IGI Airport Customs seizes 2.48 kg heroin and arrests Thai National;

Reduction of CST rate to 2% : MoF likely to sort out differences with Empowered Committee of States on April 8;

Core sector grows by 8.7% in February;

Govt says Semiconductor policy has attracted Rs 65000 Cr investment;

High-powered panel on services sector submits report to Prime Minister;

CASE LAWS

2008-TIOL-190-HC-DEL-IT.pdf + mitsubishi story.pdf

CIT, Delhi XVII Vs M/s Mitsubishi Corporation (Dated : March 25, 2008)

The State should not raise technical pleas for the sake of it and to defeat a just claim. In the present case, we feel that the Revenue has raised a plea of maintainability only to obfuscate the real issue and to deny to the Assessee what is legitimately due to it. This is unfortunate.

The State cannot recover or hold back any tax except in accordance with law for otherwise it would be unjustly enriching itself, which is clearly impermissible. The Revenue having received and accepted the amount paid by the Assessee for the relevant financial years was under an obligation to give credit to the Assessee for the payments already made or appropriated against those very financial years. Otherwise the liability of the Assessee would be unreasonably increased and the Assessee would be required to pay tax and interest twice over (or at least a part thereof) which is clearly unconscionable: DELHI HIGH COURT;

2008-TIOL-191-HC-DEL-IT.pdf + vatika story.pdf

Vatika Farms Pvt Ltd Vs UoI (Dated : March 28, 2008)

Settlement not to abate on March 31st: and to compound the irony of the situation, the Respondents had (and still do) the power, resources and capacity to ensure that the settlement application is disposed of by 31st March, 2008 but they have not even moved a little finger to do so leaving the Petitioners to their own devices. The Respondents have, through their complete inaction, virtually subverted the mandate of the law to the detriment of the Petitioners. This is hopelessly arbitrary and unconstitutional.

As things stand today, the Settlement Commission has already filed an affidavit before us saying that it is not possible for it to decide all the pending settlement applications before 31st March, 2008. The Settlement Commission has not indicated what steps it has taken to comply with the mandate of the law. Similarly, the Central Government has also not provided for any remedy to the Petitioners against the abatement of their settlement applications either by urging Parliament to extend the time limit for disposal of the settlement application by the Settlement Commission or any other remedial step. The Central Government has also not indicated what steps, if any, have been taken to comply with the mandate of the law. It cannot be that only the Petitioners and other citizens are bound by the law, but the Settlement Commission and the Central Government are not bound by the law. Such a situation would lead to anarchy, and a situation whereby the rule of law is effectively disabled.

So the High Court directed that

(a) The application for settlement filed by the Petitioners under Section 245-C of the Act would not abate on 31st March, 2008.

(b) In keeping with the mandate of Parliament, the Settlement Commission shall endeavour to dispose of all pending applications as expeditiously as possible.

(c) To enable the Settlement Commission to dispose of all pending applications as expeditiously as possible, the Central Government will render all assistance to the Settlement Commission including, if necessary, setting up additional Benches.

(d) Any information disclosed by the Petitioners in the annexure to Form 34B in Appendix II to the Income Tax Rules,1962 will not be used against the Petitioners for any purpose whatsoever until the disposal of the settlement application of the Petitioners by the Settlement Commission.

(e) All the writ petitions are admitted for final hearing. Since all the writ petitions are still at a preliminary stage and in many of them a counter affidavit has still not been filed by the Respondents, all the amendment applications are allowed. The Respondents will be at liberty to file counter affidavits to the amended writ petitions in accordance with the High Court Rules.

(f) The interlocutory applications filed by the Petitioners for interim relief are disposed in terms of the above. Since more than 100 writ petitions have been filed and we have taken them up as a batch and with the clear understanding that we will be deciding the issue of abatement of the pending settlement applications, the directions given by us above will apply in the present batch of writ petitions even where no specific interlocutory application has been made by the Petitioners for grant of interim relief in the terms that we have indicated above: DELHI HIGH COURT;

2008-TIOL-189-HC-RAJ-IT.pdf

CIT, Udaipur Vs M/s Hindustan Zinc Ltd (Dated : March 4, 2008)

Income Tax - Assessee is put incharge of and transferred the assets of a Corporation against which a compensation is paid by it to the Corporation on account of deprivation of management and possession in the intervening period before the transfer of the undertaking and another amount for acquisition of undertaking - CIT holds entire amount in the nature of capital expenditure whereas Tribunal holds amount on account of deprivation to be revenue in nature - The amount paid towards deprivation of management and possession was in consideration of fact that the Corporation was deprived of making profit during the intervening period before the transfer of the undertaking and the said amount would have had to be paid even if the deal had not finally gone through in which case the said expendtiture could not have been regarded as capital expenditure and moreover no part of the said amount constituted a consideration for transfer of any title or property of the undertaking, thus this amount on account of deprivation charges is revenue in nature - Revenue's appeal dismissed.: RAJASTHAN HIGH COURT;

2008-TIOL-188-HC-RAJ-IT.pdf

CIT, Bikaner Vs Kishan Kumar (Dated : February 5, 2008)

Income Tax - Search - Return for block period filed declaring undisclosed income, including undisclosed investment in agricultural land and plots - A.O. rejects the investment accounted for by assessee for purchase of properties and takes a higher value of investment relying on market value taken by Stamp Valuation Authority - The value of consideraton shown in the document of conveyance in case of transfer of capital asset is correct or a deflated figure is a question of fact and if department contends the value to be deflated, it has to lead positive evidence to that effect to prove that the property has been undervalued in the sale deed before making any addition whereas in the instant case apart from relying on Stamp Valuation Authority's valuation for the purpose of Stamp Duty, no other evidence has been led to prove that the property was purchased at a higher rate then shown and thus no addition can be sustained merely on the basis of value taken for the purpose of Stamp Duty in absence of any other material for making assessment u/s 158BC - Revenue's appeal dismissed:RAJASTHAN HIGH COURT;

CENTRAL EXCISE SECTION

2008-TIOL-512-CESTAT-MUM.pdf + cards story.pdf

Vidyut Metallics Pvt Ltd Vs CCE, Mumbai III (Dated : March 13, 2008)

Hanging cards on which razor blades are fixed are prima facie cenvatable – Tribunal grants waiver of pre-deposit & stays recovery: MUMBAI CESTAT;

2008-TIOL-511-CESTAT-MUM.pdf

M/s Metro Impex Vs CCE, Pune III (Dated : January 11, 2008)

AED(T&T) paid on the inputs (cotton yarn) used in manufacture of goods (Turkish towels & made-ups) exported under bond on which no AED(T&T) is payable – accumulation of credit - refund of unutilized credit available irrespective of the fact whether the exports are made under bond or under claim for rebate of duty.: MUMBAI CESTAT;

2008-TIOL-510-CESTAT-BANG.pdf

M/s Bellary Steel & Alloy Ltd Vs CCE, Belgaum (Dated : December 7, 2007)

Central Excise – duty demanded on the difference between the RG 1 quantity and the physical stocks by alleging suppression of facts – the appellants were not provided with the opportunity of cross examining the persons, based on whose statements, the demand was confirmed – principles of natural justice violated – matter remanded.: BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-192-HC-KAR-ST.pdf

CST, Bangalore Vs Standard Chartered Bank (Dated : January 24, 2008)

Service Tax – refund – question of fact: on facts both the authorities have held that the refund claim made by the assessee satisfies the grounds to allow the refund. Therefore, it is a question of fact and not a question of law. Hence, we have to answer question No. 1 against the revenue.

Service Tax – Refund – unjust enrichment: such a question was not urged by the revenue before the Tribunal. When such a question was not urged by the revenue before the Tribunal, we are of the opinion that for the first time such a contention cannot be raised by the revenue. Even if it is treated as a pure question of law, even then the revenue has no case on merits since the assessee is asking for refund of the excess service tax paid by it on account that the assessee could not recover the service tax paid by it from its customers. If the assessee was unable to recover the tax from its customers/the assessee cannot be made to pay the service tax in excess and if such refund is asked, we cannot consider the claim of the applicant as unjust and it is a just money which the assessee is entitled since the same was paid by the assessee in excess: KARNATAKA HIGH COURT;

2008-TIOL-507-CESTAT-BANG.pdf

Apco Agencies Vs CC & CE, Calicut (Dated : January 7, 2008)

C & F – Agent - Reimbursements of actual expenses incurred are not taxable: BANGALORE CESTAT;

2008-TIOL-506-CESTAT-AHM.pdf

M/s Noble Institute (Education) Pvt Ltd Vs CST, Ahmedabad (Dated : Februaruy 20, 2008)

ST - Coaching Service - Tax levied from 1.7.2003 - Revenue demands tax on payment received before the levy of tax but service to be provided after the levy was notified - Extended priod - Since there was confusion in the industry as the CBEC had first issued a Circular clarifying that no tax to be paid on such payments received but later suggesting that tax was to be paid on such payments, no mens rea can be alleged - Revenue's case fails on limitation ground as SCN was issued after two years: AHMEDABAD CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt08_035.pdf

Illegal exports across Indo-B'desh border : CBEC takes special measures for drug formulations containing Codeine or its salts;

CASE LAWS

2008-TIOL-508-CESTAT-DEL.pdf

M/s Saini Consultants Vs CC, Amritsar (Dated : January 28, 2008)

Fraud of Rs.1.68 crores - CHA filed B/E’s for imported goods & showed debit of duty in DEPB books which had fictitious licence numbers, signatures of Customs officers also forged – Notice not required before suspending licence under rule 20(2) of CHALR, 2004 -Bombay HC decision in the case of CC Vs. Raj Clearing Agency followed.: DELHI CESTAT;

ddt april 3.pdf + instruct03.pdf

Our Microsoft story - If imitation is the best form of flattery - we are flattered! ;

Excise Duty exemption - pipes used in water treatment plants – CBEC clarifies;

cobweb.pdf

Will Microsoft case prove to be an eye-opener for our Finance Minister?

icecubes.pdf

Control inflation with long-term perspective;

mbuzz490.pdf

CBDT sets AGT ball rolling; fixes April 9 as deadline for representations;

mbuzz489.pdf

India witnesses surge in registration of Geographical Indications;

mbuzz488.pdf

CCEA gives nod to creation of IT Investment Regions;

mbuzz487.pdf

OECD holding meet on tertiary education for knowledge society;