service tax in accordance with the provisions of the Finance Act, They undertook certain construction work on behalf of a trust and paid service tax accordingly. However, later they filed refund claim for the service tax so paid contending that they were not actually liable to pay service tax as it was exempt. Department also did not dispute the fact that service tax was exempted in the instant case. However, the refund claim was rejected on the ground that same was filed beyond the limitation period provided in section 11B of Central Excise Act. Point of Dispute: Is assessee eligible to claim refund on service tax paid on construction activity so done by them? Observations of the Court: The High Court of Karnataka, distinguishing the landmark judgment by Supreme Court in the case of Mafatlal Industries v. UOI 1997 (89) E.L.T. 247 (S.C.) relating to refund of duty/tax, held that service tax paid mistakenly under construction service although actually exempt, is payment made without authority of law. Therefore, mere payment of amount would not make it service tax payable by the assessee. The High Court opined that once there was lack of authority to collect such service tax from the assessee, it would not give authority to the Department to retain such amount and validate it. Further, provisions of section 11B of the Central Excise Act, 1944 apply to a claim of refund of excise duty/service tax only, and could not be extended to any other amounts collected without authority of law. Decision of the Case: In view of the above, the High Court held that refund of an amount mistakenly paid as service tax could not be rejected on ground of limitation under section 11B of the Central Excise Act, Note: Under the negative list regime of taxation of services, the service of construction of a residential complex is a declared service under clause (b) of section 66E. (c) Facts of the case: In the instant case, the adjudicating authority had disallowed the refund claim filed by the assessee and called for certain additional documents, although similar refund claims filed by the assessee for the earlier periods had been allowed by the adjudicating authority without these additional documents. The assessee failed to furnish the additional documents despite being given several opportunities to produce the same. The adjudicating authority passed an order rejecting the refund claim but failed to record any reason as to why it differed with the earlier decisions. Points of dispute: The assessee pleaded that since the adjudicating authority has failed to state any reason for differing with the earlier decisions, its order must be quashed. Revenue contended that the adjudicating authority was justified in passing the nonspeaking order 8 P a g e

9 Ans. 6 because inspite of several opportunities given to produce additional documents, the assessee had failed to produce those documents. Decision of the case: The High Court held that if the assessee had failed to furnish additional information, it had been obligatory on the part of the adjudicating authority to record a finding as to why the documents furnished by the assessee were not sufficient to allow his claim and why additional documents were necessary, especially when on the basis of similar documents furnished by the assessee in the past, the claims had been allowed. Thus, deciding the petition in favour of the assessee, the High Court set aside the order of the adjudicating authority. (a) Credit of duty on goods brought to the factory [Rule 16] : The provisions of Central Excise Rules, 2002 regarding re-entry or retention of duty paid goods into the factory of manufacture and treatment of duty on goods returned to the factory, are as under: (1) Goods can be returned for remaking, repairs etc.: The goods on which duty had been paid at the time of removal thereof can be brought to same factory in which they were produced or any other factory for being re-made, refined, re-conditioned or for any other reason. (2) Proper records to be maintained : The assessee shall state the particulars of such receipt in his records maintained for this purpose. (3) Assessee entitled to take the CENVAT credit of duty paid on goods so returned : The assessee shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2004 and utilise this credit according to the said rules. (4) Procedural compliance's on subsequent removal of such goods: (a) If the process does not amount to manufacture : If the said goods before being removed are subjected to any process which does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken at the time of return of such goods. (b) If the process amounts to manufacture: If the said goods before being removed are subjected to any process which amounts to manufacture, the manufacturer shall pay duty on goods at the rate applicable on the date of removal and on the value determined under section 3(2) or section 4 or section 4A of the Act, as the case may be. (5) Buyer of goods entitled to CENVAT credit: The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods. (6) Commissioner can specify conditions : If there is any difficulty in following the aforesaid provisions, the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently, subject to such conditions as may be specified by the Commissioner. (b) The point of taxation shall be determined as under Invoice No. Value of service(`) Reason/Remarks Point of taxation Rate of tax Service tax (`) (1) 20,00,000 Service is provided before % 2,40,000 change in rate of tax, invoice issued after change in tax rate, payment has been received after change in tax rate, POT shall be earlier of date of invoice or date of payment. (2) 10,00,000 Service is provided before % 1,00,000 invoice issued prior to such payment is received after POT shall be Date of invoice. (3) 15,00,000 Service is provided before % 1,50,000 9 P a g e

10 Ans. 7 payment is received before invoice issued after POT shall be Date of payment. (4) 20,00,000 Service is provided after % 2,00,000 invoice is issued before change the payment is received before POT shall be earlier of date of invoice or date of payment. (5) 10,00,000 Service is provided after % 1,20,000 Invoice is issued after the payment is received before POT shall be the Date of invoice. (6) 15,00,000 Service is provided after % 1,80,000 payment is received after invoice is issued before POT shall be Date of payment. Total 9,90,000 Add: EC and 3% 29,700 Total Service tax 10,19,700 (c) Computation of basic custom duty and additional duty of customs u/s 3(1) of the Customs Tariff Act, 1975 (Amount in `) Basic customs duty = 10% of assessable value under customs law = 10% of `2 lakh 20,000 Retail sale price of the goods 8,00,000 Tariff Value (30% of RSP), it is the value for purposes of levy of additional duty of customs 2,40,000 Additional duty of 12% (No EC & SHEC in view of exemption in this regard) 28,800 Note: In case of goods liable to excise duty based on tariff value, the value, for the purposes of levy of additional duty of customs, shall be such tariff value. However, the basic customs duty is leviable on the assessable value of goods under customs law only. (a) A brief note on constitution of CESTAT is as under (1) CESTAT [Section 129 of Customs Act, 1962]: The Central Government shall constitute an Appellate Tribunal to be called the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of judicial and technical members to exercise the powers and discharge the functions conferred on the Appellate Tribunal under the Act. (2) Judicial Member: A judicial member shall be a person who has for at least 10 years held a judicial office in India or who has been a member of the Indian Legal Service and has held a post in Grade I of that service or any equivalent or higher post for at least 3 years, or who has been an advocate for at least 10 years. (3) Technical Member: A technical member shall be a person who has been a member of the Indian Customs and Central Excise Service, Group A, and has held the post of Commissioner of Customs or Central Excise or any equivalent or higher post for at least 3 years. (4) Appointment of President of Tribunal: The Central Government shall appoint,- (I) a person who is or has been a Judge of a High Court; or 10 P a g e

11 (II) one of the members of the Appellate Tribunal, to be the President thereof. (5) Appointment of Vice President : The Central Government may appoint one or more members of the Appellate Tribunal to be appear, act or plead before the Appellate Tribunal. A Vice-President shall exercise such of the powers and perform such of the functions of the President as may be delegated to him by the President by a general or special order in writing. (6) Ex-members not eligible to act before Tribunal: On ceasing to hold office, the President, Vice-President or other Member shall not be entitled to appear, act or plead before the Appellate Tribunal. (b) The impact of VAT on lease transactions is as follows,- (1) VAT leviable on lease by virtue of clause (29A)(d) of Article 366 of the Indian Constitution : As per the said article - 'sale' includes "transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration''. As there exists a transfer of right to use goods in lease, therefore, it comes under the ambit of deemed sales. (2) Taxable Event: Taxable event occurs when the right is transferred to use the goods. However, the transfer of immovable property or the transfer without any consideration is outside the ambit of tax. (3) Taxable Turnover : Taxable turnover shall be the amount of consideration paid or payable for the sale that takes place at the time of transfer of right to use the goods. The turnover shall also include the other charges received as a consideration for lease. Some States provide the deduction of interest or other finance costs also, while computing the taxable turnover. (4) Inter-state leasing: Lease of an asset in inter-state or import trade is taxed under Central Sales Tax Act,1956, hence not chargeable to VAT. (5) Sub-lease : It is not necessary that the person leasing the goods must be the owner of such goods. Hence, sub-lease is also chargeable provided no State provides for taxation of VAT at only one stage. (6) Sale of leased asset after lease period: Sale of asset to the lessee or any other person, after the completion of lease period, is taxable in the similar way as normal sales under the VAT Laws of the State in which the asset is located. (7) Maintenance of Leased Assets: No VAT is leviable on the goods transferred by the lessor for the maintenance/repair of leased asset. However, the materials so used shall be treated as 'inputs' and input- credit can be availed of them. (c) Power of Court to publish name, place of business, etc., of persons convicted under the Act [Section 9B of the Central Excise Act, 1944/Section 135B of the Customs Act, 1962]: The relevant provisions are as under (1) Power of publication : Where any person is convicted under this Act for contravention of any of the provisions thereof, it shall be competent for the Court convicting the person to cause- (I) The name and place of business or residence of such person, (II) Nature of contravention, (III) The fact that the person has been so convicted, and (IV) Such other particulars as the Court may consider to be appropriate in the circumstances of the case, to be published at the expense of such person, in such newspapers or in such manner as the Court may direct. (2) No publication till appeal disposed off or time limit for filing appeal not expired: No publication shall be made until the period for preferring an appeal against the orders of the Court has expired without any appeal having been preferred, or such an appeal, having been preferred, has been disposed of. (3) Recovery of expenses of publication as fine: The expenses of any publication shall be recoverable from the convicted person as if it were a fine imposed by the Court. 11 P a g e

12 Que. No. Sub point No.(if any) 1 (a) 1 (a) 1 (b) 1 (c) 1 (c) 1 (d) 1 (d) MARKS ALLOCATION SHEET Name of Chapter Description of Concept Mark Allocatio n Excise export Calculation of duty payable 4 Warehousing & SSI Excise export Warehousing & SSI CENVAT ST Various Aspects ST Various Aspects VAT VAT Notes 1 5 Calculation of Maximum refund eligible 5 5 calculation of value of taxable service[ each tour have 1 mark] Calculation of service tax 1 5 Calculation of VAT & CST 4 Calculation of Balance credit to be Carried Fwd (e) Customs - Valuation Calculation of Assessable Value 2 1 (e) Customs - Valuation Calculation of Anti-dumping duty (a) Excise Valuation Calculation of Excise duty [each Product have 3 marks] 2 (b) ST Exemption demands & recoveries 6 6 Each Point have 1 marks (c) Customs- Basic Each have 1 mark (a) Excise Basic Each point have 1 mark (b) ST Procedural calculation of service tax 1 Compliance 3 (b) ST Procedural Person liable to Pay Service Tax 2 3 Compliance 3 (c) VAT each Point have 1 mark(any 3 point) (d) Customs- Baggage Calculation of dutiable goods imported 2 3 (d) Customs- Baggage Calculation of Customs duty Payable (a) CENVAT Credit Facts of the case (a) CENVAT Credit Observations of the court (a) CENVAT Credit Decision of the case (b) Valuation of taxable Service 4 (b) Valuation of taxable Service 4 (b) Valuation of taxable Service Facts of the case 2 Analysis & provision 2 Conclusion (c) Customs - valuation Facts of the case (c) Customs - valuation Point of Dispute (c) Customs - valuation Decision of the case (a) Settlement Commission Facts of the case 2 Total Marks 12 P a g e

13 5 (a) Settlement Commission 5 (a) Settlement Commission Point of Dispute 1 Decision of the court (b) ST Demand Adjudication & offences 5 (b) ST Demand Adjudication & offences 5 (b) ST Demand Adjudication & offences Facts of the case 2 Observations of the court 2 Decision of the case (c) Demand & Appeals Facts of the case (c) Demand & Appeals Point of Dispute (c) Demand & Appeals Decision of the case (a) Excise Gen Procedures each point have 1 marks (b) ST Basic calculation of service tax (each have 1 marks) 6 (c) Customs Classification calculation of basic & additional custom duty (a) Appeals & Revision each Point have 1 marks (b) VAT each Point have 1 marks(any six Point) (c) Offences & Prosecution each Point have 1 marks P a g e