Labour Ministry Study reveals above five lakh lost jobs between Oct - Dec, 2008 due to recession;

MoS(R) asks Income Tax to gear up to meet sophisticated methods of tax evasion; releases 'Let us Share';

Growing incidence of call drops: TRAI writes to all cellular mobile providers;

India, Maldives to work together to tackle sea-borne terrorism;

Vajpayee admitted to AIIMS; condition stable, says Doc;

AGM of Delhi MTNL caught red-handed by CBI while accepting bribe of Rs 25000/-;

ddt 4 Feb.pdf

Committee Of Chief Commissioners – CBEC Coolly Corrects a Blunder;

spl down.pdf

Administrative Setup for handling Anti-Dumping Cases in Certain Countries;

mbuzz0118.pdf

MoS(R) asks Income Tax to gear up to meet sophisticated methods of tax evasion; releases 'Let us Share';

mbuzz0117.pdf

India, Maldives to work together to tackle sea-borne terrorism;

mbuzz0116.pdf

Need to create a balance in Indo-French Bilateral Trade: Kamal Nath;

mbuzz0115.pdf

Growing incidence of call drops: TRAI writes to all cellular mobile providers;

2009-TIOL-62-HC-MAD-IT.pdf + it story.pdf

M/s Ansaldo Energia SPA Vs ITAT, Chennai (Dated: January 12, 2009)

International Taxation - if a contract is composite in spite of the apparent demarcation into separate parts, the mere fact that for off-shore supply the title passed outside India alone will not decide taxability – IHHI does hold that since in that case the entire transaction took place outside India no taxable event took place in India, but it said so after looking at the entire contract and the terms of the contract, necessary to determine whether all parts of the offshore transaction took place offshore and it did so after looking into whether the PE in India had anything to do with the offshore supply and also whether the contract was split up or a composite contract. It was in that context in IHHI case, the Supreme Court had said that all parts of the transaction in question that is transfer of properties in goods as well as payment were carried on outside the Indian soil and therefore, the transaction could not have been taxed in India and that, even though the contract was signed in India that is of no material consequence since all activities in connection with off-shore supply were outside India. The Supreme Court also held that the contract is not a complete one which has to be read as a whole and not in parts. It also held that the PE had no role to play in the transaction. So it was not only the situs of transfer of title which was the sole criterion to determine taxability. Therefore, what follows is, if a contract is a composite contract in spite of the apparent demarcation into separate parts, the mere fact that for off-shore supply the title passed outside India alone will not decide taxability. In IHHI , both the title and consideration passed outside the taxable territory and very importantly, it was found that it was not a composite contract, nor was there any involvement of the PE in the transaction. It was further factually found that the contract was a divisible one segregating the supply segment and service segment, and that by agreement the parties had decided when title passed.

"Business connection" includes close, real, intimate relationship and commonness of interest between the non-resident and the Indian person :- The word "business connection" is too wide to admit any precise definition. From the various judgments of the Supreme Court the Court found that, it includes close, real, intimate relationship and commonness of interest between the non-resident and the Indian person and where there is control of management or finances or substantial holding of equity shares or sharing of profits by the non-resident of the Indian person, the requirement of principle (iii), i.e., the existence of close, real and intimate relationship and commonness between the non-resident and Indian person, is fulfilled. Therefore, it is not just where the title passed, but also whether there was a crucial and intimate relation, whether there was an element of continuity between the business of the non-resident and the activity within the taxable territories, such transaction not being stray or isolated.:BOMBAY HIGH COURT;

2009-TIOL-61-HC-HP-IT.pdf

HP State Industrial Development Corporation Ltd Vs CIT, Shimla (Dated: December 3, 2008)

Income tax - assessee is a credit institution - claims exclusion of interest earned on refinancing operations from taxable interest - AO disallows - held, as decided by the Kerala HC, the disputed amount of interest is nothing but rediscounting and cannot form part of interest income chargeable under the provisions of Interest Tax Act - Assessee's appeal allowed:HIMACHAL PRADESH HIGH COURT;

2009-TIOL-60-HC-MUM-IT.pdf

M/s KEC Internation Ltd Vs CIT, Bombay (Dated: January 13, 2009)

Income tax - Sec 35B - assessee is into export business - claims weighted deduction for interest paid to a bank for 'packing credit loan' - held, the expression ''packing credit'' indicates that it is a loan for purpose of purchase, processing and packing of goods. That means that the loan was essentially for activities carried out within India whereas Section 35B(1)(9b)(viii) operates only when there is a performance of services outside India. Mere obtaining of a packing credit loan or payment of interest thereon in India cannot be said to entail the performance of any service outside India. The said expenditure would therefore, not be deductible - Assessee's appeal dismissed:BOMBAY HIGH COURT;

2009-TIOL-59-HC-MUM-WT.pdf

CWT, Bombay Vs Smt Krishna Kapoor (Dated: January 16, 2009)

Wealth tax - exemption u/s 5(1)(v) - Assessee holds copyright in a film - AO makes additions - Tribunal deletes the same by holding that the right in the form of copyright is exempted - held, there is no dispute that late Raj Kapoor was the owner of the copyright , now represented by the respondent and once it is established that the copyright holder was late Raj Kapoor, Sec 5(v) of the Wealth Tax Act as amended will be applicable - deletion upheld and Revenue's appeal dismissed :BOMBAY HIGH COURT;

2009-TIOL-58-HC-DEL-IT.pdf

CIT Vs Samtel Color Limited (Dated: January 30, 2009)

Income tax - Sec 37 - assessee pays lumpsum amount to obtain corporate membership of clubs - AO holds it towards capital account and disallows it on the ground that it had no nexus with the business of the assessee - CIT(A) disallows 20% of it and directs the AO to allow the rest - Tribunal allows the assessee's appeal - held, the Tribunal rightly allowed it as revenue expenditure as it was wholly incurred for business purpose by the assessee and not for the Directors of employees who can be substituted any time by the assessee, and secondly, it cannot be held to be capital in nature as it does not contribute to the profit-making apparatus of the assessee but only to smooth running of the business of the entity - Revenue's appeal dismissed:DELHI HIGH COURT;

SERVICE TAX SECTION

NOTIFICATION

stnot09_007.pdf

CBEC notifies Service Tax Return Preparer Scheme, 2009 on CBDT model;

CASE LAWS

2009-TIOL-210-CESTAT-MUM.pdf + st credit story.pdf

CCE & CC, Aurangabad Vs M/s Endurance Systems India Pvt Ltd (Dated: December 11, 2008)

Cenvat Credit - Service Tax paid on Group Mediclaim Policy and Workmen's Accident policy is available as credit as they form part of manufacturing cost as per CAS-4, para 5.2 – Tribunal.

Larger Bench decision in GTC Industries 2008-TIOL-1634-CESTAT-MUM-LB followed.:MUMBAI CESTAT;

2009-TIOL-209-CESTAT-DEL.pdf

M/s Flex Industries Ltd Vs CCE, Noida (Dated: January 7, 2009)

ST - assessee makes payment to non-resident commission agent - Revenue raises demand - tax with interest paid but demand is disputed in view of the Tribunal's decision in the case of Foster Wheeler Energy Ltd - Stay granted and pre-deposit waived:DELHI CESTAT;

2009-TIOL-208-CESTAT-AHM.pdf

M/s U B Engineering Ltd Vs CCE, Rajkot (Dated: January 1, 2009)

ST - delay in payment of service tax - tax with interest paid - penalty under Sec 76 imposed - assessee argues tax with interest was paid on its own and therefore the show cause notice in terms of Sec 73(3) is not sustainable - since Sec 73(4) makes it clear that unless there is an intention to evade tax, notice need not be issued, and if SCN cannot be issued for recovery of tax, the question of SCN for penalty does not arise - prima facie the assessee has made a strong case - waiver of pre-deposit granted:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-63-HC-P&H-CX.pdf + appeal story.pdf

CCE, Gurgaon Vs M/s Neel Metal Products Ltd (Dated: January 7, 2009)

Central Excise – CENVAT Credit cannot be denied on the ground that activities undertaken by the supplier of inputs did not amount to manufacture – Revenue appeal dismissed - the goods supplied to the assessee were covered under Chapter Heading No. 7318 and 7211 of the first schedule appended to the Act. The assessee could not have got the classification of the goods changed. The fact that the duty was paid on those inputs is evident from the invoices indicating the payment of duty for which credit has been taken. It appears that the goods were manufactured prior to 2.3.2005 and the circular dated 2.3.2005 was not to apply in any case. The view taken by the Tribunal does not suffer from any legal infirmity warranting admission of the appeal because no question of law would arise. The matter seems to be covered in favour of the assessee by the judgment of Hon'ble the Supreme Court in the case of Sarvesh Refractories (P) Ltd. There is, thus, no merit in the appeal.: PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-207-CESTAT-MUM.pdf

Shri Sanjay Bahadur Vs CCE, Belapur (Dated: November 4, 2008)

Central Excise – Rule 10 of Excise Valuation Rules invokable only when entire production sold to or through an inter-connected undertaking, demand of duty and imposition of penalty on this count not sustainable – Assistant Director (Cost ), a professional Cost Accountant - Department at liberty to requisition his services in cases of doubt in valuation – Appellant not having questioned the report of AD (Cost) as prejudiced or biased, same to be accepted – When each costing element of final product established as substantially on lower side by AD (Cost) and not contested by appellant, differential value flowing as additional consideration liable to duty – When investigations and documentary evidences prove unequivocally that there is suppression of true assessable value, demand not hit by limitation – When corrigendum to O-I-O does not alter or change the complexion of order does not warrant review – Demand of differential duty of Rs. 90 lakhs with interest and penalty upheld – Imposition of penalty under Sec. 11AC does not warrant imposition of penalty under Rule 25 of CER - Impugned order modified and upheld:MUMBAI CESTAT;

2009-TIOL-206-CESTAT-MUM.pdf

M/s Shrishti Impex Pvt Ltd Vs CCE, Thane I (Dated: November 11, 2008)

Central Excise – Non-accountal of goods procured duty free and diversion into DTA - Once goods are delivered to consignees, payments received and AR3s signed by authorized signatories of consignees, consignors are absolved of any liability to pay duty - Prima-facie duty payable by consignee - When LOP is cancelled by Development Commissioner and confirmed that export obligations were not fulfilled conditions of Notifications under which indigenous/imported goods are procured duty free violated – Request for cross-examination of witnesses routine in nature, not justified – When fraud established by Debt Recovery Tribunal with regard to claim of ownership of assets, plea for financial hardship uncalled for – Pre-deposit of Rs. 15 crores ordered – 25% of penal amounts ordered as pre-deposit on other accomplices:MUMBAI CESTAT;

2009-TIOL-205-CESTAT-MAD.pdf

CCE, Coimbatore Vs M/s Lakshmi Mills Co Ltd (Dated: December 16, 2008)

Central Excise – refund – bar of unjust enrichment is applicable to captive consumption also – matter remanded to examine whether the assessees have unjustly enriched themselves.:CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_011.pdf

Govt reduces Customs duty on poppy seeds from 40% to 20% ;

CASE LAWS

2009-TIOL-204-CESTAT-MAD.pdf

M/s Srinidhi Enterprises Vs CC, Tuticorin (Dated: October 3, 2008)

Customs – import of second hand photocopiers – penalty under Section 112(a) is reduced to 5% of the value of the goods - the decision in Sai Copiers case is a good precedent as the same was sustained by the High Court.: CHENNAI CESTAT;