Security, shoes, economy, jobs and the President (See 'DDT')

Before saying ''omega''- What does it mean? (See 'DDT')

Bansal tables Mid Year Review of Indian Economy in Parliament today;

Excise duty exemption attracting many investors in cement section in N-E: Govt ;

Bad time lies ahead for IT industry, says OECD;

Delhi has 58000 beggars including four post graduates and six graduates;

Sahar Airport Customs arrests Zambian lady with white sugar;

Director (Ad-VI) Pawan Wadhwa in CBDT succumbs to chest pain;

ddt 23 dec.pdf

No penal action on electronically filed Income Tax returns bearing acknowledgement date stamp of 1st October 2008;

2008-TIOL-645-HC-KOL-FEMA.pdf + fema story.pdf

Suborno Bose Vs Appellate Tribunal For Foreign Exchange & Ors (Dated: September 17, 2008 )

FEMA – Procurement of foreign exchange for import of machinery under EPCG scheme – If goods are imported and warehoused for years without producing exchange control copy to authorized bank violation would come within the meaning of economic offence and not a technical lapse even if there is change in management – No reason to interfere with Tribunal's order : KOLKATA HIGH COURT ;

mbuzz1295.pdf

Bansal tables Mid Year Review of Indian Economy in Parliament today;

mbuzz1294.pdf

Excise duty exemption attracting many investors in cement section in N-E: Govt ;

mbuzz1293.pdf

Airport in Arunachal Pradesh: Patel promises early steps ;

mbuzz1292.pdf

Bad time lies ahead for IT industry, says OECD;

it08cir11.pdf

Corrigendum 107/2008 to make 11th Amendment read as 10th Amendment;

it08not109.pdf

Definition of ‘Charitable purpose' under section 2(15) of the Income-tax Act, 1961 – reg.

CASE LAWS

2008-TIOL-647-HC-DEL-IT.pdf + TP story.pdf

Moser Baer India Ltd Vs ACIT (Dated: December 19, 2008)

Income Tax - Transfer Pricing - Sec 92CA(3) - Assessees opt for writ petitions for having been denied oral hearing as mandated by law - Revenue disagrees - Held,

++ The provisions of sub-section (3) of section 92 CA casts an obligation on the TPO to afford a personal hearing to the assessee before he proceeds to pass a order of determining of the ALP in terms of sub-section (3) of Section 92CA.

++ Since such a requirement flows from a plain reading of the provisions of sub-section (3) of section 92CA, the determination of ALP by the TPO cannot be sustained by taking recourse to the fact that the assessee did not demand an oral hearing.

++ To obviate any difficulties in future the show-cause notice issued by the TPO just prior to the determination of ALP under Section 92CA(3) should refer to the documents or material available with the Assessing Officer in relation to the international transaction in issue. The show cause notice should also give an option to the assessee:-

(a) both to, inspect the material available with Assessing Officer as also the leeway to file further material or evidence if he so desires, and

(b) to seek a personal hearing in the matter.

++ Appellate proceedings are not a substitute for original proceedings of TPO for determination of ALP :DELHI HIGH COURT;

2008-TIOL-646-HC-MUM-IT.pdf

Plastiblends India Ltd Vs ACIT, Mumbai (Dated: December 19, 2008 )

Income tax - total income - depreciation u/s 32 - Assessee is a manufacturer having two units at Daman - opts not to claim depreciation while claiming deduction under Chapter VI-A from total income - Revenue disallows and Tribunal agrees in view of Special Bench decision in the case of Vahid Paper Converters - Held, in view of conflicting decisions of two judge benches of the High Court, the matter referred to the Larger Bench:BOMBAY HIGH COURT;

2008-TIOL-644-ITAT-MUM.pdf + container story.pdf

ITO, Mumbai Vs M/s Jay Container Services Co Pvt Ltd (Dated: November 25, 2008 )

Income tax - Sec 40(a)(i) - assessee is shipping liner - provides containers for transporation of cargo in international traffic - makes payments to two non-resident companies as recovery charges and storage charges - Since TDS was not deducted on such payments the AO disallows the expenditure u/s 40(a)(i) - CIT(A) deletes the addition - Held, since both the non-resident companies having no business connection and no part of their income deemed to be arising in India, they are not covered under the ambit of Sec 9 of the I-T act and, therefore, no TDS was to be deducted on such payment - CIT(A) order deleting additions made under Sec 40(a)(i) upheld

TDS - payments to non-residents - assessee argues section 40(a)(i) is not attracted in the present case because the payment is neither interest nor royalty nor fees for technical services - held, such views are erroneous as the clause does not stop at mentioning these three items and goes on to include any other sum chargeable under the Act. Any payment made to the non-resident comes within the sweep of this provisions provided it is chargeable to tax under this Act in the hands of the non-resident. :MUMBAI ITAT;

2008-TIOL-643-ITAT-DEL.pdf

M/s Standard Gum & Industries Pvt Ltd Vs DCIT, New Delhi (Dated: October 17, 2008 )

AO alleged that through-out the year the assessee had purchased fabrics of various brands at a higher price and sold the same brand of fabric at much lower price. The AO further observed that there were some instances that immediately after selling a particular brand of fabric at a lower price than it was purchased, the same brand of fabric was again purchased by the assessee company at a much higher amount in comparison to the selling price.

Held that, the quantity of fabrics purchased were not sold in the same lot on the very same day and that there were instances that the purchases and sales were made on the same day but the sales made cannot be linked to the purchase made on the very same day inasmuch as the assessee was also having stock out of the purchases made earlier - It was not in dispute that all the purchases and sales were supported by vouchers and bills issued by the respective parties, who were Income Tax payees and that all the transactions of payments were made by account payee cheques.. The AO had no-where pointed out or brought any material on record to show and establish that the money paid by the assessee towards purchase of goods had flowed back to the assessee or money received by the assessee on account of sales made by the assessee has been given back to the assessee's purchaser. AO never alldged that the goods purchased and sold were not physically received or delivered by the assessee – Held therefore, no enquiry was made by the AO from the respective parties and that he had has not pointed out any discrepancy or irregularity in the documents or evidence produced by the assessee except by raising presumptions that no prudent business-man would indulge into series of transactions of purchases and sales resulting into loss to the assessee. Also held that the CIT(A) upheld AO's order only on preponderance of probabilities. :DELHI ITAT;

2008-TIOL-642-ITAT-BANG.pdf

Wep Peripherals Ltd Vs ACIT, Bangalore (Dated: November 9, 2008 )

Income Tax - Disallowance of Club membership fee - Assessee  engaged in the business of manufacturing of computer printers, UPS and Electronic typewriter & Modems, etc. - After the return being processed and refund issued, scrutiny assessment was completed u/s. 143(3) - AO  and CIT(A) disallow payment of Club membership fee of Rs. 22,50,000 - Held, in the present case it is very important to scrutinize the nature of the Club Membership and since details, documents, and relevant information are not before the Court, matter remitted back to AO to conduct proper enquiry and pass appropriate order in the light of the Judicial Decisions and as per sections 28, 29 & 145 of the Act. : BANGALORE ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-08-ARA-CX.pdf + royal energy story.pdf

M/s Royal Energy Ltd (Dated: December 11, 2008 )

The product manufactured by blending bio-diesel and petro-diesel falls under the Tariff Heading No. 3824 9090 of the Central Excise tariff – process amounts to manufacture – The word ‘manufacture' used as a verb is generally understood to mean as “bringing into existence a new substance” and does not mean merely “to produce some change in a substance, however minor in consequence the change may be.”. In the process of blending, both pure bio-diesel and petro-diesel lose their individual identities and a new product emerges. The proposed bio-diesel blend would be a product commercially different from its parent compounds in chemical composition, characteristics and use. It will not have only methyl ester or only hydrocarbons, but will contain both the compounds. Whereas petro-diesel is classifiable under Chapter 27 and pure bio-diesel classifiable under Chapter 29, this blend is classifiable under Chapter 38. The bio-diesel blend would appropriately come under CETH No. 38249090 in view of HSN Explanatory Note in relation to this Chapter.

Exempted under Notification 4/2007:- the notification intends to exempt what people commonly refer to as biodiesel, which is both pure bio-diesel and its mixtures. The notification itself has adopted a common parlance test instead of chemical composition test. So long as one of the main ingredients remains pure bio-diesel, it satisfies the test laid down in S.No.53-A of the notification. In view of the clear words of the notification, there is no need to invoke the rules of interpretation. The above blend is fully exempt from excise duty under Notification No. 4/2006-Central Excise dated 1.3.2006, as amended by Notification No. 4/2007-Central Excise dated 1.3.2007. : ADVANCE RULING AUTHORITY;

2008-TIOL-2099-CESTAT-BANG.pdf

Hindustan Coca Cola Beverages Pvt Ltd Vs CC & CCE, Visakhapatnam (Dated: August 1, 2008)

Central Excise – Valuation – When beverage syrup not marketable and excisable and aerated water produced only at vending machine – Value of CO 2 procured separately for vending machines not includible in value of beverage syrup – No merit in impugned orders – Liable to be set aside : BANGALORE CESTAT;

2008-TIOL-2098-CESTAT-MAD.pdf

CCE, Pondicherry Vs Gem Spinners India Ltd (Dated: October 3, 2008)

Central Excise – 100% EOU – refund – duty paid on twice on the returned goods – refund cannot be denied on the ground that rule 16 of the Central Excise Rules is not applicable to the EOUs when Section 11 B does not discriminate between the EOUs and DTA units. : CHENNAI CESTAT;

2008-TIOL-2097-CESTAT-MAD.pdf

CCE, Mysore Vs M/s Anurag Foods & Appliances Ltd (Dated: September 4, 2008)

Central Excise – classification – “My coffee” and “My tea” are classifiable under CSH 2101.10 and 2101.20 respectively – Classification by the Commissioner (Appeals) under 2108.99 set aside as the specific entry has to be preferred to residuary entry. : CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-2105-CESTAT-AHM.pdf + turnkey story.pdf

CCE, Vadodara Vs M/s Ishikawajima-Harima-Heavy Ind Co Ltd (Dated: November 25, 2008)

Turnkey project cannot be bifurcated so as to hold that a part of the contract would fall under category of Engineering Service, leviable to Service Tax

Tribunal's decision in M/s Daelim Industrial Co. Ltd. Vs. CCE Vadodara [ 2003-TIOL-110-CESTAT-DEL ], as upheld by the Supreme Court relied upon. Larger Bench decision in CCE Raigad Vs. Indian Oil Tanking Ltd. ( 2008-TIOL-1056-CESTAT-MUM-LB ) referred. : AHMEDABAD CESTAT;

2008-TIOL-2104-CESTAT-AHM.pdf + st work story.pdf

M/s Larsen & Toubro Ltd Vs CCE, Vadodara (Dated: November 19, 2008)

Service Tax - Can a works contract be vivisected and service portion taxed – Matter referred to Third Member: Whether the contracts can be held to be divisible and therefore service tax can be levied on the services part as held by Member(Technical) or whether the contracts are to be held as not divisible and therefore not liable to service tax as held by Member(Judicial)?: Whether extended period can be invoked as held by Member(Technical).: Whether penalties have to be imposed as held by Member(Technical) or not? : AHMEDABAD CESTAT;

2008-TIOL-2103-CESTAT-DEL.pdf

M/s Bharat Aluminium Co Ltd Vs CCE, Raipur (Dated: November 19, 2008)

ST - Service recipient - assessee avails engineering consultancy service from non-resident agency - Revenue demands tax - Commissioner(A) holds no tax is leviable as the service provider has no office in India and the tax cannot be demanded from the recipient - In view of the Tribunal's Larger Bench decision in Hindustan Zinc 2008-TIOL-1149-CESTAT-Del-LB , the assessee's appeal allowed :DELHI CESTAT;

2008-TIOL-2102-CESTAT-BANG.pdf

M/s ABS India Ltd Vs CST, Bangalore (Dated: August 5, 2008)

Service tax – Commission received for booking orders for sale of goods manufactured by Singapore subsidiary – When recipient a Singapore company and benefit of service derived only by them service to be construed as delivered outside India - Service qualifies as export and service tax paid available as refund – Impugned order set aside : BANGALORE CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft08cir048.pdf

Import of Trucks/Tippers/Dumpers etc under EPCG Scheme;

CASE LAWS

2008-TIOL-235-SC-CUS.pdf + sc story.pdf

Sunita Devi Singhania Hospital Trust Vs UoI (Dated: November 17, 2008)

CESTAT rejects ROM application filed in pursuant to Supreme Court direction – Tribunal has inherent power of recalling its own order:- It is true that the period of limitation specified in terms of Sub-Section (2) of Section 129(B) of the Customs Act is required to be observed but the Tribunal failed to notice that it has inherent power of recalling its own order if sufficient cause is shown therefor . The principles of natural justice, which in a case of this nature, in our opinion, envisage that a mistake committed by the Tribunal in not noticing the facts involved in the appeal which would attract the ancillary and/or incidental power of the Tribunal necessary to discharge its functions effectively for the purpose of doing justice between the parties, were required to be complied with.: SUPREME COURT ;

2008-TIOL-2101-CESTAT-BANG.pdf

M/s Indian Rayon And Industries Ltd Vs CCE, Bangalore (Dated: June 30, 2008)

Customs – credit on the duty already paid on the imported goods – when the assessee did not produce relevant evidence to substantiate their claim of cenvat credit, before confirming the duty,  the Commissioner should call for a report from the jurisdictional officer about liability of cenvat credit and adjudicate the matter – matter remanded for denovo : BANGALORE CESTAT;

2008-TIOL-2100-CESTAT-MAD.pdf

M/s Rallis India Ltd Vs CC, Chennai (Dated: August 21, 2008)

Customs – valuation – enhancement of value based on contemporaneous imports - All the 7 cases of contemporaneous imports at higher prices taken by the revenue were of goods shipped prior to the import of impugned goods - goods imported by the appellants are liable to be assessed to duty on the basis of the value declared by them. : CHENNAI CESTAT;