Compliance Report of Transfer Orders- 2008 - scant respect for Government - CBDT directions; CBEC is no better! (See 'DDT')

P K Mishra, IAS of 1972 batch, joins as new UPSC Member;

Mush quits Pak Presidency after nine years ;

SBI & associate banks officers go on strike over SBI-SBS merger;

HIke in TDS rate for professional sportspersons: CBDT takes final view in favour of 10% rate; Notification to be issued;

Govt likely to hike spectrum usage charge to garner additional revenue;

JMM withdraws support to Koda Govt in Jharkhand; Shibu Soren hopes to become CM;

Prof D P Agrawal takes over as new Chairman of UPSC;

Ajay Singhal, IPS, presently posted as DIG (Vig), Haryana Govt and had earlier a stint with DRI, gets President's Police Medal for Meritorious Service;

ddt 18 aug.pdf + compliancereport.pdf

Determination of Origin of Products under the Duty Free Tariff Preference Scheme for Least Developed Countries Rules, 2008!

tiol special guest.pdf

India's Look East Policy: Road to golden land of Myanmar!

guest.pdf

Think beyond your Table!

editorial.pdf

Pay hike for Govt employees: UPA Govt pays for electoral gains!

mbuzz882.pdf

Govt prepares draft guidelines for User Development Fee at airports ;

mbuzz881.pdf

TRAI calls for easing of curbs on internet telephony;

mbuzz880.pdf

'Project Arrow' launched to revitalise Post Offices;

mbuzz879.pdf

Govt closely monitoring disposal of hazardous waste generated by Industry;

2008-TIOL-406-HC-MAD-IT.pdf + it hc story.pdf

K R Palanisamy Vs Union of India (Dated: August 5, 2008 )

Income Tax – Section 50C (stamp duty value for transfer of capital assets) – constitutional validity upheld - to tax something, it is not necessary to tax everything Whether the Central Legislature is competent to enact Section 50C of the Income-tax Act? It is obvious from the provision and rather it is not disputed that the same is inserted to prevent large scale undervaluation of the real value of the property in the sale deed so as to defraud revenue the Government legitimately entitled to by pumping in black money. The impugned provision has been incorporated to check such evasion of tax by undervaluing the real properties. Tax could be evaded by breaking the law or could be avoided in terms of the law. When there is a factual avoidance of tax in terms of law, the Legislature steps into amend the income tax law to catch such an income within the net of taxation. Whether the impugned provision is arbitrary because of adoption of guideline value, violative of Article 14, principles of natural justice and no opportunity is given: what is stated in Section 50C as a real value cannot be regarded as a notional or artificial value and such real value is determinable only after hearing the assessee as per the statutory provisions. There is no indication either in the provisions of Section 50C of Income-tax Act or Section 47A of the Stamp Act or rules made thereunder about the adoption of the guideline value. Hence, the contention that the Section 50C is arbitrary and violative of Article 14 cannot be accepted.

Whether the impugned provision is discriminatory: It is well-settled that the latitude for classification in a taxing statute is much greater and, in order to tax something, it is not necessary to tax everything . These basic postulates have to be borne in mind while determining the constitutional validity of a taxing provision challenged on the ground of discrimination.

These provisions are directed only to check and prevent the evasion of tax by undervaluing the consideration of the transfer of capital assets: MADRAS HIGH COURT;

2008-TIOL-405-HC-AHM-IT.pdf

Comed Laboratories Limited Vs Union of India (Dated : May 16, 2008 )

Income Tax - Petition against Settlement Commission - Validity of Sec 245HA challeged - Interim relief granted subject to final decision by the Apex Court: GUJARAT HIGH COURT;

2008-TIOL-404-HC-KERALA-IT.pdf

M/s N J Jose & Co (P) Ltd Vs ACIT ( Dated : February 20, 2008 )

Income Tax - Is capital gains a part of the book profits under Section 115J - Held, so long as long term capital gains is part of profit included in the profit and loss account prepared under Chapter VI of the Companies Act, it cannot be excluded unless so provided under Explanation to Section 115J(1)A of the Act. In absence of any such provision assessee is not entitled to the exclusion claimed. Assessee appeal dismissed:KERALA HIGH COURT;

2008-TIOL-403-HC-DEL-IT.pdf

CIT, Delhi -X Vs M/s Prima India Products ( Dated: July 11, 2008 )

Disclosure made by assessee before Settlement Commission explains source for making investments during the year - Finding in order u/s 263 reversed

Considering the disclosure made by assessee in it application before Settlement Commission, Tribunal was satisfied that there was nexus between the income disclosed before the Settlement Commission and the investments made in the names of the partners during the relevant asst. year. Hence CIT's finding in the order u/s 263 that the ITO had failed to inquire into the source of such investments, stood reversed by necessary implication. Appeal by Revenue dismissed:DELHI HIGH COURT;

2008-TIOL-371-ITAT-DEL.pdf

ITO, Delhi Vs M/s G D Goenka Public School (Dated: February 8, 2008)

Income tax - Demand of interest after a period of four years under s. 201(1) read with s. 201 (1A) of the Act - Period of four years from the end of the relevant previous year would be a reasonable time for levy of interest in a case of delay of depositing the tax deducted at source - Where no limitation is prescribed, the order should be passed within a reasonable time - Demand of tax and interest beyond four years is unreasonable and hit by limitation - Revenue appeal dismissed: DELHI ITAT;

cbecorder195_2008.pdf

CBEC issues transfer order of 11 Addl/JCs;

CENTRAL EXCISE SECTION

NOTIFICATION

etariff08_46.pdf

Exemption granted to Ultra Mega Power Projects;

CASE LAWS

2008-TIOL-402-HC-MUM-CX.pdf

CCE, Goa Vs M/s Goa Bottling Co Pvt Ltd (Dated : June 9, 2008 )

Central Excise – Rule 173E of the Central Excise Rules, 1944 - Reference to Rule 173E was made by the CEGAT only for the purpose of pointing out that applying any notional figure of production would mean applying rule 173E – There is no evidence to suggest that the Commissioner has applied Rule 173E in the present case - Construction of Rule 173E is not determinative of real controversy in the case - It is obvious that the power to fix the norms of the production under Rule 173E is conferred on the Commissioner only and the CEGAT has not in any way interfered with such a power:BOMBAY HIGH COURT;

2008-TIOL-1325-CESTAT-BANG.pdf

M/s Kunnath Textiles Vs CC & CCE, Cochin (Dated: April 15, 2008)

Intermediate products manufactured do not find mention in the Annexure to Notification No. 08/2003 – Exemption under Notification No. 67/95 not available to intermediate products when the final product is exempted – Appeal devoid of merits hence dismissed - CESTAT:BANGALORE CESTAT;

2008-TIOL-1324-CESTAT-BANG.pdf

CCE, Hyderabad-I  Vs M/s Mahalakshmi Profiles Ltd (Dated: March 25, 2008)

There is practical difficulty in ascertaining and discharging differential duty – Details of consignment agents made available to the department – Evidence suggests that there is no wilful intention to defraud the revenue – Differential duty paid before the issue of SCN – Within the realm of Sec. 11A (2B) – Revenue appeal devoid of merits hence dismissed: BANGALORE CESTAT;

2008-TIOL-1321-CESTAT-MAD.pdf + limitation story.pdf

M/s Katrala Products Pvt Ltd Vs CCE, Coimbatore (Dated: February 18, 2008)

Any amount collected as duty of excise by any person from his buyer but not credited to the exchequer recoverable without any time limitation – Plea of the appellant that the larger period of limitation under Section 11A would not be available to the Revenue under Section 11D not sustainable – Appeal dismissed

There was no limitation provision under Section 11D and there was even no mechanism provided under Section 11D for recovery of any duty of excise collected by a person from his customer and not remitted to the Exchequer (Para 3)

Presumably, it was the intention of the legislature that any amount collected as duty of excise by any person from his buyer but not credited to the Exchequer could be recovered without the bar of limitation: CHENNAI CESTAT;

2008-TIOL-1320-CESTAT-KOL.pdf

CCE, Shillong Vs M/s Hatikuli Tea Estate (Dated: May 12, 2008)

Central Excise – denial of exemption under Notification 33/99 CE on the ground that the respondents have not carried out 25% expansion in the installed capacity – there is no infirmity in the order of the Commissioner (Appeals) allowing the exemption as the Chartered Engineer's Certificate produced by the respondents is detailed and acceptable and the same also has not been challenged by the Department:KOLKATA CESTAT;

SERVICE TAX SECTION

2008-TIOL-1326-CESTAT-BANG.pdf + cairn story.pdf

Cairn Energy (I) Pvt Ltd Chennai Vs CC & CCE, Visakhapatnam (Dated: April 29, 2008)

C & F agent receives goods from factories/premises of the Principal, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc - Relationship of principal and agent should exist for bringing the agent within the ambit of C & F Agent – Storage of crude received on behalf of client and transfer through pipe lines to vessels is taxable under the category of ‘Transport of Goods through pipeline or conduit service' w.e.f 01.05.2006 - Port fee which is a reimbursable expense cannot be subjected to service tax – Subsequent SCNs cannot be issued invoking extended period when department has knowledge of facts – Order set aside with consequential relief:BANGALORE CESTAT;

2008-TIOL-1323-CESTAT-AHM.pdf

M/s Multi Mantech International Pvt Ltd Vs CST, Ahmedabad (Dated: July 29, 2008)

ST - Consulting Engineering Service - Assessee is a contractor to M/s GAIL and charges invoice value inclusive of all taxes - Claims refund for 'survey and mapping' survey for a period not covered under service tax - Refund granted but credit to Consumer Welfare Fund on the ground of unjust enrichment - Assessee claims it did not charge service tax separately in its invoice - Since the assessee is not able to disprove that no service tax was charged and it is settled law that if invoice is raised inclusive of all taxes, it is to be presumed that service tax was also charged as a part of composite invoice - Assessee's appeal rejected:AHMEDABAD CESTAT;

2008-TIOL-1322-CESTAT-BANG.pdf

NCR Corporation India Pvt Ltd Vs CST, Bangalore (Dated: May 16, 2008)

Supply of ATMs – Commissioning and Installation of ATMs, cash replenishment service and care taker service falls under the category of ATM (operations, maintenance or management) service w.e.f 01.05.2006 - Once a particular service is introduced as separate category with effect from a particular date, then it will have only prospective effect and not liable to service tax for a prior period – Revenue's categorization of the service under BAS not accepted – Appeal allowed with consequential relief:BANGALORE CESTAT;

2008-TIOL-1319-CESTAT-BANG.pdf

M/s Airtime Enterprises Vs CCE, Bangalore (Dated: May 19, 2008)

Benefits of Government's tax payer friendly scheme availed – Service tax paid along with interest – Penalty not imposable in such cases – Appeals allowed:BANGALORE CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not030.pdf

DGFT prohibits import of rough diamond from Venezuela ;

dgft08not029.pdf

Refund of terminal excise duty: Interest to be paid after 30 days and same to be counted from receipt of complete application form on Aug 6, 2008 or after;

CASE LAWS

2008-TIOL-1328-CESTAT-MUM.pdf + cvd story.pdf

M/s Phil Marketing Services Ltd Vs CC & CCE, Goa (Dated: June 10, 2008)

There has been no loss to the exchequer and on the contrary the excise duty paid is more than the amount of differential CVD demanded – After dispensing with requirement of pre-deposit, Tribunal grants Stay:MUMBAI CESTAT;

2008-TIOL-1327-CESTAT-DEL.pdf

CC, Jaipur Vs M/s Mittal Pigments Pvt Ltd (Dated: July 9, 2008)

Customs – import of zinc dross – as per the test result of CRCL, the imported goods are zinc dross other than the dross confirming to ISRI code scrub, seal, seam or shelf and hence the same are restricted for import – impugned order is set aside and appeal allowed.:DELHI CESTAT;