Govt likely to cut petro prices by next week;

Inflation rate further diminishes to 8.4%;

HC decision in Vodafone case a shot in arm for Revenue to tax transfer of assets located in India but owned by non-residents: CBDT Chairman;

Cabinet makes it minimum one year to become Chairman of Revenue Boards;

Mumbai terror attack: An internal roadmap for new Home Minister and an external for PM! (See Cob(Web) Column)

PM's incentive package to focus on exports, automobile and realty; Central excise duty reduction for auto and duty benefits for SEZ likely to be part of organic package being finalised;

Union Minister Jaipal Reddy Seeks Total Exemption From Excise Duties On Buses;

Deepak Sandhu of PIB appointed as Media Adviser to PM;

ddt 4 Dec.pdf

Application Form for import of Restricted Items – DGFT amends Form + ISI Headquarters in Hyderabad;

tcwdec04.pdf

Mumbai terror attack: An internal roadmap for new Home Minister and an external for PM;

office_memorandum_25.pdf

Child Care Leave in respect of Central Government employees as a result of Sixth Central Pay Commission recommendations - Clarification regarding;

rbi08cir038.pdf

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR;

wcot.pdf

Names of Customs officers for exceptional acts in the area of environmental protection for being honoured by WCO-reg;

mbuzz1221.pdf

Tunisia hosts meet supported by Interpol in drive against fake medicines;

mbuzz1222.pdf

Allocation of gas to various sectors: Petro Ministry works out policy;

mbuzz1223.pdf

Cabinet gives nod to amend law to provide free legal services to sr citizens and dependent family of defence forces;

mbuzz1224.pdf

HC decision in Vodafone case a shot in arm for Revenue to tax transfer of assets located in India but owned by non-residents: CBDT Chairman;

INCOME TAX

CASE LAWS

2008-TIOL-594-HC-DEL-IT.pdf + it story.pdf

CIT Vs Delhi Brass And Metal Works Ltd ( Dated: November 21, 2008 )

Interest proceeds received from the bank had to be treated as income from other sources as it had no direct or immediate nexus with the export business; Netting cannot be allowed as this was paid as interest on over draft facility, which was, utilized in the export business- interest paid by the respondent/assessee on overdraft facility having been incurred for the purpose of business, was allowable as deductions from business income. In other words, interest paid on overdraft facility cannot be allowed as a deduction against the interest income which is chargeable to tax under the head income from other sources as it was not incurred in earning income by way of interest: DELHI HIGH COURT;

2008-TIOL-593-HC-DEL-IT.pdf

CIT, Delhi Vs M/s Deluxe Enterprises ( Dated: November 3, 2008 )

Income tax - Sec 80IB benefits - assessee claims deduction for interest paid by debtors on delayed payment - AO disallows - CITA) and Tribunal hold that the interest assumes the character of sales consideration and constitute a part of the profits and gains from the industrial undertaking - No substantial question of law involved - Revenue's appeal dismissed: DELHI HIGH COURT;

2008-TIOL-592-HC-DEL-IT.pdf

CIT Vs P P Jewellers ( Dated: November 18, 2008 )

Income tax - assessee is a jeweller - Search u/s 132 - Revenue finds shortage of stock - makes additions - Tribunal deletes it on the ground that the Revenue followed bulk weighing method which included thread, tags and studded items which resulted in error in weight not matching with the stock registers and the difference in weight was negligible - Held, no question of law involved - Revenue's appeal dismissed: DELHI HIGH COURT;

2008-TIOL-591-HC-DEL-IT.pdf

CIT Vs P M Electronics Ltd ( Dated: November 3, 2008 )

Income tax - delayed contributions towards PF - allowability u/s 36(1)(5a) - Revenue disallows - CIT(A) grants partial relief - Tribunal holds since the payments were made prior to return-filing and the amendment in Sec 43B vide the Finance Act, 2003 was curative in nature and hence applicable retrospectively, the deduction cannot be denied - Held, the ratio of SC decision in Vinay Cement case is binding and judicial discipline demands so, there is no substantial question of law involved - Revenue's appeal dismissed: DELHI HIGH COURT;

2008-TIOL-590-HC-DEL-IT.pdf

CIT, New Delhi Vs M/s Cosmos International ( Dated: November 27, 2008 )

Income tax - assessee is an exporter - makes fixed deposits with banks for availing credit facility - claims deduction for intrest earned on them u/s 80HHC - Revenue disallows as there is no nexus between the interest income and the exports business - Tribunal distinuguishes Delhi HC decision in Sri Ram Honda Power Equip = ( 2007-TIOL-38-HC-DEL-IT ) and allows the same as business income - Held, interest earned on fixed deposits for the purpose of availing of credit facilities from the bank, does not have an immediate nexus with the export business and therefore has to necessarily be treated as income from other sources and not business income - Revenue's appeal allowed: DELHI HIGH COURT;

CENTRAL EXCISE SECTION

CASE LAWS

2008-TIOL-1986-CESTAT-MUM-LB.pdf + lb story.pdf

M/s Cadbury India Ltd Vs CC & CE, Pune (Dated: November 11, 2008)

Provisional assessment - Rule 7(4) of the CER, 2002 - Interest is required to be paid even when the differential amount is paid before the finalization of the assessment – Larger Bench of the Tribunal.

Points of reference made to Larger Bench –

Observations of Tribunal Larger Bench -

# We find that none of the decisions cited has considered the language of Rule 7(4) ie. the words “succeeding the month for which such amount is determined”.  All these decisions proceed on an unreasoned basis that the interest is payable ‘ from the month in which the amount is determined /assessment is finalized '.  On a query from the Bench, Ld. Senior Counsel has fairly agreed that this is the case.

# We find no reason to substitute the words as has been done in the said decisions.  Rather, we are persuaded by the decision of the Hon'ble President of this Tribunal, sitting singly, in the case of CCE vs. Vindhya Telelinks Ltd. [ 2008-TIOL-865-CESTAT-Mum ] .

# The contention of the SDR that the phrase “consequent to order for final assessment under sub-rule 3” as appearing in Rule 7(4) refers to a stage prior to adjustment of duty provisionally assessed and paid against duty finally assessed, is borne out by the reasoning adopted by the Apex Court in the case of CCE vs. ITC Ltd. [ 2006-TIOL-141-SC-CX ] and the Larger Bench of the Tribunal in the case of A Infrastructure Ltd. vs. CCE.

# Though the above two decisions are in relation to erstwhile Rule 9B of the Central Excise Rules, 1944, yet the terms “provisional assessment”, ‘final assessment', and ‘adjustment of duty' are statutory terms carrying the same connotation under the present set of Rules i.e Central Excise Rules, 2002.

# Hence, in terms of Rule 7(4), interest would be payable on the amount determined on final assessment from the month for which such amount is determined till the date of payment.

For example:

# If the contention of the Appellants is accepted, then the interest would be payable only on the amounts due after the adjustment of duty after the final assessment.  This argument is clearly against the mandate of Rule 7(4).

# The provisions of Rule 7(4) are clear and unambiguous, when read in the context of the orders of the Apex Court and the Tribunal cited above.

# The decision of the Hon'ble President of this Tribunal, sitting singly, in the case of CCE vs. Hindustan Zinc Ltd. independent of the reasoning adopted by us at above, takes an identical view; Even if the procedure prescribed under Rule 8 of the Central Excise Rules, 2002 is not read into Rule 7(4) for calculating the interest (though there is nothing wrong in doing so), yet the result would be the same as detailed above.

# On the argument as to whether the punctuation can control the plain meaning of the language while interpreting the law, the Tribunal while agreeing with the submissions of the Counsel for the appellant that the same cannot, opined that this does not in anyway help the appellants inasmuch as in view of the Larger Bench decision of the Tribunal in the case of ETA Engineering Ltd. vs. CCE [ 2004-TIOL-959-CESTAT-Del-LB ] the case of the department that the disjunctive comma is important in controlling the interpretation of rule 7(4) is buttressed.

# In the matter of drawing a parallel between section 18(3) of the Customs Act, 1962 as sought by the Counsel for the appellant and submitting that if no dues are payable by the assessee upon finalization, inasmuch as the entire amount has been paid before finalization, then the provisions of Rule 7(4) will not come into picture, the Tribunal observed that it was not impressed with this argument and noted –

The reference was, accordingly, answered thus –

2008-TIOL-1985-CESTAT-DEL.pdf

M/s BHEL Vs CCE, Bhopal (Dated: November 3, 2008)

Central Excise - interest on differential duty - assessee pays duty on provisional basis - as soon as delivery of goods completed as per contract, the price is determined and differential duty is paid even before finalisation of assessment - Revenue for interest - Since the issue has been referred to the Larger Bench, pre-deposit is waived off: DELHI CESTAT;

2008-TIOL-1984-CESTAT-BANG.pdf

CCE, Belgaum Vs M/S Mukand Ltd (Dated: July 24, 2008)

Central Excise – CENVAT Credit on supplementary invoices – Revenue has not alleged fraud, suppression etc on duty paid by consignor – Credit not deniable to the consignee – No merit in revenue appeals: BANGALORE CESTAT;

2008-TIOL-1983-CESTAT-DEL.pdf

M/s Varanasi Bottling Co Pvt Ltd & Ors Vs CCE, Allahabad (Dated: October 13, 2008)

Central Excise - Valuation - aerated waters - advertisement and sale promotion charges collected by the distributors from the dealers are not includable in the assessable value - Crate hire chares and transportation charges are not includable in the assessable value: DELHI CESTAT;

SERVICE TAX SECTION

CASE LAWS

2008-TIOL-595-HC-RAJ-ST.pdf + st story.pdf

M/s Central Office Mewar Palace Org Vs Union of India & Ors ( Dated : October 13, 2008 )

Service Tax – Refunds – claiming refund without challenging assessment – when there is no provision for assessment, there is no question of challenging it - the very basis given by the Tribunal, simply has no legs to stand. At the outset, it may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3 ,( sic) there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc. In that view of the matter, the very basis/reasonings given by the Tribunal, simply have no legs to stand. Admittedly, the appeal under Section 85 lies against a specific order of the concerned authority in Form ST-4, which requires to disclose, designation and address of the officer passing the decision or order appealed against, and the date of decision or order, so also the date of communication of the decision or order appealed against to the appellant. Admittedly, when no order capable of being appealed against, had ever been passed, it cannot be said that the assessee could file appeal against the assessment order, and not having so filed appeal he cannot lay the claim of refund: RAJASTHAN HIGH COURT;

2008-TIOL-589-HC-P&H-ST.pdf

CCE, Jalandhar Vs M/s Batala Citi Cable Pvt Ltd ( Dated: November 28, 2008 )

ST - advertisement service - assessee is a cable operator - provides advertisement service - Revenue detects assessee not paying tax - Demand raised and penalty imposed - During that period, Govt announces Extraordinary Taxpayer Friendly Scheme which is availed by the assessee - Adjudicating authority levies nominal penalty - Commissioner reviews the order but Tribunal holds that since there was confusion in the field, the bona fides of the assessee cannot be doubted and sets aside review order - Held, since the assessee was covered under the scheme, no substantial question of law involved - Revenue's appeal dismissed: PUNJAB & HARYANA HIGH COURT;

2008-TIOL-1981-CESTAT-DEL.pdf

M/s Superior Manpower Services Pvt Ltd Vs CCE, Raipur (Dated: November 7, 2008)

ST - Manpower supply service - assessee takes registration and pays tax after many months of the levy being imposed - Revenue for interest on delayed payment - assessee pleads ignorance and seeks waiver of interest and penalty - Held, since there was delay in payment of tax, interest is payable. If interest is paid, waiver of pre-deposit for penalty granted: DELHI CESTAT;

2008-TIOL-1980-CESTAT-AHM.pdf

M/s Transpek-Silox Industries Ltd Vs CCE, Vadodara (Dated: November 5, 2008)

ST - Service recipient - Assessee receives service from commission agent located overseas - Liability is only from 1.1.05: AHMEDABAD CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not068.pdf

Import of density fibre board is no longer restricted;

ctariff08_127.pdf

Anti-dumping duty on sulphur stock imposed;

CASE LAWS

2008-TIOL-1982-CESTAT-MAD.pdf

M/s Vijaya Ratite Farms (P) Ltd Vs CC, Chennai (Dated: August 6, 2008)

Customs – exemption under Notification No 23/98 Cus for Emu Chicks and eggs as “ pureline poultry stock” - the appellants should be given one more opportunity to establish their claim for the benefit of exemption under Sl. No. 1 in the table annexed to the notification – matter remanded.

Confiscation under Section 111(d) – since the appellants had no licence to import the goods, confiscation upheld – fine and penalty reduced: CHENNAI CESTAT;