Interest liability on restrospective amendment

The Government amended Chapter 15 of the Central Excise Tariff Act with restospective effect to bring one or more of the processes of treatment of crude oil with an alkali, bleaching and deodorisation amounting to ‘manufacture’ to nullify the impact of the Supreme Court judgment in the case of Shyam Oil Cake Ltd. vs. CCE [2004 (174) ELT 148 (SC)]. The restrospective amendment came in force from the 1 March, 1986 till 28 February, 2005.

Whether the processors are liable to pay interest on the duty on deemed manufacture of the refined oil?

The amendment of Chapter 15 came on 13.5.2005 with retrospective effect. In terms of Section 11AB(1) of the Central Excise Act, where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person who is liable to pay duty, is liable to pay interest. In the present case, there is no short levy or short payment of duty prior to 13.5.2005 as the duty was levied with retrospective effect consequent upon amendment by Finance Bill, 2005 as enacted on 13.5.2005.

Therefore, there is no liability to pay interest under Section 11AB(1) of the Excise Act.

Lay Flat Tubes

Flexible Ducting and Parts thereof are entitled to exemption under Notification No. 6/2000 dated 1.3.2000 as Lay Flat Tubes classifiable under sub-heading 3917.00 of the Central Excise Tariff.

Equalised Freight is not includible in the value

Supreme Court in the case of M/s ACCURATE METERS LTD, recently held that equalised freight and insurance charges don't constitute value of the goods for the purpose of computation of Excise Duty in terms of Central Excise Act, 1944

Prosecution

In case where the order confirming demand of duty and penalty do not survive, the criminal proceeding of prosecution cannot be continued as very basis of compliant ceases to exist.

Service Tax on Beauty Parlour

Electro Homeopathy Consultant undertaking activities of hair bonding/wig weaving and sale of wigs and clip is not providing a taxable under under the category of "Beauty Treatment"

Clearing & Forwarding Service

“ Whether a person (agent) who has entered into an agreement with principal (owner) for handling and distribution of the products of the principal and entrusted with the job of receiving, storing and distributing the products of the principal to his authorised stockists and distributing centers is liable to pay Service Tax under the category of 'Clearing and forwarding Agent” when no clearing activity from the manufacturer's (Principal) premises is directly undertaken by the agent or
Service Tax is leviable under the category “Clearing and forwarding” only if an agent renders both clearing forwarding services"

P&H High court has held that it is the context in which the word “and” is positioned, being sandwiched between the words “clearing” and “forwarding” has to be looked into while interpreting the meaning. Like the legendary Trishanku, the word “and” is dangling between “clearing” and “forwarding”- neither divorcing from the Heavens, nor from the Earth. In such a positioning, it is not possible to segregate the holistic concept of 'clearing and forwarding” into divisible activities, either or both of which can be provided for answering the customers'
needs.”

Hence person not engaged in clearing activity is not a C&F Agent.

Penalty under section 11AC

The basic requirement for attracting the provisions of Section 11AC of the Act is that there has to be intention to evade the payment of Excise duty.

Such an intention cannot be presumed because the shortage which was detected during stock verification stood explained as occurred due to clerical mistake, and duty was paid without any protest.No question of law warranting admission of the appeal would arise.