ACC appoints Rahul Khullar, IAS of 1975 batch, as new Disinvestment Secretary + Mr Vivek Mehrotra goes to Ministry of Minority Affairs as Secy;

Datla Hanumanta Raju elected as President of Institute of Company Secretaries of India;

EC to set ball of Parliamentary polls rolling from early Feb;

Kamal Nath says India continues to be magnet for FDI inflows;

ICICI Lombard General Insurance Co Ltd is not a 'public authority' - No question of furnishing any information under RTI Act: CIC;

Cabinet okays proposal to impose President's rule in Jharkhand;

PM says difficult period to continue in 2009-10; very limited space for fiscal measures now;

Out of 20 sanctioned, eight Navodaya Vidyalayas are operational now;

PM says Satyam fraud is a blot on India's corporate image;

ddt 19 Jan.pdf

Notification 45/2005- Cus and SEZ clearances;

tiol top guest.pdf

An insight into Raju's fraudulent acumen!

guest column.pdf

Penalty under Income Tax Act: A case of punishing the robbed and not the robber!

cic story.pdf

Movement of persons through Chennai Airport is a personal information and cannot be parted with under RTI: CIC;

mbuzz0064.pdf

EC to set ball of Parliamentary polls rollig from early Feb;

mbuzz0063.pdf

India continues to be magnet for FDI funds: Kamal Nath;

mbuzz0062.pdf

Productivity of hydrocarbon sources of energy: India should try to emulate Japan, says Petro Secy;

mbuzz0061.pdf

Much scope for improvement in bilateral ties with Lanka: Nath;

mbuzz0060.pdf

ICICI Lombard General Insurance Co Ltd is not a 'public authority' - No question of furnishing any information under RTI Act: CIC;

mbuzz0059.pdf

PM says difficult time to continue in 2008-09; very limited space for fiscal measures now;

mbuzz0058.pdf

Out of 20 sanctioned, eight Navodaya Vidyalayas are operational now;

2009-TIOL-31-HC-MAD-IT.pdf

M/s P R P Granites Vs ACIT, Chennai (Dated: December 5, 2008)

Income tax - Sec 10B - assessee is 100% EoU - engaged in production of polished and dressed granite and exports of the same - claims deduction u/s 80HHC for early part of FY and also under Sec 10 B for remaining part of FY when it was granted licence to operate as EoU - AO disallows deduction u/s 10B on the ground that the EoU unit was set up by splitting up old unit and shifting of old machineries and the same exceeds 20% of the total value of the machinery used in the business - Held, since one arm of the Govt sanctioned the licence to the assesee to operate as EoU the other arm cannot deny benefits envisaged under the scheme. Secondly, the assessee's argument that their investment into machinery and fresh granite mines constituted more than 80% was not not considered by the AO - matter remanded - Assessee's appeal allowed:MADRAS HIGH COURT;

2009-TIOL-45-ITAT-MUM.pdf + pipeline story.pdf

DCIT, Mumbai Vs M/s Pipeline Engineering GMBH (Dated: December 19, 2008)

Income tax - Indo-German DTAA - assessee provides consultancy through PE in India - claims deduction of expenses u/s 44DA - Application of Sec 44DA is not retrospective; Even under DTAA profit of PE is subject to domestic laws and deduction of expenses u/s 44D, a non-obstante provision, is not allowed

A new scheme of taxation by inserting section 44DA in the Statue book by Finance Act, 2003 was introduced effective from 01.04.2004. Prior to insertion of Section 44DA, the non-resident companies were required to pay the lower rate of tax of 20% on the gross receipt by way of royalties or fees for technical services as per the provisions of section 115A(1)(b) of the Act.

After insertion of section 44DA, non-resident companies are now required to pay tax on the net income (after allowing deduction in respect of expenditure incurred by PE in India) but at a higher rate of tax as prescribed by Finance Act, for the concerned year. This is apparent from the provisions of section 115A(1)(b) of the Act as amended by Finance Act, 2003. By virtue of this amendment, income by way of royalties or fees for technical services referred to in section 44DA has been excluded from the purview of section 115A(1)(b).

The provisions of section 44DA cannot be said to be clarificatory. The provisions of section 44DA of the Act are to be construed prospectively and cannot be given retrospective effect.

Even under DTAA, the case is covered under Article 7 and the key words ‘according to the domestic law of the contracting state in which the PE is situated' will decide the taxability of the income and since Sec 44D is a non-obstante provision which overrides the provisions contained in Sec 28 to 44C and the deductions for expenses cannot be allowed u/s 44D

Assessee's appeal dismissed :MUMBAI ITAT;

2009-TIOL-44-ITAT-MUM.pdf

ITO, Mumbai Vs M/s Premier Consolidated Capital Trust (I) Ltd (Dated: September 18, 2008)

Income Tax - assessee earns tax-free MTNL bonds - suffers loss on sale of the same - AO disallows the same treating the same as a colourable transaction - CIT(A) allows the appeal - Held, disallowance is justified as the assessee has not offered any explanation on this aspect as to why efforts were not made to recover the loss - Revenue's appeal dismissed:MUMBAI ITAT;

2009-TIOL-43-ITAT-DEL.pdf

ACIT, Gurgaon Vs M/s Roop Rubber Mills (P) Ltd (Dated: September 26, 2008)

Income tax - One of the employees of the assessee-company books bogus purchases which were claimed by the assessee as business expenditure - once embezzlement was detected, the assessee revised its trading account and claimed the same as business loss - AO disallows on the ground that unless police investigation is completed, it cannot be allowed - CIT(A) deletes the disallowance - Held, the assessee can claim deduction only after the loss on account of embezzlement is established and finally becomes irrecoverable as per laws - Revenue's appeal allowed:DELHI ITAT;

2009-TIOL-42-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s Khoday India Ltd (Dated:September 14, 2008)

Income Tax Act – Section 37(1) and section 28 – Held, that an advance, which has been given for acquiring a capital asset or for securing an enduring benefit cannot be considered as a trading loss to be allowable when such advance becomes irrecoverable.

Income Tax Act – Section 10A – Held, that to make the formula prescribed by the statute in section 10A workable, an item, which is not included in the export turnover has to be excluded form the total turnover. Held therefore that whatever is not included in the export turnover cannot be included in the total turnover as total turnover is the sum of export turnover + domestic turnover.

Also held, that it is a will settled Rule of Construction that where the plain literal interpretation of a statutory provision provides a manifestly absurd and unjust result, which could never have been intended by the Legislature, the Court may modify the language used by the Legislature or even do some violence to it, so as to achieve the obvious intention of the Legislature and produce a rational construction:BANGALORE ITAT;

Order 12 of 2009

CBEC issues transfer order of three AC/DCs;

SERVICE TAX SECTION

2009-TIOL-111-CESTAT-DEL.pdf

CCE, Indore Vs M/s Ruchi Soya Industries Ltd (Dated: November 21, 2008)

ST - GTA service - Period 16.11.97 to 1.6.98 - SC decides the issue vide Gujarat Ambuja Cement case and tax was to be deposited within two weeks - assessee does it in 6 weeks but pays tax with interest - Revenue imposes penalty - Penalty not called for and Commissioner(A) order upheld - Revenue's appeal dismissed:DELHI CESTAT;

2009-TIOL-110-CESTAT-DEL.pdf

M/s PT-Education & Training Service Ltd Vs CCE, anpur/Jaipur/Indore & Vice Versa (Dated: December 16, 2008)

ST - Commercial Coaching and Training Service - assessee receives payment before the date the service was notified as taxable and service was provided after notification - merely because the payment was collected in advance before providing the service, it would not wipe off the tax liability - tax is payable and the benefit of cum-tax in respect of the amount realized by the assessee prior to 1.7.2003 to be extended.:DELHI CESTAT;

2009-TIOL-107-CESTAT-DEL.pdf

M/s Hindustan Zinc Ltd Vs CCE, Jaipur (Dated: December 18, 2008)

ST - Consulting Engineer service - assessee files refund claim in view of Larger Bench decision in its own case - Appeal allowed, subject to examination from unjust enrichment angle:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-30-HC-DEL-CX.pdf

CCE, Delhi-I Vs Punjab Stainless Steel (Dated: November 17, 2008)

Central Excise - refund - assessee is into exports business - refund of duty paid on inputs used in manufacture of export goods - as per Customs and Central Excise Duties Drawback Rules, 1995, if the assessee claims drawback he cannot claim refund as it would amount to double benefits - it is upto the assessee to claim either drawback or refund of credit - if he decides for the latter, the refund of credit cannot be disallowed:DELHI HIGH COURT;

2009-TIOL-114-CESTAT-MUM.pdf + ssi story.pdf

Stanlek Engineering P Ltd Vs CCE, Mumbai II (Dated: November 19, 2008)

Availment of exemption in respect of goods covered by SSI Notf 8/98-CE and availment of MODVAT benefit in respect of goods lying outside the purview of the exemption notification is not simultaneous availment of modvat and SSI exemption – Tribunal distinguishes Apex Court decision of Ramesh Foods. [ 2005-TIOL-07-SC-CX ]

Tribunal decision in Nebulae Health Care Ltd. vs. CCE, Chennai [ 2006-TIOL-1380-CESTAT-MAD ] relied upon.:MUMBAI CESTAT;

2009-TIOL-113-CESTAT-MUM.pdf + usha story.pdf

CCE, Pune-II Vs Usha Ispat Industries Ltd (Dated: November 17, 2008)

Commissioner ought to have examined the merits of the case rather than deciding the case on limitation – Tribunal remands matter on Revenue appeal.

Conversion of Iron ore fines to agglomerated iron ore (exempted) for use in blast furnace for production of Pig iron - Sinter plant intended to be set up for this purpose and capital goods imported in December 1996 – January 1997.  50% Credit taken after advent of new rules from 01.04.2000 – machinery could not be installed and put to use due to problems with the erection and installation company – however, balance credit of 50% taken in 2001-2002.  Entire credit sought to be denied alleging that the capital goods are used for manufacture of exempted product. Commissioner confirming the demand of the Cenvat availed during the year 2001-02 thus upholding the allegations leveled to the said extent but dropping the demand seeking reversal of credit taken in 2000-01 saying it is time barred.

Commissioner ought to have, at the outset, examined the basic issue as to whether the capital goods which were allegedly meant for exclusive use for the manufacture of exempted products were eligible for CENVAT credit at all - this procedure was not permissible in law.

Order set aside by allowing appeal and matter remanded to Commissioner for issuing fresh order of adjudication on all relevant issues by following principles of natural justice.

Revenue appeal allowed by way of remand.:MUMBAI CESTAT;

2009-TIOL-112-CESTAT-MAD.pdf

M/s Maschmeijer Aromatics (India) Ltd Vs CCE, Chennai (Dated: December 2, 2008)

Central Excise – CENVAT Credit – inputs received not under prescribed documents – when the transaction was genuine, identity of supplier of inputs is established, document showing duty payment is supported by facts and records of supplier of inputs show that it had purchased duty paid inputs before resale and passed on the credit of duty thereon, credit cannot be denied on procedural issues.:CHENNAI CESTAT;

2009-TIOL-108-CESTAT-MAD.pdf + duty story.pdf

CCE, Chennai vs M/s Hindustan Motors Ltd (Dated: December 11, 2008)

Central Excise – Duty deposited prior to show cause notice – Pre-deposit - Refund – Amount deposited as duty prior to the issue of the show-cause notice is also a pre-deposit and it is only after the final order of the Tribunal was passed on 22.1.2002 that the claim for refund could be considered. Therefore, it is not correct on the part of the Revenue to contend that the refund claim is barred by limitation. Appeal dismissed.:CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-109-CESTAT-MAD.pdf

CC, Chennai Vs M/s Dornier India Medical Systems P Ltd (Dated: December 10, 2008)

Customs – Exemption Notification – As per Notification No. 16/2000-Cus dated 01.03.2000 ‘diode laser' is a medical equipment entitled to the benefit of the said notification. There is nothing in the notification which suggests that ‘diode laser' used in ophthalmology alone are allowed the benefit. Appeal dismissed. ( Para 2):CHENNAI CESTAT;

2009-TIOL-106-CESTAT-MAD.pdf

Dinamalar Vs CC, Chennai (Dated: December 17, 2008)

Customs - Refund – No refund can be claimed without challenging the assessment order . Appeal dismissed.:CHENNAI CESTAT;