Recent Notification/Circulars

I. All the taxable services provided by any person to a developer or units of Special Economic Zone for the purpose of development, operation and maintenance of Special Economic Zone, or for setting up Special Economic Zone Unit, or for manufacture of goods by the Special Economic Zone Unit, are exempt from Service Tax vide Notification No. 17/2002 - S.T., dated 21.11.2002 subject to the following conditions, namely:
i) The Development Commissioner has granted permission or authorisation to the developers or units of Special Economic Zone.

ii) A committee headed by Chief Commissioner of Central Excise having jurisdiction over the Special Economic Zone has authorised the services rendered by the service provider.

iii) Proper accounts of receipt and utilisation of Services shall be maintained by the developer or Unit of a Special Economic Zone and quarterly Statement in the prescribed form shall be submitted to the Commissioner of Central Excise having jurisdiction.

Here, "Special Economic Zone" means the Special Economic Zone as notified by the Government of India in the Ministry of Commerce & Industry.

II. The Circular F.No.137/13/2001 - CX-4 dated 18.12.2002 clarifies certain Services taxable as Consulting Engineering Services. Accordingly:-

i) The drawings and design work provided by construction Agencies as part of the Tunkey Project/ Jobs for construction of flats, buildings etc are covered under the category of services provided by consulting engineers.

ii) Charges for erection and commissioning of plant and machinery is liable for Service Tax under the category of consulting engineers since the work is one of providing "Technical Assistance" to the buyer of the plant / machinery.

III. The Circular F.N.249/2/2002 - CX-4 dated 18.12.2002 clarifies that certain fees like registration fees, annual fees, etc. charged by Central Depository Services (India) Ltd. (CDSL) for providing the service to Electronic Access to Securities Information (EASI) to enable the owner of the security to access his accounts in the first phase and transact depository business in the second phase would be liable for Service Tax under the category of Banking and other financial services as a part and parcel of depository services.

SYNOPSIS OF RECENT JUDGMENTS

I. Simon Brothers Pvt.Ltd. Vs. Commissioner of Central Excise, Mumbai-I (2002) 146 ELT 142 (Tri-Mumbai). Mumbai Tribunal held that the appeal to Commissioner (Appeals) under the law governing service tax is made u/s 85 of the chapter V of the Finance Act,1994 which provides for a period of 3 months for filing an appeal before Commissioners(Appeals) and not under section 35 of the Central Excise Act,1944 as amended by the Finance Act,2001 which provides for a time limit of 60 days. Hence rejection of an appeal filed beyond period of 60 days but within 3 months is incorrect.

II. Anil Chemicals and Industries Ltd. Vs. Commissioner of Central Excise, Raipur (2002) 146 ELT 147 (Tri-Del.)

It was held by the Tribunal that a subsequent amendment in the Statute with retrospective effect cannot bring about penal consequence on the assessee.

III. Steller Travels Pvt. Ltd. Vs. Commissioner of Central Excise,
Mumbai(2002) 146 ELT 388 (Tri Mumbai)
It was held by the Tribunal that order passed without giving reasons for imposition of penalty is not speaking order and hence set aside the penalty imposed u/s 76.

IV. Kesoram Spare Pipes & Foundations Vs. Commissioner of Central Excise, Kolkata-IV (2002) 146 ELT 475 (Tri- Kolkata)

It was held by the Tribunal that payment of transport charges to the suppliers will not attract Service Tax