Service Tax on Ship-broking Activity - CBEC Clarifies (See 'DDT')

Cadre Review in CBDT - HRD Directorate Sends Questionnaire (See 'DDT')

Customs Duty on certain zinc/copper slag/ash reduced to 5%;

CoS approves six names for Income Tax Settlement Commission: Mr P K Dubey for Delhi; P C Chhotaray for Mumbai; A R Malhotra & A Das for Chennai; Ramji Sinha & M S Rai for Kolkata;

Industries polluting small rivers in States - MPs seek action from Govt;

Centre, Goa State Govt jointly organising e-governance meet in Goa tomorrow;

Pandit Bhimsen Joshi presented Bharat Ratna Award on behalf of President of India;

Disproportionate assets case against Mulayam Singh Yadav: SC reserves order on interim pleas;

ddt 11 Feb.pdf

Import Policy – Carbon Black, Seamless Tubes/Pipes and Bumpers and parts – FREE – DGFT Clarifies;

spl down.pdf

Banning of Chinese toys: Kid's story;

DRI story.pdf

SEZ is beautiful scheme but no Customs to safeguard Laxman Rekha; DRI detects huge gold jewellery diversion case;

mbuzz0146.pdf

Industries polluting small rivers in States - MPs seek action from Govt;

mbuzz0145.pdf

Centre, Goa State Govt jointly organising e-governance meet in Goa tomorrow;

mbuzz0144.pdf

Interpol issues global alert for 85 terrorist suspects wanted by Saudi Arabia;

mbuzz0143.pdf

Backed by USOF BSNL to roll out wire-line broadband to rural India;

mbuzz0142.pdf

Ganga Basin Authority Notification discussed threadbare;

2009-TIOL-68-HC-MUM-IT.pdf

DORR-OLIVER India Ltd Vs CIT, Bombay (Dated: January 20, 2009)

Income tax - assessee transfers its business to a company as a going concern on book value rather than the market value as per Govt instruction - though written down value of assets was more than book value but assessee went by Govt instruction and suffered loss - claims deduction under Sec 32(1) (iii) - AO treats it as capital loss - CIT(A) and Tribunal allow it as terminal loss - held, since the lesser amount of sale price was dictated by the Govt in this case, deduction is permissible under Section 32(1) (iii) - Revenue's appeal dismissed:BOMBAY HIGH COURT;

2009-TIOL-67-HC-RAJ-IT.pdf

CIT Vs Shree Rajasthan Syntex Ltd (Dated: January 12, 2009)

Income tax - assessee makes donation for construction of school building and a sum for the Employees Welfare Fund - claims deduction u/s 37(1) - AO disallows expenditure u/s 40A(9) - held, sinde these are business expenditure they are allowable deduction - Revenue's appeal dismissed: RAJASTHAN HIGH COURT;

2009-TIOL-99-ITAT-DEL.pdf + bg story.pdf

DCIT, Dehradun Vs M/s BG Exploration And Production India Ltd (Dated: December 18, 2008)

Income tax - Sec 44C - assessee is a non-resident, registered in Cayman Islands - enters into a Production Sharing Contract (PSC) with other parties and Govt of India as one of the parties for exploration and exploitation of mineral oil - claims deduction for reimbursement of expenses not to its Head Office but to a third party - AO invokes Sec 44C and disallows - CIT(A) allows the same on the ground that Sec 44C is not applicable to third prty - held, reimbursement of expenses to even third party is caught within the mischief of Head Office expenses inadmissible u/s 44C and the logic for the same is that the AO has no jurisdiction over the HO of the assessee and the expenses claimed cannot be verified - expenses disallowd

However, since the assessee is one of the parties of the PSC which has been held to be a separate tax regime by the Apex Court in the Enron Oil and Gas India Ltd and does not follow the normal accounting standards and also has provisions which do not allow a distinction between a capital and revenue expenditure, Sec 42 renders other provisions inoperative and allow such expenses as deductible. Certain expenses which are inadmissible under the normal business head income are admissible under the PSC which prescribes a separate assessment regime and Sec 44C is not applicable in such a case - Revenue's appeal dismissed:DELHI ITAT;

2009-TIOL-98-ITAT-DEL.pdf

Shri Kapil Dev Vs DCIT, New Delhi (Dated: November 28, 2008)

Income tax - assessee is a cricketer - AO treats his income as professional receipt and declines to grant exemption to his awards and gifts - Assessee claims deduction of expenses like travelling, telephone etc which AO disallows - Held, since the assessee is willing to furnish bills and vochers for the expenses, the matter is remanded for fresh examination:DELHI ITAT;

SERVICE TAX SECTION

ship_broking.pdf

Clarification regarding leviability of service tax on ship broking activity – reg.

CASE LAWS

2009-TIOL-250-CESTAT-DEL.pdf + management story.pdf

M/s Shervani Industrial Syndicate Vs CCE, CC & ST, Allahabad (Dated: January 23, 2009)

ST - advice, consultancy or technical assistance in the working system of client - covered under the category of "Management Consultant" – In the present case, on perusal of the agreement, the Tribunal found that" "Ongoing Technical Service" as indicated in the Schedule to the Agreement is in the nature of assistance, advising guidance, in various manner. Therefore, the appellant was rendering management consultancy in the organisation of M/s Gillete , in the manner of technical advisory service and such service is covered under the category of "Management Consultant" as defined in Section 65(65) of the Act. Therefore, the levy of tax is justified.

When there is scope for difference in interpretation extended period of limitation would not be applicable: there was scope for difference in interpretation and hence for entertaining a view that there was no levy of tax and therefore, the demand of tax for the extended period of limitation would not be applicable. It also noted that the issue involved in this case is the interpretation of the provision of the Finance Act and the penalties are not warranted. Accordingly, the demand of tax for the normal period of limitation is upheld. Penalties are set aside:DELHI CESTAT;

2009-TIOL-249-CESTAT-DEL.pdf

M/s GAP International Sourcing (India) Pvt Ltd Vs CST, Delhi (Dated: January 21, 2009)

ST - Assessee is a subsidiary of a non-resident company - recommends fabrics and undertakes various other support services like screening of vendors and issuing inspection certificates to exports goods on behalf of the parent company - receives payments in convertible currency - Prima facie it is export of services - pre-deposit waiver granted and recovery stayed:DELHI CESTAT;

2009-TIOL-248-CESTAT-DEL.pdf

M/s Paharpur Cooling Towers Ltd Vs CCE, Raipur (Dated: January 9, 2009)

ST - Commercial and Industrial Construction Service - Assessee claims 67% abatement without including the value of freely-supplied material - Revenue raises demand after including the value of Colling Tower parts in the gross amount - Assessee pleads the value of free-supplied materials is already included in the construction part of service and the Revenue's stand of including the value of cooling tower parts is not proper - Prima facie, the assessee has made a strong case - waiver from pre-deposit granted:DELHI CESTAT;

2009-TIOL-247-CESTAT-KOL.pdf

M/s Aakriti Vs CCE & ST, Kolkata (Dated: December 11, 2008)

ST - Interiror Decorator Service - Demand raised - Assessee pays tax with interest - contests imposition of penalty - Since the assessee is a self-employed lady it is a fit case for reducing penalty by invoking Sec 80 - penalty reduced under Sec 76 but confirmed under Sec 77 :KOLKATA CESTAT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular882.pdf

Classification of tea admixture containing rice flour, tapioca, vitamins, etc – regarding.;

CASE LAWS

2009-TIOL-253-CESTAT-MUM.pdf + sandoz story.pdf

M/s Sandoz Pvt Ltd Vs CCE, Belapur (Dated: December 4, 2008)

Duty free raw materials procured by an EOU in terms of notifications 1/95-CE and 53/97-Cus destroyed in a fire accident in the factory – Prima facie , the Customs and Excise duties are payable on these raw materials for non-fulfillment of conditions – Tribunal directs pre-deposit.

Tribunal's observations -

We find that Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of duty for Manufacturing of Excisable Goods) Rules, 2001 provided a procedure to be followed by an EOU claiming the benefit of Notification no. 1/95-CE ibid.

This Rule specifically provided that, if the goods, procured at concessional rate, are not used for the intended purpose, the manufacturer shall be liable to pay an amount equal to the difference between the duty leviable and that already paid, along with interest.

There is an ‘Explanation' to this Rule, which says that the goods lost or destroyed by natural causes or by unavoidable accidents during transport from the place of procurement to the manufacturer's premises or from the manufacturer's premises to the place of procurement or during handling or storage in the manufacturer's premises would not be deemed to have been used for the intended purpose. 

The Bond executed by the EOU also contained a provision which made it obligatory for them to pay duties on the raw materials in the event of breach of conditions of the relevant notifications. 

No prima facie case in favour of the appellants. 

Appellant has already made a deposit of Rs.15 lakhs – Tribunal directs that a further deposit of Rs.15 lakhs be made within a period of four weeks and report compliance.

Stay application disposed of.:MUMBAI CESTAT;

2009-TIOL-252-CESTAT-MAD.pdf

Ennore Foundries Ltd Vs CCE, Chennai-I (Dated: November 19, 2008)

Central Excise – Provisional assessment – Interest – Duty paid suo motu prior to finalization of provisional assessment. Manufacturer is liable to pay interest on the differential amount of duty. ( Para 1) :CHENNAI CESTAT;

2009-TIOL-251-CESTAT-BANG.pdf

M/s Apollo Tyres Ltd Vs CCE & CC, Calicut (Dated: November 9, 2008)

Central Excise – DNTCF manufactured and captively consumed in further manufacture of tyres for ADV classifiable under 5902 – Impugned goods have shelf life, marketable and excisable – Liable to Basic Excise duty & Additional Excise duty – Benefit of Notification No.67/95 not available – CENVAT credit available on inputs used in manufacture of DNTCF – Duty to be recomputed by original authority – Matter remanded for this limited purpose:BANGALORE CESTAT;

CUSTOMS SECTION

CIRCULAR + NOTIFICATION

ctariff09_012.pdf

Customs Duty on certain zinc/copper slag/ash reduced to 5%;

dgft08cir059.pdf

Import Policy – Carbon Black, Seamless Tubes/Pipes and Bumpers and parts – FREE – DGFT Clarifies;

dgft08pn143.pdf

DGFT amends Focus Market Scheme;

CASE LAWS

2009-TIOL-14-SC-NDPS.pdf + ndps story.pdf

Jitendra Panchal Vs IO, NCB (Dated: February 3, 2009)

NDPS – Can a person arrested and tried in USA and who had undergone sentence in USA be again tried in India? – No Double Jeopardy – offences are different :- the offence for which the appellant was convicted in the USA is quite distinct and separate from the offence for which he is being tried in India. The offence for which the appellant was tried in the USA was in respect of a charge of conspiracy to possess a controlled substance with the intention of distributing the same, whereas the appellant is being tried in India for offences relating to the importation of the contraband article from Nepal into India and exporting the same for sale in the USA. While the first part of the charges would attract the provisions of Section 846 read with Section 841 of Title 21 USC Controlled Substances Act, the latter part, being offences under the NDPS Act, 1985, would be triable and punishable in India, having particular regard to the provisions of Sections 3 and 4 of the Indian Penal Code read with Section 3(38) of the General Clauses Act, which has been made applicable in similar cases by virtue of Article 367 of the Constitution. The offences for which the appellant was tried and convicted in the USA and for which he is now being tried in India, are distinct and separate and do not, therefore, attract either the provisions of Section 300(1) of the Code or Article 20(2) of the Constitution.

A person liable by any Indian law to be tried for any offence committed beyond India is to be dealt with under the provisions of the Code, having regard to the fact that the provisions of the Code would also apply to any offence committed by any citizen of India in any place within and beyond India.: SUPREME COURT;

2009-TIOL-246-CESTAT-MAD.pdf

M/s CIBA India Ltd Vs CC, Chennai (Dated: December 17, 2008)

Customs – Import – Classification – Micronutrients – under chapter 29 as chemically defined compounds or under chapter 31 as fertilizers - The imported item LIBREL Brand Micronutrients contains Ethylene Diamine Tetraacetic Acid (EDTA) which is a chalating agent and also contains nitrogen, zinc, manganese and iron and is used as a fertilizer. HSN Explanatory Notes to Chapter 29 clearly state that separate chemically defined compounds containing other substances deliberately added during or after their manufacture are excluded from Chapter 29 and the product in dispute contains zinc/manganese/iron which is deliberately added - The imported item is classifiable under CTH 31.05.90 of the Customs Tariff 1975 as micronutrient and not under CTH 29.22. As a result, the benefit of the exemption from payment of CVD and SAD under Notification 4/2006 (S.No.63) and 20/2006 (S.No.4) is available to the goods . ( Para 1)

Deemed Manufacture – Re-packing / Re-labelling – LIBREL Brand Micronutrients is classifiable under Chapter Heading 31.05 of the Customs Tariff and as there is no deeming fiction in Chapter 31 of the CETA, 1985 that repacking and relabelling amounts to manufacture unlike such deeming fiction contained in Chapter 29 of the CETA, 1985, no duty liability arises. (Para 2) :CHENNAI CESTAT;