Incentive subsidy received by Sugar Mills was Capital Receipt and not Revenue Receipt: Supreme Court (Look for tomorrow's Breaking News)

Service Tax - Dispute Resolution Scheme covers revision orders passed by Commissioners - CBEC clarifies (See 'DDT')

Promoted Assistant Commissioners - exercise your option by tomorrow (See 'DDT')

Cabinet okays India's lunar mission at cost of Rs 425 Cr + CCEA approves several scholarship schemes for higher education and secondary education;

Cabinet approves amendment in print media policy;

Cabinet approves DTAA with Latvia and Air Services pact with Maldives;

Cabinet okays registration of rice as Geographical Indication and Institute of Nano Science;

India cannot have both high growth and high proportion of poor - let's work together for former: FM;

FDA issue: Ranbaxy hires NY former Mayor as advisor;

ADB to give USD 100 mn loan to Assam for fiscal reforms;

ddt 18 sept.pdf + 137_letter.pdf + 137_letter_II.pdf

Service Tax – Dispute Resolution Scheme covers even cases adjudicated after 1.3.2008 – Board clarifies;

cobweb.pdf

Chidambaram vs Nath: A clash of titans doing no good to economy nor to image of Dr Singh's Govt!

letter_ADII.pdf

Options for posting of officers promoted to the grade of Assistant Commissioner in Office Order No. 217/2008 dated 10.9.2008.;

DRi story.pdf

Mumbai DRI arrests high-profile software importer; Hyderabad DRI makes huge seizure of precursor chemical and nabs six persons;

mbuzz979.pdf

India, Israel extradition treaty gets nod ;

mbuzz978.pdf

Cabinet approves amendment in print media policy;

mbuzz977.pdf

Cabinet okays registration of rice as Geographical Indication and Institute of Nano Science;

mbuzz976.pdf

Cabinet approves DTAA with Latvia and Air Services pact with Maldives;

mbuzz975.pdf

ADB to give USD 100 mn loan to Assam for fiscal reforms ;

2008-TIOL-172-SC-IT.pdf

Rajasthan State Mines & Minerals Ltd Vs CIT, Jaipur (Dated: August 25, 2008)

Income Tax - Assessee is a mining PSU company - claims deduction for prospecting and development charges - AO disallows on the sole ground that it was disallowed in the past as it was termed as capital expenditure - After discussing application of Sec 35E, the CIT(A) upholds the disallowance - Tribunal also agrees with the CIT(A) order - HC dismisses the petition - Held, had the HC considered the claim u/s 35E(2), it might have arrived at a different conclusion - Matter remitted for fresh consideration :SUPREME COURT;

2008-TIOL-454-HC-DEL-IT.pdf + tds story.pdf

K C Palaniswamy Vs ITO ( Dated: September 5, 2008 )

Income Tax - TDS deducted but not deposited - Complaint u/s 279B - Proviso of Sec 278B invoked - Appellant pleads that he took over the management of the assessee company much later - Revenue insisits on continuing offence aspect of the case and argues that even if the appellant took over the management later, the offence continued as the tax was not deposited - The concept of continuing offence does not apply as this is a case where the assessee co failed to comply with the TDS provisions as and when the liability arose in a particular FY and if one fails to comply again when the TDS liability arises later, it is another offence and not the continuation of the first offence - Since the tax liability pertains to a period when the appellant was not a part of the management, he cannot be proceeded against - Appellant's appeal allowed:DELHI HIGH COURT;

2008-TIOL-453-HC-UTTRANCHAL-IT.pdf

CIT, Dehradun Vs Mcdermott International Inc ( Dated: September 5, 2008 )

Income Tax - Assessee is a non-resident company - Income taxed at deemed profit rate of 1% - Re-assessment initiated after taking permission from CIT u/s 151 - Notice u/s 148 - Notice quashed by the HC - Meanwhile, reassessment u/s 147 completed - Tribunal sets aside the order - Held, once the notice u/s 148 is quashed, the action u/s 147 cannot be sustained - Revenue's appeal dismissed: UTTARAKHAND HIGH COURT;

2008-TIOL-452-HC-AHM-IT.pdf

CIT Vs Emtici Engineering Ltd ( Dated : June 20, 2008 )

Income Tax - Assessee claims to be Public Limited Company - Revenue challenges the same - Held, Two parts of sub-clause(c) in Section 2(18)(b)(B) of the Act, are separate and independent of each other. If the company which is subsidiary company of holding company but which satisfies the requirement of being any company to which this clause applies, need not thereafter, fulfill the further requirement of being a Company whose whole of the share capital has been held by the parent company as provided in Section 108(b). Thus if a company which is subsidiary of a parent company but which independently fulfills the requirement of being Company to which this clause applies requirement of sub-clause(c) in Section 2(18)(b)(B) of the Act, stands fulfilled. Reference in favour of assessee :GUJARAT HIGH COURT;

2008-TIOL-451-HC-DEL-IT.pdf

CIT, Delhi –I Vs Ambassador Travels P Ltd (Dated: April 23, 2008)

Income Tax - Dividend u/s 2(22)(e) - Assessee is into travel business - enters into business transactions with two related concerns - Because the assessee had some share-holdings in these concerns, AO treats the transactions as deemed dividend u/s 2(22)(e) - However, the Tribunal sets aside the order - Held, since the assessee and the other concerns were in the travel business, these transactions were normal financial deals and cannot be considered as loans or advances unless the AO has some evidence on record - Revenue's appeal dismissed:DELHI HIGH COURT;

CENTRAL EXCISE SECTION

2008-TIOL-171-SC-CX.pdf + sc story.pdf

Union Of India Vs Shreeji Colour Chem Industries ( Dated: September 15, 2008 )

Central Excise – Refund – interest - if the claim of interest is on equitable ground, a written demand is imperative – interest entitled only from three months after filing claim: Interest can be awarded in terms of an agreement or statutory provisions. It can also be awarded by reason of usage or trade having the force of law or on equitable considerations. Interest cannot be awarded by way of damages except in cases where money due is wrongfully withheld and there are equitable grounds therefor, for which a written demand is mandatory.

In absence of any agreement or statutory provision or a mercantile usage, interest payable can be only at the market rate. Such interest is payable upon establishment of totality of circumstances justifying exercise of such equitable jurisdiction. “

As was observed above, if the claim of interest is on equitable ground, a written demand therefor is imperative.:SUPREME COURT;

2008-TIOL-1521-CESTAT-MAD.pdf

M/s Jyothi Laboratories Ltd Vs CCE, Pondicherry (Dated:June 20 ,2008)

Central Excise – Stay/Dispensation of pre-deposit – whether excess payment of duty can be adjusted against short payment of duty on finalization of provisional assessments – since the issue is contentious, pre-deposit waived.CHENNAI CESTAT;

2008-TIOL-1520-CESTAT-MAD.pdf

CCE, Chennai Vs Helios India P Ltd (Dated:July 17 ,2008)

Central Excise – Job work exemption under Notification 214/86 CE - the only defect noted by the appellant is that the procedure pertaining to issue of statutory challans, laid down under Rule 57F(2) / (3), was not meticulously followed by the respondents  - the benefit of Notification could not be denied to the job worker by mere reason of minor procedural defects.:CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1525-CESTAT-DEL.pdf + dewsoft story.pdf

M/s Dewsoft Overseas Pvt Ltd Vs CST, New Delhi (Dated: August 25 ,2008)

Service tax – Online computer training is not taxable under ‘online information and database access/retrieval service but classifiable under ‘Commercial training and coaching service' – Only difference between online coaching and traditional coaching is the medium – Demand, penalty and interest amounting to Rs. 9.21 crores set aside

Service tax – Proposition to classify an activity as Franchisee service – It is the burden of the Revenue to prove whether the appellant has fulfilled all the conditions in the definition to hold them liable to pay service tax and not the other way round – Demand and penalties set aside:DELHI CESTAT;

2008-TIOL-1524-CESTAT-BANG.pdf

Aryan Energy (P) Ltd Vs CC & CE, Hyderabad-I (Dated: May 22 ,2008)

Service Tax - Beneficiation/washing of coal is a mining activity: As washing of coal is recognized as a part of mining activity in the enactment relating to mining, in our view the washing or beneficiation of coal would be liable to service tax only w.e.f. 01.06.2007, In the case under appeal the period is prior to 01.06.2007 and therefore our conclusion is that for the relevant period the activity carried out by the appellant would not be liable to service tax as mining service.

Not covered under Business Auxiliary Service :-Once it is established that the activity of the appellant is mining, it cannot be taxed under the Business Auxiliary Service for the period prior to 01.06.2007. Even when we examine the definition of business auxiliary service, it is seen that production which does not amount to manufacture comes under business auxiliary service. The beneficiation of coal does not amount to production of coal because beneficiation is a process, which enhances the quality of the coal.: BANGALORE CESTAT;

2008-TIOL-1523-CESTAT-MAD.pdf

M/s Motherson Automotive Technologies & Engineering Vs CCE, Chennai-III (Dated:July 8 ,2008)

Service Tax – consulting engineer service - transfer of technical know-how for manufacture of any product in exchange for a lumpsum payment or payment of royalty does not constitute rendering of Consulting Engineer Service. :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not040.pdf

Export of Non Basmati Rice, Maize and wheat – DGFT amends policy;

dgft08pn082.pdf

SION rates of a couple of textile products amended;

CASE LAWS

2008-TIOL-1522-CESTAT-MUM.pdf + mahindra story.pdf

M/s Mahindra & Mahindra Ltd Vs CC, Mumbai (Dated:July 25 ,2008)

Misclassification of imported “Vertical Automated Storage and Retrieval system” in the Bill of Entry is an error rectifiable under sections 149 and 154 of the Customs Act, 1962 – Matter remanded to adjudicating authority by Tribunal for expeditious disposal.

Tribunal decisions in I.P.Rings, 2007-TIOL-23-CESTAT-MAD , Brakes India 2007-TIOL-323-CESTAT-MAD and Senka Carbon 2007-TIOL-1155-CESTAT-MAD holding that section 149 of the Customs Act, 1962 can be invoked for amendment of a Bill of Entry relied upon.: MUMBAI CESTAT;

2008-TIOL-1519-CESTAT-MAD.pdf

Haren Choksey Vs CC, Chennai (Dated:June 18 ,2008)

Customs – transfer of appeal from South Zonal Bench to West Zonal Bench – As per Public Notice No 2 of 2005 Dt 5.8.05 of the President, CESTAT, the captioned appeal was rightly filed with Chennai Bench and must be heard by this Bench - However, when the appellant seeks a transfer to another Bench within whose jurisdiction he resides, such application cannot be entertained by this Bench without reference to the President – Registry is directed to place the matter before the President for appropriate orders. :CHENNAI CESTAT;