Exemption to Marble Slabs fixed with Fibre Net and/or coated with resin – Board clarifies (See 'DDT')

President promotes seven Addl Judges of Rajasthan HC as full-fledged Judges;

Chennai Airport Customs seizes 350 ornamental fishes from pax coming from Singapore;

Barack Obama makes history - First 'Black' to be elected US President;

Liquidity crisis - Finance Secy holds meet with heads of foreign and pvt banks;

PM forms Apex Group to crystalise response to points raised by Industry to meet challenges of financial crisis;

ddt 05 nov.pdf + anti dumping.pdf + marble assessment.pdf

Anti Dumping Duty on Ceftriaxone Sodium Sterlite – Board cautions the field against unscrupulous importers;

special column.pdf

Valuation in case of jobwork after April 1, 2007;

rbi08cir033.pdf

Exim Bank's Line of Credit of USD 20 million (as 1st tranche of USD 80 million) to the Government of the Republic of Rwanda;

rbi08cir032.pdf

Exim Bank's Line of Credit of USD 33 million to the Government of Lao People’s Democratic Republic (Lao PDR);

rbi08cir031.pdf

Exim Bank's Line of Credit of USD 25.5 million to the Government of Cote d’Ivoire;

rbi08cir030.pdf

Exim Bank's Line of Credit of USD 100 million to the Government of the Democratic Socialist Republic of Sri Lanka;

rbi08cir029.pdf

Exim Bank's Line of Credit of USD 10.59 million to Government of Suriname;

rbi08cir028.pdf

Exim Bank's Line of Credit of USD 30 million to the African Export-Import Bank (Afreximbank);

mbuzz1133.pdf

Tourism Ministry calls for reduced tariff rates to hoteliers to make India affordable destination;

mbuzz1132.pdf

India receives USD 2.6 bn FDI in September; Services sector gets maximum;

mbuzz1131.pdf

CMIE to compile new series of IIP Data;

mbuzz1130.pdf

High Courts working with a deficit of 266 judges ;

2008-TIOL-205-SC-IT.pdf

DIT Vs Dr Nalini Mahajan ( Dated: September 30, 2008 )

Income tax - Sec 132 - Is Addl CIT(Inv) empowered to issue warrant to JD - Since the cash, jewellery and other books of accounts have been ordered to be released and assessment finalised, the appeal becomes infructuous. However, the point of law kept open:SUPREME COURT;

2008-TIOL-532-ITAT-DEL.pdf + german story.pdf

Dr Hutarew & Partner (I) Pvt Ltd Vs ITO, New Delhi ( Dated : September 5, 2008 )

Income tax - TDS u/s 195 - Assessee is into consultancy of setting up of power projects - makes payments for licence fee for using brand name and data-processing charges to non-resident - fails to deduct tax at source on both types of payments - AO treats the licence fee as royalty u/s 9(1)(vi) and diallows it u/s 40(a)(i) - also disallows the payments made for data-processing charges by treating them as fees for technical services - Assessee pleads that since there is no technology transfer, merely getting some data processed and a solution to a problem cannot be considered as a technical service - Held, since the non-resident was providing a client-oriented specific technical solution after analysing data with the aid of high-end software, it cannot be equated with any other general services provided by any service provider. Then an explanation has been appended to clause (vii) of section 9(1) of the Act with retrospective effect that if services have been used by the assessee within India, then it is immaterial whether the non-resident has a residence or place of business or business connection in India as the sum paid to non-resident would be included in the income, which will be deemed to have accrued to the non-resident. And it will be subject to TDS provisions - Assessee's appeal dismissed :DELHI ITAT;

2008-TIOL-531-ITAT-MUM.pdf

ACIT, Mumbai Vs M/s Glenmark Pharmaceuticals Ltd ( Dated : July 9, 2008 )

Income Tax Act – Section 158B(b) – Held, that the agreements entered into were the basis of the drawing of the total income for the AY 2001-02. The payments made in pursuance thereof had been recorded in the regular books of accounts maintained by the assessee. The entries in the books of accounts were based on the agreements that were entered into by the parties. The transactions have taken place through regular banking channel and found recorded in the books of accounts of the assessee as well as in the books of account maintained by payee, where consequential searches were also conducted. The genuineness of the transactions as recorded by the assessee in the books of accounts are not in serious dispute and they are not false. It is for these reasons, the learned CIT(A) has correctly come to the conclusion that by no stretch of imagination the transactions so recorded in the regular books of accounts maintained by the assessee could satisfy the test laid down under the provisions of section 158B(b) of the I.T. Act, as regards the undisclosed income.

Income Tax Act – Section 37(1) – Payments made to ward off competition - assessee already engaged in the line of business for which it entered into a non-compete agreement and with a view to expand its market base, it entered into such an agreement. Held, that the benefit of the expenditure and non competition was dictated by business necessity and commercial expediency and the benefit derived out of it was directly related to enhancement of its profitability and was not in connection with the acquisition of any tangible or capital assets. The expenditure was held to be revenue in nature:MUMBAI ITAT;

2008-TIOL-530-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s Hitachi Koki India Ltd ( Dated : September 30, 2008 )

Income tax - assessee's director stands guarantor to loans taken by a concern of which its Director was the Managing Director - loan recovery suits - Bombay High Court gives direction to the assessee-company to repay the loan - AO disallows extraordinary losses claimed as deduction - CIT(A) allows - Since there was a direction from the High Court and subsequently another civil and criminal proceedings were initiated against the assessee's Director which would have meant virtual closure of the assessee's business, payments made on his behalf were justified and CIT(A) order upheld - Revenue's appeal dismissed :BANGALORE ITAT;

2008-TIOL-529-ITAT-DEL.pdf

ADIT, Mumbai Vs M/s G E Harris Energy Control System ( Dated : September 26, 2008 )

Income tax - Indo-US DTAT - Assessee is a non-resident company - engaged in supply and installation of energy management system - receives a sum for providing training to personnel of Indian buyer - claims it to be exempt under Article 7 read with Article 5 of DTAA - AO for taxing the sum as royalty or fees of included services - CIT(A) deletes the addition by holding that since the appellant does not have a PE in India, the business profit cannot be taxed under Article 7 of DTAA - Since the CIT(A) has only talked about the royalty income and not examined the case whether it is fee for included services, the case is remanded for fresh examination; however, the DTAA provisions will prevail over the domestic laws :DELHI ITAT;

orderno_269.pdf

Commissioner (Service Tax) addl charge: CBEC cancels order;

CENTRAL EXCISE SECTION

2008-TIOL-537-HC-HP-CX.pdf

CCE Vs M/s Karam Chand ( Dated : September 26, 2008 )

Central Excise - manufacture - Section 2(f) - dilution of Alletherin to 3.6% concentration from 90% purity - no new substance is formed and only a diluted form of original substance is packaged under a different brand name - Alletherin in its concentrated form is an insecticide and the final product manufactured by the respondent is a diluted form of insecticide which will only kill small insects like mosquitoes - no new substance is created -  All that is being done is that the potency of the insecticide is being reduced which cannot be termed to be manufacture - question referred is answered against the revenue. : HIMACHAL PRADESH HIGH COURT;

2008-TIOL-1805-CESTAT-KOL.pdf + kol story.pdf

CCE, Kolkata-III Vs M/s Naffar Chandra Jute Mills Ltd (Dated: September 4, 2008)

Department to lose all appeals in Kolkata – appeal dismissed for want of gazette notification for appointment of Chief Commissioner: When the Chief functionaries under respective statutes were never validly appointed by appropriate notification in the Official Gazette as authority to carry out statutory review till the matter was heard by the Bench, all the three appeals filed pursuant to review done by them have become fatal and require to be dismissed. We order accordingly and dismiss all the 3 appeals at the threshold on consideration of the preliminary question of lack of jurisdiction without going into merits of these appeals.:KOLKATA CESTAT;

2008-TIOL-1804-CESTAT-MUM.pdf

M/s B S Talsian Vs CCE, Thane-I (Dated: July 17, 2008)

Central Excise – Manufacture of dyed yarn involving processes undertaken without aid of power – Claim for eligibility of Notification No. 4/97 CE – Since heat setting is used to improve dye fastness, to be considered as an integral part of dyeing process without which yarn cannot be marketed - Once the appellant is undertaking dyeing of yarn and using steam for making product marketable, it cannot claimed that he was under bonafide belief that such use of steam will not amount to dyeing without steam – Extended period invoked is justified – Matter remanded to determine the quantum of clearances, amount of duty and penalty :MUMBAI CESTAT;

2008-TIOL-1803-CESTAT-DEL.pdf

M/s Celestical Knits & Fabrics Vs CCE, Noida (Dated: October 12, 2008)

Central Excise - Remission of duty due to loss of goods destroyed by fire accident - Commissioner's findings that appellant has not taken due care to prevent fire is without basis - Appellant's claim of insurance excluding duty element not disputed by Commissioner - Commissioner's order liable to be set aside:DELHI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1801-CESTAT-AHM.pdf

M/s Shri Dinesh Mills Ltd Vs CCE, Vadodara (Dated: October 10, 2008)

ST - Consulting Engineer Service - In view of the Larger Bench decision in the case of Hindustan Zinc Ltd, service provided by non-resident company prior to 1.1.2005 is not taxable : AHMEDABAD CESTAT;

2008-TIOL-1800-CESTAT-KOL.pdf

M/s Assam Gas Company Ltd Vs CCE, Dibrugarh (Dated: September 17, 2008)

Service tax - Business Auxiliary Service - assessee is into transportation of gas by pipeline - Revenue for levying tax for period prior to 15.6.2005 when this activity was notified as a separate category - Since there is no change in the nature of service between the pre and post-creation of a new category, and also the fact that such a service cannot qualify to be called proccurement of input, such a levy was not warranted under the law in force at the material time - Assessee's appeal allowed : KOLKATA CESTAT;

2008-TIOL-1799-CESTAT-KOL.pdf

M/s Bharat Sanchar Nigam Ltd Vs CST, Kolkata (Dated: September 23, 2008)

ST - arithmetical errors in calculation of tax - Revenue insists there is no error - assessee pleads reduction in interest for the sum wrongly shown higher - Not a fit case for total waiver of pre-deposit - Assessee directed to deposit Rs 80 lakhs : KOLKATA CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff08_118.pdf

Anti-dumping duty on Cable ties imports from China levied;

ctariff08_114.pdf

Anti-dumping duty on phenol extended for five years;

dgft08not053.pdf

DGFT Ban on export of non-basmati rice: More African countries added to exempted list;

dgft08not052.pdf

Chapter 4 of FTP amended to make it 'import of inputs' from 'import of agri inputs';

dgft08pn100.pdf

VKGUY scheme benefits extended to export of meat products;

CASE LAWS

2008-TIOL-538-HC-MUM-EXIM.pdf + dgft story.pdf

Gopal Lal Sarda Vs Union of India ( Dated: October 20, 2008 )

DGFT notification restricting import of marble from Srilanka only through Kolkata Port – Notification not in Public Interest – quashed: - any amendment in the Policy has to be in public interest. The Government had given two reasons for issuing the notification and restricting the import of marble from Sri Lanka only at the Kolkata Port, 1) the traders are misusing the facility and were importing marble from Sri Lanka, which is not of Srilankan origin and 2) to neutralize the benefit of concession granted under the Customs Tariff Act to protect the domestic marble industry.

“It is common ground that by issuing the notification under the Customs Tariff Act, the Government of India has granted total exemption from payment of customs duty so far as import of marble amongst other commodities from Sri Lanka under the treaty. It is clear from the reply of the Respondents that the object of issuing notification is to deny the benefit of statutory notification or concession issued under the Customs Tariff Act to the petitioner and others, who import marble from Sri Lanka. In our opinion, the object of defeating the statutory notification or concession cannot be said to be a legitimate object. The Government could have, if it was so advised, withdrawn the concession given in the Customs Tariff Act or it could have gone in for amendment of the Treaty between India and Sri Lanka. In our opinion, the object which is specified in the affidavit defeats both the notification issued under the Customs Tariff Act, as also the provisions of the India-Sri Lanka Treaty and, therefore, it cannot be said that the purpose of issuing the notification is legitimate and, therefore, in our opinion, it cannot be said that the notification impugned in the present petition has been issued in public interest, because what is opposed to law cannot be said to be in public interest”. : BOMBAY HIGH COURT;

2008-TIOL-1802-CESTAT-MUM.pdf

CC, Mumbai Vs M/s Kesoram Industries Ltd (Dated: June 9, 2008)

Customs - Value based advance licence Scheme - reversal of Modvat credit after expiry of the Amnesty Scheme - the provisions of the Amnesty Scheme were to be strictly construed and there is no room for intendment and regard must be had to the clear meaning of the words - There is no discretion with Commissioner to go beyond the language of the said scheme - benefit of the scheme is not admissible - matter remanded to examine the sustainability of other grounds mentioned in the Show Cause Notice. : CHENNAI CESTAT;