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Mr P C Jha and Mr P K Mishra as Chairmen of CBEC & CBDT respectively; Mr Vijay Singh is new CBEC Member + Mr S S Khan is new Member of CBDT; Charitable institution collecting capitation fee not eligible for exemption: ITAT (Look for detailed coverage tomorrow) Exports grows by 35% in February (See Common Basket) Central Excise and Service Tax on TV production (See 'DDT') Govt slashes import duty on edible oil; takes administrative steps to curb price rise(See Common Basket + Customs Tariff Not No 42/2008) Mysore Central Excise Zone exceeds Rs 6210 Cr target by Rs 1058 Cr; |
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| Dear Member, Sending the following files: |
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CIT, Delhi XVII Vs Sara International Ltd (Dated: March 27, 2008) Income Tax - TDS - Assessee pays commission and claims the same under the head salary expenses - AO examines the payments to different parties and treats payment to one of the parties as technical service, liable to TDS u/s 194J - CIT(A) allows but Tribunal sets aside the order - On examination of the facts that the assessee merely bought some L/Cs from the other party and paid commission for supplies of wheat to the foreign buyer, there is no technical service provided - TDS u/s 194J not applicable - Revenue's petition dismissed: DELHI HIGH COURT; CIT II Vs M/s Lumax Industries Ltd (Dated: March 26, 2008) Income Tax - Revenue Vs capital expenditures - Assessee enters into an agreement for improvement of existing products - gets non-exclusive right to manufacture licensed products - pays licence fee, royalty and other charges - AO treats the same as capital expenditure - CIT(A) and Tribunal hold that even if the Assessee had obtained a long term advantage of an enduring advantage, that by itself would not convert any expenditure incurred by the Assessee into a capital expenditure, and since the Revenue has been allowing the same expenditure as revenue there is no ground to treat the same as capital expenditure after 10 years - No substantial question of law - Revenue's petition dismissed : DELHI HIGH COURT; 2008-TIOL-137-ITAT-MUM.pdf + ICICI story.pdf ICICI Bank Ltd Vs DCIT, Mumbai (Dated: October 9, 2007) Whether the remittance of US $45,000 towards rating fees to Moody's Investors Service is an income in the hands of the recipient and is assessable to tax in India and whether the assessee is liable to deduct tax under section 195 of the Act on such remittance? Commercial information with regard to ratings as per international practice was supplied to the assessee. For bringing the remittance or fees within the definition of ‘fee for included services', it should be against the availability of technical knowledge, expertise, skill, know-how or process or consist of the development and transfer of a technical plan or technical design. Unless and until the non-resident made these items available to the assessee, fees paid inter alia on that would not fall within the definition of fees for included services. Likewise consultancy service is in the context of advisory service. Categories of technical and consultancy services are to some extent overlapping because consultancy service can also be technical service. However, the category of consultancy service also includes advisory service, whether or not expertise in technology is required to perform it. Remittances made in the instant case are not in the nature of ‘fees for included services' as such are not taxable in India . The assessee cannot be held to be responsible/liable for deduction of tax under section 195 of the Act.: MUMBAI ITAT; M/s M G Motors Vs ITO, Delhi (Dated: February 29, 2008) AO wrongly allowed the claim on insufficient material: We are of the opinion that the AO has completely missed the focus on conditions specified in law and wrongly allowed the claim of the assessee based on insufficient material. Since we have opined that the AO incorrectly assumed facts and that the investigation undertaken by the AO is of routine nature, the judicial pronouncement relied upon by the AR of the assessee are distinguishable on facts of those cases. On the facts and circumstances of the present case, we find that the CIT has rightly assumed jurisdiction under section 263 of the Income Tax Act, 1961.:DELHI ITAT; |
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Relieving of officers: CBDT asks CCITs to retain officers till AGT;
2008-TIOL-61-SC-CX.pdf + sc story.pdf CCE, Delhi Vs Insulation Electrical (P) Ltd (Dated: March 27, 2008) Central Excise – classification: rail assembly for seats: It is clear that Chapter Heading 8708.00 covers parts and accessories of motor vehicles and this chapter heading is wide enough in its scope so as to cover all accessories of motor vehicles whereas Chapter heading 9401.00 covers all type of seats and parts thereof. Chapter 9401 covers all types of seats and not only the seats of a car and a seat is complete even without the rail assembly front seat, adjuster/assembly slider seat and rear back lock assembly. They are not essential parts of the seat. Chapter heading 9401 covers only the parts of seats and not accessories to the seats. A 'part' is an essential component of the whole without which the whole cannot function. Chapter heading 8708 covers both the 'parts' as well as 'accessories'. The items manufactured by the assessee are only adjuncts. These are to be affixed on the floor of motor vehicles. When seats are affixed on these rails, seats can slide back and forth with the operation of a lever forming part of other rail assembly front seat adjuster. This enables the driver or the passenger, to adjust the position of the seat to suit his comfort and convenience.: SUPREME COURT ; 2008-TIOL-494-CESTAT-MUM.pdf + otis story.pdf M/s Otis Elevator Co (I) Ltd Vs CCE, Mumbai V (Dated: February 22, 2008) Otis ordered to pay as pre-deposit Rs.50 lakhs in C.Ex. undervaluation case by Tribunal. That the entire head office expenses cannot be included as the appellants have two factories and regional offices and the allocation of the entire head office expenses on a proportionate basis for their manufacturing unit cannot be correct method unless it is established that they were towards the production activities of the manufacturing unit. Having already made a pre-deposit of Rs.24 lakhs in the earlier round of proceedings towards head office expenses, the same is considered sufficient for purpose of section 35F as regards the demand under the said head; As regards research and development expenses attributable to the manufactured goods, in the absence of any cogent evidence to substantiate the figure of 13.3%, the applicant is directed to make a pre-deposit of Rs.50 lakhs as against the duty recoverable of Rs.1.44 crores on this count. Plea of the demand being possibly hit by time bar is also considered while fixing pre-deposit quantum.: MUMBAI CESTAT; M/s IOCL Vs CC & CE, Tirupathi (Dated: December 3, 2007) Central Excise – duty on ethanol blended petrol for the interregnum period from 1.7.2004 to 3.8.2004, during which period there was no exemption – demand not sustainable in view of the notification issued under Section 11 C for the above period.: BANGALORE CESTAT; CCE & C, Vadodara II Vs M/s Kilburn Engg Ltd (Dated: February 21, 2008) Interest on refund of pre-deposit – Relevant date - Date of order is to be construed as the date of receipt of order by Revenue, which conclusion can be drawn from appeal provisions. If the date of receipt is not held to be relevant date, same may lead to chaos inasmuch as the order may lie in registry of the Tribunal without being issued for a period of more than 3 months or even if issued, may not be received by the Department, in which case, they would not be aware of passing of such order, resulting in refund of pre-deposit In the present case the Tribunal order is dated 27.06.2005 & was issued by the Registrar on 23.08.2005 & received only on 06.09.2005 by Revenue – since refund of pre-deposit granted on 06.12.2005 i.e within 3 months, no interest is payable – Revenue appeal allowed. : AHMEDABD CESTAT; CCE, Hyderabad Vs M/s Pennar Industries Ltd (Dated: December 11, 2007) Central Excise – 8% amount paid on the value of the exempted goods recovered from the customers – section 11 D is not applicable - the Commissioner (Appeals) has rightly followed the rulings rendered by the Tribunal in the assessee's own case . As there is no stay of the operation of the Tribunal's order, the issue has to be decided in the assessee's favour.: BANGALORE CESTAT;
SERVICE TAX SECTION stnot08_017.pdf + st refund story.pdf Govt extends Service Tax Refund Scheme to three more taxable services for exporters; Central Excise and Service Tax on TV production; CASE LAWS 2008-TIOL-497-CESTAT-MUM.pdf + stgst.pdf Maersk India Pvt Ltd Vs CCE, Raigad (Dated: February 28, 2008) Cenvat Credit - Re-assessment of input services cannot be done by the receiver's jurisdictional authorities – Prima facie case – Pre-deposit waived & Stay granted: MUMBAI CESTAT; CST, Delhi Vs M/s Keane Worldzen India Pvt Ltd (Dated: December 7, 2007) ST - Rebate for export of service - Delay in filing declaration required to be filed before export of service - Commissioner(A) condones the delay on the ground that the substantive benefit cannot be denied on procedural ground - No infirmity in order - Revenue's appeal dismissed : DELHI CESTAT; CCE, Jaipur I Vs M/s New India Electric Works (Dated: January 29, 2008) ST - Maintenance & Repair Service - Adjudicating Authority confirms demand and imposes penalties - Commissioner(A) sets aside the order, terming the agreement as only rate contract - Going by details of the contract, it very much falls under the maintenance or repair service - Revenue's appeal allowed: DELHI CESTAT;
CUSTOMS SECTION NOTIFICATION Customs duty on entire basket of edible oils slashed; CBEC also extends benefits under DEPB Scheme until further orders; After VKGUY Product Code No. 10.31, contained in Table 10 of Appendix 37A, more items like oil cakes & soya beans added; Hotel & tourism related services added to list of services exports covered by SEPC; DGFT amends policy to restrict and also allow import of certain metals; CASE LAWS Shri Mohd Osman Vs CC, Hyderabad (Dated: December 20, 2007) Customs –Department says order was sent by RPAD-Appellant says he has not received at. In the absence of Acknowledgement, benefit of doubt to appellant - delay condoned: BANGALORE CESTAT; |
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Government fights inflation – no import duty on Crude palm oil; Exports grows by 35% in February; Govt slashes import duty on edible oil; takes administrative steps to curb price rise; Failure to quote PANs in TDS returns: CBDT to treat deductors as non-filers; Dr Reddy's to acquire Dowpharma small molecules business in UK; |
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