Goods and Services Tax

V/DGST/30-Misc-27/e-payment/2006 Dated:- 7-7-2006 Order-Instruction – Circulars – Service Tax – D.O.F.NO: V/DGST/30-Misc-27/e-payment/2006 Dated: 6th/7 July 2006 S.S.RENJHEN DIRECTOR GENERAL Subject: Mandatory payment of service tax electronically for major assessees – Reg. My dear Considering that the payment and collection of taxes electronically is admittedly an efficient and cost effective way of collection of taxes, the Board has decided that with effect from 1st October, 2006, payment of service tax electronically shall be mandatory for those persons who are required to pay services tax and paid more than Rs.50 lakhs in the preceding Financial year or paid more than Rs.50 lakhs during the current financial ye

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2006 (5) TMI 454 – KERALA HIGH COURT – [2007] 8 VST 587 (Ker) – W.P. (C) No. 4552 of 2006 Dated:- 22-5-2006 – BALAKRISHNAN NAIR K. , J. K. BALAKRISHNAN NAIR J.-The petitioner is a company, registered under the Companies Act, 1956 and is engaged in the business of printing and publication of a daily newspaper and other publications. It is a registered dealer under the Kerala General Sales Tax Act, 1963 and the Central Sales Tax Act, 1956 on the files of the first respondent. For printing newspaper and other journals, printing ink is an essential raw material. Section 5(3) of the KGST Act provides for a reduced rate of tax at three per cent payable by the dealer, in respect of sale of raw materials to industrial units, for use in the production of finished products, for sale in the State. The seller to the industrial unit can claim the benefit of payment of the reduced rate of tax, subject to the condition of furnishing a declaration, duly filled and signed by the purchasing dealer,

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above facts, it was proposed to impose a fine of Rs. 14,66,256, being double the amount of tax due on the purchase turnover. The petitioner was called upon by the said notice, to file objections, if any, to the said proposal, within seven days. Similar notices, exhibits P2, P3 and P4, were also issued to it, concerning the financial years 2001-02, 2002-03 and 2003-04, by the first respondent. The petitioner filed exhibits P5 to P8 objections to the proposals to impose penalty on it. It was pointed out that section 5(3) of the KGST Act has been amended by Finance Act, 2000, with effect from April 1, 2000, deleting the first proviso, which provided that the concessional rate of tax will be applicable, if only the finished products are taxable. So, with effect from April 1, 2000, form 18 declaration can be issued by the petitioner, even though, newspapers and weeklies are not taxable goods. It was reiterated that the process of printing newspapers and weeklies, is a manufacturing process

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er has published reports and articles of great public interest and matters vitally affecting the rights of dealers under the Kerala General Sales Tax Act, who are subjected to harassment at the checkposts by subjecting them to payment of illegal gratification. Such illegal acts and harassment were published by factual reports and photographs. The petitioner apprehends that under such circumstances, the statutory remedy of revision before the departmental officers is only an empty formality." So, the petitioner justifies its approach to this court directly, without invoking the statutory remedy. It further submits that the impugned orders are issued without jurisdiction and relying on non-existing statutory provisions. They have been issued in violation of the principles of natural justice also. So, even if there is a statutory remedy, the petitioner is entitled to approach this court directly. The printing of newspapers and journals is a manufacturing process. So, the petitioner i

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dmitted and interim stay was granted on February 16, 2006. When it came up for extension of stay on March 15, 2006, the respondents appeared and contended that the writ petition is not maintainable, in view of the statutory remedy available to the petitioner. So, they were directed to file a counter-affidavit. After the filing of the counter-affidavit, the matter was finally heard on March 30, 2006. The learned Senior Counsel Shri Pathrose Matthai met the preliminary objection raised by the respondents, relying on the various decisions of the apex court and also this court. He submitted that since the impugned orders are issued without jurisdiction and also in violation of the principles of natural justice, this court can interfere with the same. In support of the said submission, the learned Senior Counsel relied on the decision reported in Bhopal Sugar Industries Ltd. v. D.P. Dube [1963] 14 STC 410 (SC), Carl Still G. m. b. H. v. State of Bihar [1961] 12 STC 449 (SC); AIR 1961 SC 161

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he petitioner on merits. Shri Raju Joseph, learned Special Government Pleader (Taxes), supported the impugned orders. He also contended that the petitioner should be turned away, to avail the statutory remedy available to it, without hearing the writ petition on merits. As per the statutory scheme, a dealer, who is aggrieved by an order of penalty under section 45A of the KGST Act, is entitled to file a revision against that order, before the statutory revisional authority. So, normally, when there is a statutory remedy available to the petitioner, this court should not invoke its extraordinary jurisdiction under article 226 of the Constitution of India. The learned Senior Counsel for the petitioner tried to canvass that the powers of this court are wider than the powers of the revisional authority under the statute. Since the said point is not raised in the writ petition, I am not dealing with the said contention. But, the learned Senior Counsel vehemently contended that the remedy of

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this court. I think, no special ground has been made out in this case, to deviate from the above course, usually adopted by this court. But, the learned counsel for the petitioner further pointed out that even assuming it has got a statutory remedy, it need not invoke it, when the impugned orders are passed without jurisdiction and in violation of the principles of natural justice. The impugned orders are passed, mainly on the basis of the objective assessment of the facts of the case. Therefore, hearing at the revisional stage can cure the lack of hearing at the original stage. Further, when no complicated questions of fact or law are involved, hearing need not necessarily be by words of mouth. It can be by way of a representation also. See the decision of K.S. Paripoornan J. (as His Lordship then was) in Indian Transformers Ltd. v. Assistant Collector [1983] KLT 861. In this case, all the contentions raised by the petitioner have been dealt with by the first respondent. So, the lack

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matter and makes it in law invalid or void [referred to in Firm of Illuri Subbayya Chetty case [1963] 14 STC 680 (SC) and approved in Dhulabhai's case [1968] 22 STC 416 (SC)]. The matter may have to be considered in the light of the provisions of the particular statute in question and the fact-situation obtaining, in each case. It is difficult to visualise all situations hypothetically and provide an answer. Be that as it may, the question that frequently arises for consideration, is, in what situation/cases the non-compliance or error or mistake, committed by the statutory authority or Tribunal, makes the decision rendered ultra vires or a nullity or one without jurisdiction? If the decision is without jurisdiction, notwithstanding the provisions for obtaining reliefs contained in the Act and the 'ouster clauses', the jurisdiction of the ordinary court is not excluded. So, the matter assumes significance. Since the landmark decision in Anisminic Ltd. v. Foreign Compensatio

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tion (1995 Edition), page 238, Halsburry's Laws of England (4th Edition), page 114, para 67, footnote (9)]. As Sir William Wade observes in his book, Administrative Law (7th Edition), 1994, at page 299, 'The Tribunal must not only have jurisdiction at the outset, but must retain it unimpaired until it has discharged its task'. The decision in Anisminic case [1969] 1 All ER 208 (HL) has been cited with approval in a number of cases by this court. Citation of few such cases: Union of India v. Tarachand Gupta & Bros. AIR 1971 SC 1558 (at page 1565), A.R. Antulay v. R.S. Nayak [1988] 2 SCC 602 (at page 650), R.B. Shreeram Durga Prasad and Fatehchand Nursing Das v. Settlement Commission (IT & WT) [1989] 176 ITR 169 (SC); [1989] 1 SCC 628 (at page 634), N. Parthasarathy v. Controller of Capital Issues [1991] 3 SCC 153 (at page 195), Associated Engineering Co. v. Government of Andhra Pradesh AIR 1992 SC 232; [1991] 4 SCC 93, Shiv Kumar Chadha v. Municipal Corporation of De

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Ltd.'s case [1969] 2 AC 147 Lord Reid said: 'But there are many cases where, although the Tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive.' In the same case, Lord Pearce said: 'Lack of

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moved away from the traditional concept of "jurisdiction". The effect of the dicta in that case is to reduce the difference between "jurisdictional error" and "error of law within jurisdiction" almost to vanishing point. The practical effect of the decision is that any error of law can be reckoned as jurisdictional. This comes perilously close to saying that there is jurisdiction if the decision is right in law but none if it is wrong. Almost any misconstruction of a statute can be represented as "basing their decision on a matter with which they have no right to deal", "imposing an unwarranted condition" or "addressing themselves to a wrong question". The majority opinion in the case leaves a court or Tribunal with virtually no margin of legal error. Whether there is excess of jurisdiction or merely error within jurisdiction can be determined only by construing the empowering statute, which will give little guidance. It is r

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uot;pure" theory of jurisdiction would reduce jurisdictional control to a vanishing point, the adoption of a narrower meaning might result in a more useful legal concept even though the formal structure of law may lose something of its logical symmetry. "At bottom the problem of defining the concept of jurisdiction for purpose of judicial review has been one of public policy rather than one of logic".' [(S.A. De Smith, 'Judicial Review of Administrative Action, 2nd Edition, p. 98) (1968 edition)]' (emphasis(1) supplied) The observation of the learned author (S.A. De Smith), was continued in its third edition (1973) at page 98 and in its fourth edition (1980) at page 112 of the book. The observation aforesaid was based on the then prevailing academic opinion only as is seen from the foot-notes. It should be stated that the said observation is omitted from the latest edition of the book De Smith, Woolf and JowellJudicial Review of Administrative Action, 5th edi

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ces Unions v. Minister for the Civil Services [1985] 1 AC 374 enunciated three broad grounds for judicial review, as 'legality', 'procedural propriety' and 'rationality' and this decision had its impact in the development of the law in post-Anisminic period. In the light of the above four important decisions of the House of Lords, other decisions of the court of appeal, Privy Council, etc., and the later academic opinion in the matter the entire case law on the subject has been reviewed in leading text books. In the latest edition of De Smith on 'Judicial Review of Administrative Action'-edited by Lord Woolf and Jowell, Q.C. [(Professor of Public Law) (Fifth edition)-(1995)]. In chapter 5, titled as 'Jurisdiction, Vires, Law and Fact' (pages 223-294), there is exhaustive analysis about the concept, 'jurisdiction', and its ramifications. The authors have discussed the pure theory of jurisdiction, the innovative decision in 'Anisminic&#

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t was for the county court Judge in Pearlman to decide whether the installation of central heating in a dwelling amounted to a 'structural alteration extension or addition'. This was a 'typical question of mixed law, fact and degree which only a scholiast would think it appropriate to dissect into two separate questions, one for decision by the superior court, viz., the meaning of these words, a question which must entail considerations of degree, and the other for decision by a county court, viz., the application of words to the particular installation, a question which also entails considerations of degree'. It is, however, doubtful whether any test of jurisdictional error will prove satisfactory. The distinction between jurisdictional and nonjurisdictional error is ultimately based upon foundations of sand. Much of the superstructure has already crumbled. What remains is likely quickly to fall away as the courts rightly insist that all administrative action should be

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ectly.' 'A Tribunal lacks jurisdiction if (1) it is improperly constituted, or (2) the proceedings have been improperly instituted or (3) authority to decide has been delegated to it unlawfully, or (4) it is without competence to deal with a matter by reason of the parties, the area in which the issue arose, the nature of the subject-matter, the value of that subject-matter, or the non-existence of any other prerequisite of a valid adjudication. Excess of jurisdiction is not materially distinguishable from lack of jurisdiction and the expressions may be used interchangeably.' 'Where the jurisdiction of a Tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue, or as jurisdictional.' (p. 114) 'There is a presumption in construing statutes which confer jurisdiction or discretionary powers on a body, that if that body makes an error of law while purp

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at their expertise in determining the principles of law applicable in any case has not been excluded by Parliament.' (p. 120) 'Errors of law include misinterpretation of a statute or any other legal document or a rule of common law; asking oneself and answering the wrong question, taking irrelevant considerations into account or failing to take relevant considerations into account when purporting to apply the law to the facts; admitting inadmissible evidence or rejecting admissible and relevant evidence; exercising a discretion on the basis of incorrect legal principles; giving reasons which disclose faulty legal reasoning or which are inadequate to fulfil an express duty to give reasons, and misdirecting oneself as to the burden of proof.' (emphasis(1) supplied) (pp. 121-122) 34.. H.W.R. Wade and C.F. Forsyth in their book-Administrative Law, Seventh Edition (1994)-discuss the subject regarding the jurisdiction of superior courts over subordinate courts and Tribunals under

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court would quash only if the erroneous fact was jurisdictional. New rule: The court will quash if an erroneous and decisive fact was- (a) jurisdictional; (b) found on the basis of no evidence; or (c) wrong, misunderstood or ignored. Errors of law Old rule: The court would quash only if the error was- (a) jurisdictional; or (b) on the face of the record. New rule: The court will quash any decisive error, because all errors of law are now jurisdictional." (Emphasis Here italicised. supplied) So, if an order without jurisdiction is permitted to be challenged directly before this court, bypassing the statutory remedy, now, every order can be challenged before this court, going by the expanded meaning given to the word "jurisdiction". Lack of jurisdiction is also a point, which can be urged before the revisional authority. So, this court need not entertain matters, which other authorities can also deal with. If the petitioner's grievances are not redressed, even after ex

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this court alone can do under article 136 of the Constitution of India and other provisions conferring exclusive jurisdiction on this court. There is no reason to assume that the concerned High Court will not do justice. Or that this court alone can do justice. If this court entertains writ petitions at the instance of parties who approach this court directly instead of approaching the concerned High Court in the first instance, tens of thousands of writ petitions would in course of time be instituted in this court directly. The inevitable result will be that the arrears pertaining to matters in respect of which this court exercises exclusive jurisdiction under the Constitution will assume more alarming proportions. As it is, more than ten years old civil appeals and criminal appeals are sobbing for attention. It will occasion great misery and immense hardship to tens of thousands of litigants if the seriousness of this aspect is not sufficiently realised. And this is no imaginary phob

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re quickly and equally effectively, on account of the decentralisation of the process of administering justice. We are of the opinion that the petitioner should be directed to adopt this course and approach the High Court." I think the principle analogous to what is stated above, will apply in this case, where the petitioner has a statutory remedy, but it elects to approach this court directly. In a recent decision in Union of India v. Hindalco Industries [2004] 135 STC 281 (SC); [2003] 5 SCC 194, the apex court has held as follows: "There can be no doubt that in matters of taxation, it is inappropriate for the High Court to interfere in exercise of jurisdiction under article 226 of the Constitution either at the stage of show cause notice or at the stage of assessment where alternative remedy by way of filing a reply or appeal, as the case may be, is available but these are limitations imposed by the courts themselves in exercise of their jurisdiction and they are not matter

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FEMA – 031 – Dated:- 21-4-2006 – Export of Goods and Services – Extension of period of realization RBI/2006/371A.P. (DIR Series) Circular No. 31 April 21, 2006 ToAll Banks Authorised to Deal in Foreign Exchange Madam / Sirs, Export of Goods and Services – Extension of period of realization Attention of Authorised Dealer (AD) banks is invited to AP(DIR Series) Circular No.20 dated January 28, 2002, in terms of which AD banks have been permitted to grant extension of time for realization of export proceeds beyond the prescribed period from the date of export, where invoice value does not exceed US$ 100,000 subject to the conditions prescribed therein. 2. As a measure of further liberalization, it has now been decided to increase the invoice

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V/DGST/43-GTO/02/2005/2740 Dated:- 3-4-2006 Circular – Circulars – Service Tax – Goods transport agency Abatement of 75% Withdrawal of letter confirmed Letter F.No. V/DGST/43-GTO/02/2005/2740, dated 3-4-2006 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Applicability of Notification No. 32/2004-S.T., dated 3-12-2004 vis-a-vis Notification No. 35/2004-S.T., dated 3-12-2004 – Objection raise

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2006 (3) TMI 62 – HIGH COURT, BOMBAY – 2008 (9) S.T.R. 228 (Bom.) – – Tour operator service – Apply for registration to the concerned authority without prejudice to its contention of liability – Authority shall provisionally register the petitioner – Until it is decided that ‘Tour operator’ is liable to pay tax, no penal action can be taken – Writ Petition No. 684 of 2006 Dated:- 13-3-2006 – [Order per].- P.C. :- The learned counsel for the petitioners submits that the first petitioner is not averse to get itself registered with the concerned authority without prejudice to its contention that it is not liable to pay service tax as it does not fall in the category of tour operators . 2. In the light of the submission made by the learned c

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V/DGST/22/Audit/Misc/1/2004 Dated:- 16-2-2006 Order-Instruction – Circulars – Service Tax – Construction Services / Commercial or Industrial Construction Services Instructions [ Source: G.G.S.T. Letter F. No. V/DGST/22/Audit/Misc/1/2004, dated 16-2 -2006] Subject: Collection of Service Tax under construction of Complex services/Commercial or Industrial Construction service. Service Tax was levied on “Commercial or Industrial Construction Services” and “Construction of Complex Services” w.e.f. 10-9-2004 and 16-6-2005 respectively. Further the scope of “Commercial or industrial Construction Service” was expanded w.e.f. 16-6-2005 so as to include completion and finishing services. 2. The Board vide Circular No. 80/l0/2004-S.T., dated 17-9-2004 [ (172) E.L.T. T3} has clarified that “Estate Builders” (i.e. who gets such construction done) are not covered under the ambit of these services. It is only the hired contractors engaged by these builders who are to be taxed, In o

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hat the activities undertaken by builders for construction of flat/building for or on behalf of the prospective customers for consideration in cash or deferred payment is covered under the works contract and not under sale”. 5. Considering the above decision, if the construction is undertaken by the builder for prospective customer under an agreement for sale and after construction, the rights in property have been transferred to the said prospective purchasers, the activity will amount to “work contract” or taxable service is covered under the Service Tax and not sale. 6. Divergent practices are being reported by field formations and in most of the cases, builders are avoiding registration in view of CBEC Circular No. 80/10/2004-ST., dated 17-9-2004. Further, there is wide gap between the amount charged by builders from their customers for such work contract (sale) and the amount on which contractors are discharging their Service tax liability. The various miscellaneous charges l

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ex services. In all such situations, the tax able value under section 67 shall be the gross amount charged by the service provider (builder in this case) for such services provided or to be provided by him. This read with Notification No. 18/2005-ST., dated 7-6-2005 entitles a builder/contractor an abetment of 67% on the gross amount charged, which shall include the value of goods and material supplied. Further, there is no deductions/exemptions provided for computation of such taxable value in the composite contract. 9. The aforesaid view flows from the definition of the taxable service of construction of complex besides the judicial pronouncement listed above. 10. The all India tax collection under the service head of 'Construction of complex service', is reportedly too low. Please initiate pro-active measures to realize service tax on this service especially when only 43 days are now left in the current fiscal. 11. Action taken on the above may be communicated to us with a cop

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uction the residential apartments or the commercial complex would be handed over to the purchasers who would get an undivided interest in the land also. The owners of the land would then transfer the ownership directly to the society which is being formed under the Karnataka Ownership Flats (Regulation of Promotion of Construction, Sales, Management and Transfer) Act, 1974. The question which arises for consideration is whether the Appellants are dealers and are liable to pay turnover tax under the Karnataka Sales Tax Act. The Appellants filed returns showing Nil liability to pay tax on the footing that there was no transfer of any property in goods either by itself or by virtue of any works contract. The Adjudicating Authority did not accept their contention and passed an Assessment Order claiming tax. Against the Assessment Order, the Appellants went in Appeal to the Additional Joint Commissioner of Commercial Taxes (Appeal). The Additional Joint Commissioner held that tax was

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ehta submitted that as the Judgment in Mittal Investment Corporation's case has been reviewed this matter should also be sent back to the High Court. However, on a question from the Court, whether the Appellants were accepting the principles laid down in Mittal Investment Corporation's case the answer was that the Appellants wanted to agitate all the grounds including the ground that there was no works contract. Such a contention would stand concluded by the High Court Judgment in Mittal Investment Corporation's case even after the Order passed in the Review Application. No purpose would therefore be served in remitting the matter back to the High Court. Mr. Mehta was therefore asked to proceed in this Court itself. Mr. Mehta drew the attention of this Court to relevant provisions of the Karnataka Sales Tax Act [hereinafter called the said Act]. Section 2(1)(k)(viii) defines a “dealer” as follows : “2(1)(k) “dealer” means any person who carries on the business of buying, selling or

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y of India.” Section 2(1)(v-i) is relevant. It defines a “works contract” as follows : “2(1)(v-i) “works contract” includes any agreement for carrying out for cash, deferred payment or other valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any moveable or immovable property.” It is thus to be seen that under the Karnataka Sales Tax Act the definition of the words “works contract” is very wide. It is not restricted to a “works contract” as commonly understood, i.e., a contract to do some work on behalf of somebody else. It also includes “any agreement for carrying out either for cash or for deferred payment or for any other valuable consideration, the building and construction of any moveable and immoveable property”. The definition would therefore take within its ambit any type of agreement wherein construction of a building takes place either fo

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shall pay for each year, a tax under this Act on his taxable turnover of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract mentioned in column (2) of the Sixth Schedule at the rates specified in the corresponding entries in column (3) of the said Schedule.” Mr. Mehta submitted that by virtue of the Agreement entered into by the Appellants with the owner of the property the Appellants became owners of the property even though a formal conveyance in their favour had not been executed. He took this Court through various provisions of the Agreement entered into by the Appellants with the owner of the property. He submitted that under such Agreements almost the entire consideration amount is paid to the owners and possession of the property is handed over to the Appellants. He submitted that by virtue of the principles laid down in Section 53A of the Transfer of Property Act the Appellants were the owners of the property. I

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mounts paid can be forfeited and the agreement rescinded. He submitted that a person carrying out a works contract would have no right to forfeit or rescind the contract itself. He submitted that such a clause indicates that the Agreements are not agreements to carry out a works contract. On the other hand, Mr. Hegde submitted that the definition of a 'works contract' in the said Act is an inclusive definition which is very wide. He submitted that any agreement wherein party has agreed to construct or build for cash, deferred payment or other valuable consideration would be covered by the definition of the term 'works contract' as used in the said Act. In support of his submission he relied upon the Agreements entered into by the Appellants with the various purchasers and submitted that these Agreements indicate that the Appellants are undertaking the construction of the building and the flats for and on behalf of the purchasers and that the same is for valuable consideration to be p

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ks contract if he enters into an agreement to construct for cash, deferred payment or other valuable consideration. We, therefore, do not need to go into the question whether the Appellants are owners as even if the Appellants are owners to the extent that they have entered into Agreements to carry out construction activity on behalf of somebody else for cash, deferred payment or other valuable consideration, they would be carrying out a works contract and would become liable to pay turnover tax on the transfer of property in the goods involved in such works contract. Further under the said Act there is no distinction between construction of residential flats or commercial units. Thus, a works contract, within the meaning of the term in the said Act, can also be for construction of commercial units. For the purposes of considering whether an agreement amounts to a works contract or not, the provisions of the Karnataka Ownership Flats (Regulation of Promotion of Construction, Sales,

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erest and a right to construct. Such rights do not constitute the person an owner of the property. To consider whether the Appellants are executing works contract one needs to look at a typical Agreement entered into with the purchaser. The relevant clauses are clause (q), (r) of the recitals and clauses 1, 5(c) and 7, which read as follows : “(q) (i) Construction of the said multi-storeyed building; (ii) Sale of the units in the aforesaid multistoreyed building to different persons in whose favour ultimately a Deed of Conveyance would be obtained by the Holders, directly from the Vendors, of an undivided fractional interest in the said land (i.e. the area of 5910.17 sq. metres described in the First Schedule hereunder written) and such owner of units would own, on ownership basis, the respective units on condition that an Agreement would be entered into between the Holders on the one hand and the persons (desiring to acquire on ownership basis an unit in such multi-storeyed buil

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s' and also car parking space/s No./s nil in the basement/ground floor of the said building (hereinafter referred to as 'the said Unit')” 1. As and by way of a package deal : (a) K. Raheja Development Corporation, (as Holders) agree to sell to the Prospective Purchaser an undivided 0.42% share, right, title and interest in the said land described in the First Schedule hereunder written (with no right to the Prospective Purchaser to claim any separate sub-division and/or right to exclusive possession of any portion of the said land) for a lump sum agreed and quantified consideration of Rs. 3,25,000/- (Rupees three lacs twenty five thousand only) to be paid by the Prospective Purchaser to the Holders at the time and in the manner stated in Clause 2 hereof; (b) K. Raheja Development Corporation, (as Developers) agree to build the said building named ' Raheja Towers', having the specifications and amenities therein set out in the Second Schedule hereunder written and as Develope

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ereunder written and/or in the said premises : (a) … (b) . (c) The overall control and management of the project and the development and completion of the said building shall be with the Developers and furthermore the Developers are and shall continue to be in possession of the said land and building and shall be entitled to a lien thereon and that the Prospective Purchaser shall not be entitled to claim or demand from the Holders possession of any portion of the said land or to claim or demand from the Developers possession of the said premises unless and until the Prospective Purchaser has paid in full through the Holders the full consideration money payable to the Holders under Clause 2 above and the full consideration money payable to the Developers under Clause 3 above. 7. If the Prospective Purchaser commits default in payment of any of the installments of consideration aforesaid on their respective due dates (time being the essence of the contract) and/or in observing a

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e as they may determine and the Prospective Purchaser shall not be entitled to question such sale, disposal or to claim any amount from them. Thus the Appellants are undertaking to build as developers for the prospective purchaser. Such construction/development is to be on payment of a price in various installments set out in the Agreement. As the Appellants are not the owners they claim a “lien” on the property. Of course, under clause 7 they have right to terminate the Agreement and to dispose off the unit if a breach is committed by the purchaser. However, merely having such a clause does not mean that the agreement ceases to be a works contract within the meaning of the term in the said Act. All that this means is that if there is a termination and that particular unit is not resold but retained by the Appellants, there would be no works contract to that extent. But so long as there is no termination the construction is for and on behalf of purchaser. Therefore, it remains a work

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FEMA – 021 – Dated:- 10-1-2006 – Export of Goods and Services – Liberalisation – GR Approval for export RBI/2005 – 06/ 275A.P.(DIR Series) Circular No. 21 January 10, 2006 To,All Banks Authorised to Deal in Foreign Exchange Madam / Sir, Export of Goods and Services – Liberalisation – GR Approval for export Attention of Authorised Dealer (AD) banks is invited to A.P. (DIR Series) Circular No.30 dated March 26, 2002 in terms of which AD banks have been delegated powers to approve GR form for export of items for display or display-cum-sale in trade fairs / exhibitions outside India subject to the conditions specified therein. 2. With a view to further liberalise the facilities available to exporters and simplify the procedure for export, it h

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F. No. V / DGST / 21-30 / Legal 04/2004, Dated:- 31-12-2005 Order-Instruction – Circulars – Service Tax – D.G.S.T Order F. No. V / DGST / 21-30 / Legal 04/2004, Mumbai Dated 13-12-2005 Service Tax on Air Cargo Agents under “Business Auxiliary Service” Scope of This order is in pursuance of the order of Hon'b High Court of the Bombay Judicature in Writ Petition No. 3169/2004. The petition was disposed off by Hon'ble Court with directions to the Director General of Service Tax Mumbai, to pass a reasoned order after hearing the Associations. Background: 2. The matter has arisen on account of the doubt raised by the Air Cargo Agents Association of India whether services such as billing, collection or recovery of payments, issuing airway bills, marketing or canvassing of cargo, managing distributions and logistics etc. rendered by Air Cargo Agency Agreement (herein after referred to as 'agreement') are liable to service tax and if so, whether these are covered wi

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al statute, there is no uniform of classification, no tax under service tax is payable by any Air Cargo Agent. It cannot be correct that in different parts of the country, different agents performing the same services are required to pay service tax under different headings. This would lead to chaos. Hence there must be uniform of classification. Therefore, the Counsel urged that until such time the uniform of classification is arrived, they cannot be called upon to pay service tax under any heading. It was urged by the Counsel that regardless, of any heading under which they may be made liable for registration for service tax in any office, no service tax can. be recovered from them whatsoever. This is because by Circular No. 56/5/2003, dated 25-4-2003 [ (154) E.L.T. T25}, Airlines are exempted from payment of service tax under any heading when they transport goods in relation to export cargo. Under the same circular, it is clarified that any person who provides secondary

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of the Air Cargo Agent at any time either under Business Auxiliary Services or even under IATA which regulates the business of the airlines as well as the agents and to which IATA is a signatory and active member. It was next urged that the commission received for blocking cargo space on any airline is uniform under IATA notwithstanding any other consideration. Therefore, there is no promotion of any individual airline. Thus, there is no question of business Auxiliary Services being made applicable. The counsel respectfully urged that the Board must consider the vital point that Air Agents and rail Booking Agents also book space for passengers for which they receive identical uniform commission from the Airlines under IATA. It was urged that it is inconsiderable that for passenger's space, the service is provided to the passenger but for Cargo space, the service is provided to the airline. This can never be so. Therefore, Business Auxiliary Service cannot logically be made

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es, the amount is recovered from the passengers. Therefore, for cargo services,there can be no discrimination and they are not the clients of the airlines. 4. They also submitted their points of view and contentions in writing vide their letter No. nil dated 14-6-2005 on 14th June, 2005 and received copy of the record of hearing on the same day. 4.1 The Association, in nut shell, states that its members who are IATA agents carry out following functions, as set out in the agreement. (a) Accept goods from the shippers on behalf of the member Airlines for international transportation. (b) Prepare the Airway bill on behalf of the member Airlines to the shipper. The Airway bills are issued on behalf of the Airlines, the charges of which are fixed by the member airlines and are not in control of the members of the Associations. (c) Book the space for transport of cargo after due permission from the member airlines. (d) Collect and Accept payments of prepaid transportation and

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angalore v. Kashyap Engg. Metallurgical (P) Ltd. – 1994 (71) E.L.T. 530 (Tribunal). 6. UOI v. Garware Nylon Ltd. – 1996 (87) E.L.T. 12 (S.C.). An analogy of their services with that of Air Travel Agent Rail Travel Agent has been used. They therefore contended that unless a specific heading is created for covering the activity of cargo agents, tax cannot be demanded merely on assumption and ad hoc basis under the category of Business Auxiliary Services. They have relied on the decision of High Court of Rajasthan in the case of UOI v. Maharaja Shri Umed Mills Ltd. – 2000 (123) E.L.T. 348 wherein it is held that no tax can be collected without the authority of law. Findings: 5. Before I dwell on whether the above said activities are covered under the category “Business Auxiliary services”, I consider it proper to discuss each of the issues raised by the Association. 5.1 The representatives of the Air Cargo Association of India in its oral submission dated 9-6-2005

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ether. A person can register himself and pay service tax for any one or more services rendered by him. The judgments cited by the Association are not applicable to the present case, in as much as in the said cases cited in its pleading/representation by the Air Cargo Agents Association, relate to dispute of classification of the goods under Central Excise Tariff Act, 1985. Whereas the dispute dealt herewith relate to classification of the services rendered by the Air Cargo Agents under chapter V of the Finance Act, 1994 as amended. Regarding the plea of the said agents that they have called upon by various authorities to get themselves registered under various categories listed in para 5.1 above, I must say that all aforesaid services, except Aircraft operator's services, are defined under the various Sections of the Finance Act, 1994, which are detailed as under: Sl. No. Services Sections defining a service Under the Finance act, 1994 1. Cargo

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ed that they are neither employed by the airlines nor do they give any professional service to the airlines and in fact it is the shipper/consigners who are their clients and not the airlines, as alleged in the show cause notices. It is further contended by the Associations that the Air Cargo Agents do not promote any particular airlines to the exclusion of others and that Air Cargo Agents are not providing any customer care service to any airlines nor do they provide any incidental auxiliary support services and therefore, they do not perform any business auxiliary services. 8. The “Business Auxiliary Service” was brought under the Service Tax net w.e.f. 1-7-2003 by the Finance Act, 2003, vide Notification No. 7/2003-ST., dated 20-6-2003. As per Clause (19) of Section 65 of the Finance Act, 1994, as amended, “Business Auxiliary Services” means any services in relation to: (i) promotion or marketing or sales of goods produced or provided by or belonging to the client, or (iii pro

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are also covered within the scope of “Business Auxiliary Services'. It is seen that the members of the Associations are acting as Air Cargo booking agents for the Airlines and marketing and canvassing for the cargo space available for various airline. For rendering such services to the airlines the Agents get payments/remuneration from the concerned airlines, is clearly brought out in Para 12 of Cargo Agency Agreement dated 16th May, 1999 executed between the Director General of International Air Transport Association (IATA) acting as agent for the carrier and M/s Eastern Cargo Carriers (India) Pvt Ltd., Mumbai, one of the Cargo Agent Members of the association which reads “the carriers shall remunerate the agents for services rendered under ..” 11. The respective cargo agents of the airlines are duly selected/ approved by the respective airlines itself before commencing the agreed activities/services subsequent to which blank Airway Bill Books are supplied to the Air Cargo Agents.

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Service Tax, Mumbai-IV, in Writ Petition Long No. 989 of 2004 at Bombay High Court, it is clearly stipulated in Para 7 of the Cargo Agency Agreement dated 16th May, 1999 executed between Director General of International Air Transport Association (IATA) acting as agent for the carriers and M/s Eastern Cargo Carriers ( Pvt. Ltd. Mumbai, one of the cargo agents and member of the Association, the “the Agent shall make known and shall promote the services of the Carrier in every way reasonably practicable including the use of display, promotional and publicity material that such Carrier may supply, provided that any such material of a permanent or valuable nature and so designated by the Carrier shall remain the property of such Carrier”. Also at Para 12 of the same agreement it is stated that “the carriers shall remunerate the agent for services rendered under this agreement, in an manner and amount as stated from time to time and communicated to the agent by the carrier, Para 8.1 to 8.5

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essional line of work (service) relating to booking and transportation of cargo, preparing bills, collecting them, realizing payment etc., which otherwise would have to be carriered out by the airlines concerned and the agents get paid for such services, thus establishing service provider-client relationship with the airlines. The said activity, carried out by the Air Cargo Agents, thus, squarely fall within the ambit of Section 65(19) of the Finance Act, 1994. 15. In view of the above, I conclude that the aforesaid services rendered, under the IATA Cargo Agency Agreement by the members of the Association (The Air Cargo Agents), are covered within the scope of “Business Auxiliary Services” and the Air Cargo Agents are liable to pay service tax on the remuneration/consideration received by the agents for such activities, since 1-7-2003 under Section 68 of the Finance Act, 1994. All such service providers must discharge the service tax liability forthwith. They shall also be liable

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2005 (12) TMI 291 – HIGH COURT OF GUJARAT – [2006] 69 SCL 151 (GUJ.) – – Winding up – Power of liquidator – COMPANY APPLICATION NOS. 16, 26, 43, 44, 186, 257 OF 2000, 52 OF 2002, 19 OF 2003, 237 AND 268 OF 2004 COMPANY PETITION NO. 205 OF 1996 OFFICIAL LIQUIDATOR REPORT NOS. 3 OF 2000, 23 OF 2004 AND 72 OF 2005 Dated:- 23-12-2005 – K.A. PUJ, J. S.N. Shelat, A.S. Vakil, B.T. Rao, Harin P. Raval and Y.N. Ravani for the Applicant. Ashok L. Shah, J.R. Nanavati, Pranav G. Desai, Anshin H. Desai, Ms. P.J. Davawala, S.N. Soparkar, Mrs. Swati Soparkar and B.R. Rao for the Respondent. JUDGMENT 1. Since all these Company Applications and O.L. Reports are inter related and they centre round the properties of M/s. New Jahangir Vakil Mills (in liquidation), they are heard and being disposed of by this common judgment and order. 2. Before the Court proceeds to deal with each of these applications and reports, it is necessary to have a close look at the factual background of the entire issue raise

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uidation or otherwise. NJVM became a part of a Unit of GSTC by virtue of the provisions of the Gujarat State Textile Undertakings (Nationalization) Act, 1986. The said Act provided for nationalization of total four Textile undertakings of which one was NJVM. Although the ordinance was promulgated on 1-7-1986, it provided for nationalization of the textile undertakings with retrospective effect from 1-1-1986. Even prior to such nationalization of the NJVM, GSTC was connected with NJVM as a lessee. NJVM got closed in the year 1980. GSTC took over the affairs of NJVM on lease from the Official Liquidator in September, 1982 on a lease rental of Rs. 1 lakh per month. Day-to-day affairs of the Mill were conducted and managed by GSTC till 31-12-1985. On 1-1-1986, NJVM was merged into GSTC as its unit by virtue of the retrospective effect of the Provisions of Nationalization Ordinance. After 1-1-1986 i.e., after nationalization of the unit, all business affairs were managed by the GSTC as its

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elevant parties including the Banks, Labour Unions and other financial institutions whose interest was going to be affected in the said proceedings, this Court vide its order dated 6-2-1997 has passed an order to wind up GSTC and the Official Liquidator attached to this Court was appointed as the Liquidator of the Company and he was directed to take over the charge of all the assets and properties of GSTC including possession thereof and the Gujarat Industrial Development Corporation was appointed as an agent of Official Liquidator under section 457(2)(v) of the Companies Act, 1956 for the purpose of preservation, protection and disposal of the property of the Company in liquidation. 5. Upon winding up order having been passed, statement of affairs was filed by the Director of GSTC before the Official Liquidator and the symbolic possession of all the textile mills units and head office have been taken over by the Official Liquidator at the relevant time. 6. Company Application No. 16 o

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akil Mills (in liquidation), a Unit of Gujarat State Textile Corporation Ltd., at the total price of Rs. 11 crores, on such terms and conditions as this Court deems just and proper. 8. Company Application No. 43 of 2000 is filed by State Bank of Saurashtra praying for the direction to the Official Liquidator to the effect that the amounts realised from the sale of the assets of the New Jahangir Vakil Mills (a Unit of Gujarat State Textile Corporation Limited) (in liquidation) and more particularly pursuant to the two advertisements dated 23-12-1999 and 6-2-2000 issued in the Newspaper Saurashtra Samachar , published from Bhavnagar, may not be disbursed except after first making the payments due to the applicant, with respect to loans, inclusive of interest advanced by the applicant to the New Jahangir Vakil Mills. 9. Official Liquidator report No. 3 of 2000 is filed by the Official Liquidator on 2-2-2000 giving particulars about the offers received and auction proceedings to be held an

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)7, Sheet No. 166, Survey No. 5586 admeasuring approximately 67,000 Sq. Mts. given on lease by former Ruler of Bhavnagar by virtue of lease-deed dated 10-10-1916 and approximately 7762.6 Sq. Ft. given on lease by the former Borough Municipality by Resolution No. 248, dated 12-1-1931 over which there is a building and the factory premises of New Jahangir Vakil Mills, Bhavnagar (in liquidation). The applicant has also prayed for quashing and setting aside the auction held on 16-2-2000 by the order of this Court in O.L.R. No. 3 of 2000. The applicant has further prayed for handing over the possession of the said properties to the applicant on winding up of the Company. 12. Company Application No. 257 of 2000 is filed by the applicant, namely, Satishbhai Chavda praying for quashing and setting aside the action of the Official Liquidator of initiating auction of the land occupied by the New Jahangir Vakil Mills, Bhavnagar (in liquidation). 13. Company Application No. 52 of 2002 is filed by

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further prayed for handing over the possession of the said properties on winding up of the Company and further sought for the injunction against the Official Liquidator from confirming the sale or handing over the possession to one M/s. Vicky Trading. 14. Company Application No. 19 of 2003 is filed by M/s. Vicky Trading seeking prohibition against the Official Liquidator from conducting the auction of sale of the plant and machinery, furniture and fixtures, stores, spares, scrap and other miscellaneous things of New Jahangir Vakil Mills being held on 24-1-2003 and seeking confirmation of sale of the entire property of the Company in liquidation in favour of the applicant. 15. Official Liquidator Report No. 23 of 2004 is filed praying for the direction from this Court to refer the matter to the appropriate Agency to investigate the cause of fire. The Official Liquidator has also prayed for the appointment of Government Approved Valuer to assess the damages to the properties of New Jaha

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extile Corporation (now in liquidation). The applicant-State has also prayed for the stay against the Official Liquidator from taking any further action pursuant to the order passed by this Court on 6-2-1997 in Company Petition No. 205 of 1996 in respect of disposal of properties and/or to deal with the assets and properties in any manner whatsoever. 17. Company Application No. 268 of 2004 is filed by Mill Kamdar Union seeking direction to the Official Liquidator to release the unpaid wages of the members of the applicant-Union, who are the workers of M/s. New Jahangir Vakil Mills (in liquidation) for the period commencing from 1-10-1994 to 30-9-1996 as directed by the Industrial Tribunal, Bhavnagar in Review Application Reference (IT) No. 19 of 1995 dated 27-9-1996, for which the claim has been filed by the Union before the Official Liquidator on 12-1-2000 along with the order passed by the Tribunal. The applicant-Union has also prayed for the direction to the Official Liquidator to p

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ought for the permission of this Court to give public advertisement in the Newspapers for inviting the claims from the Creditors. 19. The Court has passed several orders from time to time in different applications. During the course of hearing of all these matters, there was unanimity amongst the learned advocates appearing for the respective parties that if Company Application No. 237 of 2004 is taken up for hearing, the view taken therein will take care of all other matters. Accordingly, all submissions are made, arguments are canvassed and documents were referred to keeping in mind the reliefs sought for in the said applications. 20. As stated above, Company Application No. 237 of 2004 is moved by the State Government through the Secretary, Industries & Mines Department and the State Government has asked for the possession of the immovable properties of the Mills Company (in liquidation). 21. So far as the unit of New Jahangir Vakil Mills is concerned, there are no Secured Credi

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ilities of GSTC is only of the Government and the Government is the major creditor which has been paid approximately an amount of Rs. 826.79 lakhs until the order of winding up was passed on 6-2-1997. The State Government has moved an application earlier being Company Application No. 348 of 1997 for taking over the assets of all the 17 Units which were nationalized and vested with the GSTC. However, since the matter could not be settled at the relevant time due to non-co-operative attitude of the Secured Creditors, namely, Banks and other financial institutions, the entire idea was dropped by the Government and, therefore, the said application came to be withdrawn on 22-7-1998. 23. The State Government has thereafter moved the present application only for the purpose of taking over the immovable assets being land and building only of the New Jahangir Vakil Mills (in liquidation) where there are no secured creditors and all the liabilities including that of the labourers etc. have been

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ory basis in the vacant land of the said unit of GSTC. On fulfilment of this project and on establishment of the Diamond Park, there will be a boost to the State economy as well as national economy and at the same time will generate employment at a very large scale which would substantially solve the problem of unemployment in the district of Bhavnagar. 24. The Official Liquidator is already having sufficient fund of approxi-mately Rs. 44.89 crores in the account of GSTC which would be sufficient to discharge liabilities of the Secured Creditors as well as other unsecured creditors, if any, and if there is any deficit in repayment of dues of the aforesaid creditors, the State Government undertakes to discharge their liabilities after ascertaining the true and correct outstanding dues. So far as the liabilities towards workers and employees of the Company are concerned, the same have been fully discharged and if there is any liability either towards secured creditors or towards workers

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New Jahangir Vakil Mills while in operation. However, the liability created by the New Jahangir Vakil Mills during the first period i.e., Pre-Take over period which was prior to its having any sort of association with the GSTC may be considered as the liability of New Jahangir Vakil Mills only and GSTC need not be considered to be liable for such liabilities. However, the subsequent two stages of the life tenure of New Jahangir Vakil Mills namely, Post-Take over period i.e., subsequent to acquiring lease rights from the Official Liquidator and the Post Nationali- zation period i.e., period subsequent to Nationalization, may be considered as a period whereby the liabilities created by the New Jahangir Vakil Mills during its operation were as a result of and under the management of GSTC. Hence, the liabilities created by New Jahangir Vakil Mills during such periods may be considered to be a liability of GSTC as a whole. The Chartered Accountant has given figurative breakup of liabilities

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ed, the total liability is Rs. 2,72,04,972 as per the statement of affairs and is to be discharged out of the assets of the undertaking. However, the State Government has initiated steps to discharge the dues of Cotton Corporation of India aggregating to Rs. 146.18 lakhs for the undertaking. The State Government is intending to settle the dues of CCI separately in line with the settlement of dues of Banks and Financial Institutions, in the manner in which dues of SBS have been settled for New Jahangir Vakil Mills. Out of the remaining dues, Rs. 8,54,442 are due to GIIC, which is an institution fully owned by the State Government. The liability towards deferred dues of taxes aggregating to Rs. 1,08,19,033 is due to State Government/various departments of State Government. Thus, out of the total liability for Post Nationalization management period, Rs. 9,13,283 is due to other creditors which is to be liquidated out of the assets of the undertaking. The State Government has also paid thr

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avit that the bank balance of Rs. 80 lakhs was handed over to the Official Liquidator at the time of handing over the property of the New Jahangir Vakil Mills pursuant to the winding up order dated 6-2-1997. Thereafter, the Official Liquidator has realized Rs. 460 lakhs by way of sale of the property of the assets of the Mills company. The Official Liquidator is, therefore, having fund of about Rs. 540.53 lakhs which is in excess of the liability which aggregate to Rs. 303.47 lakhs as explained in the report of the Chartered Accountant, which is inclusive of the dues of the State Government to the tune of Rs. 136.62 lakhs. 29. It is further stated in the affidavit that there is no need for the Official Liquidator to initiate any proceedings for liquidating further assets of the Mills company. The sale effected at a low price of Rs. 12 crores is not required to be sanctioned and proceedings for sale are required to be dropped. The State Government being the sole shareholder and major cr

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Government before this Court to hand over the possession of the properties to the State Government and the Official Liquidator has no right to retain the said possession. 31. Mr. A.L. Shah, learned advocate appeared for the Official Liquidator and he has also submitted after due deliberation and discussion with the Official Liquidator that since the State Government has discharged the liabilities of the Mills Company towards Secured Creditors and labourers and there is still surplus fund available with the Official Liquidator in the account of GSTC and since the State Government has undertaken to discharge the liability, if any, which may arise in future, the Official Liquidator has no objection in handing over the possession of the properties in question to the State Government. 32. In the above view of the matter and looking to the entire facts and circumstances of the case and considering the various contentions raised from time to time and the reports submitted including the repor

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or discharging the liability or to meet with any contingency that may arise in future. However, the balance amount will have to be handed over to the State Government and the appropriate order in this regard would be passed on submission of the accounts before the Court. 34. Since the Court has taken the decision to hand over the possession of the immovable properties of NJVM a unit of GSTC, the Company in liquidation to the State Government, the question of confirmation of sale in favour of 21st Century Developers – the applicant in Company Application No. 16 of 2000, acceptance of offer for purchase of all assets including land, building etc. made by Mr. Rajabbhai K. Kangadh – the applicant in Company Application No. 26/2000, which is already stated to have been disposed of confirmation of sale of the entire property of the Mills Company in favour of M/s. Vicky Trading – the applicant in Company Application No. 19 of 2003 and setting aside the action of initiating the auction of the

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of these two applications and accordingly, these two applications stand disposed of. 37. As far as O.L.R. No. 3 of 2000 is concerned, since the sale of plant, machinery, furniture/fixtures, office equipments, spares, scrap and misc. items of the Mills Company has been confirmed by this Court in favour of M/s. I.B. Enterprise, nominee of M/s. Vicky Trading and immovable property of the Company is decided to be handed over to the State Government, O.L.R. No. 3 of 2000 does not survive and it is accordingly disposed of. 38. As far as O.L.R. No. 23 of 2004 is concerned, this Court has passed two orders earlier on 5-5-2004 and 20-7-2004. Pursuant to the order passed by this Court on 20-7-2004, the Official Liquidator has filed further report on 9-8-2004 seeking direction from this Court as to whether he should accept the claim of Rs. 1,48,307 against the total loss and/or damages of Rs. 98,57,500 assessed by the Executive Engineer, GIDC, Bhavnagar. The Official Liquidator has further sough

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concerned, in view of the decision taken by this Court in Company Application No. 237 of 2004 and in view of the fact that O.L.R. No. 23 of 2004 along with Company Application No. 19 of 2003 are being disposed of today, the directions sought for in the present report no longer survives and it is accordingly disposed of. 40. So far as Company Application No. 268 of 2004 is concerned, an affidavit-in-reply is filed by the Deputy Official Liquidator wherein it is stated that the order passed by the Industrial Tribunal, Bhavnagar in Review Application i.e., Reference (IT) No. 19 of 1995 on the basis of which the claim is made in the present Company Application, has been the subject-matter of Special Civil Application No. 826 of 1997 which is pending before this Court. It is further stated that before the winding up order was passed by this Court in the case of GSTC, GSTC introduced voluntary retirement scheme for the workers of all the Mills Company of GSTC with the financial help of the

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ompensation by 97 workers did not arise. It is further stated that at this juncture, when the Mill Company is not in existence and the Corporation who took over the management of the Mill Company is also not in existence, these 97 workers cannot claim salary for the period for which they have never worked. 41. In any case, the petition is still pending before this Court and hence, it is not necessary to pass any order in this application. It is open for the applicant-Union to move this Court after the aforesaid Special Civil Application No. 826 of 1997 is decided. Even otherwise, the State Government has undertaken the liability that if any claim on account of workers dues arises, the same will be discharged by the State Government. In view of the aforesaid position, this application does not survive at this stage and it is accordingly disposed of. 42. In the above view of the matter, all the aforesaid applications and O.L. Reports are accordingly disposed of without any order as to co

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Service Tax – TN No. 52/2005 Madurai – Dated:- 13-6-2005 – Service Tax – Centralized registration to be granted by DGST OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE :: MADURAI-2. TRADE NOTICE NO. 52 / 2005- STU, DATED: 13-06-2005. SERTVICE TAX NO. 12/ 2005 Sub: Service Tax – Centralized registration to be granted by DGST The contents of Directorate General of Service Tax s F.No. V/DGST/(21)/CR/1/2005 Mumbai, dated 9.06.2005 is communicated herewith for information, guidance and necessary action, to follow uniform practice ,for granting Centralized Registration in terms of Rule 4(3)(b) of Service Tax Rules, 1994 (communicated vide this office Trade Notice NO. 47/2005 – STU dated 26.05.2005. In order to ensure that a uniform practice is adopted to grant such permission the following guidelines are issued: (1) A check list of information/Documents to be submitted along with ST-1 application for the assessees seeking centralized registration has been formulated .(copy enclosed – Annexure

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Commissioner, under intimation to the Zonal Chief Commissioner, will forward such verifications report to the office of Directorate General of Service Tax for grant of centralized registration; (6) The DGST on receipt of such verification report, will examine and grant permission for centralized registration. The same would be intimated to the jurisdictional Commissioners as well as the Zonal Chief Commissioners; (7) The Commissioner would then issue the Centralized Registration and intimate the same to the concerned persons (applicants) as well as Directorate General of Service Tax and Zonal Chief Commissioner in format already prescribed; The Registration Number will be invariably issued in the following format: ST/ CENT / COMMISSIONERATE / DIVISION / SERVICE CATEGORY (Abbreviated forms as used in SERMON Software to be adopted) / Sr.No./ year. The main objective of adopting such a uniform Registration Number is to easily identify the location of centrally registered assessees; This

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ctional Central Excise/ Service Tax Commissionerate. (10) Bank account numbers of the branches and the central office through which the receipts are deposited / transacted. (11) List of branches, offices or premises of the assessee along with postal addresses, e-mail addresses and telephone Nos. and the name of the persons in-charge at each premises. (12) Brief note on accounting system adopted by the assessee clearly indicating method of accounting at Central Office in respect of services rendered by branch offices and method of detecting errors in the data sent by the branches so as to ensure that no transaction remained unaccounted. An Undertaking to be given by the assessee to make available the required information, records and data within 10 days, to the Audit team at the time of audit of Service Tax records. (13) List and description of records maintained at the branches and the premises where such centralized registration is required (separate list should be attached) (14) List

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V/DGST/3-GTO/02/05 Dated:- 11-4-2005 Circular – Circulars – Service Tax – Goods transport agency Abatement of 75% Circular withdrawn Letter F.NO. V/DGST/3-GTO/02/2005, dated 11-4-2005 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Applicability of Notification No. 32/2004, dated 3-12-2004 The letter F.No. V/DGST/03-GTO/02/2005, dated 30-3-2005 [2006 (1) S.T.R. C40] issued by this Directo

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V/DGST/43-GTO/02/2005/19879 Dated:- 30-3-2005 Trade Notice – Circulars – Service Tax – Transport of goods by road Scope of abatement of 75% Director General Service Tax, Letter F. No. V/DGST/43-GTO/02/2005/19879, dated 30-3-2005 Service Tax Circulars Trade Notices Subject: Applicability of Notification No. 32 dated 3-12-2004 Regarding. It is observed that there is wide spread confusion over the applicability of benefit provided under Notification No. 32/2004, dated 3

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2005 (1) TMI 624 – BOMBAY HIGH COURT – 2009 (234) E.L.T. 60 (Bom.) – – Writ jurisdiction – Adjudication – 1515 of 1990 Dated:- 27-1-2005 – S. Radhakrishnan and J.P. Devadhar, JJ. REPRESENTED BY :S/Shri Dinesh Pednekar with Ashis Parikar i/b. M/s. Khaitan and Jayakar, for the Petitioner. Mrs. N.V. Masurkar with Shri. H.V. Mehta, for the Respondent. [Order]. – P.C. : Learned counsel for the petitioner in this petition has made a statement that the bank guarantee has already been renewed and handed over to the concerned authorities. Learned counsel for the Revenue after verifying the said fact makes a statement that the renewed bank guarantee has been received by the Revenue. Statements made by both the parties are taken on record. 2. 

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m order, the consignment covered by the relevant bills of entry and invoices pertaining to the petitioner were allowed to be cleared. In other words, the interim order operated in favour of the petitioner and the goods were allowed to be cleared on compliance of the above conditions. 5. Now, what remains in the final adjudication of duty liability i.e. finalisation of the provisional assessment on the basis of which the goods were allowed to be cleared. 6. Learned counsel appearing for the petitioner submits that petitioner shall have no objection if the respondents desire to finally adjudicate upon the duty liability so as to finalise the provisional assessment made by them. The petitioner through their counsel undertook to co-op

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f India. 9. In the above premises, Revenue is directed to proceed with then adjudication proceedings as expeditiously as possible and to finally conclude the assessment proceedings within six months from today. 10. The petitioner shall keep the bank guarantee renewed and alive till the completion of the adjudication proceedings and eight weeks thereafter. If the adjudication proceedings are not completed within a period of 6 months from today, bank guarantee shall stand discharged. In that event, petitioner would be relieved of their obligation to keep the bank guarantee alive. 11. If the adjudication proceedings are not completed within six months from today and delay results in discharge of bank guarantee, then, in that eve

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V/DGST/21(9)/B & F Services/ 2/2004/18398 Dated:- 18-1-2005 Order-Instruction – Circulars – Service Tax – Service Tax Liability when on Departments and under takings of the State Police (Service tax instructions D.O.F. No V/DGST/21(9)/B F Services/ 2/2004/18398, dated 18-1 -2005 of D.G.S.T.] Subject: Payment of Service Tax by the departments and undertakings of the State Police. Let me first wish you and all your near and dear ones a very happy and productive new year. Perhaps, you would be quite aware about the numerous taxable services which are also available on www.cbec.gov.in. which are chargeable to service tax. Many such taxable services, like Mandap Keepers, Health Club Fitness Center Services are reportedly be

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the Health Club and Fitness Centers run by your establishments and providing services to persons for monetary consideration is also liable to pay service tax. Perhaps, due to ignorance, or otherwise, service tax liability, in some cases, is reportedly either not being discharged or not correctly discharged. It will be in the public interest if correct service tax is paid by them. Invoking of mandatory penal provisions of service tax against taxable service providing government bodies could be quite embarrassing. It will be advisable if such State Police bodies correctly comply with the requirements of the service tax rules and procedure. We seek your kind co-operation on the aforesaid and also request you to endorse this letter, with inst

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FEMA – 025 – Dated:- 1-11-2004 – Export of Goods and Services Period of Realisation for Export Oriented Units (EOUs) RBI/2004-05/264A.P. (DIR Series) Circular No. 25 November 1, 2004 ToAll Banks Authorised to Deal in Foreign Exchange Madam / Sirs, Export of Goods and Services Period of Realisation for Export Oriented Units (EOUs) Attention of Authorised Dealer (AD) banks is invited to the proviso 3 of sub-regulation (1) of Regulation 9 of Notification No. FEMA 23/2000-RB dated May 3, 2000 in terms of which the Reserve Bank has been empowered to extend the period for realisation and repatriation of export proceeds to India beyond six months. 2. Following the announcement by the Government in the Foreign Trade Policy in September 2004, it ha

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FEMA – 010 – Dated:- 13-9-2004 – Export of Goods and Services to Latin American Countries RBI/2004-05/175A.P.(DIR Series) Circular No. 10 September 13, 2004 ToAll Banks Authorised to Deal in Foreign Exchange Madam / Sirs, Export of Goods and Services to Latin American Countries Attention of Authorised Dealer Banks is invited to AP (DIR Series) Circular No.12 dated August 20, 2003 in terms of which, the facility for realisation and repatriation of full value of goods / software exported to the countries listed in the annexure to the above circular within 360 days, was extended upto August 31, 2004 subject to review. 2. It has been decided to discontinue the facility with effect from September 1, 2004. Accordingly, i.e. for exports made on o

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V/DGST/03/GEN/INS/01/2004 Dated:- 17-8-2004 Order-Instruction – Circulars – Service Tax – Service Tax Applicability in the State of Jammu Kashmir [Service Tax Instructions F. No. V/DGST/03/GEN/INS/01/2004, dated 17-8-2004] Subject : Applicability of Service Tax in Jammu Kashmir Kindly refer to your letter of NIL no dated 20th July on the subject cited above. Section 64 of Chapter V of the Finance Act, 1994 deals with the levy of Service Tax and excludes the applicabilit

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FEMA – 116/2004 – Dated:- 25-3-2004 – Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2004 RESERVE BANK OF INDIA (FOREIGN EXCHANGE DEPARTMENT) (CENTRAL OFFICE) G.S.R.352(E) dated June 8, 2004 – Part II – Section 3 – Sub-section (i) Notification No.FEMA.116/2004-RB dated March 25, 2004 In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7, sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.23/2000-RB, dated 3rd May 2000, the Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000,

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FEMA – 114/2004 – Dated:- 13-3-2004 – Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2004 RESERVE BANK OF INDIA(FOREIGN EXCHANGE DEPARTMENT)(CENTRAL OFFICE) G.S.R.279(E) dated April 23, 2004 – Part II – Section 3 – Sub-section (i) Notification No.FEMA.114/2004-RB dated 13 March , 2004 In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7, sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.23/ 2000-RB, dated 3rd May 2000, as amended from time to time, the Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Export of Goods and Serv

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withheld or may be given subject to such conditions as may be specified by the Reserve Bank by directions issued from time to time. (ii) for sub-regulation (2), the following shall be substituted, namely : (2) No direction under sub-regulation (1) shall be given by the Reserve Bank and no approval under clause (b) of that sub-regulation shall be withheld by the Authorised Dealer, unless the exporter has been given a reasonable opportunity to make a representation in the matter. Shyamala GopinathExecutive Director Foot Note :The Principal Regulations were published in the Official Gazette vide G.S.R.No.409(E) dated May 3, 2000 in Part II, Section 3, Sub-section (i) and subsequently amended vide a) G.S.R.No.199(E) dated February 27, 2001, b)

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FEMA – 068 – Dated:- 11-2-2004 – Export of Goods and Services – Liberalisation RESERVE BANK OF INDIA FOREIGN EXCHANGE DEPARTMENT CENTRAL OFFICE MUMBAI – 400 001 RBI/2004/54 A.P.(DIR Series) Circular No.68 February 11, 2004 To All Authorised Dealers in Foreign Exchange Madam / Sirs, Export of Goods and Services – Liberalisation Attention of Authorised Dealers is invited to paragraph C 20 of Part C to the Annexure to AP(Dir Series) Circular No.12 of September 9, 2000 in terms of which they were prohibited from either accepting for negotiation/collection shipping documents from caution listed exporters concerning exports declared on GR / SDF / PP / Softex forms or countersigning PP forms completed by them unless these forms bear approval of t

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Central Excise – 774/07/2004 – Dated:- 4-2-2004 – CIR NO.774/07/2004-CX, DT. 04/02/2004Jurisdiction of Chief Commissioners of Central Excise relating to allocation of Appeal cases within their respective jurisdictions amongst Commissioners of Central Excise (Appeals) – regarding. I am directed to state that the Board has examined the proposal for specifying the jurisdiction of Chief Commissioners of Central Excise relating to allocation of Appeal cases within their respective jurisdictions amongst Commissioners of Central Excise (Appeals). References have been received to consider specifying the jurisdiction of Chief Commissioners of Central Excise relating to allocation of Appeal cases within their respective jurisdiction amongst Commissi

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all the Commissioners of Central Excise (Appeals) within his zone. Chief Commissioner of Central Excise, within his jurisdiction, may specify the jurisdiction of individual Commissioner of Central Excise (Appeals), under his charge, by issuing suitable orders. 4. In normal situations, each Commissioner of Central Excise (Appeals) should continue to handle the appeals arising out of the jurisdiction of specific Commissionerates of Central Excise, as specified by Chief Commissioner of Central Excise. However, Chief Commissioner, may allocate the additional charge or any individual cases to Commissioner of Central Excise (Appeals), as and when, required.5. The field formations may suitably be informed.6. Receipt of this Circular may please be

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Service Tax – 69/18/2003 – Dated:- 15-12-2003 – Distribution of work amongst various sections of CBEC- regarding. Circular No 69/18/2003-ST Dated December 15, 2003 Please refer to Circular No. 661/52/2002-CX Dated 11.09.2002 issued under File No. 137/8/2001-CX-4 on the subject mentioned above. 2. It has been decided by the Board that the work relating to Service Tax exemptions under Section 93 of the Finance Act 1994 being handled by the CX-4 Section shall henceforth be handled by the TRU. 3. R

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FEMA – 040 – Dated:- 5-12-2003 – Export of Goods and Services – Liberalisation Reserve Bank of IndiaExchange Control DepartmentCentral OfficeMumbai A.P.(DIR Series) Circular No.40 December 5, 2003 ToAll Authorised Dealers in Foreign Exchange Madam / Sirs, Export of Goods and Services – Liberalisation Attention of Authorised Dealers is invited to A.P (DIR Series) Circular No.12 dated September 9, 2000, as amended from time to time, relating to Export of Goods and Services and Part C of the said circular wherein directions have been issued for allowing write-off, reduction in invoice value and extension of time limit for realisation of export proceeds to exporters in respect of outstanding / overdue export bills 2. With a view to simplifying and liberalising the procedure, providing full flexibility to all exporters and reducing the paper work associated with seeking extension of time or reduction in invoice value or write-off, it has been decided to allow all exporters (including Statu

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003, but proceeds of which are due for realisation within the prescribed period of one year. 3. Exporters dealing with more than one Authorised Dealer can avail of this facility through each AD, i..e., the limit of 10 per cent for self write-off (including reduction in invoice value) and extension of time for realisation of export proceeds would be applicable for export bills lodged for realisation with that Authorised Dealer. However, exporters operating under a consortium of banks or with multiple banks will also have the option of computing the 10 per cent limit on an aggregate basis with all the banks, provided the lead bank of the consortium or in case of multiple banking, a nodal bank undertakes to verify the exporters annual performance on behalf of all the banks. 4. Within a month from the close of the calendar year, exporters should submit a statement, as per enclosed format, giving details of export proceeds due, realised and not realised to the concerned Authorised Dealer. E

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lue/write-off in respect of non-realisation in excess of the 10 per cent limit, failing which, the Authorised Dealers may inform the exporter about the withdrawal of this facility of self write-off / extension of time, within a month, under advice to the concerned Regional Office of the Reserve Bank. 5. Requests received from exporters in terms of Paragraph 4 above may be dealt with by the Authorised Dealers as per the existing instructions relating to extension of time for realisation of export proceeds, reduction in invoice value and write-off issued by the Reserve Bank. 6. Regarding disposal of GR/SOFTEX/SDF/PP forms under the above facility, Authorised Dealers may release the respective forms relating to the write-off (including reduction in invoice value) by the exporter himself, provided the exporter submits evidence to the Authorised Dealer for surrender of export incentives availed of, if any, along with the annual statement. In the case of export bills extended for realisation

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eriod as applicable No of GR/SOFTEX/SDF/PP Amount forms due Fully Realised Partly Realised ( PART B ) (Amount in Rs 000s ) Details of Export Bills not Realised (partly or fully) within the prescribed period GR No. Amount Details of Extension /Reduction in invoice value/ write-off by the exporter himself Amount Revised due date @ Extension/Reduction in invoice value /write-off sought from AD Amount Revised due date @ (1) (2) (3) Total NOTE: 1) The exporter should approach AD/RBI for extension of time in respect of bills in Column (3) in PART B. 2)Total of Bills in column.( 2) in PART B should not exceed 10% of those in Column.1 of PART A 3) From 2005 onwards, Bills in column 1 of PART A will include those which have been extended for realisation by the exporter himself or with the approval of AD/RBI. 4) In respect of export bills written off (including reduction in invoice value), evidence for surrender of export incentives to be produced. @ For cases of extension Exporter s Signature:

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FEMA – 107/2003 – Dated:- 29-10-2003 – Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2003 RESERVE BANK OF INDIAEXCHANGE CONTROL DEPARTMENTCENTRAL OFFICEMUMBAI 400 001 Notification No.FEMA.107/2003-RB dated October 29, 2003 Published in the Official Gazette of Government of India – Extraordinary – Part-II, Section 3, Sub-Section (i) dated 22.11.2003 – G.S.R. No. 900(E) In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7, sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No.FEMA.23/2000-RB dated 3rd May 2000, the Reserve Bank of India makes the following amendment

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FEMA – 032 – Dated:- 28-10-2003 – Export of Goods and Services – Project Exports Reserve Bank of IndiaExchange Control DepartmentCentral OfficeMumbai – 400 001 A.P.(DIR Series) Circular No.32 October 28, 2003 ToAll Authorised Dealers in Foreign Exchange Madam / Sirs, Export of Goods and Services – Project Exports Attention of Authorised Dealers is invited to Regulation 18 of Notification No.FEMA 23/2000-RB dated 3rd May 2000 viz. Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 in terms of which export of goods or services on deferred payment terms or in execution of a turnkey project or a civil construction contract requires prior approval of the approving authority, which shall consider the proposal in accordance with the guidelines issued by Reserve Bank from time to time. 2. With a view to simplifying and rationalising procedures, the Memorandum of Instructions on Project and Service Exports (PEM) has been revised. A copy of the revised Memorandum is en

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Rs.50 crore for authorised dealers and Rs.200 crore for Exim Bank. Proposals in excess of Rs.200 crore in value were required to be cleared by the Working Group. Monetary limits for clearance of service export contracts have also been revised from Rs.5 crore for authorised dealers and Rs.10 crore for Exim Bank to USD 100 million uniformly for authorised dealers and Exim Bank. Service export contracts exceeding USD 100 million (revised from the present limit of Rs.10 crore) will need to be cleared by the Working Group. 2. Buyer s Credit Scheme of Exim Bank Authorisation granted to Exim Bank to extend Buyer s credit under its Buyer s Credit Scheme has been revised from Rs.50 crore to USD 20 million. 3. Periods of Deferred Credit Period for which deferred credit may be offered by the exporter was linked to the value and type of the contract. The period of deferred credit can now be determined by the exporter and his banker in mutual consultation on merits of each case and on the basis of

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n site offices have been delegated to authorised dealers subject to certain conditions. Hitherto, exporters were required to approach Reserve Bank for such permission. 6. Liaison Office At present, number of liaison offices which can be opened by the exporter is restricted to one in a country where more than one project export contract is executed. This restriction has been removed. Exporters can now be permitted by the approving authority viz. authorised dealer/Exim Bank/Working Group to open more than one liaison office in one country, if required. 7. Initial Remittance Remittance for meeting initial / mobilisation expenses from India in the absence of adequate advance payment or an overdraft / loan arrangement abroad by the exporter required approval of Reserve Bank where the amount of remittance exceeded 5 per cent of contract value and / or period of repatriation of such amount to India exceeded one year from the date of such remittance. Approving authority viz. authorised dealer/

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ird country imports approved by the approving authority while according post award clearance to the project export proposal and payment under such letters of credit should be made from out of the project receipts. Authorised dealers can now grant waiver for submission of the exchange control copy of the bill of entry subject to certain conditions where third country purchases are directly transported by the overseas supplier to the project site and for which payment is made under letter of credit opened in India. Exporters were earlier required to approach Reserve Bank for grant of such waiver. 9. Export of Equipment on Re-import Basis Export of equipment on re-import basis was being allowed by Reserve Bank and necessary GR approval was being accorded. Exporter was required to submit an undertaking that he will re-import the equipment or if sold abroad, repatriate the sale proceeds. The exporter will now be required to make an application to the authorised dealer for permission, citing

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bmitted on a half-yearly basis by the exporter to all the institutions constituting the Working Group and the concerned Regional Office of Reserve Bank through the exporter s bank. Such report may now be sent to the authority approving the project export contract and the concerned Regional Office of Reserve Bank. It will however, be necessary to forward the report to Exim Bank / ECGC also in all cases where their financial / non-financial assistance / risk cover has been obtained. In the case of project export proposals approved by the Working Group, the report in Form DPX 3 may be sent to Exim Bank, ECGC and the concerned Regional Office of Reserve Bank. The final DPX 3 report may clearly indicate the fact of completion of the project and full compliance with closing procedures laid down in para B.10 of the revised Memorandum. 12. Inter-Project Transfer of Funds Presently, copies of applications for inter-project transfer of funds together with the approval accorded by authorised deal

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required to be submitted to Reserve Bank. Such evidence will now be submitted to the authorised dealer who is monitoring the project. 14. Completion of Projects On completion of the Project, the exporter is required to submit a report giving full account of the various steps taken by him to Reserve Bank and all the members of the Working Group. Such report will now be sent within one month from the completion of the Project, by the exporter through his banker to the approving authority which had cleared the project export contract at the post award stage and in addition, to ECGC / Exim Bank if they have participatory interest in the facilities / risks. Where the project export proposal was cleared by the Working Group, the report may be sent to Exim Bank and ECGC. 15. Single Foreign Currency Account -Monitoring Exporter can maintain a single foreign currency account for more than one project being executed in the same country. He is however, required to submit project-wise statements

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ency Account in India Approving authority of the overseas contract i.e. Authorised Dealer/Exim Bank/Working Group can now allow project/service exporters to open, hold and maintain foreign currency account in India subject to certain terms and conditions. Hitherto, project/service exporters were required to approach Reserve Bank for permission to open such account in India. 18. Details of Site / Liaison Office, Payment of Agency Commission on Overseas Borrowings. The exporter may submit the following information/statements to the concerned authorised dealer which was hitherto being submitted to the regional office of Reserve Bank. Details regarding opening of liaison office/site office (expenses on these offices, closure of offices) etc. within 15 days from the date of opening of such office. Expenditure of site/liaison office within one month from the expiry of the relevant half year. The account number, name of the bank, etc. of over draft / loan account of the exporter within 15 day

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