Refund of 4% Additional Duty of Customs - CBEC issues further clarifications (See 'DDT')

India Japan Double Tax Avoidance - JBIC Replaced (See 'DDT')

Final exports figure for last fiscal crosses target of USD 160 bn;

Delhi, Haryana, Rajasthan and UP sign pact for unrestricted movement of vehicles in NCR;

ADB sanctions USD 71 mn loan for water supply project in MP;

EC notifies poll dates for five States, Model Code of Conduct comes into effect;

RBI Governor to meet PM today; Rs 20,000 Cr at 9% earmarked for MFs;

ddt 14 oct.pdf

Area Based exemption – value addition rates and inputs - cement and clinker separated; tapioca starch added as input; value addition rate of 75% fixed for fatty acids and Ferro alloys;

spl down.pdf

A funny thing happened to me this morning …

2008-TIOL-503-HC-MUM-FEMA.pdf + password story.pdf

Avinash Bhosale Vs Union of India (Dated: October 8, 2008)

Even a Court has no power to impound a passport, let alone DRI or Enforcement Directorate :- even the Court cannot impound a passport. Though, no doubt, Section 104 CrPC states that the court may, if it things fit, impound any document or thing produced before it, in our opinion, this provision will only enable the court to impound any document or thing other than a passport. This is because impounding of a “passport” is provided for in section 10(3) of the Passports Act. The Passports Act is a special law while CrPC is a general law. It is well settled that the special law prevails over the general law : BOMBAY HIGH COURT;

rbi08cir022.pdf

Exim Bank's Line of Credit of USD 20 million to Myanma Foreign Trade Bank , Myanmar;

rbi08cir021.pdf

Exim Bank's Line of Credit of USD 64.07 million to Myanma Foreign Trade Bank , Myanmar

office_memorandum.pdf

Grant of PLB and Ad-hoc Bonus to Central Government employees - revision of calculation ceiling.;

mbuzz1059.pdf

Final exports figure for last fiscal crosses target of USD 160 bn;

mbuzz1058.pdf

EC notifies poll dates for five States, Model Code of Conduct comes into effect;

mbuzz1057.pdf

RBI Governor to meet PM today; Rs 20,000 Cr at 9% earmarked for MFs ;

ORDER

CBDT Order 15_2008 + CBDT Order 16_2008

CBDT upgrades 118 ACITs to DC-level + grants financial benefits to 50 ACITs;

CASE LAWS

2008-TIOL-480-ITAT-MUM.pdf + hawkins story.pdf

Hawkins Cookers Ltd Vs ITO, Mumbai (Dated : August 8, 2008)

Income Tax and CENVAT Credit - CENVAT balance as such does not amount to payment. The balance becomes equivalent to, the payment only at the point of time the assessee exercises his option to set off the balance against the central excise liability and not before; In cases where there are statutory compulsion u/s 145A to give adjustment in closing stock, in such cases it has to presume that the assessee has exercised his option to set off against MODVAT Account. It is to be presumed that the assessee exercises his option to set off MODVAT a/c against excise liability, which amounts to payment of excise duty and accordingly the assessee is entitled to deduction u/s 43B . The above presumption is based on legal fiction created by section 145A of the Act. However, to avoid double deduction, the assessee should ensure that there will be no double adjustment of MODVAT account firstly at the time of giving effect to the section 145A and secondly at the time of final exercise option for adjustment of MODVAT account. In this regard burden is on the assessee.

Whatever adjustment is made in the valuation of closing stock, the same will be reflected in the opening stock also irrespective of any consequences on the computation of income for tax purposes - The CBDT has clarified that with a view to put an end to this point of litigation, both the opening and closing stock should reflect the correct value and that is why section 145A was inserted to the statute book. It is further stated that the valuation shall be further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called), actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. The Delhi High Court in the case of CIT Vs. Mahavir Alluminium Ltd., (2007-TIOL-742-HC-DEL-IT) has held that corresponding adjustment must be made in opening stock subject; however, to a condition that such adjustment should not result in double deduction for same expenditure. The Delhi High Court judgment is the only High Court judgment available on the issue. : MUMBAI ITAT;

2008-TIOL-479-ITAT-BANG.pdf

M/s Alternative Food Process Pvt Ltd Vs ITO, Bangalore (Dated : August 29, 2008)

Income Tax - Export on ground of FOB basis - deduction claimed u/s 10B - of freight & insurance charges one excluded from export turnover they stand excluded from total turnover also - Tribunal decision in M/s. Indo Fuji Information Technologies followed - Assessee appeal allowed: BANGALORE ITAT;

2008-TIOL-478-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Gola Five Star Banquet (Dated : March 20, 2008)

Income Tax - Search u/s 132 - AO makes additions  on the basis of seized menu sheet - Assessee challenges  assessment – CIT(A) deletes additions - Held, It is a settled legal position that undisclosed income for the block period can be determined only on the basis of material found during search. In this case, no material had been found during search showing any undisclosed income for the block period. The A.O. had gathered no material to controvert the said claim of the assessee though details of customers were available in the menu sheets and it could have been easily verified. No infirmity with the order of the CIT.:DELHI ITAT;

2008-TIOL-477-ITAT-BANG.pdf

M/s Goodrich Aerospace Services Pvt Ltd Vs DCIT, Bangalore (Dated : August 29, 2008)

I-T - Deduction under Section 10B – Expenses reduced from export turnover is to be reduced from total turnover for computing profit deductible u/s 10A – for computing deduction u/s 10B adjustment needs to be made to export turnover for expenditure incurred to delivery of goods outside India – No infirmity in CIT(A)'s order on this count - however, penalty not called for: BANGALORE ITAT;

2008-TIOL-476-ITAT-KOL.pdf

Hindustan Gum & Chemicals Ltd Vs ITO, Kolkata (Dated : December 28, 2007)

Profits of the business for the purpose of computation of deduction under sec. 80 HHC – Expl. (baa) below sub-sec. (4B) – Exclude 90 % of net interest income only and not gross interest received – Decision of Delhi High Court in Shri Ram Honda Power Equipments (2007-TIOL-38-HC-DEL-IT) followed.

Profits of the business for the purpose of computation of deduction under sec. 80 HHC – Taxable income of EOU to be considered.

Assessee has 3 units out of which one is an EOU. Only 90% of the income of EOU is exempt during the year under sec. 10B. Remaining profits to be considered for computing the eligible deduction under sec. 80 HHC.

Computation of profits of the EOU for 10B exemption – AO excluded part of total conveyance and traveling expenses in the same proportion as turnover of EOU bears to the total turnover. Since the exact figure of such expenses are available on the basis of separate books of account maintained by assessee for the EOU, no need of estimated addition.

Computation of profits of the EOU for 10B exemption – Interest received on surplus funds of EOU deposited in banks, is eligible for deduction. Wordings of sections 10B and 80HH differ materially and hence decision of Supreme Court in Sterling Foods (2002-TIOL-222-SC-IT) not applicable.

If prior period income is considered for taxation, prior period expenses also to be considered.

Appeal by assessee allowed and appeal by revenue dismissed. :KOLKATA ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-1676-CESTAT-MUM.pdf + motor story.pdf

HYVA (India) Pvt Ltd Vs CCE, Belapur (Dated: August 5, 2008)

Motor vehicle body built on chassis supplied by Tata Motors – Valuation under Rule 10A of the Valuation Rules, 2000 – Applicant offers to deposit Rs.25 lakhs as pre-deposit and Tribunal graciously accepts it.:MUMBAI CESTAT;

2008-TIOL-1675-CESTAT-MAD.pdf

M/s INDO Swiss Jewels Ltd Vs CCE, Chennai-III (Dated: July 18, 2008)

Central Excise – remission of duty on goods destroyed in riots - form the report of the jurisdictional Assistant Commissioner, it is clear that the impugned goods had become unfit for consumption or for marketing - it was not proper on the part of the Commissioner to have denied remission of duty on those goods – remission allowed.:CHENNAI CESTAT;

2008-TIOL-1674-CESTAT-DEL.pdf

M/s UNI Products India Ltd & Others Vs CCE, Delhi-III (Dated: July 16, 2008)

Central Excise - classification - carpet matting manufactured by the assessee for use in motor cars is classifiable under chapter heading 57039090, but not under 87089900 as part/accessory of motor vehicle.:DELHI CESTAT; 

2008-TIOL-1673-CESTAT-MUM.pdf

M/s DAI Ichi Karkaria Ltd Vs CCE, Pune-I (Dated: July 31, 2008)

Central Excise – Eligibility of concessional rate of duty under Notification 12/94-CE for Noigen Wax V -7 and Neterlube TC 06 BX – Products are used for spin finishing synthetic fibre – Products used for treatment of textiles and textile related goods eligible for exemption – Orders of the lower authorities denying the benefit set aside :MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-502-HC-AP-ST.pdf + stgst.pdf

M/s Margadarsi Chit Fund (P) Ltd Vs Union of India, New Delhi & 3 Others (Dated: July 14, 2008)

Service Tax – Chit Funds not taxable under ‘Banking and other financial services' – Board Circular quashed: In the absence of a specific statutory definition of ‘cash management' or even ‘asset management', the question of its wider interpretation either by seeking to include or exclude any other transactions or business does not arise and is not permissible and any such act on the part of the executive would certainly be in the teeth of Article 265 of the Constitution of India. The entire action on the part of the respondents in trying to extend the levy of the tax for the first time by way of a circular is merely an executive fiat, which is not permissible under the law. : ANDHRA PRADESH HIGH COURT;

2008-TIOL-1671-CESTAT-DEL.pdf

M/s Neeraj Construction Vs CCE, Jaipur (Dated: September 16, 2008)

ST - Rent-a-Cab Operator Service - Assessee is a small town businessman - gives on rent two vehicles to a company - Revenue raises demand - assessee argues their vehicles do not qualify as cabs as per the Motor Vehicles Act - As per the definitions of "rent-a-cab operator" and "cab" in the Finance Act, the intention is to levy service tax on services using all categories of vehicles for carrying passengers and it is explicit, however, it is a fit case for invoking Sec 80 : DELHI CESTAT;

2008-TIOL-1670-CESTAT-BANG.pdf

Majestic Mobikes Pvt Ltd Vs CST, Bangalore (Dated: May 30, 2008)

Service Tax - revision of orders by the Commissioner under Section 84 of the Finance Act to enhance the penalties under Section 76, 77 and 78 - The Revisionary Authority should keep in mind that the penalty imposed should be commensurate with the offence - Majority of the appeals relate to the commission received by the Automobile dealers from financial institutions. There was doubt in the trade circles whether the commission received should be taxable under the category of "Business Auxiliary Service." - when there is genuine doubt and the Board issued a clarification, no mala fide can be attributed -waiver of penalty under Section 80 is justified. : BANGALORE CESTAT;

2008-TIOL-1669-CESTAT-DEL.pdf

CCE, Lucknow Vs Shri Munir Uddin (Dated: August 1, 2008)

ST - Rent-a-cab operator service - Assessees provides cabs to M/s BSNL - Delay in payment of tax - On being pointed out, deposit tax with interest - Penalty - Commissioner (A) sets aside penalty - Since assessees had no mala fide intention and were providing services to a PSU which as per the Commissioner's finding did not have Service Tax as a component in their contract, penalty is not called for : DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not048.pdf

Ban on export of non-basmati rice not to apply to Nigeria, Ghana, Cameron and Seneal: DGFT;

CASE LAWS

2008-TIOL-1672-CESTAT-DEL.pdf

Shri Praveen Kumar Chugh Vs CC, New Delhi (Dated: July 10, 2008)

SEZ unit – Duty free import of goods for re-export as a trading unit – Consignment meant for export diverted to DTA and documents fabricated to show that goods were exported – Part duty paid (Rs. 47 lakhs) at the time of investigation – Pre-deposit of the balance amount ordered – Penalty on the individual waived since individual did not get any benefit from Customs duty – Stay granted : CHENNAI CESTAT;