CBI arrests its own DSP - Fence eating the Crop? (See 'DDT')

Justice Barin Ghosh appointed as CJ of JK High Court; Addl Judges appointed for Guwahati and Kerala HCs;

Customs classification of combined refrigerator freezer with separate external doors: CBEC issues clarification for extending benefit of exemption;

Procedure relating to sanction and pre-audit of refund claims- regarding;

Karnataka assembly bypolls: BJP wins 6 of 8 and gains majority;

Govt plans to launch 3G Spectrum auction by Jan-end;

Petro Minister hints at further cut in fuel prices;

Broadband subscribers cross 5.3 million-mark in Nov; 10.4 mn wiereless subscribers added in Nov ;

ddt 30 Dec.pdf

Postings/transfers to serve the Department's need rather than the individual's desire - CBDT;

stgst.pdf

Impact of SC ruling on VAT and Service Tax on works contractors;

2008-TIOL-665-HC-DEL-FEMA.pdf + cbi story.pdf

Aditya Khanna Vs Regional Passport Officer Passport Authority(Dated : December 19,2008)

Oil for Food Scam – CBI directed to return passport – right to travel abroad is a fundamental right - an order which infringes a fundamental freedom and is passed in violation of audi alteram partem rule is a nullity: It is evident that as a result of impounding, the passport does not cease to exist. Only its possession and custody changes hand and it is placed in the hands of the authorities stipulated under the statute. So far as revocation is concerned, its effect is as if the document had not been granted or issued and it is rendered non est .

The right to travel abroad being a fundamental right and part of the personal liberty of the citizen has been reiterated in several pronouncements of the Supreme Court. The Passport Act, 1967 empowers the authorities named therein to curtail such rights.

Natural justice is another name for commonsense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a commonsense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form.

Even executive authorities when taking administrative action which involves any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done. They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness. They have to act in a manner which is patently impartial and meets the requirements of natural justice.

It has been repeatedly held that an order which infringes a fundamental freedom and is passed in violation of audi alteram partem rule is a nullity. : DELHI HIGH COURT;

vacancies.pdf

Kolkata DRI looking for SIOs;

mbuzz1315.pdf

Justice Barin Ghosh appointed as CJ of JK High Court; Addl Judges appointed for Guwahati and Kerala HCs;

cbdt_transfer.pdf

Postings/transfers to serve the Department's need rather than the individual's desire - CBDT;

CASE LAWS

2008-TIOL-664-HC-DEL-IT.pdf + dharampal story.pdf

CIT, Delhi Vs M/s Dharam Pal Prem Chand Ltd (Dated : November 27, 2008 8)

Income tax - Sec 80-IB benefits - assessee is a manufacturer of chewing tobacco and kiwam - has one of the units in North-East - govt notifies 10 years excise duty holiday for N-E - assessee pays excise duty on clearances from its bonded warehouse and claims the same as refund in the succeeding month - claims Sec 80IB benefits on such excise duty refund - AO disallows on the ground that such refund cannot be said to be 'derived from industrial undertaking' - CIT(A) and Tribunal disagree with the AO - Held, since there is a direct nexus between the refund and the industrial activity, the assessee cannot be denied benefits. The language used in Sec 80-IB is 'profit and gains derived from any business' whereas it is 'profits and gains derived from an industrial undertaking' in other sections like 80HH, 80I, 80IA and 80E. In other words, for Sec 80-IB, the test of proximity - the direct nexus with the industrial activity is not inevitable for claiming benefits. : DELHI HIGH COURT;

2008-TIOL-663-HC-DEL-IT.pdf

CIT, Delhi Vs Samir Bio-Tech Pvt Ltd (Dated : December 4, 2008)

Income tax - Sec 68 - AO makes addition for share application money - Tribunal deletes it - Held, if the identity of the subscribers stands established and it is also a fact that they have shown the said amounts in their audited balance sheets and have also filed returns before the Income Tax Authorities, there is nothing for the Revenue to reject the same - Revenue's appeal dismissed : DELHI HIGH COURT;

2008-TIOL-662-HC-P&H-IT.pdf

CIT, Chandigarh Vs M/s Anand Affiliates (Dated : December 9, 2008)

Income Tax - Sec 80IA benefits - assessee manufactures auto filter elements which are in turn consumed in manufacture of auto filters - AO disallows benefits on the ground that the process undertaken by the assessee does not result in a commercially known and distinct product - Tribunal allows assessee's appeal - Held, most widely-accepted test to determine whether a process amounts to manufacture or production is that a new and distinct product should be produced. Since the Tribunal has found that a distinctive product with its character and application has emerged, Revenue has no case - Appeal dismissed : PUNJAB & HARYANA HIGH COURT;

2008-TIOL-661-HC-P&H-IT.pdf

CIT, Amritsar Vs M/s Partap Steel Rolling Mills Pvt Ltd (Dated : December 17, 2008)

Income tax - depreciation u/s 32 - assessee claims 15% rate by treating rolling mills and furnances as 'machine tools' - AO treats them as part of plant and machinery - assessee seeks order in its favour on the basis of earlier order of the High Court - Revenue refers to old Appendix I which refers to rule 5 of the Income Tax Rules, 1962 and lays down the rate of depreciation under entry III and the rate applicable in the relevant year was 10% - held, although the Revenue has a point in its case but since the tax effect is less than the Board Circular, the Revenue's appeal dismissed : PUNJAB & HARYANA HIGH COURT;

2008-TIOL-660-HC-P&H-IT.pdf

M/s Shree Ganpati Embroidery Private Limited Vs CIT, Amritsar (Dated : November 10, 2008)

Income tax - Survy u/s 133A - Revenue finds excess stock outside the books of accounts - AO rejects books of account and made best judgement assessment - CIT(A) upholds assessee's plea but Tribunal agrees with the AO - Held, once it is found that sales were done outside the book of accounts and true income cannot be reflected by the books, Tribunal rightly rejected the appeal - No substantial question of law involved - Assessee's appeal dismissed : PUNJAB & HARYANA HIGH COURT;

CENTRAL EXCISE SECTION

2008-TIOL-2147-CESTAT-MUM.pdf + Aura Oil Story.pdf

Aura Oil Industries Vs CCE, Mumbai (Dated: December 11, 2008)

Section 4A of CEA'44 - Soap cakes could be easily detached without mutilating individual packs, MRP on individual cakes was not scored off and no indication on individual packs that they are for sale as a pack of three – Duty to be discharged on MRP of combined pack – Tribunal.

Tribunal's observations -

++ The issue involved in these cases is whether a pack of three soaps having individual MRP (of Rs.12/-) printed on them but secured by a band indicating that three soaps are for sale for MRP of Rs.24/-, are to be assessed accordingly or on MRP indicated on individual pack.

++ We note that learned Counsel is not able produce the actual pack which is in dispute for the reason that the issue being very old, assessee has no packs left with them.

++ In view of this we would decide the issue based on the records and findings of the lower authorities.

++ We find that adjudicating authority had seen the pack of soap cakes secured by a band .

++ It is also on record that when the said soap cakes were detached from the band it could be done easily without mutilating the individual packs .

++ It is also undisputed that MRP printed on the individual soap cakes was not mutilated nor was there any indication on individual soap cake that they are for sale as a pack of three soaps .

CBEC Circular dated 28.10.2002 [paragraph 4] covers situation like this.

In the absence of any contrary evidence to the factual findings of the adjudicating authority we find that the appellant has not made out a case.

The orders of the lower authority were correct and did not require any interference.

Appeals of the assessee rejected. Cross objections of Revenue in support of impugned orders disposed of. : MUMBAI CESTAT;

2008-TIOL-2146-CESTAT-DEL.pdf

CCE, Jaipur Vs Hindustan Zinc Ltd (Dated: July 16, 2008)

Central Excise - One Commissioner wearing two hats by holding additional charge cannot be regarded as a Committee of two Commissioners - Such authorisation to file an appeal is illegal and defeats the legislative intent – Appeals not maintainable : DELHI CESTAT;

2008-TIOL-2145-CESTAT-BANG.pdf

M/s Hi-Tech Auto Craft Vs CCE, Cochin (Dated: June 19, 2008)

Central Excise – Body building on duty paid chassis supplied by others without availing CENVAT credit on chassis and other inputs eligible for excise exemption under S. No. 212 of Notification 6/2002-CE – Impugned orders set aside : BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-2143-CESTAT-DEL.pdf

M/s Anant Spinning Mills Vs CCE, Bhopal (Dated: November 12, 2008)

Service Tax - Agreement entered with overseas parties (agents) with a view to solicit orders from the overseas market in China, Japan, Hong Kong, Korea, Indonesia, Thailand etc. – Agents paid commission - Such offshore services are liable for tax w.e.f. 18-4-2006 consequent upon insertion of Section 66A, but for earlier period the same will not be so.

Service Tax Circular No.36/4/01 dt. 8-10-2001 holds that service provided beyond the territorial waters will not attract service tax. This circular will be relevant till the amendment brought out in service tax laws by insertion of Section 66A w.e.f. 18-4-2006. Therefore, the appellant's contention that the demand on services relating to identified offshore services cannot be subjected to service tax during the relevant/period is acceptable.

Contention that Larger Bench in Hindustan Zinc Ltd. ( 2008-TIOL-1149-CESTAT-DEL-LB). has not decided the issue of service tax per se is acceptable as in para 15, it has been clearly held that - " there being no dispute about the nature of the service in question ........... reference to Explanation would appear to be misplaced ."

Taxability of offshore services has been dealt with by the Tribunal in the case of Foster Wheeler Energy Ltd. vs. C.C.E. & Cus., Vadodara II ( 2007-TIOL-785-CESTAT-AHM). Holding that chargeability of tax on such offshore services have been created by insertion of Section 66A in the Finance Act, 1994  w.e.f 18.04.2006. : DELHI CESTAT;

2008-TIOL-2142-CESTAT-MUM.pdf

M/s Credentials Vs CCE, Pune (Dated: October 22, 2008)

ST - Business Auxiliary Service - Assessee provides verification service of information furnished for home loan/credit card etc - Revenue for taxing it under BAS from 1.7.2003 - In view of Tribunal's decision in S R Kalyanakrishnan where such a service has been held as Business Support Service w.e.f 1.5.2006, waiver from pre-deposit granted : MUMBAI CESTAT;

2008-TIOL-2141-CESTAT-MAD.pdf

M/s Faithful Security Services Vs CCE (ST), Coimbatore (Dated: August 1, 2008)

Service tax – Security services – the service tax due was paid before the issue of Show Cause Notice – penalty imposed under Section 76 is reduced to Rupees two lakhs - the penalty imposed under Section 78 of the Act is set aside – demand of interest is sustained. : CHENNAI CESTAT;

2008-TIOL-2140-CESTAT-AHM.pdf

CCE & CC, Vadodara-1 Vs M/s M A Menon & Co (Dated: November 18, 2008)

ST - Business Auxiliary Service - assessee is a commission agent - pays tax under BAS - later claims exemption under Notification No 13/2003-ST and files refund claim - Revenue rejects it on the ground that the assessee does marketing and promotion of the goods apart from booking of ordes and payment follow ups - since the commission is linked to actual sale and realisation of payments, the assessee is eligible to avail exemption : AHMEDABAD CESTAT;

CUSTOMS SECTION

CIRCULAR

cuscir08_23.pdf

Customs classification of combined refrigerator freezer with separate external doors: CBEC issues clarification for extending benefit of exemption;

cuscir08_22.pdf

Procedure relating to sanction and pre-audit of refund claims- regarding;

CASE LAWS

2008-TIOL-2144-CESTAT-BANG.pdf

M/s Bank Of Nova Scotia Vs CCE, Bangalore (Dated: July 3, 2008)

Customs – Import of gold duty free by nominated agency and export of gold products by exporter after procurement of gold on loan basis – Documentary evidence furnished to customs accepted and bond cancelled – Impugned goods not liable for confiscation - No violation of EXIM policy or Customs provisions by Nominated agency – Non-realization of export proceeds by exporter attracts provisions of FEMA/RBI regulations and no jurisdiction for Customs authorities to initiate action under Customs Act – Exporter and Nominated agency not liable for any duty and penalty : BANGALORE CESTAT;