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We can only generate good reports: CAG (See 'DDT') Mr Gautam Bhattacharya is new Joint Secretary (TRU-Service Tax); Inflation shows downward trend; goes down to 11.44%; DRI arrests Filipino lady with 1.2 kg heroin at IGI Airport; DPC for promotion to Chief Commissioner-level in CBEC - Mr K R Bhargava is last name; CCEA okays move to pay bonus of Rs 50 per quintal on paddy over & above MSP + incentive for tourism related institutes ; Central Excise mop-up registers -3.8% growth rate in August; Service tax collections continue to grow at about 26% so far; CCEA gives nod to sale of Aditya Birla Telecom's shares to Mauritius-based P5 Asia Holding Investments; |
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| Dear Member, Sending the following files: |
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Penalty under Section 11 AC – Revenue wins huge battle in Supreme Court ; Rising tide of global financial tsunami: Should world economy pay for USA's greed? Slow pace of reforms becomes a virtue for India! 2008-TIOL-192-SC-CX-LB.pdf + sc story.pdf Union of India Vs M/s Dharmendra Textile Processors (Dated: September 29, 2008) Mandatory Penalty – Section 11AC – No discretion to reduce penalty: It is a well-settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner , the courts cannot aid the legislature's defective phrasing of an Act, they cannot add or mend, and by construction make up deficiencies which are left there. It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so. Rules of interpretation do not permit the courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. The courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget, reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. It is of significance to note that the conceptual and contextual difference between Section 271(1) (c) and Section 276C of the IT Act was lost sight of in Dilip Shroff's case. The Explanations appended to Section 272(1 )( c) of the IT Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilp N. Shroof's case has not considered the effect and relevance of Section 276C of the I.T. Act. Object behind enactment of Section 271 (1 )( e) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C of the I.T. Act. : SUPREME COURT; RBI further cuts CRR by 1%; hikes interest rates by half percent for NRI deposits; Health Ministry amends packaging and labeling rules for Bidi; Denmark is highest-taxing and Mexico is lowest-taxing OECD countries ; CCEA okays sale of Aditya Birla Telecom to P5 Asia Holding Investments ; CCEA approves incentive package for IITTM, FCIs and IHMs ; CCEA decides bonus of Rs 50 per quintal on paddy over and above minimum support price ; |
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Y K Singh goes as CVO of CAPART; Adhir Jha goes as Director of Dept of Food & Public Distribution; CASE LAWS 2008-TIOL-192-SC-CX-LB.pdf + sc story.pdf Union of India Vs M/s Dharmendra Textile Processors (Dated: September 29, 2008) Mandatory Penalty – Section 11AC – No discretion to reduce penalty: It is a well-settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner , the courts cannot aid the legislature's defective phrasing of an Act, they cannot add or mend, and by construction make up deficiencies which are left there. It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so. Rules of interpretation do not permit the courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. The courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget, reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. It is of significance to note that the conceptual and contextual difference between Section 271(1) (c) and Section 276C of the IT Act was lost sight of in Dilip Shroff's case. The Explanations appended to Section 272(1 )( c) of the IT Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilp N. Shroof's case has not considered the effect and relevance of Section 276C of the I.T. Act. Object behind enactment of Section 271 (1 )( e) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C of the I.T. Act. : SUPREME COURT; 2008-TIOL-487-ITAT-MUM.pdf + ING story.pdf DCIT, Mumbai Vs M/s ING Investment Management (India) Pvt Ltd ( Dated : July 18, 2008 ) Expenditure billed in the name of sister company; There is no dispute about the fact that it a particular expenditure has been incurred by the assessee in the carrying on of its business, then the disallowance cannot be made only on the technical ground that the bill was raised in the name of its sister concern for certain business considerations. However, it is necessary that the expenditure should have a direct nexus with the carrying on of the assessee's business. Rent on garden: The assessing Officer has disallowed the rent of garden space simply on the ground that the nature of assessee's business did not necessitate any garden space. What amount of expenditure is to be incurred by the assessee in carrying on its business purely falls in his domain and the Assessing Officer cannot interfere so long as the expenditure is for business and has been genuinely incurred. For the reason that the AO has not denied that the assessee was in fact using the garden space which it had paid rent in inclusive manner. Capitalised advertisement expenditure; -: the real question for determining the deductibility or otherwise of any expenditure is its nature and not the treatment given in the books of account. If a particular expenditure is deductible by virtue of its nature being revenue, the assessee cannot be denied the deduction merely on the ground that it had capitalized it in the books of account. In the same manner, if a particular amount has been claimed as deductible, which is otherwise capital in nature that cannot be allowed because of the treatment given in the books of account. So, the crucial factor is the nature of expenditure and not the way in which it has been reflected in the books of account.” No personal expenditure in the hands of the company. the assessee is a private limited company and in such a situation, there cannot be any question of a personal use of the facilities by the Directors of the company.: MUMBAI ITAT; ACIT, Mumbai Vs Landmark Builders Pvt Ltd ( Dated : July 10, 2008 ) Income Tax - Assessee is engaged in Real Estate business - files loss return - AO partly reduces business loss and fixes speculation loss - disallows interest partially u/s 36(1)(iii) - Held, the test of commercial expediency in giving interest-free funds is relevant for deciding the issue and the AO has applied the correct test, and therefore the disallowance is confirmed. AO is however directed to quantify the amount of disallowance of interest following the aforesaid test. : MUMBAI ITAT; M/s TATA Elxsi Ltd Vs ACIT, Bangalore ( Dated : September 12, 2008 ) Income Tax - Sec 10A benefits - Assessee is into System Integration and Software Development Services - incurs various sorts of expenses in foreign currency - AO for inclusion of commission paid in foreign currency in total expenditure to be deducted from export turnover - Assessee disagrees - held, the commission expenses incurred in foreign exchange such as freight, telecommunication expenses are includible in the total expenditure in foreign currency for reducing the same from the export turnover for availing Sec 10A benefits; Charging of interest u/s 234B being mandatory is leviable - Assessee's appeal rejected : BANGALORE ITAT; ACIT, Mysore Vs M/s Toyota Techno Park India (P) Ltd ( Dated : August 29, 2008 ) Income Tax - Assessee is in the business of industrial park - Approval from FIPB, GOI; Govt of Karnataka etc - Status of infrastructure project granted as per infrastructure policy - Income earned from occupants of industrial park is income assessable under head 'Business or professional income' - In the absence of any new material by the Reveiw to hold a different view, CIT(A) order which followed Tribunal's decision in previous AY in assessee's own case upheld - Revenue appeal dismissed : BANGALORE ITAT; ACIT, Kanpur Vs M/s Ratan Housing Development Ltd ( Dated : May 23, 2008 ) Income Tax Act – Section 14A & Section 56 – Expenditure incurred for earning income not liable to tax – Held, if assessee is not able to earn any income under any head or from any source, but incurs expenditure and it is proved that activities for earning income have been carried out by the assessee then notwithstanding that any income has not been earned the expenditure incurred in earning such income will be considered as a loss under that head or from that source and that would be considered for set off against income from other source or under other heads. For the purposes of allowing an expenditure, it is not necessary that there should always be a positive income.- Held further, that heading of section 14A is 'Expenditure incurred in relation to income not includible in total income'. The word used is 'includible'. It is not equivalent to 'included'. There is a vast difference in the concept of 'included and 'includible'. The word 'includible' refers to a capability of being included in the total income of the assessee. Again the words "does not form part of the total income" cannot be said to be related to actual physical forming part of total income but relates to the eligibility of the income as per provisions of the Act to be includible in the total income. Thus, section 14A speaks of the nature and quality of income includible in the total income and not the actual inclusion of such income in the total income : LUCKNOW ITAT; |
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| Vacancies in World Customs Organization Application Form Annex I Annex II Annex III Annex IV Annex V
2008-TIOL-192-SC-CX-LB.pdf + sc story.pdf Union of India Vs M/s Dharmendra Textile Processors (Dated: September 29, 2008) Mandatory Penalty – Section 11AC – No discretion to reduce penalty: It is a well-settled principle in law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. As a consequence, a construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As observed in Crawford v. Spooner , the courts cannot aid the legislature's defective phrasing of an Act, they cannot add or mend, and by construction make up deficiencies which are left there. It is contrary to all rules of construction to read words into an Act unless it is absolutely necessary to do so. Rules of interpretation do not permit the courts to do so, unless the provision as it stands is meaningless or of doubtful meaning. The courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget, reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. It is of significance to note that the conceptual and contextual difference between Section 271(1) (c) and Section 276C of the IT Act was lost sight of in Dilip Shroff's case. The Explanations appended to Section 272(1 )( c) of the IT Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilp N. Shroof's case has not considered the effect and relevance of Section 276C of the I.T. Act. Object behind enactment of Section 271 (1 )( e) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276C of the I.T. Act. : SUPREME COURT; 2008-TIOL-1686-CESTAT-MUM.pdf + sandoz story.pdf M/s Sandoz Private Ltd Vs CCE, Thane I (Dated: September 8, 2008) If credit cannot be denied and an amount equal to 10% is not required to be paid in respect of exempted goods exported under bond, equal credit cannot prima facie be denied and amount equal to 10% is not required to be paid under Rule 6(3)(b) of the CCR, 2004 in respect of exempted goods cleared for export under rebate – Tribunal Even if it is admitted that Rule 6(6)(v) is not applicable to the goods exported under claim of rebate yet the fact remains that the applicants have paid duty @16% at the time of removal which is more than the amount equal to 10% of the value of the goods. In that event, the question of paying a further amount equal to 10% prima facie does not appear to be correct. If credit cannot be denied and an amount equal to 10% is not required to be paid in respect of exempted goods exported under bond in terms of Rule 19 of the Central Excise Rules, 2002, equal credit cannot prima facie be denied and amount equal to 10% is not required to be paid under Rule 6(3)(b) of the Cenvat Credit Rules, 2004 in respect of exempted goods cleared for export under Rule 18 of the Central Excise Rules, 2002. The appellants, prima facie , appear to be entitled to the credit in respect of inputs used in the exempted goods cleared for export and claim refund of the same under Rule 5 of the Cenvat Credit Rules. The Tribunal in the case of Punjab Stainless Steel Industries reported in 2008-TIOL-1004-CESTAT-DEL has held that the Cenvat credit of the inputs used in exempted goods for export is permissible and refund in respect thereof can be claimed under Rule 5 of the Cenvat Credit Rules, 2004. Prima facie , it appears that the Order of the Commissioner is contrary to and inconsistent with the judgment of the Hon'ble Bombay High Court in Writ Petition no. 6951 of 2007 filed by M/s Repro India Ltd. The Tribunal in the case of Norris Medicines Ltd. in the context of the availability of the Modvat credit on the inputs used in the exempted products being exported, has held that the bar of Rule 57C and Rule 57CC will not be applicable in respect of exported products even though the same are otherwise exempt from duty. Prima facie , it appears that the applicants are not required to pay an amount equal to 10% under Rule 6(3)(b) of the Cenvat Credit Rules, 2004 and appear to be entitled to the credit of the duty paid on inputs used in the goods, as these goods were for export :MUMBAI CESTAT; M/s Seco Tools India Pvt Ltd Vs CC,Mumbai (Dated: August 13, 2008) Appeals – Commissioner (Appeals) does not have the power to remand the matter to the original authority as per law as held by Apex Court in MIL India case [ 2007-TIOL-30-SC-CX ] – Matter remanded to the Commissioner (Appeals) to decide the appeal on merits by passing a speaking order :MUMBAI CESTAT; CCE, Chennai Vs M/s Castrol India Ltd (Dated: July 30, 2008) Central Excise – Valuation – insurance charges are not includable in the assessable value – revenue appeal has no merit . :CHENNAI CESTAT;
SERVICE TAX SECTION 2008-TIOL-1691-CESTAT-AHM.pdf + mundra story.pdf M/s Mundra Port & Special Economic Zone Ltd Vs CCE, Rajkot (Dated: September 30, 2008) Service Tax- Port Services – CENVAT Credit - Steel and cement used for construction of jetty, not entitled; The cement and steel have undoubtedly been used in the construction of jetty and port building by the contractor, which service is itself liable to service tax, though the same is exempted under the Notification. As such, it can be safely concluded that the cement and steel stand used for providing the output service of construction of building and not used in providing the port service, such an interpretation would lead to unwarranted results and the definition cannot be so stretched so as to include the use of cement and steel as used for providing the output service of port services. If such a wide meaning is given to the above expression then the cement and steel used for construction of any building which houses the office etc. would become eligible inputs for the purposes of providing output services. Credit entitled for mobile phone, rent a cab, CHA & Surveyor charges the Commissioner(Appeals), Rajkot vide order-in-appeal No.346 /2007/ Commr (A)/RAJ dt . 30/11/2007 has allowed credit of the service tax paid by the appellants on mobile phone, rent a cab, CHA & Surveyor charges and professionals. The said order has not been challenged by the Revenue and as such has attained finality . Air-conditioners are capital goods, entitled for credit - The appellant has contended that such Air-conditioners are capital goods falling under Chapter 85 of the Central Excise Tariff Act, 1985 and as such in terms of the definition of capital goods, credit has to be allowed.: AHMEDABAD CESTAT; M/s Harshad Thermic Industries Pvt Ltd Vs CCE, Raipur (Dated: June 25, 2008) ST - Business Auxiliary Service - Assessee is a contractor of Indian Railways - undertakes thermite welding of joints of rail tracks - Revenue raises demand - Assessee pleads commercial or industrial construction service provided to in relation to road, rail and airport is exempted from service tax - Prima facie, the assessee is a strong case - Waiver of pre-deposit granted :DELHI CESTAT; M/s Indian Hume Pipe Co Ltd Vs CCE, Trichy (Dated: July 23, 2008) Service tax – Erection, commissioning and installation service – the activity of lying of water supply pipelines for Water Supply and Drainage Board is not taxable under Erection, commissioning and installation service. :CHENNAI CESTAT; M/s Matadin Mali Vs CST, Ahmedabad (Dated: August 29, 2008) ST - Appellant is a small-time labour contractor - pays duty after issue of SCN - fails to file an appeal because of lack of legal knowledge - Delay condoned and pre-deposit waive off as tax and penalty already paid : AHMEDABAD CESTAT;
CUSTOMS SECTION M/s Hindustan Lever Ltd Vs CC, Chennai (Dated: July 10, 2008) Customs – valuation - transaction value is required to be accepted in the absence of circumstances mentioned under Rule 4(2) of the Valuation Rules. : CHENNAI CESTAT; |
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