CBI Cases - Conviction Rate : A Reality Check (See 'DDT')

Civil Aviation Secy Ashok Chawla becomes Secy, DEA and M Madhavan Nambiar to take over as Civil Aviation Secy + Rahul Sarin moves from Food Processing to DoP&T + in-situ upgradation of many posts;

Lehman Brothers seeks bankruptcy protection; Global financial market once again faces turmoil;

Rangarajan says inflation would nosedive to 10% by December;

Govt reduces stamp duty on P-Notes and debentures;

BSNL to go for staff polls on IPO decision;

Power Ministry issues advisory to overdrawing States endangering Grid;

Pay Review Committee for Prof and college teachers speeds up work to finalise recommendations;

ddt 15 Sept.pdf

Import Authorisation for Restricted Items – Only through Specified Ports;

tiol top guest.pdf

The anti-avoidance provisions of 1939: Is CBDT shying away from applying them today or ...?

guest column.pdf

Attachment of immovable property from successor : A TOWERING proposition!

ACC.pdf

Civil Aviation Secy Ashok Chawla becomes Secy, DEA and M Madhavan Nambiar to take over as Civil Aviation Secy + Rahul Sarin moves from Food Processing to DoP&T + in-situ upgradation of many posts;

mbuzz966.pdf

India to celeberate International Ozone Day tomorrow;

mbuzz965.pdf

President to preside over Governors' meet on internal security tomorrow;

2008-TIOL-426-ITAT-MUM.pdf + star story.pdf

Star India Pvt Ltd Vs ACIT, Mumbai ( Dated : May 28, 2008 )

Income Tax - Assessee is engaged in three independent activities of mobilising advertisements, distribution of Star Channels and export of content and programmes - pays licence fee to two foreign entities - AO disallows - CIT(A) allows 20% of the fee - Assessee argues the payments were made as per agreement and the same were approved by the RBI and the same cannot be disallowed - Matter remanded to the AO for having not considered the TPO report on arm's lenght price even after referring the same to the TPO

AO makes additions based on report of TPO - TPO clubs three different activities of the assessee for determining common ALP - Assessee flays the same and argues that the TPO needs to examine each international transaction separately and determine different ALP for different transactions - As per law decided in the case of Aztec Software, the Revenue cannot club independent activities to determine common ALP - Matter remanded to the AO to further refer the case to TPO and afford fresh opportunities to the assessee before the TPO report is accepted and in case the same is rejected, the reasons are to be recorded

Assessee claims deduction u/s 80HHF - Commission income from advertisements - AO excludes 90% of gross receipt of commission from the profits of business as per clause (baa) of Explanation to Sec 80HHF - Assessee claims earning commission income is one of the three main activities of the assessee and it constitutes 13% of the total revenue and it has a turnover characteristic - Held, the receipt of certain percentage of commission for collecting advertisement for the principla cannot be treated as a part of operation income of the assessee. Such an income also does not have an element of turnover as it is to be received only on realisation of consideration from advertisement and as such cannot be included in the turnover because it has no nexus with the main business of export of TV content for which deduction u/s 80HHF is allowable - Matter restored to the AO for allowing netting between the expenses incurred to earn the commission and the commission received if the nexus is established :MUMBAI ITAT;

2008-TIOL-425-ITAT-MUM.pdf

DCIT, Mumbai Vs Safmarine Container Lines N V ( Dated : July 18, 2008 )

Income Tax - Assessee is a non-resident shipping company - Indo-Belgium DTAA - AO for taxing Inland Transporation charges as it is not covered by Sec 44B - Assessee argues it is covered by Explanation to Sec 44B which includs the words “demurrage charges or handling charges or any other amount of similar nature” - Held, the Inland Haulage charges are towards transport the goods from the exporter place to the port. The very nature of inland transportation charges clearly differentiates it from handling or demurrage charges, which is of a different genus. However, the assessee has a choice to opt between the I-T Act and the DTAA whichever is beneficial to it and the Inland Haulage Charges being a part of composite activity of the assessee to transport the goods from the place of exporter to its final destination are covered within the scope of ‘income derived from the operation of ships in the international traffic' as per Article 8 of the DTAA as per OECD Commentary and the commentary of Klause Vogel, and hence not taxable in India

As regards the clause ( c ) of Article 8(2), the word “containers” in this clause encompasses the income derived from “trailers and related equipments for the transport of containers”. It is further succeeded by the words “in connection with the transportation of goods or merchandise in international traffic”. On a combined reading of this clause, it is found that not only the income derived from the use, maintenance or rental of containers but also the income derived from trailers and related equipment for the transport of containers would stand included within its ambit. The words “related equipment for the transport of containers” include not only the trailers but also trucks and other means of transportation for carrying on the goods by road or rail. The stress is on the words “equipment for the transport of containers” in connection with the transportation of goods in international traffic where the income is derived from an activity which is incidental to any activity directly connected with such transportation. As the assessee has transported the containers for fee purpose of transportation in international traffic, the case is also caught within the sweep of clause ( c ). Since the activity of transporting the goods from exporter's place to sea port is incidental to the activity directly connected with the transportation of goods from sea port to the importing country, the assessee is entitled to the benefits of Article 8 under this clause as well - Revenue's appeal dismissed :MUMBAI ITAT;

2008-TIOL-424-ITAT-DEL.pdf

M/s SEDCO Forex International Drilling Inc Vs DCIT, Dehradun ( Dated : July 31, 2008 )

Income Tax - Assessee contends inclusion of mobilisation charges in gross revenue u/s 44BB on the ground that a major chunk of it was incurred outside India - Since the payment made by ONGC has no nexus with the actual expenditure incurred on mobilisation of rigs etc, it is includible in the gross revenue as decided by the jurisdictional HC

Second issue is about the includibility of reimbursement for catering and supply of meterials - This issu is also no longer res integra as it is already settled in favour of Revenue - Assessee's appeals dismissed :DELHI ITAT;

2008-TIOL-423-ITAT-KOL.pdf

DCIT, Kolkata Vs ICI (India) Ltd ( Dated : February 29, 2008 )

Exigibility to Capital gains – Sale of two units as going concern – held no capital gains arises

Assessee sold its fertilizer and fibre units for a sum of Rs. 85 crores to one of its subsidiary company and claimed long term capital loss. Since bifurcation of sale proceeds are not available, AO treated the entire sum towards assets of the two units and hence calculated short term capital gains under sec. 50 of the Act. On appeal, CIT(A) held it to be a slump sale since the units were sold as going concern.

On appeal, Tribunal held that merely because the agreement to sale is with a subsidiary, it cannot be presumed as a colourable device. Tribunal observed that the agreement has been acted upon between the parties and the units under consideration has been transferred on the basis of such agreement. After going through various clauses in the sale agreement it was held that the transfer was as a going concern and separate value was not fixed for any individual assets transferred in this process. :KOLKATA ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-1504-CESTAT-MUM.pdf + molasses story.pdf

M/s Sanjivini (Takli) SSK Ltd Vs CCE &CC, Aurangabad (Dated: July 29,2008)

Common inputs - Duty paid Molasses used for manufacture of Rectified spirit which in turn is used for manufacture of dutiable denatured spirit and Country liquor which is not chargeable to duty – Payment of 8% amount under rule 6 of CCR, 2004 is proper as captive consumption is also clearance - no cause for credit reversal – Tribunal.

Apex Court decision in Ballarpur Industries Ltd. [ 2007-TIOL-153-SC-CX ] relied upon.: MUMBAI CESTAT;

2008-TIOL-1503-CESTAT-MAD.pdf

Textile Syndicate Vs CCE, Chennai (Dated: July 4,2008)

Central Excise – lapsing of unutilized credit on opting for exemption under Notification No 30/2004 CE – as the claim of the appellant that the final products were exported need to be verified, matter remanded : CHENNAI CESTAT;

2008-TIOL-1502-CESTAT-AHM.pdf

M/s Lark Wires & Infotech Ltd Vs CCE & CC, Vadodara-II (Dated: July 22,2008)

Central Excise - CENVAT Credit - suo-moto re-credit of CENVAT Credit - the reversal in the RG23A Part-II register was made without any verification and on the basis of the direction of the officers who conducted the audit - the reversal was not a conclusion of any legal process - what has been done by the appellants is basically adjustment of the credit and it has no link to any transaction other than taking credit - plea that the appellant should have claimed refund is not accepted - in respect of rejected goods returned to the factory, since the goods did not undergo any process, credit availed on rejected goods need to be reversed. : AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-446-HC-UTTRANCHAL-ST.pdf + st hc story.pdf

CCE, Meerut I Vs M/s Indian Institute of Petroleum, Dehrudun (Dated: September 5, 2008)

Service Tax – Scientific and technical service – project report prepared before Service Tax was imposed, though deliver after – no tax;  the letter of intent was issued by NRL to IIP (respondent assessee) much before the ‘Scientific and Technical Consultancy' was brought under the net of service tax. Not only this the payment of Rs. 1.03 lakhs was paid by the customer to the respondent assessee much before the aforesaid date 16.07.2001 i.e. the date of bringing the service under the net of the service tax. No doubt, final project report may have been submitted by the respondent assessee after 16.07.2001, but that by itself does not make the assessee liable to pay the service tax in respect of the service provided prior to 16.07.2001. Also, it is to be kept in mind that nature of service tax is that of an indirect tax, and if the respondent assessee is made to pay service tax in respect of the service already provided by him prior to 16.07.2001, it is not left with option to charge the indirect tax from the customer, as the payment was to be made by the party to the assessee as per the contract only. : UTTARAKHAND HIGH COURT;

2008-TIOL-1500-CESTAT-BANG.pdf

M/s ABS India Ltd Vs CST, Bangalore (Dated: August 5,2008)

ST - Export of service - Assessee is a subsidiary of a Singapore-based company - books orders for sale of goods manufactured by the Singapore company - received commission for the same and paid service tax initially - Later they realise they exported service and filed refund claim - Revenue rejects the claim - assessee argues the service was delivered to Singapore company and it cannot be said that the service was delivered in India and the service was utilised in Singapore - Held, in terms of Rule 3(2) of the export of service rules, 2005, the service rendered is indeed an export on which the assessee is not required to pay tax - Assessee's appeal allowed : BANGALORE CESTAT;

2008-TIOL-1499-CESTAT-DEL.pdf

M/s Kochhar Enterprises Vs CCE, Chandigarh (Dated: April 3,2008)

ST - Rectification of Mistake - Assessee pays tax with interest before issue of SCN - In reply to the adjudicating authority assessee mentions wrong date of duty payment - Commissioner imposed penalty for delayed payment - In the light of the evidence furnished by the assessee there is a mistaken apparent and the Commissioner did not consider the facts properly - matter remanded:DELHI CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft08cir032.pdf

Port of registration on authorizations issued for import of restricted items;

CASE LAWS

2008-TIOL-1501-CESTAT-MUM.pdf

CC, Mumbai Vs Grasim Industries Ltd (Dated: June 25,2008)

Customs - classification of Alpha Cellulose Grade Arbocel - the classification by revenue under CTH 3912.90 is upheld -  Since the goods are not chemical wood pulp but manufactured therefrom the same cannot be classified under Ch 47 as contended by the respondents. .: MUMBAI CESTAT;