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FM announces 2% cut in basic excise duty + Service tax; Notifications expected by evening Applicability of the provisions of the Export of Services Rules, 2005 in certain situations; What does the ‘___' against an entry in Customs Notification 21/2002 under column for CVD mean? (wait till tomorrow) CBEC clarifies what amounts to Business Support Service? (See 'DDT') CBEC file for ad hoc promotion to Commissioner-level shuttles between DoP&T and Law Ministry; unlikely to be cleared by outgoing Govt; JN Port logs 13.8% growth in container handling in 2008; Cabinet okays move to amend Civil Defence Act & Right of Children to Free & Compulsory Education Bill; CCEA approves Rs 450 Cr interest subvention to help exporters; Cabinet gives nod to one-year extension for E-Committee supervising E-courts project; Cabinet allows researchers to have equity stake in scientific enterprises; Cabinet gives nod to extension of term for 2nd Administrative Reforms Commission upto April 30, 2009 + approval granted to M/s NTT Docomo Inc, Japan, to acquire 27.31% equity in Tata Teleservices Ltd for Rs 12924 Crore; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY FM announces 2% cut in general rate of excise duty and service tax; No change in Excise duty rates of 8% and 4%; Anomaly related to Sec 10AA benefits for SEZ and DTA units removed; Duty concession granted to Naptha for power generation; Extracts Of FM's Reply On The Interim Budget Further Concessions In Central Excise & Service Tax Announced Customs Duty Exemption On Naptha Extended Beyond This Fiscal ; PC recommends Income Tax exemption for oscAR Rahman but will he get Customs exemption? CBEC Circular puts Realty Sector in neutral gear! JN Port logs 13.8% growth in container handling in 2008; Cabinet okays move to amend Civil Defence Act & Right of Children to Free & Compulsory Education Bill; Confidence is key to tide over crisis time: WTO Chief; Cabinet gives nod to one-year extension for E-Committee supervising E-Courts project; Cabinet allows researchers to have equity stake in scientific enterprises; Cabinet allows researchers to have equity stake in scientific enterprises; |
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2009-TIOL-23-SC-IT.pdf + sc story.pdf CIT, Jalandhar-I Vs Shri Rajiv Bhatara (Dated: February 19, 2009) Income tax - Surcharge in block assessment cases - A search was conducted on the assessee's premises in the year 2000 - block assessment - AO levies surcharge on assessed tax - CIT(A) takes the view that in view of insertion of provision to Sec 113 vide Finance Act, 2002 w.e.f 1/6/2002, surcharge is not applicable to cases booked before 1/6/2002 - Tribunal upholds the CIT(A) order - HC also goes with the Tribunal's views on the basis of similar decisions of other HCs - Held, As a general concept, income tax includes surcharge. By reading Section 2(1) of the Finance Act, 2001, it is clear that the term 'income tax' as used in Section 2(1) and proviso to Section 2(3) of the said Act did not include the amount of surcharge. Surcharge was a separate item of taxation, different from income tax. This was made clear vide Section 2 (1)(a), proviso to Section 2(3) and Para A of Part I to Schedule I. ++ Section 158-BA(2) read with Section 4 of the Act looks at Section 113 for the imposition rate at which tax has to be imposed in the case of block assessment. That rate is 60%. That rate is fixed by the Act itself. That rate has been stipulated by Parliament not with a view to oust the levy of surcharge but to make the levy cost effective and easy. Therefore, a flat rate is prescribed in Section 113. ++ Though Parliament was aware of rate of tax prescribed by Section 113 and yet in the various Finance Acts, Parliament has sought to levy surcharge on the tax in the case of block assessment. In the present case, the assessing officer has applied the rate of surcharge at 17% which rate finds place in Para A of Part I of Schedule I to the said Finance Act of 2001, therefore, surcharge leviable under Finance Act was a distinct charge, not dependent for its leviability on the assessee's liability to pay income tax but on assessed tax. ++ Even without the proviso to Section 113 (inserted vide Finance Act, 2002 w.e.f. 1.6.2002), Finance Act, 2001 was applicable to block assessment under Chapter XIV-B in relation to the search initiated on 6.4.2000 and accordingly surcharge was leviable on the tax. ++ To clear that doubt precisely, the proviso has been inserted in Section 113 by which it is indicated that Finance Act of the year in which the search was initiated would apply. Therefore, it has to be held that the proviso to Section 113 was clarificatory in nature. It only clarifies that out of the four dates, Parliament was opted for the date, namely the year in which the search was initiated, which date would be relevant for applicability of a particular Finance Act. Therefore, the proviso has to be read as it stands.: SUPREME COURT; 2009-TIOL-90-HC-MAD-IT.pdf + jaya story.pdf J Jayalalithaa Vs ACWT, Chennai (Dated: January 20, 2009) Not mandatory that the documents mentioned in the complaint should have been made available to the Magistrate even at the time of taking cognizance of the complaint - It is pertinent to point out that the well settled legal principle relating to pleadings is that the evidence of facts as distinguished from the facts themselves need not be pleaded. In other words the pleadings should contain a statement of material facts on which the party relies but not the evidence by which those facts are to be proved. The complaint should contain only facta probanda and not facta probantia - The facts are of two types:- (a) Facta probanda - the facts required to be proved (material facts); and (b) Facta probantia - the facts by means of which they are to be proved (particulars or evidence). The complaint should contain only facta probanda and not facta probantia . The material facts on which the complainant relies for bringing home prima facie the offence alleged are called facta probanda and they must be stated in the complaint but the facts or evidence by means of which the material facts are to be proved are called facta probantia and they need not be stated in the complaint. They are not the fact in issue but only relevant facts required to be proved at the trial in order to establish the fact in issue. It is pertinent to point out that admittedly in this case the petitioner was already an assessee and as such she cannot evade liability from filing the return. Hence the contention of the petitioner cannot be countenanced and the same is rejected. Whereas section 17 deals with cases relating to escaped assessment and it is not the case of petitioner that the assessment pertaining to the petitioner falls under this category namely escaped assessment. Only in a case where section 17 applies a notice contemplated under Section 17 (1) of the Act can be issued but not otherwise. Magistrate to decide the case in five months - the petitioner cannot be entirely blamed for the delay in disposal of the case by the Court below but on the other hand the respondent as well as the Court below is also responsible for the huge delay that has occasioned. Considering the fact that the case is pending right from 1997 the learned Additional Chief Metropolitan Magistrate, (Economic Offence - I), Egmore , Chennai, is directed to dispose of EOCC No.263 of 1997 as early as possible and preferably within a period of five months.: MADRAS HIGH COURT; CIT Vs Gujarat Guardian Limited (Dated: January 23, 2009) Income tax - Sec 40A(2) - Assessee is a joint venture company - signs agreement with many partners, including one non-resident company, for manufacture of float glass - Govt approves 5% exports commission against exports of at least 25% of production - as per this agreement the commission agency was to be one of the group companies of the non-resident company - assessee pays 12.5% commission to the exports sale agency and claims deduction u/s 37(1) - AO disallows on the ground that since the financial institutions had objected to the royalty payment to the non-resident partner in preference to their dues the assessee devised this arrangement to compensate them - CIT(A) allows 5% commission provisioned in the initial agreement and disallows the rest u/s 40A(2) and Sec 92 - held, once the CIT(A) accepted the plea of the assessee that there was not much domestic demand and the international price of float glass was lower than its production cost but aggressive exports were undertaken to reduce the piling up inventories, and the exports sale agency provided the necessary sale service, paying more commission is the discretion of the assessee and the Revenue cannot sit in judgement - held, no infirmity in the views of the Tribunal and unless Revenue produces some contrary evidence, disallowance cannot be made u/s 40A(2) and also under Sec 92 as Transfer Pricing Officer has already accepted the same - Revenue's appeal dismissed Loan - assessee seeks restructuring of loans - pays pre-payment premium - claims deduction - Revenue disallows - assessee argues it is nothing but up-front payment, that is, present value of the differential rate of interest that would have been due on loan if no restructuring of loan had taken place and the same is allowable as business expenditure u/s 43B(d) - Tribunal treats it as revenue expenditure u/s 36(1)(ii) read with Sec 2(28A) of the Act - held, no infirmity in the Tribunal's decision and much less is the involvement of any substantial question of law - Revenue's appeal dismissed:DELHI HIGH COURT; CIT Vs Gangour Investment Ltd (Dated: January 30, 2009) Income tax - Sec 68 - Assessee receives share application money from various shareholders - AO suspects a major chunk was assessee's own money routed through a finance company - assessee furnishes details of shareholders, their addresses and creditworthiness - AO makes additions u/s 68 - CIT(A) disagrees and Tribunal upholds the deletion of additions as it finds the assessee has discharged its obligation of proving the identity and other details of shareholders and the payments were received by cheques through banking channels - held, once the assessee succeeds in discharging its obligations, the onus shifts on the Revenue to prove it otherwise - no question of law involved - Revenue's appeal dismissed:DELHI HIGH COURT; |
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| SERVICE TAX SECTION NOTIFICATION Applicability of the provisions of the Export of Services Rules, 2005 in certain situations; Service tax rate reduced from 12 to 10 percent; Reference from Commissioner Nashik seeking clarification in respect of levy of service tax on Repair/ renovation/ widening of roads; CASE LAWS CCE, Ludhiana Vs M/s Nahar Fibre (Dated: November 25, 2008) Service Tax - Goods Transport Agency Service - payment of Service tax on GTA from CENVAT Credit account - revenue appeal against such payment from CENVAT has no merit.:DELHI CESTAT; M/s Selvel Media Services Pvt Ltd Vs CST, New Delhi (Dated: January 14, 2009) ST - Advertising Service - assessee is a hoarding / outdoor contractor - claims advertising agencies paid service tax even on the service charges paid to them - Since the evidence was not produced before the first adjudicating authority, the case is remanded:DELHI CESTAT; M/s KSL Industries Ltd Vs CCE, Vapi (Dated: January 20, 2009) ST - Penalty - assessee deposits tax with 25% of penalty - Commissioner holds penalty u/s 78 to be waived off to the extent of 78% in terms of provisions of Sec 73(1A) - held, once Sec 73(1A) comes into play, penalty under Ss 76 and 77 are not sustainable :AHMEDABAD CESTAT;
NOTIFICATION Excise Duty Rate cut by 2%; CASE LAWS 2009-TIOL-329-CESTAT-MUM.pdf + cable story.pdf M/s Raychem RPG LT Vs CCE, Thane (Dated: January 16, 2009) Cable Jointing kits Undervaluation of manufactured inputs Demand of Rs.5 Crores - Tribunal asks Raychem RPG Ltd. to make a pre-deposit of Rs.15 lakhs for getting stay. Assembling of Cable Jointing kits is not manufacture u/s 2(f) of the CEA'44 Andhra Pradesh High Court decision in X L Telecom Ltd. Earlier assessee paying duty on Cable jointing kits by putting together in a carton own manufactured items and bought out items Pursuant to the decision assessee started paying duty on own manufactured items only and carrying out the assembling work in another unit which fact declared to the Department Valuation was done in terms of Rule 8 of Valuation Rules which fact was also intimated to the department Department issuing an extended period demand notice alleging that valuation ought to be done in terms of Rule 11 of the Valuation Rules, 2000 as rule 8 can be applied only when the items manufactured are consumed in manufacture of other articles Tribunal observes that prima facie substantial portion of the demand is hit by limitation as facts known to the department Portion of demand within time is Rs.50 lakhs - issue arguable Pre-deposit ordered of Rs.15 lakhs - to be paid within six weeks.:MUMBAI CESTAT; CCE, Coimbatore Vs M/s CRI Pumps (P) Ltd (Dated: December 12, 2008) Central Excise SSI exemption simultaneous exemption for unbranded goods and payment of duty on branded goods is admissible exemption cannot be denied to the unbranded goods on the ground of availing CENVAT credit for branded goods revenue appeal has no merit. Scrap the assessee is liable to pay scrap arising on pro rata basis of branded and unbranded goods appeal partly allowed.:CHENNAI CESTAT; M/s Bisleri International (P) Ltd Vs CCE, Chennai (Dated: October 15, 2008) Central Excise CENVAT Inputs supplied by EOU - The entitlement to input credit when a manufacturer receives inputs manufactured by an EOU is governed by the formula in sub-rule (7) of Rule 3 of CCR, 2004. - The lower authorities have determined the entitlement of credit in accordance with statutory provisions correctly as per the said formula. Therefore, the appeal is dismissed. ( Para 5):CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION Inclusion of Krishnapatanam port for export / import under various schemes; Naptha exempted from basic custom duty; DGFT notifies officers of various Ministries to assist exports; CASE LAWS CC, Mumbai Vs M/s Cannon Shipping Co Pvt Ltd (Dated: January 23, 2009) Tribunal upholds sensible' objection by shipping company Authorization ought to have been given by the Committee prior to filing of appeal under s.129A of the Customs Act, 1962 and not after the appeal was dismissed on that ground ROA dismissed by Tribunal. Tribunal's observations The appellant (department) was asked to produce the authorization, if any, existing as on the date of filing of the appeal . That was the defect sought to be cured. |
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