Air Customs – top corporate houses involved in aircraft import evasion (See 'DDT')

Evasion of Custom duty on import of jelly cup & chocolate coated biscuits by way of misclassification - Delhi Customs case (See 'DDT')

Pawan Kumar Wadhwa to replace M D Sinha as Director Admin, CBDT;

Govt releases five lakh tonne additional sugar;

Steel Ministry for hike in export duty; MoF not averse to the idea;

CBDT allots charges & regions for 815 newly-recruited Inspectors;

Inflation further goes up to 12.63% for week ending on Aug 9;

ddt 22 Aug.pdf

Waiver of Pre-Deposit – No Licence to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest;

Evasion of Customs duty.pdf

Evasion of Custom duty on import of jelly cup & chocolate coated biscuits by way of misclassification.;

aus_cus.pdf

The Customs International Executive Management Program (CIEMP) of the Australian Customs Service to be held from 13th October to 14th November 2008 in Canberra.;

Standard of Weights and Measures.pdf

Standards of Weights and measures (Packaged Commodities) (Amendment) Rules, 2006;

rbi08cir010.pdf

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR;

rbi08cir009.pdf

Foreign Exchange ManaAct, 1999- Advance Remittance for Import of Goods - Liberalisation ;

rbi08cir008.pdf

Advance Remittance for Import of Rough Diamonds ;

mbuzz895.pdf

DRI seizes vessel worth Rs 10 Cr after recovering USD 1.7 lakh at Kakinada Port;

2008-TIOL-155-SC-IT.pdf + sc it story.pdf

Agricultural Produce Market Committee, Delhi Vs CIT (Dated: August 21, 2008)

Income Tax - local authority - Exemption under Sec 10(20) - Assessee, an agricultural produce market committee claims exemption on the ground that it is an extended arm of the municipality committee and exercises control of market fund - AO disallows on the ground of amendment vide Finance Act, 2002 and insertion of Explanation excluding such committees - CIT(A), Tribunal and also HC dismiss assessee's petition - Held, assessee is neither a Municipal Committee nor a District Board under the said Explanation to Section 10(20) of the 1961 Act, they are not entitled to exemption. In fact what makes it more abundantly clear is the fact that the Union Govt has vide Finance Act, 2008 exempted such bodies under sub-section 26AAB of Sec 10 w.e.f April 1, 2009.

The functional test and the test of incorporation as laid down in the case of R.C. Jain is no more applicable to the Explanation to Section 10(20) of the 1961 Act. The judgment of this Court in the case of R.C. Jain followed by judgments of various High Courts on the status and character of AMC(s) is no more applicable to the provisions of Section 10(20) after the insertion of the Explanation/definition clause to that sub- section vide Finance Act, 2002. The R C jain decision was applicable when the Income Tax Act had not defined the term 'local authority' and the same was bodily borrowed from the Sec 3(31) of the General Clauses Act, 1897. However, it is now well-defined and 'other authority' used in the General Clauses Act has been omitted in the Explanation which covers bodies like AMC.: SUPREME COURT;

2008-TIOL-385-ITAT-DEL.pdf + psu story.pdf

Mannesman Demag Sack AG Vs ACIT, New Delhi ( Dated : July 8, 2008 )

Indian PSU acting as agent of foreign company – dispute with Income Tax – no need of COD clearance : clearance from the COD is necessary only where there is a dispute between a public sector undertaking and the ministries of the Government of India and if the assessee is a non-resident, represented for income-tax assessments by representative assessee or an agent, the requirement of COD approval cannot be extended to such a case.

For purposes of levying customs duty the design and engineering received in a packed condition are treated as machinery, but for that reason alone it cannot be called a plant.- . However, the possibility cannot be ruled out that the PE in India had a role, however small, to play in the effective commissioning of the plant. After the receipt of the design and engineering in a packed condition, the supervisory staff of the PE in India must have certainly helped in implementing them and making use of them in the effective installation and commissioning of the plant supplied by the assessee to SAIL:DELHI ITAT;

2008-TIOL-384-ITAT-DEL.pdf

M/s Asia Aviation Ltd Vs ACIT, New Delhi ( Dated : January 4, 2008 )

Income tax - Deduction claimed towards expenses for TBO and HIS of aircraft - If business liability arises in the P.Y. deduction should be allowed although the liability may have to be quantified and discharged at a future date - In mercantile system of accounting revenues of a particular accounting period have to be matched with the corresponding expenses relatable to the very same accounting year irrespective of the fact whether there is an actual cash out flow in respect of that expenditure or not - Expenditure is for preserving/maintaining an existing asset and did not create any new asset - To be categorized as revenue expenditure only - CIT's order set aside and assessee's appeal allowed:DELHI ITAT;

2008-TIOL-383-ITAT-HYD.pdf

Shri A K Debnath Secnderabad Vs DCIT, Hyderabad ( Dated : May 23, 2008 )

For limitation period u/s 158BE to be computed the last panchnama should be in r/o the last authorization executed and the said Panchnama is valid in the eyes of law - Date of panchnama relevant for determining the period of limitation for passing the order u/s 158BC by the Assessing Officer – Tribunal cannot go into the conduct of the search party including the issuing of restrained order/prohibitory order – Assessee's challenge with regard to limitation set aside

For additions to income when net asset method is adopted, liabilities also should be taken into account and the income should be determined accordingly – Assessee's appeal and Revenue's appeal partly allowed by way of remand:HYDERABAD ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-154-SC-CX.pdf + sc story.pdf

CCE, Tamil Nadu Vs M/s Southern Structural Ltd (Dated: August 6, 2008)

No extended period of limitation when facts are known to the Department; since the fact regarding advances received was already in the knowledge of the Department and the earlier similar proceedings initiated by the Department were dropped by the Assistant Commissioner, the Revenue was not justified in invoking the extended period of limitation.

Burden is on Revenue to prove that interest-free advance has influenced the price: since the fact regarding advances received was already in the knowledge of the Department and the earlier similar proceedings initiated by the Department were dropped by the Assistant Commissioner, the Revenue was not justified in invoking the extended period of limitation.

If there is no difference in the selling price for both categories of the wholesale buyers and there is also 'no proof' that on account of advance deposits taken from some buyers, the price charged from all buyers has been reduced, then the element of notional interest on advance deposits, cannot be added. Obviously, where there are two prices, one for those who have made the advance and the other who have not, it would require no further proof of the lower price having been influenced by the interest-free advance made by the buyer. But otherwise it would require proof and the proof for the purposes of holding that interest-free advance has influenced the price would obviously be provided by the Revenue. There is no scope for any such presumption:SUPREME COURT;

2008-TIOL-408-HC-RAJ-CX.pdf + welding story.pdf

Hindustan Zinc Ltd Vs UoI (Dated: July 1, 2008)

Welding electrodes entitled for CENVAT Credit: In that case the Hon'ble Supreme Court even went to the extent of holding, that use of electrical equipments, like lighting, electrical humidifiers, exhaust fan etc. were also taken to be necessary equipment, to effectively carry on the manufacturing process. Thus, with the above, if the quoted part of the judgment in JK Cotton's case is read, it becomes clear, that the expression “in the manufacture of goods” should normally encompass entire process carried on by the dealer, of converting raw materials into finished goods, where any particular process, or activity, is so integrally connected with the ultimate production of the goods, but for that process, manufacturing, or processing of the goods would be commercially inexpedient, goods required in that process would, fall within expression “ in the manufacturing of goods”.

In our view the proposition propounded above sets the controversy at rest. The question, as framed, is accordingly required to be answered in favour of the assessee.:RAJASTHAN HIGH COURT;

2008-TIOL-1362-CESTAT-MUM.pdf

CCE, Goa Vs M/s Costa & Co Pvt Ltd, Goa (Dated: June 25, 2008)

Central Excise - remand order - remand proceeding were limited to re-determine the classification and thereafter to work out the duty demand - the Commissioner could not have gone into the aspect of the brand name and has rightly not gone into it - Once CESTAT order was not challenged by Revenue, it has attained finality and the order passed in remand proceedings cannot be challenged on the ground that Tribunal's remand order itself was erroneous.:MUMBAI CESTAT;

2008-TIOL-1361-CESTAT-DEL.pdf

M/s Perfetti Van Melle India Pvt Ltd Vs CCE, Gurgaon (Dated: July 4, 2008)

Tattoos cleared with Bubble Gum – not entitled for CENVAT Credit: Advocate argued the matter on merits as also on the point of limitation but fairly drew our attention to the earlier order of the Tribunal in the case of Jayco India Pvt. Ltd. vs. C.C.E. , Chandigarh ( 2006-TIOL-746-CESTAT-DEL ) dealing with identical dispute holding that tattoos supplied with bubble gum cannot be held eligible input and as such, not entitled to credit. After going through the said judgment of the Tribunal dealing with identical dispute. We do not find any justifiable reason to take a different view. Accordingly, we hold against the appellants on merits.

Facts known to the Department – no extended period of limitation: it cannot be said that the credit was availed with mala fide intention or there was suppression on the part of the appellants. As such, we find no justification for invoking the extended period of limitation. The demand is required to be restricted for a period of one year from the date of issuance of show cause notice.

No penalty: Further, inasmuch as the issue involved is about legal interpretation of the Modvat provisions and as already held that no suppression, misstatement or mala fide are attributable to the appellants, we do not find any justifiable reason for imposition of penalty upon the appellants. The same is accordingly set aside.:DELHI CESTAT;

2008-TIOL-1360-CESTAT-MUM.pdf

M/s Amar Ispat (P) Ltd Vs CCE, Thane-I (Dated: June 25, 2008)

Central Excise - demand of duty on clandestine clearances - demand of duty upheld only for the period for which evidence in the form of private records is available - demand for the earlier period purely based on the norms of power consumption is not sustainable.:MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1357-CESTAT-DEL.pdf

M/s Santosh Maloo Vs CCE, Jaipur (Dated: June 23, 2008)

ST - Business Auxiliary Service - Assessee claims since it is proprietary business it is not covered by the term 'commercial concern' used in the law - It is now settled issue that even proprietary and partnership firm are business conerns and very much covered under the BAS for service tax purposes - Appeal rejected:DELHI CESTAT;

2008-TIOL-1356-CESTAT-DEL.pdf

M/s M P Laghu Udyog Nigam Ltd Vs CCE, Bhopal (Dated: July 10, 2008)

ST - Consulting Engineering Service - Assessee pleads it gets supervision charges for construction of govt hospitals, schools, hostels etc - Going by the contract the Govt pays certain commission only to meet the establishment and overhead charges - Prima facie the appellant has a strong case - Pre-deposit waived off:DELHI CESTAT;

2008-TIOL-1355-CESTAT-BANG.pdf + stgst.pdf

M/s Rohan Builders Ltd Vs CST, Bangalore (Dated: July 28, 2008)

Service tax – Development of residential flats in terms of a tri-partite agreement – Developer constructing flats to a third party on the land owned by another party –Activity of the developer amounts to construction of flats for the third party buyers and classifiable under the category of ‘Construction of Complex service' – Service tax paid with interest before the issue of show cause notice – No penalty leviable as the assessee has a genuine misunderstanding of the provisions :BANGALORE CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08cir029.pdf

DGFT clarifies deemed export benefits are available to supplies to Mega Power Projects;

dgft08pn067.pdf

Imposition of ban on exports: DGFT clarifies EO period under EPCG automatically gets extended without any fee;

CASE LAWS

2008-TIOL-1359-CESTAT-DEL.pdf

Ms Tike International And Others Vs CCE, Jaipur (Dated: July 7, 2008)

Customs - Stay/Dispensation of pre-deposit - non-tufted carpets imported by declaring the same as polypropylene carpets - non-tufted carpets attract higher rate of duty - prima facie, not a fit case for total waiver of duty - Rs one crore ordered to be deposited in addition to the duty already deposited. :DELHI CESTAT;

2008-TIOL-1358-CESTAT-MAD.pdf

M/s Swaroop Shipping Services Vs CC , Chennai (Dated: February 7, 2008)

Role of CHA is coextensive to the role an exporter – CHA's function comes to an end only after shipment of goods – No evidence on record to establish CHA's role in export of red sanders - No mens rea on the part of CHA – Penalty under Section 114 set aside – Appeals allowed

However, there is nothing on record or in the provisions of law to indicate that, with the issuance of the above order under Section 51, the exporter's function came to an end. In my view, the exporter's function would come to an end with shipment only. His agent's role is coextensive with his. If that be so, the role of a CHA for the exporter would also extend upto shipment of the goods (Para 3)

The CHA in the present case, admittedly, did not do anything other than signing blank formats to be used as annexures to the Shipping Bill. It was their practice to do so at the rate of Rs.150/- per Shipping Bill. The evidence on record indicates that the CHA was not aware of the prospect of red sanders being smuggled out of the country in the guise of export of granite chips under the above Shipping Bill. Any mens rea has not been shown to have been present on the part of the CHA in relation to the confiscated goods (Para 3) :CHENNAI CESTAT;