|
| How to reduce litigation on Cenvat |
| Sukumar Mukhopadhyay / New Delhi May 25, 2009, 00:30 IST |
|
Cenvat credit has become so much of a litigated subject that by random counting I found amongst the reported judgements in some magazines that nearly one-fourth to one-third of the cases relate to admissibility of Cenvat Credit in some way or the other. My suggestion here is that controversies that occur again and again on several items can certainly be removed or minimized if a list of items is prepared and circulated by the Board in monthly intervals.
If the past is any guide, there used to be earlier a compilation by the Board of items under the Customs Tariff indicating the classification which was known as the Pink Book (not Red Book). This Pink Book used to be a daily guide for all assessing officers in the Custom Houses. They could see the alphabetical list of items where the classification with a short explanation was available
What I am now suggesting is that the Board may follow the same pattern and alphabetically indicate the items which have been accepted as inputs for the purpose of giving Cenvat credit by Tribunals, High Courts and Supreme Court. This would be only those Tribunal and High Court cases where no appeal has been filed by the Board. The Tribunal order number should also be indicated. A sample has been prepared by me, which is reproduced below:
It should be made clear that the List is not exhaustive since it is not practicable even for the Board to enumerate each and every case. Just because the item of input under consideration does not appear in the list circulated by the Board, it should not be taken to mean by the junior officers that the item is not admissible to Cenvat credit.
For Service tax also a similar list should be prepared in the type of format that I have indicated above. There are many examples of Cenvat cases regarding service tax where credit was disallowed by Revenue but have now been allowed by the CESTAT.
Once case readily available with me is that of repair of car/motor vehicles service, photography service can be treated as input services used in relation to manufacture of cement. The Tribunal has held that both the services have to be treated as services used directly or indirectly, in relation to manufacture of final products and they are to be treated as input service.
There are other types of cases where the issues involved are much more broad that just not being only related to admissibility on the basis of the definition of inputs. One example is that of goods sent for job works not sent back within a certain period. CESTAT has given many favourable decisions to manufacturers but the same type of cases is proliferating.
A clarification on each type of such cases is necessary. There are many such issues which are general and a common clarification will do good to all concerned.
The conclusion is that the Board should analyse the type of cases which occur again and again. They can be grouped together and clarifications issued on each type of issues so that the unmerited rejection of input credit by Revenue which is the present day pastime does not take place any more or at least is minimised
smukher2000@yahoo.com
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
