Fate of Adjudication Orders in favour of revenue but apparently not legal and proper (See 'DDT')

Service tax on GTA - Ghost of abatement availability rears its head again only to be exorcised by the Board (See 'DDT')

Govt to launch Scheme to install 50,000 more telephones in villages to reach last mile of 100% tele-connectivity in country;

FM to address Chairpersons of RRBs tomorrow;

Fiscal deficit all set to double because of hike in subsidies;

Pak democracy runs into trouble; Sharief party pulls out of PPP-coalition;

ddt 26 aug.pdf

Service tax on GTA – Ghost of abatement availability rears its head again only to be exorcised by the Board;

letter.pdf

Minutes of the Conference of Chief Commissioners and Director Generals held on 29-30 May, 2008.;

service_tax_gta.pdf

Service Tax - GTA- Certain further clarification in respect to clarification issued vide Circular No. 5/1//2007-ST, dated 12.03.2007 regarding exemption under notification No. 32/2004-ST dated 03.12.2004-reg.;

mbuzz905.pdf

Centre hosts conference on geosciences and geological surveys;

mbuzz904.pdf

Scheme to provide 50000 more public telephone in villages to be lauched;

mbuzz903.pdf

ICAI organising two-day workshop on Financial Reporting Standards;

mbuzz902.pdf

Monsoon: India receives less than Long Period Average rainfall;

mbuzz901.pdf

Efforts are on to create 500 mn trained manpower by 2020: Prime Minister;

2008-TIOL-390-ITAT-BANG.pdf + hal story.pdf

M/s Hindustan Aeronautics Ltd Vs ITO, Bangalore ( Dated : March 31, 2008 )

Income tax – Procurement of prototype aircraft engines with technical know how and documentation – When the composite contract for procurement clearly mentions that the engines procured cannot be copied or reproduced without the consent of the non-resident manufacturer it tantamounts to a contract for sale and not service – Payment made to the non-resident cannot be regarded as fee for technical services within the meaning of explanation 2 to s. 9 (1) (vii) of the Act read with article 12 of the Indo-Russian DTAA – Such payment is not liable for any TDS deduction in India – Orders of the CIT (A) set aside : BANGALORE ITAT ;

2008-TIOL-389-ITAT-BANG.pdf

M/s Nous Infosystems Pvt Ltd Vs ITO, Bangalore ( Dated : June 3, 2008 )

Income Tax - Deduction u/s 10A - AO clubs losses from non-STPI unit with the profit of STPI unit before allowing Sec 10A deduction - CIT(A) agrees with the AO - Held, the exemption under section 10A to STPI unit and consequently to allow carry forward of such losses and depreciation of non-STPI Unit were two separate issues; the law is very clear regarding incomes not taxable under Chapter III in the Income Tax Act which only relates to incomes forming part of total income has to be considered when the assessee has been able to establish the income of the STPI Unit as was available to the Assessing Officer remains undisputed - Assessee's appeal allowed: BANGALORE ITAT ;

2008-TIOL-388-ITAT-DEL.pdf

DCIT, Dehradun Vs Pride Foramer SAS ( Dated: May 30, 2008 )

Income Tax - Assessee is a non-resident company - hires technicians from associate company for certain technical work in India - salary paid in excess of exemption limit - AO passes order u/s 163(1) and treats the assessee as agent of foreign technicians - AO assessees salary and perquisites in the hands of the assessee and since no tax was deducted nor any advance tax paid, interest u/s 234B was charged - CIT(A) holds since the entire income of technicians was liable to TDS, there was no advance tax payable - Held, the tax deductible at source has to be excluded while computing the advance tax liability as provided in section 209(1)(d), even if the tax had not actually been deducted. In this case, there is no dispute that the entire income of the assessee was tax deductible at source. Therefore, no advance tax was payable by these assessees and as a result there will be no case for charge of interest under section 234B. The CIT(A) order upheld - Revenue's appeal dismissed :DELHI ITAT ;

2008-TIOL-387-ITAT-MAD.pdf

ACIT, Chennai Vs M/s Carborundum Universal Ltd ( Dated : December 28, 2007 )

Assessee changed its method of accounting for valuation of closing stock because of Accounting Standard AS-2 which has been made mandatory for all companies by the Institute of Chartered Accountants of India. This changed method of valuation for closing stock resulted in increased value of closing stock. On behalf of the assessee it was submitted that the assessee should be either allowed to write off of the notional profit because of such change in method of valuation of closing stock or opening stock should also be valued on the basis of new method. Held, contention of assessee cannot be accepted because when originally the assessee changed its method of valuation of closing stock in the Asst. Year 1971-72 from actual cost to direct cost method which led to reduction in profit to the extent of Rs.17,80,329/-, the revenue wanted to apply the same method of valuation of closing stock for opening stock also but that argument was rejected by the Tribunal as well as the Hon'ble Madras High Court because, since the assessee was required to follow this changed method of accounting from year to year which might be prejudicial or detrimental to the interest of the Revenue in the initial year but later on no such prejudice would be caused. Also Held, that when the change in method of valuation of closing stock is bona fide and is going to be followed from year to year even if it is detrimental to revenue, the value of opening stock cannot be allowed to change, same principle has to be applied when the changed method of valuation of closing stock is detrimental to the assessee.

Sec.234D was introduced in the Statute by Finance Act 2003 with effect from 01.6.2003, therefore interest under sec.234D cannot be charged in respect of AY's prior to coming into force of these provisions.

Inclusion of Miscellaneous Income from processing charges in the business profits for the purpose of deduction under sec.80HHC of the Act - matter set aside with a direction to the Assessing Officer to decide the issue after examining the details in the light of the judgment of the Hon'ble Supreme Court in the case of CIT v. K. Ravindranathan Nair:CHENNAI ITAT ;

CENTRAL EXCISE SECTION

2008-TIOL-416-HC-UTTRANCHAL-CX.pdf + cx story.pdf

CC & CE, Meerut Vs M/s Khushal Fertiliser Pvt Ltd (Dated: June 16, 2008)

Central Excise – suppression - Letter given to an officer not having jurisdiction cannot be treated as a letter to the jurisdictional officer: the information given on 22.01.1991, to the Inspector of the Range with regard to which he had no jurisdiction in the matter, cannot be said to be information to the office of Assistant Collector, Central Excise. Therefore, the observation of CESTAT that no concealment was made by the assessee is erroneous in law.:UTTARAKHAND HIGH COURT;

2008-TIOL-1380-CESTAT-MAD.pdf

Arulmigu Kumaragiri Spinning Mills Pvt Ltd Vs CCE, Salem (Dated: February 1, 2008)

Show cause notice issued beyond the normal period after coming to know of the relevant transactions involving intentional evasion - Larger period could not be invoked to demand the amount not levied/short levied – Demand set aside – Appeal allowed:CHENNAI CESTAT;

2008-TIOL-1379-CESTAT-BANG.pdf

M/s Ramachandra Paper Boards (P) Ltd Vs CCE, Visakhapatnam (Dated: December 31, 2008)

Classification of Newsprint in reels under Chapter sub-heading 4801.00 of CETA - nil rate of duty upheld: BANGALORE CESTAT;

2008-TIOL-1378-CESTAT-MAD.pdf

CCE, Coimbatore Vs SSM Processing Mills (Dated: January 22, 2008)

Central Excise – Manufacture – Activity of padding and application of starch / chemicals and special processes to fabrics is not manufacture – Processes as defined in Section 2 (f) of the Central Excise Act, 1944 only relevant - Revenue appeal dismissed by Tribunal

The only relevant question is whether padding with starch and the special processes involve a processes involve a process amounting to manufacture as defined in the Section 2(f)(v) of the Central Excise Act. That the exemption notification does not cover or cover a process for exemption is not material. By applying starch with some chemicals and the special process identified, the fabrics acquire the quality of stiffness and sheen which vanishes after a couple of washes. Such a process which does not bring into existence goods with a new name, properties or uses cannot be held to be manufacture. Apex Court has found that the Note 3 to Chapter 52 does not in effect lay down a deeming provision as regards manufacture. Therefore the impugned goods cannot be subjected to further duty liability on account of the impugned process. (Para 6.1):CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1384-CESTAT-MAD.pdf + bsnl story.pdf

GM, BSNL Vs CCE, Madurai (Dated: February 1, 2008)

Service tax – Liability to pay interest on short/delayed payment of duty is mandatory – Interest under Section 75 is not penal as stated by the appellants - It is a civil liability which is inescapable – Appeal dismissed

Section 75 ibid made it mandatory for the appellants to pay such interest. That the appellants had no intention to withhold payment of service tax or that the short-payment was occasioned by arithmetical error is no valid consideration insofar as this provision of law is concerned. The liability under Section 75 is not penal as stated by the appellants. It is a civil liability which is inescapable (Para 1):CHENNAI CESTAT;

2008-TIOL-1383-CESTAT-AHM.pdf

M/s Sai Consulting Engineers Pvt Ltd Vs CST, Ahmedabad (Dated: July 30, 2008)

ST - Consulting Engineer Service - Assessee claims part of the work was done as sub-consultant and the tax was paid by main consultant - also claims certain expenses as reimbursed by clients - Demand with penalty - Since the assessee has failed to establish that the tax was paid by the main consultant and also the reimbursable expenses are related to office space, rent and staff which an independent consultant is expected to maintain, it is not a fit case for waiver of pre-deposit - Rs 60 lakh pre-deposit ordered :AHMEDABAD CESTAT;

2008-TIOL-1382-CESTAT-AHM.pdf

M/s Bharuch Enviro Infrastructure Ltd Vs CCE, Surat- II (Dated: July 29, 2008)

ST - Business Auxiliary Service - Assessee is into disposal of waste for various industries - Revenue raises demand - Assessee refers to Board's letter which holds incineration / shredding of bio-medical waste cannot be treated as 'processing of goods' - Since the letter was not presented before the Commissioner, the matter remanded for fresh consideration:AHMEDABAD CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not035.pdf

More relaxations from DGFT on export of edible oils;

CASE LAWS

2008-TIOL-1381-CESTAT-MAD.pdf

CC, Chennai Vs M/s Kapil International (Dated: March 28, 2008)

Ship store import prices or overseas retail price list cannot form basis for assessable value – No other material evidence found to reject the transaction value – Value declared by the importer cannot be rejected without any basis – Apex Court decision in Eicher Tractors followed – Confiscation and penalty ordered by original authority set aside by Commissioner (Appeals) – No reason to interfere - Appeal filed by Revenue dismissed

All the grounds raised in this appeal have been successfully met by the respondents through Counsel. Ld. Commissioner (Appeals) has rightly accepted the declared value in the absence of evidentiary material for rejecting it. There was no mis-declaration of value and therefore the confiscation and penalty ordered by the original authority have been set aside (Para 4): CHENNAI CESTAT;