CBEC graciously agrees with Delhi High Court order related to Sec 11AC (See 'DDT')

Processing of returns of A.Y. 2007-08 - Steps to clear the backlog – CBDT instructions (See 'DDT')

Central Excise case: Bombay HC directs Raymond to pre-deposit Rs 16 Cr - SC reduces it to Rs 8 Crore (See 'DDT')

CBDT Member Saroj Bala to hold addl charge of Member (L&C) during leave period;

Govt not very keen to implement Law Commission recommendations; Law Secretary reveals under RTI Act;

ddt 23 june.pdf

Fear of arrest costs an assessee Rs 16 Crores – reduced to 8 Crores by Supreme Court!

tiol top.pdf

Bhutan and Happiness Index: Learning 'Art of Patience'!

guest column.pdf

Service Tax on road repairs - When in doubt, consult Higher Authority!

mla_vacancy

Govt notifies vacancies for posts of Members in Adjudicating Authority under Prevention of Money Laundering Act;

mbuzz735.pdf

Nath hopeful of signing IPR treaty with Singapore soon ;

mbuzz734.pdf

Admission in 20 NITs: HRD Ministry directs for filling up outside State quota ;

mbuzz733.pdf

11th Plan earmarks Rs 200 Cr for river links ;

mbuzz732.pdf

Kolkata Port handles highest number of vessels last fiscal ;

instruct0806.pdf

Processing of returns of A.Y. 2007-08 - Steps to clear the backlog - regarding;

CASE LAWS

2008-TIOL-268-ITAT-DEL.pdf + prider story.pdf

ACIT, Dehradun Vs Pride Foramer France Sas ( Dated : February 22, 2008 )

Reimbursement of expenses to be incurred by contractee is not taxable under section 44BB – No doubt that section 44BB is a code in itself and it starts with non obstantive clause which excludes application of sections 28 to 41 and sections 43 and 43A of the Act but at the same time, to assess any sum under that section, the activity must fall within the activity described in sub-section (2) of section 44BB of the Act. Supply of Dry Fruits and recovery of communication expenses specifically do not find mentioned in sub-section (2) of section 44BB as these activities have nothing to do with the activity of prospecting for or extraction or production of, mineral oils in India or outside India. So as it relates to reimbursement of cost of equipment, the same also does not fall within the ambit of sub-section (2) of section 44BB as the same apply on supply of plant and machinery on hire and the equipment, 75 per cent cost of which is reimbursed, was not machinery on hire being used in such activity.

Interest on delayed issue of refunds could be taxed only under article 12.2 of the DTAA . Assessee is not in a business of obtaining income-tax refunds and earning interest thereon: And, therefore, the interest is neither derived from nor attributable to the business activity of the assessee. It is merely fall out of the profits earned by the assessee and is an appropriation of profit and when excess amount than what is due under the Act is appropriated, assessee get refund thereto, and when there is a delay in granting such refund, assessee is granted interest thereon which is taxable under the head “Income from other sources”. Therefore, also the interest earned by the assessee cannot be held to be related to activity of permanent establishment. Thus, cannot be related to article 12.5 of the DTAA. :DELHI ITAT;

2008-TIOL-267-ITAT-DEL.pdf

Shri Neelam Kochhar Vs DCIT, New Delhi ( Dated : March 28, 2008 )

Income Tax Act – Section 80HHC - assessee had not made any export sales during the year under consideration but claimed benefit of deduction u/s 80HHC on account of foreign exchange fluctuation rates in respect of sales made in earlier years, which were realized in the year under consideration - Held, that in the absence of export turnover and the assessee having local turnover the computation of export profits under clause (a) of section 80HHC(3) will be zero and in clauses (b) and (c) of section 80HHC(3) will be negative profits. In the cases where the assessee has neither export sales nor local sales the export profits in clauses (a) and (c) of section 80HHC(3) will be indeterminate, however export profit in clause (b) of section 80HHC(3) will be negative profits as the computation formula does not contain in it the total turnover of the business carried on by the assessee. – Held further that in the case of assessee admittedly there was no export made out of India and the assessee had received foreign exchange gains on sale proceeds realized during the year relatable to exports made in earlier years. The sale proceeds received in convertible foreign exchange inclusive of exchange gains cannot be treated equivalent to the exports made out of India in the current year – No appeal relating to assessment years in which export took place was pending before ITAT, and thus ITAT cannot set aside the issue to the file of AO with the directions to consider the claim of the assessee in the years of in which exports were made. :DELHI ITAT;

2008-TIOL-266-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s P P Jewellers ( Dated : March 14, 2008 )

Income Tax - search & seizure u/s 132 - After analysing vouchers the AO applies GP rate of 13.34% - undisclosed income based on undisclosed sales worked out for block assessment - assessee contends against GP rate - CIT(A) deletes additions - Held, any discrepancies and shortage of stocks without the supportive materials culled during the search are outside the ambit of 'undisclosed income'. The surmises and conjectures cannot take the place of proof - Revenue Appeal dismissed. :DELHI ITAT;

2008-TIOL-265-ITAT-DEL.pdf

M/s Bullet International Vs ITO, Noida (UP) ( Dated : March 28, 2008 )

Income Tax - Exemption u/s 10A - Assessee was a proprietorship enterprise - two new partners join the concern - AO disallows the exemption on the ground that the assessee failed to furnish the details of new machineries and also changed the character of the enterprise into a partnership firm - Since the exemption is allowed to the manufacturing unit it does not make any difference who owns it - Sec 10A benefits are alllowable - Assessee's appeal allowed. :DELHI ITAT;

CENTRAL EXCISE SECTION

11ac.pdf

Observations of Delhi High Court regarding first proviso to section 11AC;

CASE LAWS

2008-TIOL-126-SC-CX.pdf

M/s Raymond Ltd & ANR Vs Union Of India & ORS ( Dated: June 20, 2008 )

Central Excise - Pre-deposit - Appeal against HC order for Rs 16 Crore pre-deposit - Sum reduced to Rs 8 Crore and speedy proceedings ordered as SCN is already issued : SUPREME COURT ;

2008-TIOL-977-CESTAT-DEL.pdf + Eicher story.pdf

M/s Eicher Motors Ltd Vs CCE, Indore (Dated : June 6, 2008)

Central Excise – valuation – goods cleared by the job worker to the principal manufacturer on payment of duty under Rule 8 of the C entral Excise valuation rules –while arriving at the cost of manufacture of goods by the job worker whether 10% addition made to the intermediate goods supplied by the principal manufacturer has to be included – question answered in favour of the revenue.

Rule 8 speaks about the value of the goods as being 110% of the cost of production or manufacture. The Tribunal, we are afraid, is not competent to make any probe as to what additional 10% stands for. All that we know is that the value of the goods has been statutorily fixed at 110% of the cost of production or manufacture. We are of the view that the statutorily determined value under Rule 8 would apply at all stages and for all purposes whenever the question of ascertaining the value of goods in non-sale transactions arises. ( Para 27)

We are not able to appreciate as to how having taken credit of the duty paid on chassis on the basis of 110% of the cost of production/manufacture, Bhagirath (job worker) would not include the additional 10% of cost in the assessable value of the vehicle, particularly when in respect of other goods procured directly by them on the account of Eicher , used as raw material, their transaction value is taken into account and credit is taken of the duty paid on those goods. ( Para 28) :DELHI CESTAT;

2008-TIOL-976-CESTAT-MUM.pdf

Krohne Marshall Private Limited Vs CCE, Pune-I (Dated : April 9, 2008)

Notification No.3/2004-CE dated 08.01.2004 merely requires production of a certificate, which would identify the project and the intended purpose for which the goods are required – prima facie substantive benefit not to be denied on the ground of non-fulfillment of conditions procedural in nature.

Appellant clearing Magnetic Flowmeter and parts thereof to M/s Gannon Dunkerley and Co. Ltd., C/o M/s.Hindalco Industries Ltd., Hirakud Complex (Power Project) at P.O. Hirakud Dist. Sambalpur - goods covered by the certificate issued by the District Magistrate, Sambalpur – Prima facie, strong case for complete waiver of pre-deposit of duty and penalty. :MUMBAI CESTAT;

2008-TIOL-975-CESTAT-BANG.pdf

M/s Millennium Appliances India Ltd Vs CCE, Hyderabad (Dated : February 15, 2008)

Appeals – Recovery of dues - Revenue ought not to proceed to recover the amounts when the stay order is in force : BANGALORE CESTAT;

2008-TIOL-974-CESTAT-MAD.pdf

Transworld Garnet India Pvt Ltd Vs CCE, Tirunelveli (Dated : May 2, 2008)

100% EOUs – MOT charges – collection of MOT charges for normal working hours is contrary to the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998 - Board's Circular No.31/2003 dt. 7.4.2003 is ultra vires Regulation (3) of the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998. : CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-979-CESTAT-AHM.pdf + jet airways story.pdf

M/s JET Airways (India) Ltd Vs CST, Ahmedabad (Dated : June 9, 2008)

Appellant is admittedly an Airline engaged in the business of transportation of passenger and Cargo. The appellant takes booking of the cargo which is to be transported either by himself at its booking office or through IATA agents appointed at various locations all over the country.

Revenue alleges that the service provided by the Appellant is a Cargo Handling Service and raised a demand of Rs.96.86 lakhs - appellant neither collects the cargo from the consignor premises nor delivers the same to the consignee of the cargo - From the definition of Cargo Handling Services, it becomes clear that services to be taxed under the said heading are to be provided by cargo handling agency and the same must be in relation to cargo handling services - The appellants are admittedly not providing any cargo handling services to the public at large and as such, are not perceived to the trade or public as a cargo handling agent.

Clarification contained in TRU letter F.No.B2/8/2004-TRU dated 10.09.2004 reveals that services of loading/unloading provided by the Airlines were not covered under the cargo handling services, otherwise, there would have been no need to issue the clarification regarding levy of service tax in respect of services provided in the category of 'transportation of goods by air'.

Once the new entry “Transport of Goods by Air” is introduced w.e.f 10.09.2004 without disturbing already existing entries, it has to be held that the new entry was not covered by the previous entry – Appellant cannot be called a “Cargo Handler” so as to be taxed under Cargo Handling Service – Tribunal decisions in Dr. Lal Path Lab (P) Ltd. 2006-TIOL-1175-CESTAT-DEL and Board of Control for Cricket in India 2007-TIOL-684-CESTAT-MUM and Glaxo Smithkline Pharmaceuticals 2005-TIOL-688-CESTAT-MUM relied upon.

Order of Commissioner confirming the demand in revision proceedings set aside and appeal allowed. : AHMEDABAD CESTAT;

2008-TIOL-978-CESTAT-MAD.pdf

Shri G Sanjeevi Vs CCE (ST), Trichy (Dated : April 4, 2008)

Service tax – Stay / dispensation of pre-deposit – Rent-A-cab service – prima facie, the demand raised is time barred – full waiver of pre-deposit granted. : CHENNAI CESTAT;

CUSTOMS SECTION

2008-TIOL-973-CESTAT-KOL.pdf

M/s DIC India Ltd Vs CC, Kolkata (Dated : February 10, 2008)

Customs – imports on forged and fake DEBP scrips – Having found factually that the Appellant had acted on the basis of forged, fake and fabricated document, without bothering to enquire from the Customs Authority, DGFT Authority or the so called DEPB holders as to genuineness of the DEPB scrips , the Appellants can be said to have committed breach of law - appeal relating to the duty demands in all the three Appeals are dismissed and appeal relating to imposition of penalty in those appeals is allowed by way of remand to the Adjudicating Authority as the investigation into the aspect of criminal conspiracy of forged DEPB scrips to evade duty is yet to reach finality. : KOLKATA CESTAT;