You are under arrest! - DGCEI revises instructions on arrest (See 'DDT')

SC quashes amendment to AIIMS Act on Dr P Venugopal's appeal; finds it discriminatory to retire noted cardiologist;

CBEC rapidly-moving COIN posting file comes to a halt; Pending with MoS(R) office for five days now!

Proper study of Animation & Gaming Industry: I & B Ministry hires PwC & invites feedback;

Major steel makers reduce prices of flat products by Rs 4000 per tonne and structural steel by Rs 2000 per tonne;

Nothing private about a laptop at the border – customs can search (See 'DDT')

2008-TIOL-95-SC-IT.pdf + sc it story.pdf

CIT, Thiruvanathapuram Vs Joseph Valakuzhy (Dated : May 6, 2008)

Film Production – deduction: The rule, as it now stands, provides that in such cases, deduction of the cost of production of the film is to be allowed to the extent of the amount realized during the number of days of commercial exhibition in that year and the balance has to be allowed in the next year. Rule 9A ( 2) provides that where a feature film is certified by the Board of Film Censors for release in any previous year, and in that previous year the film is released for exhibition for at least 180 days, before the end of that previous year, the entire cost of production of the film shall be allowed as a deduction in computing the profits and gains of such previous year. Rule 9A (3) provides that where the film is not released for exhibition for 180 days in the previous year, deduction of the cost of production is to be allowed to the extent of the amount realized during the period of commercial exhibition in that year and the balance shall be allowed in the next year.

It is not a business loss. That if a film is not released for exhibition on a commercial basis at least 180 days before the end of such previous year, the cost of production of the film insofar as it does not exceed the amount realized by the film producer by exhibiting the film on a commercial basis, is to be allowed as a deduction in computing the profits and gains of such previous year and the balance, if any, is to be carried forward to the next following previous year and allowed as a deduction in that year.: SUPREME COURT ;

2008-TIOL-174-ITAT-DEL.pdf

DCIT, Delhi Vs M/s Estel Communications Pvt Ltd (Dated: March 10, 2008)

Income Tax - AO disallows payments made for purchase of internet bandwidth - In view of the Tribunal's earlier order in the case of the same assessee whereby it was held that the payment is not towards rendering of any managerial, technical or consultancy services but merely use of Internet access facility of certain bandwidth, it cannot be disallowd u/s 40(a)(i); Such payment can also not be said to be chargeable to tax u/s 9(1)(vii) of the Act and no TDS to be deducted u/s 195 - Revenue's appeal dismissed. : DELHI ITAT ;

2008-TIOL-173-ITAT-MUM.pdf

Dalal Street Investments Ltd Vs ITO, Mumbai (Dated : February 27, 2008)

Income Tax - Assessee trades in shares and securities and is also Non-Banking Finance Company engaged in the business of investment - files return declaring loss - AO disallows the claim of loss on the ground that the assessee entered into a pre-meditated arrangement with Mutual Fund for buying and selling back the Mutual Fund units with the sole purpose of avoiding tax and the assessee had earned huge dividend, before selling - CIT(A) confirms the AO order - In view of  Special Bench decision in the case of Wallfort Shares & Stock Brokers Ltd.(2005-TIOL-130-ITAT-MUM-SB ), assessee's claim cannot be disallowed

Section-73 - AO considers trading of shares as speculative loss - Assessee contends that it is not covered by the second limb of Explanation to section 73 - assessee company does not fall into any exception and the loss suffered by it in the sale and purchase of shares is to be treated as loss of speculation business : MUMBAI ITAT ;

2008-TIOL-172-ITAT-DEL.pdf

ACIT, Faridabad Vs M/s Borar Overseas Pvt Ltd (Dated : January 31, 2008)

Income Tax - Sec 80IB - Assessee is into powder coating of auto parts and claims it to be a manufacturing activity - AO disallows it by treating it as only jobwork of painting - CIT(A) deletes the additions and notes that the assessee has its own plant and machinery with power connection to carry on manufacturing activity - As per settled law, no infirmity in the CIT(A) order - Revenue's appeal dismissed : DELHI ITAT ;

CENTRAL EXCISE SECTION

dgceicircular.pdf

You are under arrest! - DGCEI revises instructions on arrest;

CASE LAWS

2008-TIOL-703-CESTAT-MAD.pdf

The Central Arecanut And Cocoa Marketing & Processing Co-Op Ltd Vs CCE, Mangalore (Dated : February 22, 2008)

Central Excise – valuation – Section 4A – Eclair brand chocolates manufactured on job work and cleared in packs containing 100 pieces – individual toffees weighing 5.5 gms per piece as well as packs of 100 such pieces do not attract assessment under Section 4 A of the Act – duty is payable under Section 4 only. : CHENNAI CESTAT;

2008-TIOL-702-CESTAT-BANG.pdf

M/s Anantha Poly Products Pvt Ltd Vs CCE, Madurai (Dated : February 19, 2008)

Central Excise – valuation – related person - The fact that the entire production of APPPL is sold to PPPL or that a representative of PPPL attended to the maintenance of the machinery leased to the appellant by PPPL does not indicate that the transactions between the appellant and PPPL are not at arm's length. That PPPL suggests suitable vendors from whom to procure raw materials by APPPL to ensure quality of the chairs is in no way indicative of a control exercised by PPPL on the manufacturing activity of APPPL. The Commissioner has found that lease amount paid was ‘comparatively low'. There is no basis for this finding on record. The Commissioner found that the appellant was “a sort of floated company”. This vague observation is again without any basis. The impugned order describes the appellant as a job worker. In such a case, the assessable value has to be determined in terms of the ‘Ujagar Prints' formula. We find that this observation is also incorrect. : BANGALORE CESTAT;

M/s German Remedies Ltd Vs CCE, Mumbai-IV ( Dated : March 3, 2008 )

Neurotrat - fixed dose combination of Vitamin-1, Vitamin-6 and Vitamin 12  is a medicament classifiable under SH 3003.10 of CETA'85 & not under SH 2936.00 as an admixture of vitamins – LB decision in Micropure Parenterals Pvt. Ltd. 2005-TIOL-1109-CESTAT-MUM-LB followed – Appeal allowed. : MUMBAI CESTAT;

SERVICE TAX SECTION

rentwrits.pdf

Writ Petitions filed in various High Courts all over the Country challenging levy of Service Tax on renting of immovable property - regarding;

CASE LAWS

2008-TIOL-262-HC-P-H-ST.pdf + cf story.pdf

CCE, Jalandhar Vs United Plastomers (Dated : February 20, 2008 )

Service Tax – C&F agent: services of commission agent are included in the definition of ‘business auxiliary service' from 1-7-2003 and mere procuring or having orders for the principal by an agent on payment of commission basis would not amount to providing services as “ clearing and forwarding agent”, within the meaning of the definition of that expression under Section 65(25) of the Finance Act, 1994.

While reaching to this conclusion the Tribunal has observed that the expression “directly or indirectly” “and in any manner” occurring in the definition of ‘clearing and forwarding agent' cannot be isolated or the activity of clearing and forwarding operations and an agent if engaged only for procuring purchase orders for the vendor on commission basis does not engage in any of the activities connected with clearing and forwarding operation directly or indirectly : PUNJAB & HARYANA HIGH COURT;

2008-TIOL-706-CESTAT-KOL.pdf

M/s Pebco Motors Ltd Vs CCE, Jamshedpur (Dated : March 7, 2008)

Service Tax - Notification No.13/2003 – Appellants are dealers in cars – Notification exempts only such commission agents, who cause sale or purchase of goods on behalf of another person - Commission received from the banks for assisting the banks to sale loans for cars and not for sale of cars- exemption restricted to sale or purchase of goods and not for sale of purchase of service like car loans- demand of tax and interest upheld –Issue covered under section 80 – Penalty waived – Tribunal : KOLKATA CESTAT;

2008-TIOL-705-CESTAT-MAD.pdf

M/s Lalit Enterprises Vs CST, Chennai (Dated : February 14, 2008)

Service Tax – stay / dispensation of pre-deposit – the remand order passed earlier was challenged by the appellant in High Court – however, the appellant has not been able to obtain any stay – appellate authority passed order confirming the service tax on remand – no prima facie case for waiver of pre-deposit. : CHENNAI CESTAT;

2008-TIOL-704-CESTAT-MAD.pdf

M/s Sudharson Security Bureau Vs CCE, Madurai (Dated : February 26, 2008)

Service Tax – Security agency service – valuation - employees' wages and other reimbursable expenses are not excludable from the value of service - provisions of Section 67 (v) as they stood during the material period did not provide for abatement of such reimbursable expenses from the taxable value. : CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn014.pdf

DGFT notifies AP agency for issuing certificate of Origin;

dgft08pn013.pdf

DGFT amends SION rate of Transformer;

dgft08not007.pdf

Import of betel nuts from Myanmar : DGFT removes port restrictions for border trade with retrospective effect from Feb 29, 2007;

CASE LAWS

2008-TIOL-708-CESTAT-MUM.pdf + vodafone story.pdf

Vodafone Essar seems to be on the path to victory – Stay granted in 9.73 crores Customs case by Tribunal.

Arguments of the applicant's Counsel that the compact discs were required as back up in the case of the failure of the entire system seemed to be on a stronger footing & that the Constitution Bench of the Supreme Court in the case of Acer India Ltd. [ 2004-TIOL-81-SC-CX-LB ] was considering an identical issue whereas the SC decision relied upon by the Revenue of Hewlett Packard India Sales Pvt. Ltd. [ 2007-TIOL-154-SC-CUS ], seemed to be misplaced.

Pre-deposit waived & Stay granted – Since involving high revenue stakes early hearing fixed in July 2008. : MUMBAI CESTAT;

2008-TIOL-707-CESTAT-MUM.pdf

CC & CE, GOA Vs M/s Narayan Bandekar & Sons Pvt Ltd (Dated : March 26, 2008)

Export of Iron Ore – s. 16 of Customs Act, 1962 - once the 'Let Export' order is given, the question of loading of the vessel subsequently is of no consequence – Since no duty payable on the date of Let Export order, refund claim held admissible by Commissioner(A) – being a well reasoned order, no reason for granting Stay – Matter to be heard out of turn. : MUMBAI CESTAT;

ddt 08 may.pdf

Writ petitions challenging the constitutional validity of levy of Service Tax on renting of immovable property – CBEC files transfer petition in Supreme Court.;

cobweb.pdf

Annual Transfer Season: Revenue booms but taxman glooms!

training.pdf

Nominations sought for workshop on prevention of money-laundering in Washington;

2008-TIOL-92-SC-CT.pdf + kerala story.pdf

M/s Reckitt Benckiser India Ltd Vs CIT (Dated : April 29, 2008 )

Kerala VAT classification - Kerala VAT Act is aligned with Customs Tariff which in turn is aligned with HSN and consequently each product in question was required to be seen in the context of HSN Code and judgments based thereon : SUPREME COURT ;

mbuzz592.pdf

Govt to undertake plantation over six mn degraded forests;

mbuzz591.pdf

To stop sea erosion, Centre doles out funds to States;

mbuzz590.pdf

WB sanctions USD 50 mn to Neapl for expediting peace consolidation efforts;