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CBEC finally going for Central Excise Valuation Database (See 'DDT') Constitution of Panel of Senior/Junior Standing Counsels for handling Indirect Taxation cases before High Courts (See 'DDT') August exports registers 26.9% growth; CBDT worried over marginal growth in Q2 advance tax payments; Petroleum Ministry unveils elaborate public grievance redressal system ; Mr J M K Sekar retires and Mr Rakesh Sharma joins as new CBEC Member; News Broadcasters Association seeks incentive-based regulations for TV content; |
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| Dear Member, Senidng the following files: |
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ddt 1 Oct.pdf + file224.pdf + office.pdf + valadm.pdf Right to enjoy life and liberty includes the right not to be disturbed. A right to be left alone is a right under Article 21 of the Constitution of India; DEPB on supply of goods from DTA to SEZ Developers: DGFT needs to do some more homework! Pay revision of employees of Quasi-Government Organizations, Autonomous Organizations, and Statutory Bodies, etc set up by and funded/controlled by the Central Government - Guidelines regarding.; August exports registers 26.9% growth; Petroleum Ministry unveils elaborate public grievance redressal system ; Working Group on use of Ammonium Nitrate meets and decides to hold seminar for state govt officials; WB okays USD 362 mn aid for Orissa roads and tank system; |
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CIT, Delhi-II Vs Moser Baer India Ltd ( Dated: September 22, 2008 ) Income Tax - Sec 10A/Sec 10 B benefits - Assessee, a 100% EoU, manufactures floppies and CDs - transfers huge stock from its three units to its overseas warehouse - AO does not treat it as direct export sales and denies exemption to the assessee on the ground that the total exports were less than 75% - CIT(A) and Tribunal allow the appeal - Since the Tribunal has found that by the year-end a major chunk of stock transfer had moved out of the overseas warehouse which amounted to direct sales, it was nothing but exports, and benefits u/s 10A / Sec 10B cannot be denied - Revenue's appeal rejected : DELHI HIGH COURT; CIT, Mumbai Vs Mehta Pvt Ltd ( Dated: September 12, 2008 ) Income Tax - assessee claims deduction for guarantee money written off - AO disallows on the ground that the Directors of the several companies involved in this case were common and the entire exercise of giving guarantee was collusive and only to book losses - CIT(A) allows assessee's appeal on the ground that the guarantee given against a loan by the assessee was a calculated risk and prudent business decision as proper due diligence was done by the banks and RBI before advancing loans to the loan-seeking company for its revival - Tribunal agrees with the findings of facts arrived at by the CIT(A) - Since the Revenue has not produced any adverse material to the contrary to prove that it was not a deal at arm's length, disallowance set aside - Revenue's appeal dismissed : BOMBAY HIGH COURT; 2008-TIOL-457-ITAT-BANG.pdf + 10B story.pdfM/s Rajesh Exports Ltd Vs ACIT, Bangalore ( Dated : August 14, 2008 ) Income tax Interest earned on FDs deposited as margin monies with banks for opening LCs for import of gold bullion T here is an inextricable link between the margin monies and the business of the undertaking, but there is also a link between the interest arising from the margin monies and the assessee's business The expression profits of the business of the undertaking' in s. 10B (4) has to be construed in a wider sense than the expression 'profits and gains' as are derived by a hundred percent export-oriented undertaking from the export of articles or things in s. 10B(1) of the Act Income earned by way of interest thereon is eligible for exemption u/s. 10B Income tax Commission paid to an agent Additional evidence in the form of certificates amongst others only self serving and not admissible Credible evidence not produced as to the nature of services provided to the assessee A commission payment for services rendered can be allowed as a deduction only if the assessee proves to the satisfaction of the Income-tax authorities that the agent has rendered some services justifying the payment of commission'' - Deduction claimed by the assessee not admissible : BANGALORE ITAT; ITO, Bangalore Vs M/s Foresee Information Systems (P) Ltd ( Dated : March 16, 2007 ) Income Tax - Sec 10A benefits - Assessee was a firm, engaged in export of software and used to claim exports benefits u/s 80HHE - then transforms itself into a company and relocates itself as a STP unit with due approval of authorities - claims Sec 10A benefits - AO raises objections on the ground that it cannot be treated a new industrial undertaking as no new machineries were installed and it is a case of shifting of used machines to the STP unit - CIT(A) sets aside the order - Held, since the foreign trade policy and the CBDT Circular permit conversion of a DTA unit into a STP unit and there is no transfer of capital assets involved in this exercise, the Sec 10A benefits cannot be denied but the same can be availed only for the remaining period of 10 years tax holiday envisaged by the Govt - Revenue's appeal dismissed : BANGALORE ITAT; DCM Shri Ram Industries Ltd Vs DCIT, New Delhi ( Dated : June 13, 2008 ) Contingent liability Additional sale price of sugar and interest payable on such payment deductible only in the year of payment Capital gain Slump sale - Sale of two units as going concern Not exigible to capital gains tax Premium payable on redemption of debentures held allowable as deduction Interest on amounts borrowed for purpose of business allowable since AO did not prove the borrowal was for non-business purposes Diversion by overriding title Transfer to Molasses Storage Fund held deductible Subscription to clubs held deductible Sec. 43B Advance payment of excise duty held deductible. Sec. 115JA provision for bad and doubtful debts - could not be added back to book profits as unascertained liabilities Sec. 115JA provision made for additionals ale price of sugar and interest on such amount - could not be added back to book profits as unascertained liabilities Liability in respect of additional sale price of sugar and interest payable on such additional sale price are contingent in nature. It can be allowed as deduction only in the year of actual payment. The two units sold by assessee to its subsidiary company as going concern at consideration of Rs. 1.5 crores. AO treated the sale consideration at Rs. 5 crores which was initially fixed and lateron reduced to Rs. 1.5 crores on due diligence valuation. On appeal Tribunal upheld the stand of assessee since the reason for such reduction in value was properly explained by assessee. Further it was held that since the two units were sold as going concern, it was only slump sale which will not attract capital gains tax in A.Y. 1998-99. The rule under sec. 43B is that liability should be allowed on actual payment. Advance payment of excise duty are actually payment of duty during the year. Following decision of ITAT Special bench, Chandigarh in DCIT Vs Glaxo Smithkline Consumer Healthcare Ltd, claim of assessee allowed. Appeal by assessee partly allowed and appeal by revenue dismissed :DELHI ITAT ; |
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cbecorder233_2008.pdf + cbecorder234_2008.pdf CBEC issues transfer order of four AC/DCs + retains one Commissioner at NACEN;
2008-TIOL-1600-CESTAT-MUM.pdf + capital story.pdf CCE, Mumbai V Vs M/s Capital Controls (I) Pvt Ltd (Dated: August 4, 2008) Mere right to use the brand name without objection from the owner does not confer ownership and accordingly the benefit of SSI exemption notification is not available :MUMBAI CESTAT; M/s Hindustan Rubber Factory Vs CCE, Belgaum (Dated: July 18, 2008) Central Excise demand of duty on capital goods cleared as waste and scrap on which CENVAT credit was availed Rule 3(5A) of CENVAT Credit Rules 2004 - demand of duty is legal, but no case to impose any penalty. : CHENNAI CESTAT; M/s Hindustan Zinc Limited Vs CCE, Jaipur (Dated: August 1, 2008) Central Excise demand of duty on capital goods cleared as waste and scrap on which CENVAT credit was availed Rule 3(5A) of CENVAT Credit Rules 2004 - demand of duty is legal, but no case to impose any penalty.: BANGALORE CESTAT;
SERVICE TAX SECTION 2008-TIOL-1603-CESTAT-MAD.pdf + agent st story.pdf Franch Express Network (P) Ltd Vs CST, Chennai (Dated: July 23, 2008) Agents who undertake the work of courier on behalf of Courier Company not franchisees :- the so called franchisees being agents who undertake the work of courier on behalf of FEN, it cannot be held that any other service is involved in the transactions or that there is a different person receiving the service. "Courier Agency" means any person engaged in door-to-door transportation of time-sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly. Therefore FEN undertakes only courier service engaging several agents who do not operate as principals in the arrangement. Therefore the agents are not franchisees and FEN franchisor in a franchise. From the accounts furnished for the year 2004-05, FEN made a profit of above Rs. 52 lakhs on a turnover of above Rs. 12 crores . The accounts do not show any income under a head 'franchise'. : CHENNAI CESTAT; CCE, Ludhiana Vs M/s Singhania Chemicals Agency (Dated: August 28, 2008) Service tax Clearing and Forwarding Agent Service the relationship between the respondents and the principals indicate that the goods are sold at prices fixed by the principals and sold on behalf of the principals and delivered to the customers on behalf of the principals and the entire sequence of activities/responsibilities undertaken by the respondents show that they act only as consignment agent - "consignment agent" is specifically included under the category of 'clearing and forwarding agent' by the inclusive definition Commissioner (Appeals) order is not sustainable and revenue appeal is allowed.: DELHI CESTAT; CCE, Nagpur Vs M/s Indorama Synthetics (I) Ltd (Dated: June 27, 2008) CENVAT Credit Credit availed on service tax paid on mobile phones Earlier CESTAT decision which allowed such credit is not stayed by High Court Staying of Commr (A) granting relief based on such CESTAT decision will amount to allowing the appeal itself : MUMBAI CESTAT;
CUSTOMS SECTION NOTIFICATION Export of basmati rice: DGFT clarification on drawing samples by Customs; CASE LAWS 2008-TIOL-477-HC-AHM-CUS.pdf + customs story.pdf CC Vs Hindalco Industries Ltd ( Dated: September 24, 2008 ) Customs refund on finalisation of provisional assessment unjust enrichment Bombay High Court judgement not good law; The judgment in case of Bussa Overseas & Properties Pvt. Ltd .( supra) rendered by Mumbai High Court cannot be considered to be correct exposition of law, more particularly when the judgment in case of Allied Photographic India Ltd. which has been rendered subsequently was not considered. It is equally well settled that mere rejection of a petition for Special Leave to Appeal cannot be treated as authoritative pronouncement of law by the Apex Court. Customs refund on finalisation of provisional assessment unjust enrichment Amendment to Section 18 substantial and not clarificatory no retrospective effect: it becomes apparent that sub-section (5) is the material amendment which indicates that the Proviso appearing below sub-section (2) of Section 27 of the Act has now been incorporated as a part of Section 18 of the Act. On a plain reading the distinction between Section 18 as it stood prior to amendment i.e. upto 12.7.2006 and subsequent to the amendment i.e. with effect from 13.7.2006 becomes apparent. The difference is stark and revealing and it is not possible to agree with the contention of revenue that such amendment has to be understood as clarificatory in nature. This is more so, when one reads the amendments made in 1998 and the amendment made in Rule 9B of the Central Excise Rules in 1999 considering the pronouncement of the Apex Court as to the distinction between making of a refund and claiming of a refund; the amendment cannot be considered to be retrospective in nature; and cannot be made applicable to pending proceedings. Thus in effect upto 12.7.2006 no provision existed in Section 18 of the Act which would permit revenue to invoke principles of unjust enrichment in relation to duty paid in excess, found to be so, upon finalization of provisional assessment under Section 18 of the Act. The Court can only read the provisions and the statute as they stand, and if necessary, interpret the same but the Court cannot legislate. This is a salutary principle of interpretation. Furthermore, as noticed, the Apex Court has in no uncertain terms drawn the distinction between making of refund and claiming of refund. The High Court cannot equate the two in light of the authoritative pronouncement of law by the Apex Court. Therefore, on both counts, in light of the authorities referred to and on interpretation of provisions of Section 18 of the Act, on finalisation of assessment if any excess duty is found to have been paid at the time of provisional assessment Revenue is bound in law to make the refund without any claim being required to be made by an assessee. This would be the position in law upto 12.7.2006 and not thereafter. : GUJARAT HIGH COURT ; Mithran Vs CC, Coimbatore (Dated: July 23, 2008) Customs penalty under Section 114(i) for abetting the smuggling of red sanders since the show cause notice against the exporter has not yet been adjudicated; the findings against the appellants on abetment of smuggling are premature. : BANGALORE CESTAT; |
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