India awaiting reply to demarche served on Pak to hand over fugitives: Pranab;

Inflation in OECD area drops to 3.7% in October;

Realty, SEZs step up retrenchment drive; Reliance-Haryana SEZ issue pink slip to all except a few; puts investments on hold;

PC to come out with detailed internal security roadmap by Dec 10;

Mumbai Airport Customs seizes Titan watches worth Rs 15 lakh; Pax coming from Dubai arrested;

India calls Pak High Commissioner and serves him demarche on Mumbai terror attack issue;

FBI, Scotland Yard join Mumbai Police investigation in terror attack;

Civil Aviation Secretary reviews security walls at airports with senior officials of multiple agencies;

ddt 2 Dec.pdf

Industrial Park Scheme, 2008 – CBDT amends Form IPS-I;

rbi08cir037.pdf

Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses;

mbuzz1216.pdf

Geography, poverty and population make South Asia vulnerable to impact of climate change: WB;

mbuzz1217.pdf

Belgium short film Nicolos Provost's Plot Point wins Golden Lamp Tree Award at Goa;

mbuzz1218.pdf

MoU signed to set up 'Online High Power Test Lab' for quality;

2008-T2008-TIOL-602-ITAT-DEL.pdf  + stanchart story

Standard Chartered Grindlays Bank Ltd Vs DDIT, New Delhi ( Dated : October 24, 2008 )

a PE in India - Foreign branches of the assessee issue international credit cards - AO for taxing commission income arising out of transactions related to such cards taking place in India - assessee argues that since the PE earns no commission on such transactions it cannot be taxed - CIT(A) holds as per section 9(1)(v)(c), income can be deemed to have accrued in India only if payment is made for the debt that has been incurred in India by a non-resident which will not be the case here since the issuing bank which provides debt is outside India being a foreign branch - Revenue argues before Tribunal that the fee is in nature of technical services and, therefore, taxable in terms of section 9(1)(vii) as well as under Article 12 of Indo-UK DTAA

Held, where the foreign branch has issued credit card and even if the transaction takes place in India, the credit is given to the customer outside India and the debt has also arisen outside India. The merchant shipment in India may receive the payment but the merchant shipments do not incur any debt. They merely receive charges for the goods sold or services rendered. However, the charges are received by the foreign branch for providing credit to their card holders outside India. The amount payable by the card holders who have acquired the credit card from branches outside India incur the debt outside India. Therefore, the fees in respect of such transaction are not taxable in India: DELHI ITAT;

2008-TIOL-601-ITAT-MUM.pdf

M/s British Pharmaceutical Laboratories Vs ACIT, Mumbai ( Dated : October 1, 2008 )

Income tax - Assessee files loss return - AO makes additions - CIT(A) dismisses appeal for want of prosecution - Held, tribunal can dismiss an appeal under Rule 24 of ITAT Rules, 1963 and can also recall the same if satisfied but CIT(A) has no such power to dismiss an appeal for non-appearance on the date of hearing - matter remanded for disposing off the same on merit: MUMBAI ITAT;

2008-TIOL-600-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Sumi Motherson Integrated Technologies Ltd ( Dated : September 19, 2008 )

Income tax - assessee pays a lumpsum amount for getting registration with the STPI authority - AO treats the same as capital expenditure - Held, since the registration was taken not to set up a new business but to carry on with exports, it is a revenue expenditure

Royalty payment - AO considers it as capital expenditure - Since the assessee paid the sum not for obtaining any trade mark right or licence to use the foreign manufacturer's brand name, it is revenue expenditure

Expenditure incurred on repair of computers - AO says it amounts to benefits of enduring nature - Since the upgradation was only for smooth and faster operation, it is revenue expenditure: DELHI ITAT;

2008-TIOL-599-ITAT-DEL.pdf

M/s Technico Industries Ltd Vs ACIT, New Delhi ( Dated : September 26, 2008 )

Income Tax Act – Repairs – Held, the difference between the expenditure incurred by the assessee in regard to the repairs of the car and the insurance claim received by the assessee were revenue expenditure.

Held further, that expenditure incurred by the assessee on account of the replacement of the Voltage Controller, were no new asset came into existence the expenditure incurred was in the nature of general repairs: DELHI ITAT;

IOL-598-ITAT-BANG.pdf

M/s Open Stream Technologies (India) Pvt Ltd Vs ITO, Bangalore ( Dated : August 29, 2008 )

Income - Deduction claimed towards telecom expenses, freight insurance allowed from export turnover but not total turnover - deduction has to be in proportion to denominator - Any amount not a part of export turnover cannot be a part of total turnover as the arithmetical accuracy does not have any hypothetical assumption - Has to be arrived at from accepted cannons of construction of law - Assessee appeal allowed: BANGALORE ITAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt08_47.pdf

CBEC creates a new Excise Commissionerate by shifting certain areas out of Shillong and Dibrugarh;

CASE LAWS

2008-TIOL-221-SC-CX.pdf

M/s Bengal Hammer Industries Pvt Ltd Vs CCE, Kolkata (Dated: October 21, 2008)

Central Excise – manufacture – whether ship breaking amounts to manufacture – matter remanded – In such cases of technical nature, particularly when ship breaking involves expertise, the Adjudicating Authority was required to examine in detail the process by which the breaking of the ship takes place and also the emergence of angles, plates, rounds and heavy steel pipes etc. Since that has not been done, we set aside the impugned judgment and remit the matters to the Adjudicating Authority for fresh consideration in accordance with law: SUPREME COURT OF INDIA;

2008-TIOL-1968-CESTAT-KOL.pdf + Anurag Ferro Story

CCE, CC & ST, BBSR-II Vs M/s Anurag Ferro Products (P) Ltd (Dated: September 9, 2008)

Central Excise – Appeals – Applications for condonation of delay in filing appeals filed in a casual manner - If reasons explaining the delay are irrational prayer for condonation of delay in filing appeal becomes fatal – Delayed filing of condonation applications infringe the right of other party to be free from litigation after statutory limitation for filing appeals – Apparent callousness and negligence on the part of Revenue even when the stakes are so high – Applications for condonation of delay dismissed - Member (Judicial)

Member (Technical): Concurs with Member (Judicial) in rejecting the application for COD – Board is statutorily required make appointments and specify the jurisdictions of Senior Tax Officials for the tax administration to run smoothly - Board has almost abdicated its statutory responsibility of making timely appointments to an extra statutory authority called the "Placement Committee" under the Transfer Policy - Transfer Policy is in direct conflict with the statutory provisions which requires the Board to do the appointments independently - Doctrine of public accountability requires the Board to act timely and in a responsible way discharging its statutory obligation in the matter of appointments under the Customs and Excise law: KOLKATA CESTAT;

2008-TIOL-1967-CESTAT-AHM.pdf

M/s Capiq Engineering Pvt Ltd Vs CCE, Vadodara (Dated: October 16, 2008)

Central Excise - refund claim under Rule 5 of the CENVAT Credit Rules - there is no requirement of one to one co-relation between the input service and the final product - refund cannot be denied on the ground that the input service is of general nature which could be used for several quarters: AHEMADABAD CESTAT;

2008-TIOL-1966-CESTAT-MUM.pdf

M/s Duraline India Pvt Ltd Vs CCE, Goa (Dated: September 19, 2008)

Central Excise - refund claims re-submitted after 13 months of original submission, after rectifying the defects pointed out by revenue - the re-submitted refund claims are to be treated as claims filed within the stipulated time period - cannot be rejected on the ground of time bar: MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1972-CESTAT-DEL.pdf  + stgst.pdf

M/s Punjab Ex-Servicemen Corporation Vs CCE, Chandigarh (Dated: November 11, 2008)

Service tax - Security service - demand of service tax under Security Agency Service upheld - the contention that the appellant is not a commercial concern and is not covered under the definition of Security Agency under Section 65 (94) of the Finance Act 1994 is not acceptable.

Valuation - the value for payment of service tax is the gross amount charged - no deduction on account of salary paid to the security personnel is allowed.

Limitation - during the material period, to invoke larger period under Section 73, all that was required was omission or failure on the part of the assessee to file return under Section 70 for any prescribed period or failure to disclose wholly or truly all the material facts required for verification of the assessment under Section 71. Demand not hit by time bar.

Penalty under Sections 76,77 and 78 - the appellant is a Corporation set up by the State of Punjab and it cannot be said there is a deliberate act with intention to evade the service tax - penalties vacated: DELHI CESTAT;

2008-TIOL-1971-CESTAT-DEL.pdf

M/s Dixon Electronics Vs CCE, Chandigarh (Dated: November 5, 2008)

ST - Maintenance and Repair service - assessee has an agreement with an electronics manufacturer to provide free service to its appliance buyers during warranty period - assessee pays service tax on charges collected from direct customers but pays no tax on payments received from the electronic manufacturer - Revenue points out the same - Assessee pays tax with interest before issue of SCN - Revenue levies penalty under ss 76 and 78 - In view of the fact that the assessee deposited the tax before the issue of SCN and it was admitted to be a bona fide case, it is a fit case for Sec 80 - Penalty set aside: DELHI CESTAT;

2008-TIOL-1970-CESTAT-DEL.pdf

M/s Bharti Airtel Limited Vs CCE, Delhi (Dated: November 12, 2008)

ST - telecom service - assessee sells SIM card to post-paid subscriber and pays sales tax on that, and in the case of pre-paid subscriber, similar treatment is given to the SIM card - Revenue argues that there is no question of simple sale of SIM card unless it is sold alongwith the service and then there is huge difference between the price of SIM sold to dealers and consumners - In view of Tribunal decision in the case of Hutchison telecom, waiver of pre-deposit granted: DELHI CESTAT;

CUSTOMS SECTION

CIRCULAR

cuscir08_20.pdf

Guidelines for compounding of offences under Customs (Compounding of Offences) Rules, 2005 - regarding;

NOTIFICATION

dgft08not067.pdf

Import of milk from China - ban extended by another six months;

dgft08not066.pdf

Export of honey - only Indian origin to be allowed;

dgft08not065.pdf

Import / export of rough diamonds from Venezula prohibited;

CASE LAWS

2008-TIOL-1969-CESTAT-MUM.pdf  +  container story.pdf

Pol India Agencies Ltd Vs CC, Raigad (Dated: October 1, 2008)

Notification 104/94-Cus – Containers imported could not be re-exported and have now been reduced to scrap after lying with the Customs authorities for more than a decade – Duty to be paid on scrap value and not on depreciated value of containers – Tribunal.

Tribunal's observations -