Consumer Protection Act to be amended to become more consumer friendly: Pawar;

WTO talks again collapse; India expresses disappointment;

Law Commission recommends amendment of Explanation to Section 6 of Hindu Succession Act (See 'Common Basket');

Govt likely to delay ethnol-blending notification;

RBI Governor orders probe into leakage of monetary policy documents before embargo;

WTO deliberations heading for another fiasco; Agri issues remain major bone of contention;

ddt 30 july.pdf + sez_circular.pdf

Hyperactive Commerce Ministry – issues follow up instructions consequent to open House;

spl down.pdf

International Taxation of E-Commerce: A national approach to an international Problem;

postsmembers.pdf

Income Tax Settlement Commission looking for Members;

mbuzz832.pdf

Law Commission recommends amendment of Explanation to Section 6 of Hindu Succession Act;

mbuzz831.pdf

Government moots National Commission for Ex-servicemen;

mbuzz830.pdf

Consumer Protection Act to be amended to become more consumer friendly: Pawar;

mbuzz829.pdf

ICICI Prudential, Reliance Capital, SBI & HSBC chosen to be PF fund managers;

mbuzz828.pdf

PIB gives nod for Chennai Airport modernisation;

2008-TIOL-10-ARA-IT.pdf + ara story,pdf

Airports Authority of India (Dated: July 28, 2008 )

Payment received by foreign Company in respect of software and provision of services of installation, testing and training shall be taxable under the Income-tax Act read with DTAA

Sale of Hardware – business income: So far as proceeds of sale of hardware are concerned, there is no dispute about the nature of the income as such; it is business income. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated there, as per the DTAA. If the enterprise carries on business in the other State, only so much of the profits shall be taxable in the other State as is attributable to that permanent establishment. in the absence of permanent establishment, as per Article 7 of DTAA, the income does not attract tax under the Act.

Royalty: the expression ‘royalty' has almost the same meaning, both under the Act and the DTAA.  It is the payment made for the conferment of a right entitling the use of a copyright, etc.  Since the provisions of the Act and the DTAA are very clear on this point, no reference to the Copyright Act or to any other source appears necessary.  In conclusion, the Authority held that as RC is a tax resident of USA, it is eligible to the benefits of the provisions of DTAA or the Act whichever is more favourable to it, for the purpose of taxation of royalty income.

Software as goods : It was the contention of the applicant that software is ‘goods' and that the present case involves sale of copyrighted article deriving support from the Apex Court decision in Tata Consultancy case for the first proposition and Article 12 of the OECD Model Tax Convention for the second proposition.

Tata Consultancy not applicable; the legislative scheme of sales tax law and income-tax law are very different.  While the object of sales tax  law is to tax transactions of sale of moveable  properties, income  tax law is concerned with  taxing incomes and profits of individuals, companies and other entities in whatever manner earned.  For this purpose, income has been classified into different types, like business income, income from house property,  salary income, capital gains, royalty income, etc., which have been given different tax treatments.  Under the sales tax law, the definitions of the terms ‘goods' and ‘sale' have been kept very wide.  ‘Goods' includes all kinds of moveable properties, including intangible  things like electricity.  Delivery of goods on hire purchase and the transfer of right to use goods are deemed under this branch of law as amounting to sale.  There is no provision with regard to royalty under the sales tax law.  As could be seen from Tata   Consultancy case, the Court has treated the disc/floppy containing the software as goods, whose value has been greatly enhanced because of the intellectual property input incorporated in it.  Passing of the right to use intellectual property as such has not been regarded as a taxable event.  On the other hand, under the Income-tax Act as well as DTAA the payment made in lieu of transfer of right to use copyright is a royalty income. The transfer of disc/floppy on which the copyrighted software has been inscribed is immaterial for this purpose.

Installation, testing and training services :, these primarily relate to software and they are in the nature of ‘technical services' as per section 9 of the Act and ‘included services' as per paragraph (4) of Article 12.   According to Explanation (2) to clause (vii) of sub-section (1) of section 9, ‘fees for technical services'  means any consideration for the rendering of any managerial, technical or consultancy services, including provision of services of technical personnel. This income is chargeable to tax @ 10 per cent as per section 115A(1)(b)(BB) of the Act.: DELHI ADVANCE RULING AUTHORITY;

2008-TIOL-344-ITAT-HYD.pdf

Pravin K. Dedhia Vs ACIT, Hyderabad ( Dated : May 16, 2008 )

Issue of notice section 148 without sanction of JC , bad in law – In certain cases, the absence of facts relevant to the issue itself becomes a fact available on record - Reassessment quashed: In certain cases, the absence of facts relevant to the issue itself becomes a fact available on record in respect of which a finding can be given by the Tribunal. The Tribunal certainly has the power to examine the record itself. We hold that the issuance of notice u/s 148 is bad in law. We may also add that it is not merely a formal administrative approval which is required u/s 151(1) but the higher authority should be satisfied on the reasons recorded by the Assessing officer that it is a fit case for the issue of such notice. This satisfaction of the superior authority is not on record and hence the reassessment made pursuant to the issuance of notice u/s 148 is bad in law. Accordingly, we quash the reassessment order. : HYDERABAD ITAT;

2008-TIOL-343-ITAT-MUM.pdf

Sovika Infotek Ltd Vs ITO, Mumbai ( Dated : May 14, 2008 )

Income Tax - Benefits u/s 10B - Assessee is into software development business - files returns with Form 56G - claims set off of loss arising out of EoU unit against the income of other units - Revenue insists that the assessee did not file declaration for exclusion from Sec 10B purview and is not eligible for set-offs - Obligations to file Form 56G under sub-section (5) of Sec 10B and filing declaration under sub-section (8) are two different requirements. If the assessee intends to avail Sec 10B benefits then Form 56G is to be filed and if exclusion is sought, a declaration is required to be filed - Assessee's contention rejected

Set-off of loss incurred in business u/s 10B against other incomes under Ss 70 or 71: Since sub-sec (6) of the Sec 10B is non obstante clause and provisions of section 70 or 71 have not been included in the non-obstante provisions, it cannot be said that provisions of section 70 or 71 cannot be applied in computing the income of the assessee. Had the Legislature intended that the provisions of sections 70 and 71 should not be applied in respect of loss incurred in business eligible under section 10B, it could have specifically provided so as provided in respect of section 72 or section 74 - Assessee is eligible to set off the loss of the industrial unit against the incomes of other sources :MUMBAI ITAT;

2008-TIOL-342-ITAT-MUM.pdf

ITO, Mumbai Vs M/s Great Escape Travels Pvt Ltd (Dated : May 28, 2008 )

Assessee was engaged in the business of travel agency, primarily for corporate houses, it claimed that they had passed commission / handling charges to various parties directly.

It was claimed that Rs.4,65,505/- was paid in cash by passing internal debit vouchers. Held, the revenue is entitled to succeed on this ground. The finding of fact by the AO that a person who has gone abroad on 21.04.2000 has come back and collected Rs.3,500/- within one and half month's time is a proposition difficult to digest. So also the cash credit vouchers with regard to 24 persons, 59 persons and 10 persons, etc. Assessee has not brought on record any evidence to show that in which ship they had gone / come back. Atleast, if this fact is brought on record, the version of the assessee was acceptable. Mere fact that there is a competition in the field because of changed scenario alone is not sufficient in the absence of any evidence to hold that the amount perhaps would have been transferred to the passengers.

Further held, that the finding of the CIT(A) that some of the payments were made through cheques, was not established. Return of notice issued under section 133(6) may not be fatal but the assessee has not made available the new address. The assessment year involved is 2001-02. It is seen that the assessment proceedings were initiated by issuing notice in the month of October 2002 and the assessee, if at all, should have made available the address of the party concerned.:MUMBAI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-1211-CESTAT-MUM-LB.pdf + lb story.pdf

M/s BDH Industries Ltd Vs CCE, Mumbai I (Dated: July 9, 2008)

Taking of suo motu credit – conflicting decisions in Comfit Sanitary Napkins 2004-TIOL-995-CESTAT-BANG and Motorola India Ltd. 2006-TIOL-168-CESTAT-BANG – hence matter referred to Larger Bench.

Larger Bench delivers a powerful blow – There is no provision in the Central Excise Act and Rules allowing suo motu taking of credit – filing of refund claim u/s 11B is a necessity to examine whether the claim is hit by the bar of unjust enrichment.

Supreme Court decision in Mafatlal Industries [ 2002-TIOL-54-SC-CX ] and Sahakari Khand Udyog Mandal Ltd . [ 2005-TIOL-48-SC-CX-LB ] relied upon. : MUMBAI CESTAT;(Larger Bench )

2008-TIOL-1210-CESTAT-MAD.pdf

CCE, Chennai Vs M/s Sundaram Fastners Ltd (Dated: April 24, 2008)

Central Excise – classification – the impugned goods, spur gear and pinion wheel are appropriately classifiable under Chapter heading 84.83 as per the note (2) of Section XVI of the tariff – revenue appeal is allowed. : CHENNAI CESTAT;

2008-TIOL-1209-CESTAT-MUM.pdf

M/s Tatra Trucks India Ltd Vs CCE, Chennai (Dated: April 23, 2008)

Central Excise – NCCD – the assessee is eligible for exemption under Notification 67/95 CE for NCCD.

Classification – the impugned goods do not have the box-like movable body, and hence cannot be said that it has the essential character of a fully built dumper - the subject goods can only be classified under SH 8706.49 as dumper chassis and not under SH 8704.30 as dumper – levy of NCCD is upheld. : MUMBAI CESTAT;

2008-TIOL-1208-CESTAT-MUM.pdf

M/s Supreme Auto Industries Vs CCE, Mumbai-I (Dated: May 19, 2008)

Value of clearances of scrap of copper and brass to job workers on payment of duty at the normal rate not includible in the aggregate value of clearances for claiming SSI exemption : MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1206-CESTAT-MAD.pdf + hyundai story.pdf

Hyundai Motors (India) Ltd Vs CST, Chennai (Dated: February 19, 2008)

Revenue by its conduct has created confusion and chaos in the mind of the assessee regarding classification of service – Transfer of technical know-how – Tribunal has consistently held that this is not Consulting Engineer's service

Assessee paid service tax with interest before the issue of SCN – Service tax paid eligible as CENVAT credit giving rise to revenue-neutral situation - Revenue cannot allege suppression of facts and invoke extended period – A fit case to be considered under Section 80 – Penalties not imposable – Appeal allowed

This conduct of the department was enough to create confusion in the mind of the appellants as to which of the two taxable services would cover the present case of transfer of technology (Para 3)

The fact remains that they have already paid the tax with interest and are entitled to CENVAT credit of the tax, creating a revenue-neutral situation. In the circumstances, in our considered view, the appellants are entitled to the benefit of Section 80 of the Finance Act, 1994, whereunder the penal provisions of Sections 76 & 78 are not to be invoked against a person who failed to pay service tax within the prescribed time due to reasonable cause (Para 3) : CHENNAI CESTAT;

2008-TIOL-1205-CESTAT-MAD.pdf

CCE, Madurai Vs M/s Arai Seisakusho Co Ltd (Dated: April 4, 2008)

ST – Royalty paid for transfer of technical know-how not taxable under Consulting Engineer's service : CHENNAI CESTAT;

2008-TIOL-1204-CESTAT-MAD.pdf

Dollar Company Pvt Ltd Vs CCE, Chennai (Dated: April 23, 2008)

Service tax – Clearing and Forwarding agents service - Tax liability on recipient of C & F services after 16.10.98 - Section 117 of the Finance Act 2000 is procedural and does not in any way alter in substantive provision brought on the statute book by Section 116 - No Service Tax liability can be fastened on the recipient of C & F Agent beyond 16.10.98. : CHENNAI CESTAT;

CUSTOMS SECTION

2008-TIOL-368-HC-MAD-CUS.pdf + cestat story.pdf

National Oxygen Ltd Vs CC, Chennai (Dated: July 10, 2008)

CESTAT has no power to impose pre-conditions for de-novo adjudication: As per Section 129B of the Customs Act, the Tribunal is vested with the power either to confirm or modify or annul the decision of order appealed against. In the facts of the case, the Tribunal did not think fit either to confirm or modify or annul the decision appealed against, but thought it fit with supporting reason, to refer the case back to the authority, which passed such decision or order. In the absence of any power vested on the Tribunal to impose condition, rather a pre-condition for setting aside the order appealed against, the pre-condition imposed by the Tribunal can only be regarded as arbitrary, and without any statutory backing. The terminology "as it thinks fit" cannot be interpreted independently without having any regard to the subsequent terminology used in the provision such as confirming, modifying or annulling the decision. The terminology "as it thinks fit" would only mean to empower the Tribunal either to confirm or to modify or to annul the order appealed against. That would not clothe the Tribunal with the power to refer for the purpose of remitting back the case with a direction to conduct de novo enquiry by imposing pre-condition. : MADRAS HIGH COURT;

2008-TIOL-1207-CESTAT-MAD.pdf

AHP Manufacturing BV Vs CC, Chennai (Dated: April 29, 2008)

Customs – benefit of exemption under Notification 20/99 Cus to Maduranycin Ammonium as veterinary drugs and other goods specified in List 1 – similar benefit has been granted to another assessee subsequently in terms of an identical entry figuring in the successor notification 21/2002 - it was also not in dispute that the imported item was meant for use in animal feed – benefit of exemption available. : CHENNAI CESTAT;