IOCL finally opens mouth; says withdrawal of tax holiday to hit Paradip refinery;

Proposal to increase retirement age of SC & HC judges by three years is under consideration : Law Minister;

Govt intends to amend Organ Transplant Law;

CBI arrests 1999 batch IRS officer of Income Tax + CA for manipulating accounts of defence agent Suresh Nanda and his son in Barak arms deal case;

PM says Govt committed to implement farm loan waiver scheme by July;

2008-TIOL-02-ARA-IT.pdf + ara story.pdf

Income Tax – Advance Ruling: The earlier ruling does not require reconsideration on the ground that the concession given by the department was wrong or that the applicant did not make frank disclosure of material facts on the issue of PE. The endeavour of Revenue 's Counsel to project some doubts on the correctness of earlier ruling has proved to be an infructuous exercise.

No TDS for hardware repair abroad: the applicant is not legally required to deduct tax on the payments made to Raytheon Company, USA .

TDS for software maintenance is 10%. In application No. AAR/754/2007, only the second part of third question needs to be answered. The rate at which the tax has to be withheld in relation to the payments made to Raytheon company on the Software Maintenance Contract should be 10% (ten per cent), apart from the applicable surcharge.

AO ignores AAR's Ruling: The assessing officer took his own view practically discarding the ruling of this Authority in relation to Hardware repair contract, even without giving any reasons for departing from the view taken in that Ruling. Technically, the ruling was in the case of the applicant but not Raytheon. This gave room to the assessing officer to take its own independent view contrary to the ruling of AAR, presumably taking shelter under clauses (a) and (b) of section 245S . Be that as it may, we have to examine whether there is any jurisdictional fetter or legal impediment to decide the question raised in the present application. : ADVANCE RULING AUTHORITY :

2008-TIOL-135-HC-RAJ-IT.pdf

Income Tax - A.O. makes addition of income from lease rent in accordance with mercantile system of accounting - Assessee adopted receipt basis of accounting for income from lease rent despite following mercantile system otherwise, and moreover only real income can be taxed and there can be no tax if there is no income regardless of entries in book-keeping as in the instant case where assessee did not earn any income - Revenue's apeal dismissed. : RAJASTHAN HIGH COURT;

2008-TIOL-134-HC-RAJ-IT.pdf

Income Tax - Recourse to Sec.142A, for making reference to Valuation Officer, can be made only for the purpose of estimating of value of unexplained investment etc. and does not empower A.O. to refer every case of regular assessment, as a matter of routine, to the Valuation Officer - Revenue's appeal dismissed. : RAJASTHAN HIGH COURT;

2008-TIOL-133-HC-DEL-IT.pdf

Income Tax - Search & Seizure u/s 132 - Revenue seizes documents related to the assessee from premises of another company - While making block assessment the AO writes to the officer having jurisdiction over the assessee company to issue a notice u/s 142(1) - Later an order issued to transfer the jurisdiction of the assessee to the AO of the searched company - Notice u/s 158BD issued - Assessee alleges no satisfaction recorded before issue of notice - Tribunal goes with the Revenue - Provisions of Chapter XIV-B are drastic and draconian and should not be used in a mechanical manner - Since the AO failed to record the satisfaction before initiating action u/s 158BD, the assessee's appeal allowed : DELHI HIGH COURT;

CENTRAL EXCISE SECTION

2008-TIOL-360-CESTAT-BANG.pdf

Central Excise - Statement admitting unaccounted clearances - no further corroboration is needed : BANGALORE CESTAT;

2008-TIOL-359-CESTAT-MAD.pdf

Butter Scotch' packed and sold along with ‘Coffee bite' – amounts to manufacture - credit eligible : CHENNAI CESTAT;

2008-TIOL-358-CESTAT-BANG.pdf

Merger of two companies does not disentitle eligible credit – undervaluation for clearance to sister unit – no suppression : BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-356-CESTAT-DEL.pdf

ST - whether bottling of liquor amounts to manufacture or only packaging so as to attract service tax - Since issue is pending with larger bench of high court, penalty set aside and pre-deposit waived off : DELHI CESTAT;

2008-TIOL-355-CESTAT-DEL.pdf

ST - Banking & Financial services - Penalty imposed for delay in payment of service tax - Commissioner(A) reduces penalty - Since the first appellate authority's finding is that the delay was related to the initial months of the levy, the invocation of Sec 80 is sustainable under the given circumstances : DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt08_025.pdf

Quick disposal of seized, perishable items : CBEC adds sandalwood to list;

CASE LAWS

2008-TIOL-38-SC-CUS.pdf + sc copper story.pdf

Customs – excise exemption to Copper waste and scrap used within the factory of production for the manufacture of unrefined or unwrought copper, copper sheets or circles and handicrafts. The issue involved in these appeals is as to whether the scrap imported by the appellants is chargeable to 'NIL' rate of additional customs duty under Section 3 of the Customs Tariff Act, 1975. Is the Notification applicable to imported goods?

No requirement that scrap should be generated in the factory: The sum and substance of the entry, is that if a manufacturer uses copper waste and scrap within the factory of production for the manufacture of unrefined or unwrought copper, copper sheets or circles and handicrafts, then it would be entitled to the exemption under the impugned notification. In the present case, the appellants satisfy all the three conditions as they had used the copper/brass waste and/or scrap within the factory of production, and for the manufacture of handicrafts. The entry nowhere uses the word 'generated' or 'imported'. The condition that only that scrap would be entitled to exemption which has been generated in the factory of production is, therefore, unwarranted and unsustainable. The word, 'within' occurs after the word, 'used'. The assessing authority as well as the Tribunal have arrived at the finding that only that scrap/waste of copper would be entitled to the exemption which had been generated in the same factory because of the word, 'within' used in the heading 74.04. According to them, the word, 'within' pre-supposes that the copper waste and scrap was generated in the same factory. We are unable to read the entry in the manner as suggested by the Revenue.

The test laid down by the Tribunal that the benefit of the notification/tariff heading would be admissible to only that copper waste and scrap which is generated in the factory of production and not the imported waste and scrap, is not supported either by the text of the exemption notification, heading 74.04 or any other authority.

The words "if produced or manufactured in India " does not mean that the like article should be actually produced or manufactured in India . As per the explanation if an imported article is one which has been manufactured or produced then it must be presumed, for the purpose of Section 3(1), that such article can likewise be manufactured or produced in India . For the purpose of attracting additional duty under Section 3 on the import of a manufactured or produced article the actual manufacture or production of a like article in India is not necessary. : SUPREME COURT;

2008-TIOL-357-CESTAT-KOL.pdf

Import of candles – Levy of CVD to be the full rate & not under notification 3/2001-CE as such a notification prescribing 4% if credit not availed on inputs cannot be obviously satisfied.

Import of candles – Levy of CVD – whether at 4% under Notification 3/2001CE or full rate - exemption is subject to the condition that credit of duty paid on inputs or on capital goods has not been taken under the CENVAT Credit Rules - An interpretation, which would put Indian manufacturers at a disadvantage and deny them a "level playing field" will do violence to the scheme of levy of additional customs duty under Section 3 of the Customs Tariff Act, 1975 apart from upsetting the settled law, is clearly not warranted – Imported candles to attract full CVD.

An exemption which is conditional, subject to not availing of the credit of duty paid on inputs used in the manufacture of final goods cannot obviously be satisfied in the case of imported goods; nor can such imported goods get concessional excise rate for the purpose of determining additional customs duty. : KOLKATA CESTAT;

ddt 10 mar.pdf + cir44.pdf + cvccir01.pdf

Export of rice – DGFT amends export schedule.;

Acceptance of Bank Guarantees– CVC instructions;

Disciplinary action against retired PSU officers – CVC instructions;

tioltop.pdf

Exemption-oriented and no-reform Budget!

guest column.pdf

Service Tax on software : Centre poaching in States' territory?

book review.pdf

Grit That Defied Odds by A K Pande;

2008-TIOL-37-SC-CT.pdf + sc mens rea story.pdf

UP TRADE TAX - Selling of part of the goods procured for manufacture against conditions imposed – mens rea evident – penalty imposable: Ordinarily a dealer must abide by the undertaking given by it. If it is not in a position to comply with the requirements contained in the statute, it is expected that it would inform thereabout to the assessing authority. It purchased the goods in the assessment year 1985-86. It did not disclose as to when it sold out the goods. What was its consumption during said assessment year or the next assessment year had not been disclosed. As a finding of fact has been arrived at that the dealer had not furnished any proof in regard to its inability to use it for manufacturing purposes. It was obligatory on the part of the appellant as it has special knowledge in regard thereto to show as to why the entire quantity of goods could not be utilized.

Moreover, the assessing authority as also the appellate authority had held that the appellant sold the goods knowingly and, it must, therefore, be inferred that the finding in regard to mens rea had also been arrived at.: SUPREME COURT;

mbuzz417.pdf

IRDA to take action if details of charges deducted from policy premium not provided by insurance companies ;

mbuzz416.pdf

Reliance Communications offers ESOPs to over 20,000 employees;

mbuzz415.pdf

Mastek goes for second insurance acquisition in USA: