CBEC promotes G S Narang as Chief Commissioner and posts him as DG, Inspection;

Survey and Investigation Branch in Delhi Service Tax Commissionerate (See 'DDT')

WTO Chief Lamy is in India (See 'DDT')

FM to address heads of PSU Banks tomorrow;

CBEC working on AC/DC order to fill up vacancies in preventive organisations;

Govt asks Idea Cellular to surrender one of the licences to facilitate merger with Spice Telecom;

Govt likely to allow private PFs to invest in stocks;

SC says actions of Assembly Speaker & legislators cannot be challenged but officials working under them cannot enjoy same immunity;

PPP projects worth Rs 10500 Cr approved by Govt;

House Panel summons SP MP in cash-for-vote case;

ddt 12 aug.pdf

Import of Rough Marble Blocks – Additional requirements;

mbuzz868.pdf

Munshi indicates hike in DAVP ad rates to be decided soon ;

mbuzz867.pdf

Industrial growth rate dips to 5.4% in June;

mbuzz866.pdf

Chennai to host 7th PBD in Jan, 2009; PM to address;

mbuzz865.pdf

India and South Africa to sign Cultural Exchange Programme;

2008-TIOL-395-HC-P-H-IT.pdf

CIT-I, Ludhiana Vs Mahavir Spinning Mills Ltd ( Dated: February 7, 2008 )

Income Tax - deduction under Section 80-I - Assessee also claims exemption under Section 10B after its conversion as 100% EOU - Held, in such a situation, it has to be analysed in the light of both the sections, i.e. Section 10B and 80-I, and their requirement. The Tribunal has given a finding of fact that the unit of the assessee was entitled to the benefit under Section 10B of the Act. Admittedly,  the circular No.1/2005 is clarificatory in nature and the same is also binding upon the department. Revenue appeal dismissed.:P & H HIGH COURT;

2008-TIOL-394-HC-ALL-IT.pdf

CIT-I, Lucknow Vs M/s Kashipur Rice Mills P Ltd ( Dated: July 8, 2008 )

Inordinate delay of about three years in filing appeal - evidence show that claim of revenue that impugned order of ITAT was received only in 2008 is factually incorrect - Appeal dismissed on ground of limitation

ITAT dismissed appeals filed by revenue in the case of three assesses by a common order dated 20.04.2005. Against one assessee in this order, revenue filed appeal in 2005 and against another assessee only in 2008 on the ground that the order of ITAT was received by CIT only on 21.04.2008. After noting that revenue has not approached the Court with clean hands, the appeal filed in 2008 by revenue was dismissed on the ground of limitation considering the long delay in filing the appeal.:ALLAHABAD HIGH COURT;

2008-TIOL-364-ITAT-DEL.pdf + technical story.pdf

ACIT, New Delhi Vs Sh Abhilash Karant ( Dated : June 30, 2008 )

Income tax - Exemption to a technical person under s.10(5B) of IT Act - Appellant is a technical person with specialized knowledge and skills - Taxes on the appellant borne by the employer - No malafide intention on the part of appellant to furnish information - Exercise of powers by CIT(A) in terms of provisions of section 250(4) or 250(5) to call for and examine additional evidence valid and legal - Conditions like employment in India as a technical person with specialized knowledge and experience, non-resident status fulfilled - Appellant satisfied the conditions of s. 10(5B) and eligible for exemption.:DELHI ITAT;

2008-TIOL-363-ITAT-MUM.pdf

ACIT, Vs M/s EPSOM Shipping (I) Pvt Ltd ( Dated : July 3, 2008 )

Option made u/s 115VP not to be rejected on technical grounds - Tonnage certificate issued later on will date back to the date of application

Assessee is an Indian company incorporated for the purpose of doing business in shipping. The company acquired a ship on 07.01.2005 and obtained certificate under Merchant Shipping Act on 19.01.2005. Though assessee immediately applied for tonnage certificate from Mercantile Marine Dept., the said certificate was obtained only on 10.05.2005 due to reasons beyond the control of assessee. It made claim for exercising option for tonnage scheme u/s 115VP for A.Y. 2005-06. Since tonnage certificate was not enclosed with the application, Addl. CIT denied such claim. On appeal CIT(A) and ITAT held that assessee's claim for exercising option for tonnage scheme to be considered favourably since the tonnage certificate issued lateron relates back to the date of application and further such procedural irregularities will not hinder the claim of assessee. Revenue's appeal dismissed.:MUMBAI ITAT;

CENTRAL EXCISE SECTION

NOTIFICATION

etariff08_45.pdf

CBEC exempts enriched potassium fluroborate from excise duty;

CASE LAWS

2008-TIOL-396-HC-RAJ-CX.pdf + grasim story.pdf

Union Of India Vs M/s Grasim Industries Ltd & Anr ( Dated : July 31, 2008 )

Central Excise – waste and scrap arising out of cutting of M.S. Sheet Plates etc. for making them of required size and specification, for own use in the factory for repair and maintenance of the plant and machinery – excisable and dutiable: The repair and maintenance may require replacement of a floor sheet of a machinery, which sheet may require particular specification, in its thickness, metal properties, heat and cold resistance, and so many other aspects. Likewise, it may be some pipe, some tube, some plate, some pulley, or the like, at times it may be required to be fitted by nuts and bolts, at times it may be required to be fitted by heat process, while at times it may be required to be fitted by welding process, and in those events, the bringing about of the part concerned in existence in the workshop by a mechanical process, from out of plates, sheets, channels, beams, angles, welding electrodes etc. would definitely amount to manufacturing process, and if metal waste, and/or its scrap is generated in the course of manufacturing, in our view, there is no escape from the conclusion, that such metal waste, and scrap, would be exigible to excise duty.: RAJASTHAN HIGH COURT;

2008-TIOL-1292-CESTAT-AHM.pdf + japan story.pdf

M/s Polycab Wires P Ltd Vs CCE, Vapi ( Dated: June 24, 2008 )

108/95 produced before Assistant Commissioner – Project financed by Japan Bank for International Cooperation - Classification declaration filed – Benefit extended by authorities after satisfying themselves about fulfilment of conditions of the notification like production of certificates – No suppression of material facts – Extended period not invokable – Equivalent penalty set aside – Identical case in Jyoti Structures followed - Member (Judicial)

Drawing out attention to the fact that the benefit of the notification was availed on the basis the certificates issued by the project authorities and duly countersigned by the Principal Secretary of the State, he submits that there was bonafide belief on the part of the concerned buyers including the appellant that the goods supplied to projects financed by Japan Bank for International Cooperation would be entitled to exemption of the Notification. He further submits that the classification lists were duly filed claiming the benefit of the notification and the benefit was so extended by the authorities after satisfying themselves about fulfilment of the conditions like production of certificate etc. and as such it cannot be said that any materials facts were suppressed by the appellant from the Revenue so as to invoke extended period of limitation (Para 3)

Classification declaration filed by assessee indicating availment of exemption notification – RT -12 filed indicates only quantity and value of the goods cleared under the Notification – No indication about filing of the certificate with the authorities – Only point to be decided is question of limitation – As assessee failed to produce the certificates larger period invokable – Member (Technical)

The manufacturer produces a certificate to the Asst. Commissioner of Central Excise having jurisdiction over his factory before clearance of the said goods.(emphasis provided) from the executive head of the Project Implementing Authority and counter signed by the Principle Secretary or the Secretary(Finance) in the concerned state government that the said goods are required for the execution of the project and 'that the said project has duly been approved by the Govt. of India for implementation by the concerned state government (Para 9)

The ld. Advocates on behalf of the appellants did not dispute that the benefit of Notification was not available to them. Therefore what remains is the question of limitation. It is noticed from the relevant RT-12 returns filed for the months of March, 2001, January, 2001 that only the quantity and the value of the clearances under Notification No. 108/95 have been shown. There is no evidence of having submitted copy/copies of the certificate with the RT-12 returns even though the Notification required submission of copy of the certificate before clearance of the goods before the Asst. Commissioner. In the list of annexures given in the covering letters for submission of the RT-12 returns also there is no mention of the certificates under Notification No. 108/95 (Para 11)

Difference of opinion amongst Members – Matter referred to the President to be placed before Third Member: AHMEDABAD CESTAT;

2008-TIOL-1291-CESTAT-BANG.pdf

CCE, Mangalore Vs M/s Sushil Chemicals ( Dated: May 16, 2008 )

Proposal for clubbing of clearances of all the units relevant only when there is a principal unit and the rest of the units are dummies – It is the burden of the revenue to show that all the other units are dummies – Revenue failed in that respect - Mutuality of interest cannot be a reason for clubbing of clearances – Principal pumped enormous funds through a finance company to finance new small scale units in the name of sons – Does not violate any Central Excise law – Commissioner's Order upheld - Revenue appeal devoid of merits hence dismissed: BANGALORE CESTAT;

2008-TIOL-1290-CESTAT-BANG.pdf

M/s IOC Ltd Vs CCE, Guntur ( Dated: April 22, 2008 )

Ethanol blended Motor Spirit exempted from levy of excise duties by Government of India vide Notification No. 25/2006 CE (NT) dated 20.11.2006 – Notification issued under Section 11C of CE Act - Stay application and appeal allowed: BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-1295-CESTAT-MUM.pdf + st story.pdf

M/s Midas Care Pharmaceuticals Vs CCE, Aurangabad ( Dated: July 23, 2008 )

Service Tax - Branded Medicaments containing alcohol and duty of excise paid thereon under the Medicinal & Toilet Preparations Act, 1955 – Prima facie applicants are producing goods for the client and are covered under BAS – Tribunal orders pre-deposit of Rs.50 lakhs.

Goods of particular brand are produced for particular party and supplied to that party, as per the contract.  The applicants cannot use those specifications/brand names to produce the goods on their own account.  The applicants also cannot sell these branded goods in open market.  Therefore, it is apparent that the applicants are producing goods for the client and are thus prima facie covered under BAS.

The activity of production of goods in question does not amount to manufacture in the Central Excise Act, 1944 and these are covered under MTP Act, 1955.

What is excluded from the definition of BAS is ‘manufacture' within the meaning of Central Excise Act, 1944 which prima facie would mean that it is only manufacture of goods liable to Central Excise duty, which would stand excluded from the purview of BAS.

The ratio of the case laws in the cases of M/s Kedia Castle Delleon Industries Ltd. and M/s Som Distilleries cannot prima facie be applied to the present case as the issue involved therein is the leviability of service tax on the packing activity whereas the issue involved in the instant case is the leviability of service tax on BAS.  Further, in the cited cases, Madhya Pradesh Excise Act, 1915 is involved, whereas in the case before us MTP Act, 1955 is involved, which is a Central legislation.

The sale price of the goods consists of the cost of raw materials, cost of packing materials, cost of consumables, overheads and profit of the company.

The value of taxable service under Section 67 of the Finance Act, 1994 can only be the amount assigned to the taxable services rendered and this can be the value received for conversion of input into final product .

Therefore, at least on this portion of the value , the service tax prima facie appears to be leviable. : AHMEDABAD CESTAT;

2008-TIOL-1294-CESTAT-AHM.pdf

M/s BSNL Vs CST, Ahmedabad ( Dated: July 21, 2008 )

ST - Interconnect Usage Charges - No tax is leviable in view of the Board's clarification that such a service was not taxable prior to Finance Bill, 2007: AHMEDABAD CESTAT;

2008-TIOL-1293-CESTAT-DEL.pdf

M/s Bharat Heavy Electricals Ltd Vs CCE, Bhopal ( Dated: July 17, 2008 )

ST - Consulting Engineering Service - Transfer of right to use a patented technology is IPR Service which is taxable from 10/9/2004 only: DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08cir026.pdf

Modification in IEC Number;

CASE LAWS

2008-TIOL-1289-CESTAT-MAD.pdf

M/s Taneja Aerospace & Aviation Ltd Vs CC, Chennai ( Dated: April 25, 2008 )

Customs – import – valuation - technical know-how fee paid by the appellants to foreign collaborator was not liable to be included, under Rule 9(1)(c), in the assessable value of the imported components and parts – there is no nexus between the payment of technical know-how fee and the components/parts imported by the appellants. There is nothing in the Agreement indicating that the payment of the fee was a condition of sale of the components/parts by the licensor to the licensee. :CHENNAI CESTAT;

2008-TIOL-1288-CESTAT-DEL.pdf

Shri Harish Kumar Sharma Vs CCE, Jaipur ( Dated: May 16, 2008 )

Customs – revocation of CHA licence - there is no allegation of loss of revenue and the CHA explained the irregularity – revocation is required only in cases where infraction is of a very serious nature warranting exemplary action on the part of the authorities – revocation of CHA licence is set aside.: DELHI CESTAT;