Govt gearing up for National Plan for Climate Change: PM;

Bangalore DGCEI books Rs 60 Cr duty evasion case against 17 body-building manufacturers for misdeclaring trailers as specially-fitted vehicles;

Advance Tax collections: Mumbai registers 54% growth in last quarter;

CoS recommends names of Mr P C Jha + Mr P K Mishra II for posts of Chairman in CBEC and CBDT respectively;

Kolkata Airport Customs detains Mohan Bagan's ace striker Jose Barreto for not declaring excess forex; Customs Commissioner Gautam Ray confirms;

Jaipur Central Excise detects evasion of Rs 1.4 Cr duty; recovers Rs 50 lakh + arrests partner of gutkha manufacturer;

cbdtorder042_2008.pdf

CBDT promotes three as CITs;

CASE LAWS

2008-TIOL-160-HC-P&H-IT.pdf

CIT, Faridabad Vs Shri Sohan Pal HUF (Dated: February 5, 2008)

Income Tax - Assessee is paid enhanced compensation and interest on acquisition of his land which is not however offered to tax on the ground that the issue with respect to enhanced compensation is still in dispute thus the amount will be offered to tax only on its accrual on final determination of the issue - A.O. charges the amount of enhanced compensation and interest to capital gains tax and initiates penalty proceedings for concealment of income - Assessee had disclosed all relevant facts with respect to the compensation and interest thereon and had not offered it to tax on bonafide belief relying on certain judgements and though the claim of the assessee was not accepted in quantum proceedings it was based on one of the possible views as the matter was in dispute and thus debateable therefore it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income for the purpose of levy of penalty u/s 271(1)(c) - Revenue's appeal dismissed: P & H HIGH COURT;

2008-TIOL-159-HC-ALL-IT.pdf

CIT, Agra Vs M/s Chmba Mal Harjeet Singh (Dated: March 14, 2008)

Income Tax - Partition of HUF between bigger and smaller HUF and in a particular year income from house property and business income is returned in the status of bigger HUF contending that in the relevant year business is carried by all memebers of family as per family arrangement - A.O. disallows on the ground that business of smaller of HUF cannot be treated as that of bigger HUF merely by family arrangement - As per Sec.171 any partition, whether partial or total, for purposes of IT Act has to be enquired into by A.O. who also has to give a finding to that effect and mere family arrangement will not amount to a partition for the purposes of IT Act and in absence of such a finding the assets and income will continue to be assessed in the hands of persons as before the alleged partition - In the instant case the assets sought to be transferred from smaller HUF to bigger HUF in order to give effect to the alleged partition will only be valid if there is an enquiry by the officer and his acceptance of such a partition in absence of which even if the property is transferred, no benefit can be obtained, thus claim of assessee of business income belonging to bigger HUF on the basis of family arrangement cannot be sustained - Reference answered in favour of reveneue. : ALLAHABAD HIGH COURT;

2008-TIOL-125-ITAT-DEL.pdf + nafed story.pdf

NAFED Vs JCIT, Delhi (Dated: January 25, 2008)

Interest liability not accrued in the Assessment year cannot be allowed as deduction. It cannot be said that there was any liability in presenti on the part of the assessee till such time the Delhi High Court passed a decree which was only on 28.1.2000 after the end of the Accounting Year. The same cannot be claimed as a deduction in the aforesaid A.Ys .

Disallowance of the claim of the assessee for deduction on account of rebate given to members. The nature of rebate is such that it cannot be said to be an appropriation of profits. It is more in the nature of commission or incentive and is an allowable deduction while computing income. The rebate allowed to the members goes to increase the purchase price of the assessee and consequently will also reduce its profits. It is only after taking into account such rebate that true profits of the Assessee can be arrived at.

Ex-gratia to employees - remanded: The assessee claimed a sum of Rs. 1 ,13,80,021 /- on account of exgratia payment to the employees. it was pointed out that in A.Y. 1996-97 the CIT (A) allowed similar claim of the assessee holding that it was in the nature of bonus and should be allowed on the basis of the actual payment, subject to the provisions of Ss.43 B of the Act. So the Tribunal remanded the matter to the AO for a fresh consideration for a decision, in accordance with the decision of the CIT ( A) in the A.Y. 1996-97.: DELHI ITAT;

2008-TIOL-124-ITAT-DEL.pdf

M/s Sant Steel & Alloys Vs ACIT, Dehradun (Dated: October 31, 2007)

Income Tax - Assessment order is cancelled by CCIT (OSD) u/s 263 for non-consideration of certain issues at the time of assessment - Assessee objects on the ground that all details were provided for and adequately considered by the A.O. at the time of assessment - Powers u/s 263 can be exercised only on satisfaction of the twin requirements of erroneous order and being prejudicial to the interest of revenue which is not there in the instant case as assessee had responded to all the queries by the A.O. which were adequately considered by the latter before passing of the order and merely because there is no mention of investigation in the order sheet, it does not mean that issues have not been examined - Assessee's appeal allowed: DELHI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-158-HC-P&H-CX.pdf

CCE, Jalandhar Vs M/s Shakti Fastners (Dated: February 8, 2008)

Central Excise – penalty on SSI unit when clearance within exemption limit: A perusal of the impugned order of the Tribunal would show that the Tribunal has given a pure finding of fact that imposition of penalty is clearly unwarranted as the revenue has no case of evasion of duty. It has also been found as a matter of fact that the production of the respondent upto the date of seizure was only Rs.50 lacs ,i.e . well below the exemption limit. In view of this finding of fact, the Tribunal found that the order of confiscation or penalties is illegal.

Thus, we find no reason to interfere with the finding of fact given by the Tribunal and no substantial question of law arises in the present appeal and the same is hereby dismissed.: P & H HIGH COURT;

2008-TIOL-423-CESTAT-MUM.pdf + unjust story.pdf

M/s Indoswe Engineers Pvt Ltd Vs CCE, Pune (Dated: January 30, 2008)

Doctrine of unjust enrichment has no application to deposits made Under Protest during pendency of dispute – Tribunal allows appeal with consequential relief.

In the case of Sahakari Khand Udyog Mandal Ltd [ 2005-TIOL-48-SC-CX-LB ], the Mandal had recovered the amount from their customers in which circumstance it was held that doctrine of unjust enrichment would apply inasmuch as no person could be allowed to enrich inequitably at the expense of another. In the present case, the amount was paid Under Protest during pendency of proceedings & after the clearances were made & hence the same is a deposit - doctrine of unjust enrichment would not apply as clearly laid down by the High Courts of Bombay and Punjab & Haryana in the case of Suvidhe Ltd. [ 2003-TIOL-188-HC-MUM-CX ] & in Modi Oil & General Mills [ 2007-TIOL-195-HC-P&H-CX ] respectively: MUMBAI CESTAT;

2008-TIOL-422-CESTAT-MAD.pdf + handloom story.pdf

M/s Bala Handloom Exports Co Ltd Vs CCE, Chennai (Dated: November 16, 2007)

CE – export – refund of accumulated credit - ‘manufacture' includes the process of blending of any goods or making alterations or any other operation thereon. Refund eligible: CHENNAI CESTAT;

2008-TIOL-421-CESTAT-MUM.pdf

Oboi Laboratories Vs CCE, Mumbai V (Dated: January 9, 2008)

Commissioner(A) passing a common order & appellant filing five separate appeals - Tribunal passing an order & setting the order of the Commissioner(A) – Appeals on issue of classification unfortunately remained to be tagged – Revenue not having filed a ROM against such an order, & neither raising this stand on that date, it is not permitted to do so now: MUMBAI CESTAT;

2008-TIOL-420-CESTAT-MUM.pdf

M/s Sulaki Chemicals Pvt Ltd Vs CCE (A), Pune II (Dated: January 18, 2008)

SED erroneously paid through debit in Cenvat account – later upon being pointed out, amount made good through PLA & refund sought of amount debited in Cenvat account – delay in granting such refund also attracts interest u/s 11BB of CEA'44 – Tribunal decision in Annapurna Plasopack Ltd followed: MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-419-CESTAT-BANG.pdf

M/s Keltech Energies Ltd Vs CCE, Mangalore (Dated: January 9, 2008)

Service Tax – credit on mobile phones and land line at the Director's residence: the mobile phones and landline phones have been installed by the Company for business purpose and the bills are paid by the company. Therefore, it has to be considered as input services and that they are eligible for the benefit of the Cenvat credit. This ratio would also apply for the landline phones installed in the Directors' and Company Official's residence, as the bills are paid by the company and the telephones are used for business purpose.: BANGALORE CESTAT;

2008-TIOL-418-CESTAT-MAD.pdf

M/s SSI Media India Pvt Ltd Vs CST, Chennai (Dated: January 14, 2008)

ST - Director of a limited company cannot be held liable for the tax payable by an erstwhile partnership firm-stay granted :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft07not086.pdf

Import of certain items under Indo-Lanka FTA allowed only through Kolkata port;

CASE LAWS

2008-TIOL-157-HC-DEL-CUS.pdf

Smt Mamta Sharma Vs UoI (Dated: February 25, 2008

Customs - Petitioner brings some gold jewellery from outside India which by an order is allowed to be re-exported within a period of 2 months but on failure to do so another 2 months is granted on payment of redemption fine - In the meantime gold is smelted despite the request of petitioner - Petitioner was willing to re-export the jewellery but since it has been smelted, she has to be compensated with an amount equivalent to the value of gold at today's rate on payment of redemption fine for redeeming of gold - Petition allowed.: DELHI HIGH COURT;

2008-TIOL-425-CESTAT-MUM.pdf + mahindra story.pdf

Anand Mahindra Vs CC (Import), Mumbai (Dated: February 13, 2008)

Import of second hand Sailboat – Tribunal allows importer to sail smoothly on rough seas

Import of the secondhand yacht is restricted as per para 2.17 of the Foreign trade Policy, 2004-09 and since the importer did not possess a specific import licence, the liability of the vessel to confiscation under the provisions of Section 111(d) of the Act is upheld.

As regards Section 111(f), since the steamer agents had applied for amendment to the IGM seeking an additional entry converting the said vessel as cargo on the ground that it had since been sold to a buyer in India, although it had earlier arrived as a visiting yacht & the IGM was permitted to be amended, no contravention of S. 30 of Customs Act has been made out so as to warrant confiscation of the vessel under section 111(f) of the Customs Act.

As regards Section 111(m), it is noticed that the Commissioner has relied upon information downloaded from internet regarding sale of similar vesels at much higher prices & the fact that the vessel itself was insured for US $3,50,000/-. Reliance on internet information for upholding charge of under invoicing cannot be sustained in the light of the Tribunal's orders in India Campus Crusade For Christ vs. CC, New Delhi [ 2006-TIOL-823-CESTAT-BANG ], Eastern Exports & Imports Co. vs. CCE, Kolkata [ 2006-TIOL-1184-CESTAT-KOL ] and CC, Cochin vs. Rushabh Plastics [ 2007-TIOL-535-CESTAT-BANG ] & as for the insured amount, the same cannot be taken as the base for valuation in view of Tribunal decision in Orient Enterprises vs. CCE, Cochin ( 2002-TIOL-399-CESTAT-DEL-SB ) and Nina Chaka Pvt. Ltd. vs. CC, New Delhi ( 2003-TIOL-291-CESTAT-DEL ). Consequently, there has been no contravention of the provisions of Section 111(m).

No reasons have been adduced by the Commissioner for imposition of a heavy fine of Rs.25 lakhs u/s 125(2) of the Act & considering the fact that the finding of violation under section 111(f) & (m) have been set aside, the fine imposed is reduced to Rs.5,00,000/- keeping in view the fact that the vessel was for personal use, and further noting that specific import licence would have been granted by the DGFT on applying for the same.

As regards penalty, although there can be no quarrel with the proposition that existence of mens rea is not necessary for imposition of penalty, it is well settled that it is not mandatory and it depends upon the facts and circumstances of every case. In the present case, as the valuation adopted by the Commissioner has been held to be improper, the finding that the importer had a guilty mind is no longer sustainable & in view of the fact that contravention of sections 111(f) & (m) have been set aside, circumstances warrant that no penalty is called for: MUMBAI CESTAT;

2008-TIOL-424-CESTAT-BANG.pdf

M/s ANZ International Vs CC, Bangalore (Dated: November 14, 2007)

Central Excise – Cenvat credit – exports – refunds - Exported goods are not exempted goods – 100% EOUs eligible for Credit and refund: BANGALORE CESTAT;

ddt 20 mar.pdf

Goods Transport Agency – not output service, but credit allowed for capital goods?

Central Excise and proprietor and other changes in the rules – Board explains;

COB(WEB) .pdf

FBI-like status for CBI: Sooner we do it, better it would be for modern India!

Appointment of SIO

DGCEI looking for SIO/IOs at Hqs;

mbuzz453.pdf

BoA grants formal approval to 5 more SEZs; total notified number reaches 206;

mbuzz452.pdf

Govt to consult TRAI for Mobile Virtual Network Operator service;

mbuzz451.pdf

Govt proposes to set up National Knowledge Network; Broadband subscribers cross 30 lakh-mark;