Marker ink is also writing ink, rules SC (Look for analysis tomorrow in 'Breaking News')

Cabinet gives approval to establish regional facility of Permanent Court of Arbitration + Presidential Order notifying effective date of corrigendum related to Delimitation of constituencies in Bihar, UP, WB, TN, Delhi & Karnataka;

FM approves 17 FDI proposals worth Rs 1844 Cr; M/s Quippo Telecom (Rs 781 Cr) + Ramky Infrastructure (Rs 400 Cr) proposals also approved;

Govt revises Children Education Allowance for Govt servants from Rs 40 per child to Rs 1000 per child per month for two children;

Kamal Nath says auto exports to reach $ 25 billion by next decade – India to be destination of choice for design and manufacture of automotive components;

CCEA gives nod for revival of HEC in Ranchi + 20 new Navodaya Schools ;

Nuclear deal issue puts on new colours; BJP demands resignation of UPA Govt;

SC advises Govt to appoint expert Member on IP Appellate Board;

ddt 4 Sept.pdf

EOUs claiming Deemed Export Benefits – Alternative Bank Certificate to be produced;

cobweb.pdf

Income Tax on Pay Commission pay-outs: Will fiscal deficit-riding FM correct the lapses?

posts_CVOPSUs.pdf

DoP&T invites applications for CVO-posts in PSUs;

FDI.pdf

17 FDI Proposals worth Rs 1844 Cr Approved;

mbuzz938.pdf

Govt hikes Children Education Allowance for Govt servants from Rs 40 to Rs 1000 per child per month;

mbuzz937.pdf

Meerut Central Excise books steel rolling mill for duty evasion;

mbuzz936.pdf

Delhi to host regional centre of Permanent Court of Arbitration;

mbuzz935.pdf

Cabinet okays high-end biomedical research programme;

mbuzz934.pdf

India's external debt up by 30.4% over previous fiscal;

mbuzz933.pdf

Govt identifies 16 cities for implementing Air Quality Management Plans

2008-TIOL-163-SC-IT.pdf + SC it story.pdf

CIT, Dehradun Vs Enron Oil & Gas India Ltd ( Dated: September 2, 2008 )

Income Tax - Assessee is non-resident company - engaged in oil exploration - participates in a bid for development of concessional blocks - forms a consortium with two other partners, one of them is a nominate of the Govt - signs production sharing contract (PSC) - gets designated as the Operator under the PSC - claims exchange loss u/s 42(1) - AO disallows by treating the same as mere book entry / notional loss - CIT(A), Tribunal and HC allow the assessee's contention - Held, Section 42 provides for deduction for expenses provided for in the PSC. The PSC provides for both capital and revenue expenditures. It also provides for a method in which the said expenses had to be accounted for. The PSC is an independent accounting regime which includes tax treatment of costs, expenses, incomes and profits. It prescribes a separate rule of accounting. In normal accounting, in the case of fixed assets, generally when the currency fluctuation results in an exchange loss, addition is made to the value of the asset for depreciation. However, under the PSC, instead of increasing the value of expenditure incurred on account of currency variation in the expenses itself, the assessee was required to book losses separately. Therefore, PSC represents an independent regime. The shares of the Government and the contractors were also determined on that basis. Section 42 is inoperative by itself. It becomes operative only when it is read with the PSC. Expenses deductible under Section 42 had to be determined as per the PSC. This implied that expenses had to be accounted for only as contemplated by the PSC. If so read, it is clear that the primary object of the PSC is to ensure a fair "take" to the Government. The said "take" comprised of profit oil, royalty, cesses and taxes. The PSC prescribed a special manner of accounting which was at variance with the normal accounting standards. The said "PSC accounting" obliterated the difference between capital and revenue expenditure. It made all kinds of expenditure chargeable to P&L account without reference to their capital or revenue nature. But for the PSC Accounting there would have been disputes as to whether the expenses were of revenue or capital nature. In view of the special accounting procedure prescribed by the PSC, Accounting Standard 11 had to be ruled out.

Since the origin of exchange loss is 'cash call', investment money contributed by co-venturers and not a loan in that case the interest is not allowable as per PSC, the exchange loss is allowable deduction u/s 42 - Revenue's appeal dismissed: SUPREME COURT;

2008-TIOL-437-HC-MAD-IT.pdf

CIT-II, Coimbatore Vs M/s Ramakrishna Mills (CBE) Ltd ( Dated: July 21, 2008 )

Income Tax - Deduction u/s 80HHC - Just like interest, commission and rent form part of profit but do not partake the character of turnover, central excise and sales tax also do not form part of turnover - Revenue's appeal dismissed: MADRAS HIGH COURT;

2008-TIOL-436-HC-RAJ-IT.pdf

CIT, Udaipur Vs Kanhaiya Lal ( Dated : August 5, 2008 )

Income Tax - Search & Seizure - Revenue finds an unregistered sale deed showing much higher price for a property than the price shown in the registered deed - AO makes addition - Tribunal deletes it - Since the Tribunal has considered all the facts and found that the unregistered and unsigned sale deed cannot be relied upon, no fault can be found with the Tribunal's order - Revenue's appeal dismissed:RAJASTHAN HIGH COURT;

2008-TIOL-435-HC-DEL-IT.pdf

CIT Vs Dart Manufacturing India Pvt Ltd ( Dated: August 12, 2008 )

Income Tax - Assessee claims deduction for sum paid to State Electricity Board for installing transformer and LT Lines - Revenue treats it as capital expenditure - Since the assets created belonged to the SEB and not to the assessee which only derived business advantages, such expenditure is revenue in nature - Revenue's appeal dismissed :DELHI HIGH COURT;

CENTRAL EXCISE SECTION

2008-TIOL-1441-CESTAT-AHM.pdf + reliance story.pdf

M/s Reliance Industries Ltd Vs CCE, Vapi (Dated: July 15, 2008)

Central Excise – Interest for delayed refund of CENVAT Credit – Provisions of Section 11BB are also applicable for delayed refund of CENVAT Credit under Rule 5 of CENVAT Credit Rules.: AHMEDABAD
CESTAT;

2008-TIOL-1440-CESTAT-MAD.pdf

M/s Tulya Alloy Castings Ltd Vs CCE, Coimbatore (Dated: July 4, 2008)

Central Excise – payment of duty consignment-wise due to default in payment under Rule 8 of the Central Excise Rules – during the relevant period, payment is allowed from CENVAT Credit account.:CHENNAI CESTAT;

2008-TIOL-1439-CESTAT-MUM.pdf

CCE, Aurangabad Vs M/s Wipro Ltd (Dated:January 30, 2008)

Central Excise – Penalty under Rule 25 of CE Rules read with Section 11AC of CE Act – When duty is paid with interest before the issue of show cause notice reduction of penalty is justified – Commissioner (Appeals) order reducing penalty upheld :MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1444-CESTAT-AHM.pdf + lease story.pdf

CCE, Vadodara – I Vs M/s GE India Industries (P) Ltd (Dated: July 24, 2008)

Service Tax - Banking and Financial Services - machinery given on lease and monthly user charges collected - the service is not taxable under Banking and Financial Services - revenue appeal dismissed.: AHMEDABAD CESTAT;

2008-TIOL-1443-CESTAT-KOL.pdf

M/s Permanent IP Systems Vs CCE, CC & ST, Siliguri (Dated: July 7, 2008)

ST - Tax on service recipient - Import of software - Revenue for treating the same as import of service as it involves downloading of data - Pre-deposit waived and stay granted :KOLKATA CESTAT;

2008-TIOL-1442-CESTAT-MAD.pdf

CCE, Madurai Vs M/s Bhakya Beauty Parlour (Dated: June 20, 2008)

Service Tax – penalty under Section 76 and 78 of the Finance Act – reduction of penalty under Section 76 by the lower authority is not correct – reduction of penalty under Section 76 is set aside and penalty imposed under Section 78 maintained. :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not037.pdf

Export of non-Basmati rice : Export shall be allowed only with effect from 15 th October, 2008 out of paddy procured in KMS 2008-09;

dgft08not036.pdf

Financial aid to exporters to meet legal expenses for trade-related matters: Aid to be restricted to only statutory compliances;

CASE LAWS

2008-TIOL-1438-CESTAT-BANG.pdf

Wipro Ltd Vs CC, Chennai (Dated: March 10, 2008)

Customs – Classification of patch panel – Patch panel used for connecting the hardware i.e. wiring or telecommunications closet consisting of row or rows of ports using patch cables to connect horizontal or backbone cables to an arrangement of fixed connectors to form the cross connections or inter connection - Imported goods are specifically designed for use as an accessory in computer systems classifiable under 8471 – Patch panels classifiable under 8473 and not 8537 as claimed by Revenue : BANGALORE CESTAT;