Foreign Exchange (Compounding Proceedings) Rules, 2000 amended to enhance monetary limits (See 'DDT')

Direct Receipt of Import Bills / Documents – RBI announces Liberalisation (See 'DDT')

SC holds Sanjeev Nanda and three others guilty in BMW case;

PMO agrees to grant excise exemption to goods supplied to flood victims in Bihar;

Depreciating rupee pushes exports growth to 31% in July;

Japanese PM Y Fukuda resigns amidst worsening economic woes;

ddt 2 sept.pdf

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

Revision of pension of pre-2006 pensioners.pdf

Pay Commission recommendations: Govt notifies revision of pension of pre-2006 pensioners / family pensioners;

femanotification.pdf

Foreign Exchange (Compounding Proceedings) Rules, 2000 amended to enhance monetary limits;

National Housing Bank.pdf

NHB looking for Asst GM/ Regional Manager;

rbi08cir013.pdf

Direct Receipt of Import Bills / Documents - Liberalisation;

mbuzz925.pdf

DoT to link 500 blocks by wireless broadband after Spectrum allocation ;

mbuzz924.pdf

RBI, Petro Ministry sanction relief package for flood-hit Bihar;

mbuzz923.pdf

Exports grows by 31.2% in July; Trade deficit ups;

2008-TIOL-161-SC-IT.pdf

M/s Toyota Motor Corporation Vs CIT (Dated: August 25, 2008)

Income Tax - Penalty u/s 271C read with Sec 274 - AO drops proceedings - Invocation of powers u/s 263 - Tribunal holds invocation of Sec 263 was impermissible in the light of materials placed by the assessee - HC observes tribunal could not have substituted own reasonings which were required to be recorded by the AO and AO directed to pass a reasoned order - Held, HC order cannot be interfered with at this stage and matter remanded to the AO for passing reasoned order - Assessee's appeal dismissed :SUPREME COURT;

2008-TIOL-433-HC-MUM-IT.pdf + bom hc story.pdf

Ornate Traders Private Limited Vs ITO, Mumbai ( Dated : August 6, 2008 )

Condonation of Delay: Where there is sufficient cause shown and the application for condonation of delay has been moved bonafidely , the court would normally condone the delay but where the delay has not been explained at all and, in fact, there is unexplained and inordinate delay coupled with negligence or sheer carelessness, the discretion of the court in such cases would normally tilt against the applicant. It really would not make much difference whether the applicant before the Court is a Government Department or is a private individual.

Greater indulgence to Government : Of course, as per the settled principles, the courts are inclined to show greater indulgence to the departments of the Government because of inter and intra departmental steps to be taken before initiation of a legal proceedings by the department, but this indulgence has its own limitations and cannot be extended without any reasonable cause and that too beyond the permissible time. It is expected that the Government Departments should function in a properly mechanized manner and not to act so casually that because of its inaction or misdeeds, the public exchequer is made to suffer.

The law of limitation is normally to be construed strictly as it has the effect of vesting for one and taking away right from the other. To condone the delays in a mechanical or a routine manner may amount to jeopardizing the legislative intent behind Section 5 of the Limitation Act. Statutes of limitation are designed to effectuate a beneficent public purpose viz. to prevent the taking away from one what he has for long been permitted to consider his own and on the faith of which he plans his life, habits and expenses. Long dormant claims are often more of cruelty than of justice in them. This principle is more based on public policy. Its aim being to secure the quiet of the community and to prevent oppression. These rules have been viewed by some as an infamous power created by positive law to decrease litigation and encourage dishonest defences. This may not be wholly true but still the limitation vests a definite right in a party after a lapse of period prescribed under law.

Functioning of Government offices: In performance of their functions, public officers or public servants have the duty to act judiciously, fairly and expeditiously.An officer can hardly justify that a file would lie on his table for months or days together and he would not act on the said file just because he claims to be pre-occupied. Pre-occupation of an officer or officials can be a reasonable excuse, but for a short period and nothing justifies the inaction for a pretty long period running into months. If such an excuse is to be permitted in law, then the Courts would have to completely ignore the law of limitation. Public interest imposes an obligation upon the Department as a whole to act in a channalised manner and to ensure that every appeal which is sought to be preferred by the Department is not rendered barred by time that too by inordinate and unexplained delays. It is too farfetched an excuse to be put forth before the Court of law that the lawyers retained the files for months together and the Department was so helpless that it could take no steps to file its appeals within a reasonable time. The expression “sufficient cause” will always have relevancy to reasonableness. The actions which can be condoned by the Court should fall within the realm of normal human conduct or normal conduct of a litigant. It is neither expected nor it can be a normal conduct of a public servant or a litigant that they would keep the files unmoved, unprocessed for months together on their tables.

Some extent of public accountability and responsibility will have to be the basis for looking into such conduct.

The Court issued following directions for compliance by the authorities concerned:-

The concerned authority, highest in the hierarchy of the Department, is hereby directed to issue Circular to all the concerned officer/officials to file the Appeals arising from the Income Tax Act particularly Section 260A of the Income Tax Act, within the period of limitation provided under law.

The said Circular shall also introduce the concept of public accountability and responsibility in discharge of its official duties. Applying this principle, the concerned authority shall provide for a mechanism which will fix responsibility and consequences thereof in relation to the officer/official dealing with the approval, preparation and filing of Income Tax Appeals in this Court.

The directives in the Circular shall also specify the time within which the authorities are expected to take action and have due cooperation and co-ordination between the concerned Departments.

It should be the responsibility of the senior officer in the hierarchy of the Department to ensure compliance of the directives contained in the said Circular as due compliance to the directives would help in achieving greater public purpose and help in saving huge public revenue.

It may be useful for the said authority even to provide directives in relation to engagement of Counsel, preparation of Appeal and its filing. It may be desirous to have more Advocates working on the panel of the Department so as to ensure that neither the Appeals are rendered barred by time nor they are dismissed for default of appearance of the Advocate for the Department when listed before the Court for hearing.:BOMBAY HIGH COURT;

2008-TIOL-395-ITAT-LKW.pdf + relief story.pdf

Mansarovar Urban Co-Operative Bank Ltd Vs DCIT, Lucknow ( Dated : May 23, 2008 )

Income tax - Disallowance of provision for bad debt u/s 36(1)(viia) - Borrowing of various concepts from Banking Regulation Act for the purposes of allowing exemption, deduction or computation of income under Income-tax Act cannot be extended endlessly - Cooperative society recognized as Cooperative bank is excluded from the definition of scheduled and non-scheduled bank in terms of s. 36 (1) (viia) read with s. 5(c) of Banking Regulation Act, 1949 - If legislature intended to provide the benefit of section 36(1)(viia) they could have specifically said in the definition of non-scheduled bank as they have specifically said so that co-operative bank is not included in scheduled bank - Order of CIT (A) upheld and assesee's appeal dismissed: LUCKNOW ITAT;

2008-TIOL-394-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Bechtel India Pvt Ltd ( Dated : August 08, 2008 )

Income Tax Act – Section 37(1) – Training Expenses – CIT(A) held that there was no evidence brought on record by the AO to show that the expenses incurred by the assessee company on recruitment and training had any nexus with the newly acquired computers and that the acquisition of such new computers had resulted in expansion of the assessee's business. CIT(A) further held that the training of employees was essential in the today's competitive business environment especially in the case of the assessee which was undertaking work of a highly technical nature – ITAT held, upholding order passed by CIT(A) that the said expenditure incurred by the assessee was not related to the capital field and having regard to the nature of its business, the same was clearly of revenue nature being incurred for the purpose of increasing the efficiency of its business – Held further, that even though the assessee had written off the expenditure in its books of account over a period of five years, it must be allowed in its entirety in the year in which it was incurred if it is of revenue nature and is wholly and exclusively incurred for the purpose of business.

Income Tax Act – Section 80HHE – Total Turnover - assessee incurred certain expenses on behalf of the clients such as traveling, lodging & boarding etc. for visiting the sites of the customers as per their request which were subsequently recovered from them - this recovery was made only to the extent of actual expenses incurred and there was no profit element involved - the expenditure recovered from the customers actually did not pertain to the assessee company but to their clients – Held, reimbursement of expenses actually incurred by the assessee company on behalf of its clients was claimed by it as per the agreement and even the bills for such reimbursement were separately raised by it on the concerned customers – Held therefore, that total turnover for purpose of section 80HHE should be restricted only to such receipts which have an element of profit in it.:DELHI ITAT;

2008-TIOL-12-ARA-IT.pdf

Small Business Corporation ( Dated: August 29, 2008 )

Income Tax - DTAA with South Korea - Applicant heads liaison office of a Korean Govt undertaking in India - claims exemption to his salary income on the ground that its organisation - Small Business Corporation (SBC) - funded by the Govt is an arm of the State - Exemption u/s 20(1) cannot be granted to the applicant as he fails to substantiate that the SBC is a Govt department. Although the Korean Govt does earmark certain funds for the Corporation and also specifically for meeting the personnel costs but it is not clear the same fund is utilised for salary payment of the SBC employees - Issue left open for the applicant to furnish more information before the AO for claiming exemption : ADVANCE RULING AUTHORITY ;

Order 208 of 2008

CBEC issues transfer order of five Commissioners;

CENTRAL EXCISE SECTION

NOTIFICATION

etariff08_47.pdf

Govt extends SSI exemption to goods bearing brand name of another person for packing materials;

CASE LAWS

2008-TIOL-1426-CESTAT-MAD.pdf

M/s Lakshmi Precision Tools Ltd Vs CCE, Coimbatore (Dated: April 4, 2008)

Goods manufactured and supplied as a job worker without payment of duty are not exempted goods – CENVAT credit on capital goods used by the job worker not deniable

Capital goods used by a job worker for manufacturing finished goods to be supplied under challans, without payment of duty, to the customer cannot be said to have been used for the manufacture of exempted final products. A view to the same effect had been taken in relation to inputs by the Larger Bench in Sterlite Industries (supra) and the ratio of the Larger Bench decision was followed in respect of capital goods also (Para 2): CHENNAI CESTAT;

2008-TIOL-1425-CESTAT-MAD.pdf

M/s Tamil Nadu Electricity Board Vs CCE , Trichy, Tirunelveli, Chennai And Coimbatore (Dated: April 28, 2008)

Central Excise – refund - where “UNDER PROTEST” stamping was there on TR-6 challan evidencing payment of duty under protest, the requirement under Rule 233B should be considered to have been substantially complied with – refund not time barred.

Unjust enrichment – in view of the earlier order of the Tribunal in favour of TNEB, in all the cases, the respective original authorities should consider the plea of TNEB against the bar of unjust enrichment in the light of our Final Order No.207/2008 ibid and pass fresh speaking orders in accordance with law.

Section 11 – recovery of sums due – adjustment of refund arising in one division against the dues in other division of the same Commissionerate – since the person in both the cases is only TNEB, there is nothing in support of TNEB in section 11 against such recovery – revenue appeal allowed.: CHENNAI CESTAT;

2008-TIOL-1424-CESTAT-BANG.pdf

M/s Choice Apparels, Bangalore Vs CCE, Bangalore (Dated: May 9, 2008)

Duty payable or ought to have been paid prior to enactment of Finance Act, 2001 – Interest not payable in such cases – Covered by provisions of Section 11AB(2) of CE Act – Demand of interest in such cases illegal – Appeal allowed: BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-1430-CESTAT-MUM.pdf + security story.pdf

Continental Drugs Co Pvt Ltd Vs CST, Mumbai (Dated: July 23, 2008)

Applicant primarily providing Security Agency services coupled with other services such as management advice, group auditing, guidance on business and financial planning etc. – Adjudicating authority treating it as single service of Security Agency - Tribunal orders pre-deposit of Rs.15 lakhs considering service tax liability only on security agency services.: MUMBAI CESTAT;

2008-TIOL-1429-CESTAT-MAD.pdf

M/s Sri Saravana Spinning Mills (P) Ltd Vs CCE, Madurai (Dated: May 2, 2008)

Service tax – CENVAT Credit can be utilized for payment of service tax on Goods Transport Agency service – delay in filing the appeal is condoned keeping in view of the facts of the case.: CHENNAI CESTAT;

2008-TIOL-1428-CESTAT-AHM.pdf

M/s Shakti Motors Vs CST, Ahmedabad (Dated: July 23, 2008)

ST - Authorised Service Station and BAS - Tax paid before issue of SCN - Since there was initially confusion about the liability to pay tax, and no evidence to indicate any intention to evade tax, it is a fit case for invocation of Sec 80 - Penalty set aside but interest to be paid : AHMEDABAD CESTAT;

CUSTOMS SECTION

2008-TIOL-1427-CESTAT-MUM.pdf + defective story.pdf

CC (GEN), Mumbai Vs Canon Shipping Co Pvt Ltd (Dated: August 6, 2008)

Recalcitrant Revenue finds its appeal dismissed by Tribunal as being defective.

Despite the provision of section 129A(2) of Customs Act, 1962 being so clear and unambiguous, we are surprised to note that the office of the Commissioner of Customs, has intimated to the registry that no authorization is required for filing the appeal which is contrary to the provisions in section 129A(2) of the Customs Act, 1962.

Suffice to say, that this is a wrong interpretation of the statute; we dismiss the appeal filed by the revenue as defective .:MUMBAI CESTAT;