3G Spectrum charges: TRAI for switching over from Revenue model to flat rate linked to market rate; proposes 2% of highest bid as admn charges;

Economy Stimulus Package gives step-motherly treatment to Services Sector! (See 'Common Basket');

USA, Liechtenstein ink historic tax pact to share information on tax evasion funds;

IMF cautions corporate defaults may lead to failure of many banks in Asia;

Terror attack: Both Houses of Parliament seek strict action and all-out efforts to prevent its recurrence;

Need for full-time Finance Minister: Congress Party looking for 'politician FM'

Pawar advises farmers to exploit potato exports potential;

ddt 10 dec.pdf

Credit on goods procured from 100% EOUs – CENVAT Credit Rules amended finally;

tiol insight.pdf

Economy Stimulus Package gives step-motherly treatment to Services Sector!

special column.pdf

Compounded levy may yield more revenue but not desirable!

RBI Circular 41.pdf

USD 30 mn credit to Repubic of Malawi;

RBI Circular 40.pdf

Foreign travel - mode of payment in rupees;

RBI Press Release.pdf

Unhedged foreign exchange exposure of clients – Monitoring by bank;

mbuzz1239.pdf

Govt working on new policy to prevent alcoholism and drug abuse;

mbuzz1238.pdf

ICAI to launch new Accounting Technician Course;

mbuzz1237.pdf

OECD accelerates anti-corruption drive with China, Israel and African nations ;

2008-TIOL-616-HC-DEL-IT-LB.pdf + penalty lb story.pdf

CIT Vs M/s Rampur Engineering Co Ltd (Dated: November 27, 2008 )

Income tax - penalty u/s 271(1)(c) - Is recording satisfaction with the words ''I am satisfied'' mandatory for initiating penalty proceedings or the same can be done if it is discerniable from the assessment order? - Full Bench rules, ++ power to impose penalty under Section 271 of the Act depends upon the satisfaction of the Income Tax Officer in the course of the proceedings under the Act. It cannot be exercised if he is not satisfied and has not recorded his satisfaction about the existence of the conditions specified in clauses (a), (b) and (c) before the proceedings are concluded. ++ It is true that mere absence of the words 'I am satisfied' may not be fatal but such a satisfaction must be spelt out from the order of the Assessing Authority as to the concealment of income or deliberately furnishing inaccurate particulars. ++ In the absence of a clear finding as to the concealment of income or deliberately furnishing inaccurate particulars, the initiation of penalty proceedings will be without jurisdiction.

++ In our opinion, the law is correctly laid down in Ram Commercial Enterprises (supra) and we are in respectful agreement with the same.

This legal position of law is to apply to only those cases where assessment orders were made prior to April 1, 1989 as the law has been amended retrospectively by the Govt w.e.f April 1, 1989. Vide Finance Act 2008, the Govt has inserted sub-Sec 1B in Sec 271. And it now seeks to create a fiction by which satisfaction of the assessing officer is deemed to have been recorded in cases where an addition or disallowance is made by the assessing officer and a direction for initiation of penalty proceedings is issued.: DELHI HIGH COURT (Larger Bench );

2008-TIOL-615-HC-RAJ-IT.pdf

CIT, Ajmer Vs M/s Unique Precured Retraders (Dated: September 12, 2008 )

Income tax - Penalty u/s 271(1)(c) - assessee files return - Survey conducted - assessee surrenders certain income and revised return filed - penalty initiated - CIT(A) and Tribunal allow assessee's appeal - Held, determining liability of penalty is essentially a question of facts and unless it is alleged that the Tribunal order is perverse or vitiated, it does not call for interference by the High Court - Revenue's appeal dismissed : RAJASTHAN HIGH COURT;

2008-TIOL-614-HC-DEL-IT.pdf

CIT Vs Dr R N Goel (Dated: November 6, 2008 )

Income Tax - Assessee claims deduction on account of Commission and service charges paid to a company - AO finds the commission unreasonable and excessive in terms of Sec 40A (2)(b) but still allows a part of it - CIT(A) allows commission in totality and service charges in part - Tribunal allows both commission and service charges in entirety - HC holds the question of reasonability of expenses u/s 40A (2)(b) to be a question of fact and not a substantial question of law - Revenue's appeal dismissed accordingly. : DELHI HIGH COURT;

2008-TIOL-613-HC-RAJ-IT.pdf

CIT, Udaipur Vs The Bank Of Rajasthan Ltd (Dated: August 28, 2008 )

Income tax - assessee bank collects penal interest on late payment of instalments of Recurring Deposits (RD) by depositors - AO for leving interest tax on it - Tribunal allows the assessee's appeal - Held, since the deposits made in RD accounts by depositors cannot be said to be loans and advances by banks, and the law stipulates that interest tax is leviable only on interest earned on loans given by banks, penaly interest charged by banks on such deposits are not exigible to tax - Revenue's appeal dismissed: RAJASTHAN HIGH COURT;

2008-TIOL-612-HC-P-H-IT.pdf

M/s Vikas W S P Limited Vs CIT, Hissar (Dated: September 11, 2008 )

Income tax - Scope of best judgment assessment by rejecting books of account is different from the scope of assessment - During assessment, burden on department to show taxability of income but for discharging that burden, it is not necessary that department leads evidence - If department raises any such presumption assessee is required to rebut the evidence – CIT (A)'s or Tribunal's findings to the extent not shown to be perverse - no reason to reverse the decision: PUNJAB AND HARYANA HIGH COURT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular879.pdf

CBEC issues 37B order for classification of bura, makhana, mishri and battasas;

CASE LAWS

2008-TIOL-225-SC-CX.pdf + crown story.pdf

UoI Vs Sicom Ltd (Dated: December 5, 2008 )

Central Excise arrears have no precedence realization of the duty under the Central Excise Act will have no priority over the secured debts in terms of the State Financial Corporation Act. Crown debt prevails over other debts is confined only to the unsecured ones as secured debts will always prevail over a crown debt. “Generally, the rights of the crown to recover the debt would prevail over the right of a subject. Crown debt means the debts due to the State or the king; debts which a prerogative entitles the Crown to claim priority for before all other creditors. Such creditors, however, must be held to mean unsecured creditors. Principle of Crown debt as such pertains to the common law principle. A common law which is a law within the meaning of Article 13 of the Constitution is saved in terms of Article 372 thereof.

It is trite that when a Parliament or State Legislature makes an enactment, the same would prevail over the common law. Thus, the common law principle which was existing on the date of coming into force of the Constitution of India must yield to a statutory provision.

The right to recover must start with the sale of excisable goods. It is only when the dues of the Central Excise Department are not satisfied by sale of such excisable goods, proceedings may be initiated to recover the dues as land revenue.

A statutory provision shall prevail over the Crown debt. Furthermore, the right of a State Financial Corporation is a statutory one . The Act contains a non- obstante clause in Section 46B of the Act : SUPREME COURT;

2008-TIOL-2016-CESTAT-MUM.pdf

CCE, Aurangabad Vs M/s Rohit Industries Ltd (Dated: September 12, 2008)

Central Excise – Inclusion of cost of moulds and dies supplied freely – Extended period not invocable when the assessee is audited from time to time and the IAP has not raised any objection to this effect – No infirmity in the lower authority's order : MUMBAI CESTAT;

2008-TIOL-2015-CESTAT-DEL.pdf

M/s Raymond Ltd Vs CCE, Raipur (Dated: August 28, 2008)

Central Excise - interest is not payable under Section 11 AB of the Central Excise Act as the demand of CENVAT Credit was for the period prior to 11.5.2001.: DELHI CESTAT;

2008-TIOL-2014-CESTAT-MUM.pdf

M/s Laxbro Manufacturing Co Vs CCE, Pune-1 (Dated: September 29, 2008)

Central Excise – Classification – Goods like Petri dishes, Storage vials, Storage tubes etc are neither classifiable under Chapter 9018 as contended by assessee nor 9027 as contended by Revenue – National Aids Research Institute and National Institute of Virology certified the items as lab wares - Goods are articles made of plastic used in laboratory – Duty demand and imposition of penalty set aside : MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-2021-CESTAT-AHM.pdf + cosmetic story.pdf

CCE & CC, Vadodara-I Vs M/s New Look Cosmetic Laser Center (Dated: November 5, 2008)

Service Tax - Beauty Parlour Service - the activity of laser treatment for removal of facial and body hairs cannot be taxed under Beauty Parlour Service.: AHMEDABAD CESTAT;

2008-TIOL-2020-CESTAT-MAD.pdf

Prodorite Anticorrosive Ltd Vs CCE, Chennai (Dated: September 19, 2008)

ST - Consulting engineer service - assessee enters into an agreement to provide technical / engineer service - collects supervisory charges - Revenue raises demamd and imposes penalty - Held, it is clear from the terms of the agreement that they were providing consulting engineer service which is liable to tax and since they had bona fide belief that they were not liable to tax it is a fit case for invoking Sec 80 but the assessee cannot escape the penal liability u/s 75A :CHENNAI CESTAT;

2008-TIOL-2019-CESTAT-AHM.pdf

CCE, Rajkot Vs Adani Pharmachem P Ltd (Dated: July 16, 2008)

ST - Cenvat credit - tax paid on CHA service - assessee is an exporter - exports made on FoB/CIF basis - claims credit for availing CHA service as input service - Revenue disallows - Commissioner(A) holds credit is admissible - held, since the place of removal in this case is the load port and even the definition of input services means any service rendered in relation to outward transportation upto the place of removal, credit cannot be denied : AHMEDABAD CESTAT;

2008-TIOL-2018-CESTAT-DEL.pdf

M/s Jagraon Co-Operative Sugar Mills Ltd Vs CCE, Ludhiana (Dated: October 31, 2008)

ST - Warehousing service - assessee is a sugar manufacturer - maintains buffer stock as per Govt instruction and is compensated for the same - Storage of sugar as per Govt instruction and the compensation paid for the same is not covered under the service tax : DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not070.pdf

Para 1.2 in FTP: DGFT amends word 'Duration' in policy;

dgft08pn113.pdf

DGFT notifies HBP v1, HBP v2 and DEPB Schedule under FTP;

dgft08cir047.pdf

Clarification regarding service tax refund;

CASE LAWS

2008-TIOL-2017-CESTAT-MAD.pdf

Prema Colors & Chemicals Vs CC, Chennai (Dated: July 8, 2008)

Customs – Classification of imported sulphonated oil – Contradiction in test report of samples - Weightage cannot be given to test report on samples drawn by assessee without presence of departmental officers – Test report for samples drawn by Department in presence of assessee only to be considered – Import of sulphonated oil classifiable under Chapter 34.03 – Impugned orders sustained : CHENNAI CESTAT;