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Annual Supplement to Foreign Trade Policy 2009-10 (see Common Basket) Imports under DFIA and rebate/CENVAT Credit – CBEC walks into reality (See 'DDT') Transfer Policy - Former FM's legacy - Many legitimate reasons for Pranab Mukherjee not to carry this 'baggage'! CBEC posts Deepak Sethi as Commissioner of Central Excise and Customs, Daman; WHO warns of drug-resistant form of malaria in South-East Asia; FM asks RBI, banks to reduce interest rates; Govt decides to shift Overseas Indian Centre from Dubai to Abu Dhabi; Justice Hemant Laxman Gokhale, Chief Justice, Allahabad High Court is transferred as CJ of Madras HC; India seals borders with Bangladesh after BDR revolts against Bangla Govt; Inflation further goes down to 3.36%; Ice sheets of Greenland and Antarctic losing mass due to global warming: UN; Petro Ministry toying with idea of another cut in diesel prices; Jairam Ramesh resigns, wants to focus on electioneering; No let up in FDI inflow from NRIs: Govt; |
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| Dear Member, Sending the following files: |
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ANNUAL SUPPLEMENT TO FOREIGN TRADE POLICY 2009-10 Minister's Speech; Annual Supplement; TIOL COMMENTARY Guide to New Assessees Coimbatore Initiative; Transfer Policy - Former FM's legacy - Many legitimate reasons for Pranab Mukherjee not to carry this 'baggage'! RBI CIRCULARS Exim Bank's Line of Credit of USD 10 million to the Government of the Republic of Gambia; Exim Bank's Line of Credit of USD 15 million to the Government of Sierra Leone ; Exim Bank's Line of Credit of USD 14.50 million to the Government of the Gabonese Republic; MIXED BUZZ Textile and leather to get Rs 325 Cr incentive from April 1, 2009: Nath; Delhi not sitting on e-waste time bomb: Govt; Cabinet eases DCRF norms to enable States to borrow upto 3.5% of GDP; Ice sheets of Greenland and Antarctic losing mass due to global warming: UN; WHO warns of drug-resistant form of malaria in South-East Asia; |
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OFFICE ORDER 7 CCITs retire; additional charge order issued; CASE LAWS CIT Vs Nitin Shantilal Parikh (Dated: February 2, 2009) Income tax - Sec 2(22)(e) - assessment for block period - additions made for loans and advances made by the assessee company to one of its shareholders - Tribunal holds that for the additions to be made sustainable, the payment from the assessee should be from the accumulated profits and since no evidence has been found in this regard by the AO, it is not sustainable - Held, Tribunal has given a finding of facts and it is not perverse - Revenue's appeal dismissed:GUJARAT HIGH COURT; ITO Vs J J Corporation (Dated: January 20, 2009) Income tax - Assessee is a partnership firms - deposits money in bank for claiming deduction u/s 32AB - Revenue recovers the same towards arrears - Tribunal finds that the sum deposited was already taxed in the hands of the partners and the same cannot be taxed again in the hand of the assessee which was dissolved before the deposits were made - no question of law involved - Revenue's appeal dismissed :GUJARAT HIGH COURT; 2009-TIOL-127-ITAT-MUM.pdf + revenue story.pdf Chemet Vs ACIT, Mumbai (Dated: December 11, 2008) Taxation of Compensation for termination of Agency: if the payment is considered as compensation for termination of the agency agreement, the same can be taxed under the provisions of section 28(ii)(c) only when it is established the agreement was an agency agreement in strict legal sense of the term. For application of provisions of section 28(ii)(c), it is necessary that there must be an agency agreement and that for understanding the true nature of the agreement. The test of an agency is that the person should have authority to enter into transactions on behalf of the principal. Representative character and derivative authority are the distinctive features of an agent. The agent should be in a position to create, modify, and terminate contractual obligations between his principal whom he represent and third persons. Mere use of the word commission' in a contract does not convert a relationship into that of an agency. In this case, though the assessee in the agreement has been referred to as an agent and had been getting commission on sales, a careful perusal of terms and conditions of the agreement shows that the assessee was not an agent in true sense of the term. The assessee was not authorised to conclude contract for sale or to collect payment on behalf of the Degussa as is clear from clause (2) of the agreement. Clause 9 of the agreement further makes it clear that Degussa was under no obligation whatsoever to the agent with regard to accepting any business submitted or otherwise advised by him. The assessee was thus only procuring orders for Degussa which could be accepted or rejected by the latter. The assessee could not bind Degussa with respect to third parties in any way. Assisting Degussa in procurement of orders without any authority to accept order or collect payment on behalf of the principal, does not make the assessee an agent as held by Supreme Court in case of R.D. Agrawal & Co. Though the assessee had exclusive right in a territory to bring business or order to the German company but this does not create the relation of agency. However, part of the compensation will have to be attributed to the restrictive covenant which the assessee had signed as a part of the termination agreement and as per which assessee was refrained from competing with the products of the foreign company or its affiliates for one year. This was an independent obligation and part of the payment attributable to this would be capital receipt. This will have to be computed on the basis of material available on record.:MUMBAI ITAT; M/s Sheriff Constructions Vs ACIT, Bangalore (Dated: December 23, 2008) Income tax - Assessee is a partnership firm - owns a property - lets out the same - while calculating annaul letting value (ALV) it deducts association's maintenance charges - AO disallows as it is not admissible u/s 24 - held, it is already settled that maintenance charges are admissible deduction from ALV under Sec 23 - Assessee's appeal allowed:BANGALORE ITAT; Sun Microsystems India Pvt Ltd Vs ACIT, Bangalore (Dated: November 14, 2008) Income Tax - Sec 10A benefits - AO allows deduction to STP unit by multiplying the profit by export turnover and dividing the same by the total turnover of the STP unit - CIT invokes Sec 263 powers and directs AO to divide the sum by total turnover of the business for allowing exports benefits - held, the issue is no longer res integra as it is decided in favour of the assessee that for allowing deduction u/s 10A(4), it is the export tunrover and the total turnover of one unit only which are to be taken into account - Invocation of Sec 263 are not sustainable - assessee's appeal allowed:BANGALORE ITAT; |
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| SERVICE TAX SECTION 2009-TIOL-349-CESTAT-MUM.pdf + Supreme Industries Storypdf M/s Supreme Industries Ltd Vs CCE, Pune-I (Dated: December 12, 2008) Cenvat Credit - Service Tax paid on Air Travel Agent's Commission and Real Estate Consulting Services issue arguable, Pre-deposit ordered of Rs.20,000/-. Credit of Service Tax paid on mobile phone bills prima facie allowable as issue covered by various decisions: MUMBAI CESTAT; M/s Ankleshwar Taluk Ongc Land Looser Travellers Co-Op Society Ltd Vs CCE, Surat-II (Dated: January 6, 2009) ST - Rent-a-Cab Service - assessee is a cooperative society of land losers to ONGC - provides rent-a-cab service to ONGC - fails to pay tax as there was no provision for tas in the agreement - issues goes to arbitrator and the assessee finally pays the tax with interest - Revenue imposes penalty - assessee contests the same - Commissioner(A) upholds minimal penalty - Since the assessee has not pleaded any financial hardship and the fact that the tax liability is not in dispute, and the imposition of minimal penalty, no further relief to be granted - assessee's appeal dismissed : AHMEDABAD CESTAT; M/s Pashupati Spg & Wvg Mills Ltd Vs CCE, Chandigarh (Dated: January 15, 2009) ST - Service recipient - assessee manufactures yarn and exports them - avails services of commission agents who have no office in India - Revenue raises demand - Issue has been settled by the Bombay High Court decision in the case National Ship Owners Association whereby it is held that it is taxable from 18.4.2006 after insertion of Sec 66A - Assessee's appeal allowed :DELHI CESTAT; Senior Terminal Manager Vs CCE, Tirunelveli (Dated: September 18, 2008) Service Tax amount collected by the Terminal of IOCL from the Refinery of IOCL - the so-called service is one rendered by the appellants to themselves. Such service cannot be subjected to levy of service tax.:CHENNAI CESTAT;
CIRCULAR Levy of cess on sugar manufactured out of cess paid raw material/ input; CASE LAWS M/s Madura Sugars Vs CCE, Madurai (Dated: January 30, 2009) Central Excise refund of duty paid on molasses which was retained in the factory and eventually deteriorated duty was paid in the year 1998-99 and refund claimed in 2005 refund barred by limitation under Section 11 B.:CHENNAI CESTAT; M/s Godrej Hi Care Ltd Vs CCE, Trichy (Dated: October 29, 2008) Central Excise Modvat Notification 14/98-CE(NT) dated 02.06.1998 - Where the input on which MODVAT credit to the extent of 95% of the duty was availed by a manufacturer of final product on or after 02.06.1998 under Notification 14/98-CE(NT), is removed as such under Rule 57F(2) and (3) of the erstwhile Central Excise Rules, 1944, the recipient of the input (being another manufacturer of final product) is entitled to full credit i.e., equivalent to the credit reversed by the supplier. ( Para 4) :CHENNAI CESTAT; CCE, Chennai Vs Sua Explosives & Accessories Ltd (Dated: December 19, 2008) Central Excise Refund Unjust enrichment - Price variation clause Due to the price variation clause, on reduction of prices, the respondents returned the excess amount received to their customer through credit notes and claimed refund of excess duty paid. The claim for refund of the excess duty paid was rejected on the ground of unjust enrichment. HELD - When an assessee clears the excisable goods under a contract containing price variation clause, the assessable value applicable to clearances gets finalized at a later date in terms of the contract - The price realized by the assessee on finalization of the contract alone forms parts of the assessable value of the goods - The tentative price adopted at the time of clearance of the goods will not be the transaction value applicable for assessment of clearances. As the relevant assessable value gets finalized in such cases after the clearances on payment of duty, refund of duty paid on the excess amounts does not involve unjust enrichment of the assessee. ( Para 4) :CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION Exchange rate for March notified; DEPB rates revised for two items of Chemical Products; DGFT amends Paras 3.23.10 & 3.23.13 related to grant of freely transferable duty credit scrip based on FOB value of exports; CASE LAWS 2009-TIOL-96-HC-ALL-CUS.pdf + cus story.pdf M/s Novamet Industries Vs UoI (Dated: February 6, 2009) Customs Pre-Deposit; power of waiver of pre-deposit has to be exercised such that the order of the assessing authority will be tested by appellate forum and it will not cause any serious prejudice to the revenue:- since it is always the endeavour of this Court to have the matter decided on merits and where the order of revenue authority is subject matter of appeal but condition of pre-deposit is there in the statute before the appal can be entertained, the power of waiver of pre-deposit has to be exercised by the appellate authority considering over all facts and circumstances with a view that if a party gets opportunity to have matter decided on merit, the order of the assessing authority will be tested by appellate forum and it will not cause any serious prejudice to the revenue. On the contrary, it will get doubly sure about the correctness of the order and this will inspire confidence in the public in assessing that no particular, unjust and undue demand has been made by the revenue authorities.:ALLAHABAD HIGH COURT; M/s Power Grid Corporation Of India Ltd Vs CC, Chennai (Dated: October 20, 2008) Customs Exemption Notification Refund Time bar The appellants paid duty, though exempted, due to delay in sanctioning of loan by the World Bank. HELD In similar matters it is seen that department has sanctioned refund without raising the question of time-bar. Also senior representatives of the ministries concerned decided that the time-bar provisions should be relaxed in respect of refund claims filed by parties associated with execution of power projects with assistance from World Bank. In this scenario, the cash payment made by the appellants is to be treated as a deposit' and claim for its refund to be entertained without reference to the time-bar provisions of Section 27 of the Customs Act. Hence, appeal allowed. ( Para 7) :CHENNAI CESTAT; |
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