CIC(Management) Regulations, 2007 amended to make CIC Order Final (See 'DDT')

Chandrayaan-1 swings into last leg of journey to moon;

FM meets Chiefs of banks; discusses measures to overcome liquidity problem;

Ad hoc promotion to Commissioner in CBEC: Delhi CAT modifies Stay Order to allow promotion of remaining 8 of 1986 Batch;

Dozens of Somalian pirates who captured Iranian vessel mysteriously die aboard; Experts fear vessel loaded with radio-active materials;

PM urges industry to avoid job-cut;

ddt nov 04.pdf

CESTAT without a President – Waiting for a Justice!

stgst.pdf

Service tax on customised software - Madras HC delivers a punch!

mbuzz1129.pdf

Govt decides to declare Ganga as 'National River'; also to set up Ganga Authority;

mbuzz1128.pdf

Allotment of 3G spectrum by January 2009: Minister;

mbuzz1127.pdf

AICTE receives 56 proposals to conduct technical education courses in collaboration with foreign bodies;

mbuzz1126.pdf

36th National Convention of Company Secretaries to be held in Goa

2008-TIOL-536-HC-DEL-IT.pdf

DIT, New Delhi Vs KLM Royal Dutch Airlines ( Dated: October 22, 2008 )

Income tax - DTAA - Assessee is incorporated in Netherlands - engaged in airlines business of carrying passengers as well as cargo - gets licence from Airport Authority of India for cargo space - enters into a contract with a company to take care of cargo-booking and handling service on commission basis - While making payments to the outsourced company the assessee adjusts the rent payable to AAI - AO treats the rent deducted from the payments made to the outsourced company as income taxable to tax in India - Tribunal finds it inextricably linked to the cargo handling business for which licence was issued and such rent adjustment cannot be treated as 'income from other sources - Tribunal has correctly understood the law - Revenue's appeal dismissed : DELHI HIGH COURT;

2008-TIOL-535-HC-MUM-IT.pdf

CIT-5 Vs M/s Essar Oil Ltd ( Dated: October 16, 2008 )

Income tax - Sec 9(1)(i) - Assessee executes certain projects in Oman - excludes profit earned there from total income offered to tax in India - Revenue disallows but Tribunal allows - Held, since the assessee has a PE in Oman and the income earned by the PE was offered to tax as per Oman Income Tax laws, in view of the Article 7 of the DTAA with Oman, the profit earned there rightly excluded from total income by the Tribunal - Revenue's appeal dismissed : BOMBAY HIGH COURT;

2008-TIOL-534-HC-DEL-IT.pdf

CIT, Delhi Vs D K Gupta ( Dated: September 26, 2008 )

Income Tax - Search - seizure of two diaries, dotted with entries, notings and jottings - AO makes additions - CIT(A) finds the diaries as dumb documents and deletes the additions - Tribunal finds the assessee has explained the entries and there is no evidence to indicate that the entries made in the diaries actually translated into transactions which are not found in regular books and since the burden of proof shifts on Revenue after an explanation was submitted, the AO fails to substantiate it - Since it is an issue based on facts and the Tribunal being the highest fact-finding body, it does not call for any interference - Revenue's appeal dismissed : DELHI HIGH COURT;

2008-TIOL-528-ITAT-JODHPUR-TM.pdf + TM story.pdf

DCIT Vs Prem Cables (P) Ltd ( Dated : April 11, 2008 )

Job work charges reduced after the end of the year to reduce tax liability of sister concern – agreement colourable: It is observed that the alleged agreement between these sister concerns is nothing but a colourable device for shrinking the total tax liability of the group. If it had been genuinely entered into on the stated date, the same must have been acted upon during the year and the invoices properly raised and the payments accordingly made. It is highly unbelievable that rate of job charges is settled at Rs.1 ,000 per metric tonne at the beginning of the year but the rate is continuously charged at Rs.4,000 to 5,000 per metric tonne throughout the year without any knowledge, whisper or objection from the either side. If the situation had been in fact as per the alleged agreement, it would have come to the fore immediately and correction would have been made accordingly during the year itself.

It is the duty of the assessee to extend cooperation to the Assessing Officer and furnish details as required enabling him to make assessment.: The assessee is liable to be visited with the adverse consequences if he fails in discharging the duty cast upon him by not furnishing necessary particulars called for by the Assessing Officer. However, the assessee is entitled to produce additional evidence before the first appellate authority where the Assessing Officer had refused to admit evidence which ought to have been admitted or where the Assessing Officer had made the assessment order without giving sufficient opportunity to the assessee to adduce evidence.

The Tribunal cannot act as a mute spectator to the defrauding of the Revenue : It is not possible to accept that the parties to the agreement continued to raise bills not in accordance with the alleged agreement and payments were also accordingly made throughout the year after deduction of tax at source. The facts which are clear to the naked eye cannot be brushed aside. The Tribunal, being a final fact finding authority cannot act as a mute spectator to the glaringly unbelievables going on, which is nothing but an arrangement between two interconnected concerns aimed at defrauding the Revenue and reducing the incidence of tax on the whole. It is under such circumstances that the cloak of corporate veil needs to be pierced for unearthing the real intention of the parties. : JODHPUR ITAT (THIRD MEMBER);

2008-TIOL-527-ITAT-MAD.pdf

ACIT, Chennai Vs Shri B Ramachandran ( Dated : July 17, 2008 )

Computation of agricultural income is very much part and parcel of the computation of income under I.T. Act.

AO made addition on account of inflated claim of agricultural income. CIT(A) deleted it on the reasoning that assessee has not claimed any credit for such agricultural income and did not explain it as source for any outgoing.

On appeal, Tribunal upheld the order of AO. When the assessee is disclosing agricultural income in the Return of income, it is his duty to satisfy the AO that the income arose out of agricultural operations. It is for the AO to compute the agricultural income of the assessee in the course of the Income tax proceedings as per I.T. Rules, 1962. :CHENNAI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-533-HC-DEL-CX.pdf

CCE, Delhi-I Vs Blow Plast Ltd ( Dated : July 15, 2008 )

Central Excise - manufacture - Office furniture systems/work stations cleared on payment of duty by the manufacturer and assembled by the appellants - demand of duty on the appellants again under Office furniture systems/work stations -  same product as known to the trade cannot be manufactured twice over - nothing new has come into existence so as to bring the activities of the assessee within the parameters specified in Section 2(f) of the said Act - revenue appeal has not merit. : DELHI HIGH COURT;

2008-TIOL-1795-CESTAT-AHM.pdf + yarn story.pdf

M/s Mahesh Texturisers & 3 Others Vs CCE, Surat (Dated: September 17, 2008)

Yarn received for texturising by job workers in cartons bearing Brand name – Texturised yarn cleared in same cartons – Benefit of SSI exemption available - Tribunal by Majority.

Appellants took a categorical stand before the lower authorities that they received the POY from various units in cartons, which already carried the brand name. POY received by them was wound on paper tubes, which did not carry any brand name and after texturising they used the same cartons for packing the texturised yarn and cleared the same to the principal manufacturer, who after re-packing either sold the same in the market or sent the same further for twisting to other manufacturers. They also contended that there was a general practice in the texturising industry to re-use the cartons received from the POY manufacturers and the packing slips of the manufacturers are either pasted on the outside of the cartons or kept in the cartons only with the purpose to identify as to whom the goods belong, as they received yarn for texturising purposes from various manufacturers.

Member(J) viewed that the contention of the appellants was correct, both on merits as well as on limitation.

Member(Technical) while agreeing with the order of the Member(J) in respect of some appellants, opined that the benefit of the SSI exemption cannot be extended to two assessees namely M/s Jagat Texturising and one another.

Matter came to be referred to third Member on account of difference in opinion.

Third Member on reference noted that Member (Technical) has not expressed any divergent opinion so far as the time bar aspect is concerned and consequently it has to be held that the demand is hit by bar of limitation even in respect of M/s Jagat Texturising & 1 another.

Majority decision – Appeals allowed with consequential relief. :AHMEDABAD CESTAT;

2008-TIOL-1794-CESTAT-AHM.pdf

M/s Aditya Industries Vs CCE, Ahmedabad (Dated: October 8, 2008)

Central Excise - 100% EOU - remission of duty on the raw material received duty free and destroyed in the factory premises due to unavoidable reasons - remission cannot be denied. :AHMEDABAD CESTAT;

2008-TIOL-1793-CESTAT-AHM.pdf

CCE, Vadodara Vs M/s Sicgil Industrial Gases Ltd (Dated: October 8, 2008)

Central Excise - valuation of goods cleared to sister unit - since the duty paid is available as credit and issue is revenue neutral, charge of suppression of facts with intention to evade payment of duty is not sustainable - no infirmity in the order of the Commissioner (Appeals) - revenue appeal has no merit.:AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-1798-CESTAT-MUM.pdf + st credit story.pdf

B G Shirke Construction Technology Pvt Ltd Vs CCE, Pune-III (Dated: October 14, 2008)

For an amount of credit of Rs.19.62 lakhs, no assessee would like to forego the benefit of 67% of the abatement as granted by the Notification 01/06-ST – Prima facie case for grant of waiver of pre-deposit as credit already reversed – Tribunal.

Tribunal's observations -

A comparison between the conditions imposed in both the notifications 15/04-ST and 01/06-ST which granted an abatement of 67% highlights the major difference between the two and which is - that prior to 01/03/2006 the condition of non-availment of Cenvat credit of service tax on input services was not there.

This would mean that an assessee can take the Cenvat credit of the service tax paid on inputs services and utilize the same.

In the current case, it is undisputed that the applicant had taken Cenvat credit of the service tax paid on inputs services, which was received by them prior to 01/03/2006 but the payment thereof were made subsequently ie. 01/03/2006.

It is also undisputed that the said credit was utilized by them for discharging the service tax liability on the services rendered by them prior to 01/03/2006.

We also find that for an amount of credit of Rs.19.62 lakhs, no assessee would like to forego the benefit of 67% of the abatement as granted by the Notification.

Principal Bench in the case of Sachdeva Roadlines (P) Ltd. was considering an identical issue wherein the Cenvat credit of Rs.1.10 lakhs were availed and demand was raised for approximately Rs.1.39 crores, denying the benefit of abatement.

In the present case, the applicant has reversed the entire amount of credit of Rs.19.62 lakhs and we are of the considered opinion that the issue in this case may be covered by the decision of Hello Minerals Water (P) Ltd. ; an identical situation was also before the Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. [ 2002-TIOL-41-SC-CX ].

Finding that the applicant had already reversed the amount of Cenvat credit of the service tax availed on the inputs services, it was held that they had made out a prima facie case for the waiver of pre-deposit of the amount involved.

Application for waiver of pre-deposit of the amount involved allowed and considering the high stake of revenue involved (Rs.9.74 Crores), an out of hearing fixed on the 17th November 2008. :MUMBAI CESTAT;

2008-TIOL-1797-CESTAT-AHM.pdf

M/s Gujarat Narmada Valley Fertilizers Co Ltd Vs CCE, Vadodara (Dated: October 13, 2008)

ST - Consulting Engineering service - Assessee entered into contract with two non-resident companies for 'revamp' of their plants between Sept 2002 to Feb, 2003 - Revenue raises demand - Assessee treats it as 'works contract' and argues it is not vivisectable into distinct taxable service - In view of the Larger Bench decision in the case of Hindustan Zinc Ltd that such services received prior to 1.1.2005 and provided by non-resident companies having no office in India is not taxable - Assessee's appeal allowed :AHMEDABAD CESTAT;

2008-TIOL-1796-CESTAT-BANG.pdf

M/s Mysore Leasing And Finance Ltd Vs CCE, CC & ST, Mysore (Dated: July 24, 2008)

Service Tax – Tax paid on the interest on loans – Refund claims for such taxes shall be governed by limitation under See 11B – claims filed beyond limitation period are hit by limitation – Appeal dismissed. : BANGALORE CESTAT;

CUSTOMS SECTION

2008-TIOL-1792-CESTAT-MAD.pdf

Lakshmi Machine Works Ltd Vs CC, Chennai (Dated: April 1, 2008)

Refund – Unjust enrichment – Price of the machinery of which the impugned goods formed part remained unchanged before and after the single import when the impugned goods were assessed at higher rate of duty - If the assessee is able to prove that the price of finished goods remained unchanged before and after the imports with documentary evidence they shall be eligible for refund without being hit by the bar of unjust enrichment : CHENNAI CESTAT;