IDT Importance for NOV 2010

Mukesh Chhangani (professor) (342 Points)

29 September 2010  



Prof. MUKESH CHHANGANI (visiting faculty of CA Institute)

Note: students are requested that they should study the entire syllabus and the below questions to be done only on priority basis.


1.       Input does not include steel, cements, etc. used for construction of shed, building or structure.

2.       Special audit can also be done By CA & CS also.

3.       Clean energy cess w.e.f. 1.7.10 on gross quantity of raw coal, lignite and peat raised and dispatched from a coal mine in India. (it is collected as excise duty, it is also charged on imported coal, for ex. If tariff value is 100 duty payable is 50 per ton. no education cess and SAH, cenvat credit cannot be utilized for paying clean energy cess). (Not. No 1 to 5 of clean….2010)

4.       Single use packaged or canned software- pay excise duty, service tax is not chargeable. (Not. No. 2/2010).

5.       Transforming blank CD into software loaded disk CD is manufacturing as the process changes the basic character of blank CD. (Oracle software India 2010 –SC)

6.       Arihant Tiles and marbles 2010 SC (3 members Bench). It was observed that the word production is wider than manufacture. Mere extraction of stones and mere cutting them into slabs per se will not amount to manufacture.

7.       Cooking and preparing food is manufacture. (Bombay anand bhuwan restaurant SC 2009)

8.       Packing and bottling of liquor is manufacture. (Maa sharda wine traders-2009 HC)

9.       Software loaded in a laptop is laptop because the laptop cannot run without such operating software.( HP India 2007 SC)

10.   Assessee was selling anti-dandruff shampoo along with face wash gel free in a combipack. Duty as per MRP on combo-pack only. Himalaya drug co. 2009 T)

11.   A package containing 10 retail packages of 20 cigarettes is a wholesale package and MRP is N.A. (ITC 2009 HC).

12.   Place of removal in case of export is custom barrier. Kuntal Granites 2007 T)

13.   Medicines, free samples given to doctors and physician are identical in all respect of the similar goods in the market. Hence the valuation should be on the basis of Rule no. 4 section 4. Cadila pharma 2008 CESTAT 3 Members bench). Since price based on MRP is deemed price, valuation of physician sample should be on the basis of MRP. (As per circular 915/2010 CBEC.)

14.   If imported goods are in loose conditions and not pre0packed commodity, MRP based valuation is not required. Thamilzh ponni exports 2009 CESTAT.

15.   CENVAT CREDIT ON SERVICE TAX paid on imported services. Service receiver is eligible to avail cenvat even if he is liable to pay the same under reverse charge. Jindal steel and power 2008 CESTAT.

16.   Cement and steel for foundation of machinery is not eligible for Cenvat credit. Vandana global ltd. 2010 CESTAT 3 Members bench.

17.   Capital goods used outside factory premises but integrally connected with factory may be eligible. Vikram cements 2006 SC. Maihar cement 2009 CESTAT.

18.   When statute does not prescribe any time limit for any action, no time limit can be imputed into that statute from any other provisions. Hence there is no time limit for taking Cenvat Credit. (Johnson Matthey Chem India 2009 CESTAT / industrial cables 2009 HC./ Pierlite India 2010 CESTAT)

19.    As per CBEC circular 911/2010 Assessee should not avail CC on inputs and pay excise duty on output if the activity does not amount to manufacture.

20.   CC on mobile phones will be eligible even if the cell phones are in the name of employees if the phone is used for business of Assessee. (Wiptech Peripherals 2009 CESTAT).

21.   No duty is payable if inputs or capital goods are removed as such for export under bond. As per circular 345/2000. Videocon international 2009 CESTAT.

22.   Jigs and fixtures can be sent outside even when raw materials are not send outside. There is no requirement that it should be returned within 180 days. Guala closures 2009 CESTAT.

23.   SSI to pay duty on quarterly basis from 1-4-10 onwards.

24.   SSI to file quarterly returns on 10th of the next month following the quarter.

25.   SSI can avail 100% cenvat credit on capital goods in the first year itself from 1-4-10 onwards.

26.   Practical question will be asked on mode of calculating excise duty in case of transfer from 100% EOU to DTA. Rule 17.

27.   Practical question will be asked common input or common input services used in manufacturing exempted as well as taxable goods.

28.   Definition of manufacture, Discount, Curing, Outwards Handling charges, Job work.

29.   Cheetoos are not cereals but namkeen. (Frito LAY 2009- SC)

30.   Endorsed Bill of Entry is also an eligible document for CC. Krishna insulation 1996 T

31.   Sample valuation as per Rule 4 section 4 of central excise Act, 1944.

32.   Price is not the consideration (Theory or practical question)

33.   Omni car seat adjustments are part of a car and part of a seat. Insulation Electrical Ltd. 2008 SC.

34.   Freight paid up to customer’s doorstep is eligible for input service credit if ownership of goods gets transferred at customer’s doorstep. Ambuja Cements 2009 HC.

35.   Outward transportation from place of removal held as input services, as it is an activity relating to business. ABB ltd. CESTAT.

36.   Erection, commissioning at buyers premises is eligible for input service credit. Alidhara Tax tool Engg. Pvt. Ltd. 2009 CESTAT.

37.   CC taken but not utilized – No interest will be payable. India Swift Lab. 2009 HC. However as per circular 897/2009 interest as to charged even if credit is wrongly taken.

38.   Provisional Assessment.

39.   Procedure in respect of registration Rule no 9 of central excise Rules 2004.

40.   Case studies on Rule no 21, of central excise Rules 2004.

41.   2 marks question on Rebate/ Refund of excise duties.

42.   Rule no 11 of invoice.

43.   Advance ruling: who can file an application for advance rulings?

44.   CESTAT which appeals lies to CESTAT.

45.   CESTAT: Powers of tribunal to rectify any mistakes apparent from record.

46.   Settlement of cases: custom/ excise based question. No need to file bill of entry or return from 8-5-2010.

47.   Smuggling is also covered under settlement of commission.

48.   One sure question on APPEAL.

49.   CUSTOM DUTY: 1 practical question and one question on duty drawback are expected. Definition of assessment, custom area, foreign going vessel, goods, person in charge, shipping bill.

50.   Remission on volatile goods.

51.   What is taxable event in case of import and export of goods?

52.   Warehousing: period of warehousing, right of owners to deal with goods.

SERVICE TAX AND VAT DO THE FULL PORTION. For practical question on individual services the important services are : clearing & forwarding, goods transport agency, IPR (2marks basically R & D cess), storage & warehouse charges, cargo handling services, man power recruitment services (2 marks), REAL ESTATE AGENTS  (VERY IMP.) business auxiliary services.