The document contains summaries of recent updates related to indirect taxes in India. It summarizes changes to customs procedures that allow officers to approve re-exports and modify the exchange rate of the Swiss franc. It also summarizes court rulings related to customs duty demands, the definition of registered post as it applies to speed post, modifications to central excise jurisdictions, and instructions limiting the use of summons powers. Additionally, it summarizes that service tax is not applicable to chit funds before or after July 2012 according to Supreme Court rulings.

1. News Flash – Indirect Tax
Udyog Software (India) Ltd.
26/01/2015
This document contains a brief summary of the latest updates related to Indirect Taxes

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Customs: Officers empowered to adjudicate may allow re-export
The CBEC has simplified the procedure for dealing with requests for re-export of consignments that were
wrongly shipped. Customs officers may now exercise the power of allowing re-export in accordance with their
powers of adjudication. This has been communicated in CBEC Circular 4/2015-Customs dated 20 January
2015, which is accessible at http://cbec.gov.in/customs/cs-circulars/cs-circ15/circ04-2015cs.htm.
Customs: Exchange rate of Swiss franc modified
The CBEC has issued notification 11/2015-Customs (NT) to change the customs exchange rate of the Swiss
franc. The rate with effect from 20 January 2015 is INR 72.15 per Swiss franc for imported goods and INR
70.35 per Swiss franc for export goods, as compared to INR 61.40 and 59.95 respectively as notified on 15
January. The notification with the new rates can be seen at
http://cbec.gov.in/customs/cs-act/notifications/notfns-2015/cs-nt2015/csnt11-2015.htm. The change has
come in the wake of the Swiss franc being uncapped against the Euro: see a report at
http://www.bbc.com/news/business-30829917.
.
Customs: Excise authorities could not demand customs duty for contravention of end-use conditions till
2011: HC
For certain end-use based customs exemptions, the end use is monitored by the jurisdictional central excise
formations under the relevant customs rules. However these functionaries, not being the „proper officer of
customs‟, were not authorised to issue demands of customs duties, till the definition of „proper officer‟ under
the Customs Act was amended in July 2011 to include them. For a narration of this ruling dated 16 October
2014 of the Karnataka High Court (N. Kumar and B. Manohar, JJ) in the case of CCE versus Molex India
Limited, see http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=22600.
Customs, excise, service tax: Speed post is also registered post: HC
Earlier decisions of the CESTAT have held that the statute requires service of orders by registered post and
that speed post does not satisfy this requirement. Section 37C of the Central Excise Act (which is also
applicable for service tax by virtue of section 83 of the Finance Act 1994) was subsequently amended with
effect from 10 May 2013 to include speed post as a recognised means of service. Prior to this, the
corresponding section 153 of the Customs Act had been amended with effect from 28 May 2012 to add courier
as a recognised means of service. Now the Orissa High Court has studied the definition of „registered post‟ in
the Indian Post Office Act 1898 and concluded that speed post is also registered post, and that this applies to
the period before the amendment. This judgment was given by Orissa High Court on 24 December 2014 in the
WP(C) 4896 of 2014 filed by Jay Balaji Jyoti Steels Limited. When uploaded, it would be available on the
court‟s website at http://judis.nic.in/judis_orissa/chejudis.aspx by entering the said case details. Till then, a
report on the matter can be perused at
http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=22587.
Central excise: Jurisdictions modified
The CBEC has issued notification 1/2015-CE(NT) dated 20 January 2015 to modify the jurisdictions of Chief
Commissioners, Principal Commissioners and Commissioners of Central Excise that were earlier notified under
notification 27/2014-CE(NT) dated 16 September 2014. The latest notification can be seen at
http://cbec.gov.in/excise/cx-act/notfns-2015/cx-nt2015/cent01-2015.htm.
Central excise: CBEC issues instructions on summons
The CBEC has reportedly instructed its field formations that summons need not be issued when a politely
worded letter will serve the purpose of securing documents required for investigation; summons are to be
issued only as a last resort, when absolutely required. Noting that “top senior officials” of companies are
being routinely summoned, the CBEC has now placed administrative curbs on the powers of summons that are
vested in the Superintendent under section 14 of the Central Excise Act, by stipulating that the
Superintendent must get the written permission of the Assistant Commissioner before issuing summons, and
the reasons for issue of summons must be recorded. Though widely reported, the said instruction of the CBEC

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dated 20 January 2015, issued from F.No. 207/07/2014-CX-6, is not available on the CBEC website. It can be
perused at http://taxguru.in/service-tax/guideline-issue-summons-central-excise-service-tax-matters.html.
Service tax: No service tax on chit before 2012: SC upholds AP High Court order
The CBEC believes that chit funds are exigible to service tax, both after the negative list regime and before it.
For the period from July 2012 the Delhi High Court had struck down a CBEC guideline and notification to this
effect in the writ petition filed by the Delhi Chit Fund Association. The government‟s appeal against this was
dismissed by the Supreme Court.
For the pre-2012 period, the department was of the view that chit funds are taxable as “banking and other
financial services”, and issued a clarification to this effect in its „master circular‟ in 2007. This clarification
was successfully challenged by the Andhra Pradesh Federation of Chit Funds, and the High Court of Andhra
Pradesh struck down the master circular to this extent. Now the Supreme Court has dismissed the
government‟s Special Leave Petition against the AP High Court order. The resultant position is that chit funds
were not taxable either before or after July 2012. The order dated 24 November 2014 of the Supreme Court
can be accessed from the Supreme Court website at http://courtnic.nic.in/courtnicsc.asp by entering the
information given above in the „title‟ search.
Service tax: Extended period invokable for demand even though penalty waived: CESTAT
Section 80 of the Finance Act 1994 requires penalty to be waived if the noticee shows reasonable cause for
non-payment of service tax. In appeal number ST/12026/2013 of Ajmnani Jaspal Singh versus CCE Surat the
lower appellate authority had waived penalty but sustained the demand, part of which fell beyond the normal
period of limitation. The appellant contended before the CESTAT that once penalty had been waived under
section 80, the extended period was not applicable for the demand. However the single-member bench
observed that the two provisions are independently applicable; that in the appellant‟s case he had chosen not
to pay even the amount that fell within the normal period of limitation; and that there was no evidence that
the appellant had any confusion in his mind about the liability for service tax. With these observations the
bench upheld the demand. The order can be accessed at
http://judis.nic.in/dist_judis/Cestat_Delhi/Retrieve/CaseNo_Qry.asp by selecting „Ahmedabad‟ bench and
entering the information given above

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Content provided by:
Radha Arun
Consultants to Udyog Software (India) Ltd.
radha.arjuni@gmail.com
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