For

BAJAJ STEEL INDUSTRIES LTD.

E.E.P ON INDIRECT TAXES

RECENT CHANGES IN CENTRAL
EXCISE
 1. INCREASE IN RATE FROM 8% TO 10% FOR
MAJOR CHAPTERS

 2. CONCEPT OF ‘DEEMED MANUFACTURING’

 3. CLEAN ENERG CESS INTRODUCED

 4. INPUT SERVICES ‘ USED IN OR IN RELATION

TO MANUFACTURING’
 5. NON APPLICAPILIBITY OF RULE 6(6) FOR
THREE MORE CASES (5% EXCISE DUTY0

 6. ITC FOR JIGS AND FIXTURES SENT FOR

USE WITH JOB WORKERS

 7. RELAXATION OF PRE-
AUTHENTICATIONOF INVOICES
 8. Inclusion of After Sale Service and Pre-
delivery Inspection Charges in the
assessable value.

 9. EXTENSION OF EXPORT
WAREHOUSING FACILITY TO NAGPUR

 10.
INPUT SERVICES

 includes services used in relation to setting up,

modernization, renovation or repairs of a factory,
premises of provider of output service or an office
relating to such factory or premises, advertisement or
sales promotion, market research, storage upto the place
of removal, procurement of inputs, activities relating to
business, such as accounting, auditing, financing,
recruitment and quality control, coaching and training,
computer networking, credit rating, share registry and
security, inward transportation of inputs or capital goods
and outward transportation upto the place of removal.
Coca Cola India v. CCE (2009) 22 STT 130 (Bom HC DB) and
ABB Ltd. v. CCE (2009) 21 STT 77 = 15 STR 23 (CESTAT

 Five parts of definition of ‘input service’ are independent of each other - The
definition of ‘input service’ can be conveniently divided into following five
categories, so far as the manufacturers are concerned -
 (a) Any service used by the manufacturer, whether directly or indirectly, in or in
relation to the manufacture of final products.
 (b) Any service used by the manufacturer, whether directly or indirectly, in or in
relation to clearance of final products, from the place of removal (now it is ‘upto the
place of removal’ but that does not change the conclusion of decisions of Bombay HC
and Tribunal).
 (c) Services used in relation to setting up, modernization, renovation or repairs of a
factory, or an office relating to such factory (or premises in case of service provider).
 (d) Services used in relation to advertisement or sales promotion, market research,
storage upto the place of removal, procurement of inputs.
 (e) Services used in relation to activities relating to business and outward
transportation upto the place of removal.
 If cost included in assessable value, Cenvat
credit is available - It was observed by Hon.
Tribunal that ‘question of denial of Cenvat
credit does not arise if cost of (outward) freight
is included in the transaction value’.
 Thus, if a cost is included in assessable value, its
Cenvat credit will be certainly eligible.
However, even if it is not included, it will still be
eligible if it is in relation to business of assessee.
 All expenses upto port eligible in case of export - In CCE v. Rolex Rings (2008)
16 STT 193 = 230 ELT 569 (CESTAT SMB), it has been held that in case of
exports, port is the ‘place of removal’ as exporter continues to be owner of
goods till the same are exported. Hence, CHA and surveyor services which are
relating to export business are eligible for Cenvat credit - followed in CCE v.
Adani Pharmachem (2009) 19 STT 239 = 232 ELT 804 (CESTAT SMB), where it
was held that CHA service in respect of export goods  is ‘input service’ and is
eligible for Cenvat credit – also followed in Rawmin Mining v. CCE (2009) 18 STT
329 (CESTAT).
 Port is place of removal and GTA service upto port is eligible – CCE v. Colour
Synth Industries (2009) 22 STT 88 (CESTAT SMB) * CCE v. Fine Care Biosystems
(2009) 244 ELT 372 (CESTAT SMB).
 Port is place of removal for exports and hence C&F service is eligible as input
service – Adani Pharmachem v. CCE (2009) 238 ELT 179 (CESTAT SMB).
 Port/airport is place of removal in case of export - In case of exports, the place
of removal is port where export documents are presented to customs office –
Kuntal Granites v. CCE (2007) 215 ELT 515 = 2007 TIOL 930 (CESTAT) – quoted
and followed in Rajasthan Spinning & Weaving Mills v. CCE (2007) 8 STR 575
(CESTAT). Hence, all expenses upto that place should be considered as ‘input
service’.
RESTRICTIVE VIEW

 1. Cenvat credit cannot extend beyond

removal of goods

 2. Service should have relation to

manufacture
RECENT CHANGES IN MVAT

 1. ADJUSTMENT OF REFUND FOR 2009-10

FOR THE YEAR 2010-11

 2. COMPULSORY REGISTRATION IF
TURNOVER EXCEEDS Rs. 5 lakhs

 3. INTIMATION ABOUT CHANGE IN NATURE

OF BUSINESS,
 ADDRESS OR BANK ACCOUNT
 4. TRANSACTION WISE ASSESSMENT IN CASE
OF EVASION

 5. INCREASE IN PENATLY FROM Rs. 100 TO Rs.

1000

 6. EXTENSION OF TIME LIMIT FOR PENALTY

FROM 5 YEARS TO 8 YEARS

 7. INCREASE IN LIMIT FOR AUDIT TO Rs. 60

LAKHS
 8. DEBARRING APPEALS IN THE
FOLLOWING CASES
 ORDERS LEVYING INTEREST 30(2)/ 30(4)
 ORDERS OF INTIMATION 63 (7)
 ORDERS OF PROVISION ATTACHMENT 35 (1)/(2)

 9. ‘F’ FORMS ARE REQUIRED FOR ALL

INTERSTATE MOVEMENT OF GOODS NOT
IN NATURE OF SALE, INCLUDING JOB
WORK AND GOODS RETURN
CIRCULAR 22T OF 2010 DT. 5/10/10
 1. REFUND WITHIN 30 DAYS OF B.G
RECENT CHANGES IN SERVICE
TAX
 Couriers, goods transport agencies,
container transportation by rail:- These
 three services are not in the nature of `input
services’ but could be linked to export goods
and hence the decision to allow refund of
service tax.