BMR Edge-Tax & Regulatory Mont - BMR Advisors

eautifying, promoting attractiveness etc) which are not present in ‘Dettol’.
Accordingly, ‘Dettol’ being a drug would get covered under the specific entry no 21 of
the Fourth Schedule of the Assam VAT Act taxable at 4 percent during the disputed
period.
Reckitt Benckiser v State of Assam [2012-56-VST-452 (Gau)]
Excise
Section 11AC of the Central Excise Act, 1944 allows a taxpayer the option to pay only
25 percent of the demand as penalty if the entire demand along with interest and
reduced penalty is paid within 30 days from the date of communication of Central
Excise Officer’s order. The said time limit cannot be modified by any authority
whatsoever
The taxpayer, a manufacturer of excisable goods, had availed excess input credit
which was subsequently reversed after it was pointed out by the Revenue Authorities.
Penalty under section 11AC of the Central Excise Act, 1944 was confirmed against
which an appeal was filed before the Customs Excise and Service tax Appellate
Tribunal (“Tribunal”). The Tribunal observed that the adjudication order did not provide
the taxpayer the option to pay reduced penalty of 25 percent under section 11AC and
held that the benefit of reduced penalty would be available if 25 percent penalty is paid
within 30 days of communication of its order. The Revenue Authorities seeking to
recover 100 percent penalty preferred an appeal before the Bombay HC against the
decision of the Tribunal.
The Revenue Authorities contended that once demand was confirmed by invoking
larger period of limitation, penalty under section 11AC was to be compulsorily levied
and the benefit of 25 percent penalty would be available only if the demand along with
interest and reduced penalty is paid within 30 days of the communication of Central
Excise Officer’s order as provided under the Central Excise Act, 1944.
The taxpayer argued that the Tribunal’s order is perfectly valid as the operative part of
the adjudication order did not explicitly clarify the option of reduced penalty available
with the taxpayer.
The Bombay HC disregarded the taxpayer’s arguments by stating that it was not
obligatory to include the above explained option in the adjudication order’s operating
part. The taxpayers’ plea that section 11AC should be read liberally was rejected as
the section imposed punishment on those who evaded taxes. The appeal was allowed
and it was held that when the legislature specifically fixed a time limit to avail an
incentive, it was not open for any authority to modify the time limit so fixed.
CCE v Castrol India Ltd [2012 (286) ELT 194 (Bom)]
Benefits provided under Exemption Notification No 56/2002 – CE will be available even
though the Khasra numbers of the industrial areas where the units are located are
different from those given under the relevant Notification
The taxpayer, located in Jammu & Kashmir, was in the business of manufacture of
goods which were exempt from excise duty as provided under Exemption Notification
No 56/2002 – CE subject to the condition that the goods were manufactured and
cleared by units located in industrial growth centres, industrial estates, export
promotion industrial parks, etc as given under Annexure II to the said Notification.
In the present case, appeals were filed before the Tribunal by the Revenue Authorities
against the decision given by the Commissioner of Central Excise (Appeals) in favour
of the taxpayer on the ground that the units of taxpayers were located in Khasra
numbers other than those specified in the Notification No 56/2002 – CE.
The Revenue Authorities agreed to the fact that the goods and the industrial areas
where the units were located were specified in the Notification but argued that duty
was still payable because the units were not located in Khasra numbers specified
against the corresponding industrial area in the said Annexure. It was further argued
that the provisions of the Notification be construed strictly and interpreted only on their
wordings.
The Tribunal observed that in some cases there were some typo-graphical mistakes
and in other cases the relevant Khasra numbers were included in the Notification albeit
they were wrongly specified against other industrial areas. After noting that the
Notification did not stipulate that the unit must also be located in the Khasra numbers
mentioned against the each industrial area, the Tribunal held that just because of
some typo-graphical mistakes or just because a Khasra number is mentioned against
a wrong industrial area, the benefits of the Notification could not be denied to the
taxpayer. Consequently, all the appeals of the Revenue Authorities were dismissed.
CCE v BR Agrotech Ltd [2012 (286) ELT 127 (Tri – Del)]
The liability to pay excise duty in case of job work arrangements falls on the person
who gets the goods manufactured on job work basis
Diwan Saheb Fashions, the taxpayer, was engaged in stitching garments out of fabric
bought by customers from their shop (stitching to take place after sale of fabric) or from