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Thursday, April 4, 2013

CA Final Indirect taxes - Expected Questions for May 2013 examination

CA Final Indirect taxes

Expected/Important Questions for May 2013 examination

I. Compulsory Question –Practical Problem

(a) Central Excise Valuation Rules preferably
Captive consumption, relative valuation/ very rarely Transaction value problem

(b)Central Excise- SSI- Calculation of
400 lakhs Limits/150 lakhs limit

(c) Central Excise Cenvat Credit
Preferably on Rule 3 (Availment, Utilisation/Reversal)/  rarely- Rule 5 or 6

(d) Service tax- Point of taxation Rules
preferably change in effective rate of tax /Rule 2A determination of date of
payment.(again it can be asked), Rule 7, reverse charge

(e) Service tax- Service portion in
execution of works contract

(e)Vat- Calculation of Vat liability,
Methods of vat Invoicing

(f) Customs Valuation duty calculation/very
rarely- Custom duty drawback.

II. Central Excise Important questions

Taxable event and significance
of date of removal of goods in case of excise duty.(Wallace flour mills, Vazir
sulthan tobacco)

Dutiability of waste &

 Short shelf life goods,

Dutiability of site related

Deemed manufacture

Explain whether the following circumstances would constitute "manufacture" for purposes of section 2(f) of the Central Excise Act, 1944:

Both  inputs
 and  the
 final  product
 fall  under  the
 same  tariff
 heading  under  the
 first schedule to the Central Excise Tariff Act, 1985 (Tariff Act.)

Inputs and final product fall under different tariff headings of the Tariff Act.

a Raw Material Supplier can be treated as manufacturer? Are there
any exceptions to afore stated preposition?

Marketability concepts of goods

Trade parlance theory of
classification/classification of parts, packing material

Essential character

MRP valuation/Valuation of
samples Rule 4

Place of removal concept

Specific duty valuation

Sec 11 AC penalty in case of
extended period of limitations

Definition under cenvat credit
rules Input, Input service and Capital goods, exempted goods, exempted service,
case study on any these.

Cenvat credit rule 5 refund,
Rule 6 common inputs,

Storage of inputs outside
factory Rule 8

Cenvat credit on private
challans/photo copies

Procedure of removal of goods
from 100% EOU to DTA,/ LTP

Duty remissions/waiver Rule 21

Consequences if excise duties
are not paid by due dates Rule 8(3A)

Excise CERA Audit, Valuation
and cenvat credit audit sec 14 A, AA

Payment of duty under protest

Relevant date u/s 11A, extended
period of limitation

Doctrine of unjust enrichment

Appeals to CE Commissioner

AAR/Settlement commission
–Conditions, applicant, case, Powers

Sec 11 E- Excise recovery
subject to priority & Corresponding sections in customs/service tax sec 88


III Customs

1.       Definition of goods, definition under Import procedure, Smuggling, Relative,stores,baggage

2.       Provisions regarding anti-dumping duty

3.       Search, seizure in excise, customs and Service tax

4.       Transit and transhipment

5.       Coastal goods

6.       Drawback u/74 &75

7.       Assessment Sec 17/Provisional assessment 18

8.       Import export through courier/Post

9.       procedures to be followed by master of vessels in case of import
and export of goods

10.   Customs valuation TV 4 conditions

11.   Baggage definition, clearance, declaration, rate of duty

Service tax

New Service Definition and
Case study on service definition

2.       Definition
of taxable territory

3.       Definition
and classification of bundled services,

4.       Definitions
under FA Act Support/auxiliary services, business entity, renting, works

5.       What
is meant by declared service list any 4 declared services?

6.       What
is objective of government for bringing certain services within the purview of
'Declared Services

7.       Define
the term "Negative List".  Specify any  four 
services which  have  been 
included in Negative List of Services.

8.       List any 6 taxable services which have been exempted from payment of service ta by
virtue of Notification No. 25/2012-S.T. dated 20.06.2012

9.       Point
of taxation rule 2A meaning of date of payment,

10.   Point
of taxation Rule 4 change in effective rate of tax, POT in case of Reverse

11.   Adjustments/treatment
of advances up to Rs. 1000 in case of Rule 6/PoT

12.    What essential conditions are to be satisfied
for treating the provision of any service as Export of Service  

13.   Valuation
rules Definitions :Gross amount charged,  Original Works in the context of Rule 2A of Valuation
Rules, 2006.Total amount in the context of Rule 2A of Valuation Rules, 2006. A case study on these areas.

14.   Place
of provision rules 2012- How to determine the location of service

15.   How
to determine the place of provision in case of service of events, goods

16.   What
 are  the
 advantages  derived
 by  Exporters  of
 Taxable  Services  under new service tax law with
 effect  from 01.07.2012 (Ans Rebate and cenvat credit refund under
rule 5

17.   Service
tax Rule 6 Service tax payment/adjustment/Provisional assessment/Repayment-Anything
can be asked.

18.    records and invoicing of ST anything can be

19.   Registration
requirements of service tax

ST rule 7- Returns/late fee for delay
in filing

What are various modes of recovery of any amount due to Central Government under sec 87

Service tax Penalties/especially
criminal penalties

23.   Specific
services under Declared services/Negative list/exempted list

Renting of
immovable property/Construction complex/copy right/software/education
services/Government services/Works contract/transport of goods/ transport of
/Advocate services



Case laws Expected/ Important case laws for May 2013.(highlight with red more important)

Addition and mixing of
polymers and additives to base bitumen is not manufacture and not a new
marketable commodity. CCE v. Osnar Chemical Pvt. Ltd. 2012 (276) E.L.T. 162

The process of removal of
foreign materials from iron ore for concentration of such ore does not amount
to manufacture  No excise duty liability Commissioner
of Central Excise Jamshedpur v. Steel Authority of India Ltd. 2012 (283) E.L.T.
A112 (S.C.)

Iodine Cleansing Solution
USP' and 'Wokadine Surgical Scrub' Classification should be made under Specific
entry  not under a residuary entry, CCE
v. Wockhardt Life Sciences Ltd. 2012 (277) E.L.T. 299 (S.C.)

4.       When the price used for selling of a
product below the cost price for penetration of market  It cannot be considered as transaction value.
Best Judgment valuation is applicable. CCEx., Mumbai v. Fiat India Pvt.Ltd.
2012 (283) E.L.T. 161 (S.C.)

Director General, Directorate General of Central Excise Intelligence can be
considered a central excise officer for the purpose of issuing SCN Raghunath
International Ltd. v. Union of India, 2012 (280) E.L.T. 321 (All.)

6.       Revenue accepts judgment of the
Commissioner (Appeals) on an issue for one period, it can be precluded to make
an appeal on the same issue for another period Commissioner of C. Ex.,
Mumbai-III v. Tikitar Industries, 2012 (277) E.L.T. 149 (S.C.)

7.       Assessee can claim the benefit of SSI
exemption on the brand name of another firm if its proprietor is also a partner
in such other firm Commissioner v. Elex Knitting Machinery Co. 2012 (283) E.LT.
A18 (S.C.)

The service
tax liability created under law can't be shifted by a clause entered in the
contract? Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran 2012 (26)
S.T.R. 289 (S.C.)

9.       Testing is critical to ensure marketability
of manufactured product i.e. the manufacture is not complete without testing;
is CENVAT credit of the testing material 
is allowed Flex Engineering Ltd.
v. Commissioner of Central Excise, U.P. 2012 (276) E.L.T. 153 (S.C.)

Can the Settlement Commission decline
to grant immunity from prosecution after confirming the demand and imposing the
penalty .
the present case, without placing the burden on the department to prove
their case, the Settlement Commission confirmed the demand on the assessee.
Settlement   Commission   should  
not   have   refused  
the   benefit   of  
immunity   from prosecution.  Hence, 
that  part  of 
refusal  to  grant 
immunity  for  prosecution 
is  aloneMaruthi Tex Print & Pr ocessors P. Ltd.
v. C. & C. Ex. Sett.Comm., Chennai 2012(281) E.L.T. 509 (Mad.)

goods on which duty has been paid by mistake by the assessee and refund thereof
has also not been claimed would be excluded while computing turnover for
preceding year for claiming SSI exemption Bonanzo Engg. & Chemical P.
Ltd. v. CCEx. 2012 (277) E.L.T. 145 (S.C.)

12.   Metal scrap or waste generated during the
repair of his worn out machineries/parts of cement manufacturing plant by a
cement manufacturer does not amount to manufacture? No duty.Grasim Industries Ltd. v. UOI 2011 (273) E.L.T. 10

13.   Physician samples excisable goods in view of the
fact that they are statutorily prohibited from being sold Medley Pharmaceuticals Ltd. v. CCE & C., Daman
2011 (263) E.L.T. 641 (S.C.)

Product with
short shelf-life satisfies the test of marketability.  They are Goods and marketable.  Nicholas Piramal India Ltd. v. CCEx.,
Mumbai 2010 (260) E.L.T. 338 (S.C.)

15.   CENVAT credit on the
duty paid on capital goods which were later destroyed by fire. The Insurance
Company reimbursed the amount inclusive of excise duty.  CENVAT credit availed by the assessee not
required to reverse
CCE v. Tata Advanced Materials Ltd. 2011 (271)
E.L.T. 62 (Kar.)

16.   In case of combo-pack of bought
out tooth brush sold along with tooth paste manufactured by assessee; is tooth
brush eligible as input under the CENVAT Credit Rules, 2004?
CCus. v. Prime Health Care
Products 2011 (272) E.L.T. 54 (Guj.)

17.   Penalty can't be imposed on the directors of the
company for the wrong CENVAT credit availed by the company. Rule 15 provides
penality can be levied on a person for wrong availment. Ashok Kumar H. Fulwadhya v. UOI 2010 (251) E.L.T.
336 (Bom.)

18.   Clearances of two firms having common brand name,
goods being manufactured in the same factory premises, having common management
and accounts etc. can be clubbed for the purposes of SSI exemption CCE v. Deora Engineering Works 2010 (255) ELT 184
(P & H)

19.   Subsequent increase in the
market price of the imported goods due to inflation would not lead to increase
in customs duty as the contract price between the parties has not increased
The  commodity involved  had 
volatile  fluctuations  in 
its  price  in 
the  international  market, 
but  having delayed the shipment;
the supplier did not increase the price of the commodity even after the  increase in 
its  price  in 
the  international market.
There  was  no 
allegation of  the supplier and
importer being in collusion. Thus, the appeal was allowed in the favour of the
respondent- assessee.
Commissioner of Cus., Vishakhapatnam v. Aggarwal Industries Ltd. 2011
E.L.T. 641 (S.C.)

20.   The assessee be cannot be denied
the refund claim only on the basis of contention that he had produced the
attested copy of TR-6 challan* and not the original of the TR-6 challan*
Narayan Nambiar Meloths v.
CCus. 2010 (251) E.L.T. 57 (Ker.)

21.   In case of a Settlement Commission's order, Assessee
not permitted to accept what is favourable to them and reject what is not Sanghvi Reconditioners Pvt. Ltd. V. UOI 2010 (251)
ELT 3 (SC)



Declaimer: Do not cover only the above
questions. Focus more and pay more attention 
on the above questions.


Good wishes and best of luck

CA N Rajasekhar M.Com FCA DISA (ICAI)



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1 comment:

Gautamraghunath said...

Thank you very much sir