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Service Tax exemption for SEZ – with conditions and complexities (See 'DDT') Can RF be imposed when goods are not available for confiscation (See 'DDT') Indian Post to receive insurance premium for ICCI Prudential; FM approves 29 FDI proposals worth Rs 616 Crore; Justice Samindar Rudrayya Bannurmath, Judge of Karnataka HC appointed as Chief Justice of Kerala HC; Justice Jacob Benjamin Koshy, Judge of Kerala High Court, appointed as CJ of Patna HC; Justice Deepak Verma, Judge of Karnataka HC goes as CJ of Rajasthan HC; Justice Aftab Hussain Saikia, Judge of Gauhati HC goes as CJ of Sikkim HC; Justice Chandramauli Kumar Prasad, Judge of Patna HC goes as CJ of Allahabad HC; Hong Kong Govt decides to widen network of international treaties; India successfully test-fires new version of BrahMos missile; Strong Intellectual Property regime can herald a new era of IP protection and growth: Registrar; Financial crisis to aggravate poverty, up child mortality rates: UN Report; Protectionism cannot be 'smart', says WTO Chief R S Dhaliwal, former Head of Cardio at PGIMER, Chandigarh, sentenced to five-year RI in corruption case by CBI Court; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Taxable services provided to SEZ developers and units – Exemption with conditions and complexities; Greater Role for DRI post 26/11; CASE LAWS State Of Kerala Vs Mini Shamsudin (Dated: February 2, 2009) Sales tax - Lottery ticket - it is an actionable claim and may be treated as moving property in the wider sense of definition of goods but it is only for the statutory exclusion under the sales tax laws - no sales tax can be levied on lottery ticket which has no value in itself but represents a right to a conditional benefit of winning a price of a greater value than the consideration paid for the transfer of that chance - Appellant's appeal dismissed:SUPREME COURT; MIXED BUZZ Indian Post to receive insurance premium for ICCI Prudential; FM approves 29 FDI proposals worth Rs 616 Crore; Strong Intellectual Property regime can herald a new era of IP protection and growth: Registrar; Financial crisis to aggravate poverty, up child mortality rates: UN Report; Protectionism cannot be 'smart', says WTO Chief; |
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2009-TIOL-139-ITAT-MUM.pdf + DHL story.pdf M/s DHL Express (I) Pvt Ltd Vs ACIT, Mumbai (Dated: February 18, 2009) Income Tax - A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. Setting up of business is distinct from commencement of business - expenses incurred after the setting up of the business are deductible as Revenue expenditure: It is well-settled that business is nothing more than a continuous course of activities and for commencement of business all the activities which go to make up the business need to be started simultaneously. As soon as an activity which is the essential activity in the course of carrying on the business is started, the business must be said to have commenced. A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing organization that it can be said that the unit has been set up. The business of the assessee company cannot be said to have been set up on the date of incorporation of the said company as the main objects of the assessee company was to acquire the international express business of AFL Ltd. which in-turn was subject to necessary approvals of Laws. In order to commence its business, the assessee company was dependent on the demerger of business of AFL Ltd. and the business of the assessee could not be said to have been set up on the incorporation of the assessee company. Further, the assessee company carried out the formalities of holding a preliminary meeting and thereafter the first meeting of Board of Directors on 27.06.2001, wherein a formal resolution was passed to acquire the international express business of the AFL Ltd. The proceedings of the assessee company are underway but in no way it can be said that the business of the assessee company has been set up by mere passing of the resolution. The date of setting up of business and date of commencement of business are distinct and the expenses incurred after the setting up of the business are deductible as Revenue expenditure as held by the Delhi High Court in CIT Vs. ESPN Software India (P) Ltd :MUMBAI ITAT; ACIT, New Delhi Vs Shri Ellis 'D' Rozario (Dated: December 05, 2008) Income tax - Assessee is an Australian national - relocates himself to India as a regional manager of a UAE-based company - his responsibility is to set up Liaison Office in India - assessee offers his income to tax for 275 days stay in the capacity of resident but not ordinarily resident in India - also discloses in his return that he was outside India for 51 days, travelling in relation to other assignments, not connected to his contract - claims exclusion of income for this period - AO disallows but CIT(A) agrees with the assessee - held, since statements given by the assessee to the AO reveal that even in Dubai the assessee had performed works related to his Indian contract and if that be so, he will not be entitled to exclusion of income for the period during which he was outside India. However, the case is restored to the AO for re-adjudication and the assessee may submit fresh evidence to prove that his stay outside India was not related to the contractual work related to India - Revenue's appeal allowed:DELHI ITAT; DCIT, Mumbai Vs M/s Global Airfreight Pvt Ltd (Dated: November 26, 2008) Income Tax - Search and seizure action u/s 132 was conducted at assessee company's premises and assets were found - AO made 50% addition to assessee's income as the assesse failed to substantiate the source of income - CIT(A) partly deleted the addition - Held, since the expenses were incurred for business purposes the reduction made by CIT(A) to the estimated disallowance is reasonable - Held, on random test check by calling information from the parties u/s 136, no discrepancy was found, therefore, the addition was rightly deleted - W.r.t addition on account of unexplained investment in land, it was held that as per the provisions of Sec 132(4A), the contents of document found in possession of assessee are treated as true unless contrary is proved and addition made purely on presumption basis without bringing any material on record cannot be sustained - Appeals partly allowed.:MUMBAI ITAT; ACIT, Mumbai Vs M/s Indexport Ltd (Dated: January 29, 2009) Income tax - Sec 14A - Assessee earns dividend income - AO disallows proportionate investment and other indirect expenses upto 10% utilised for earning tax-free receipts - CIT(A) reduces disallowance of other expenses to 5% - held, in view of Special Bench decision in the case Daga Capital Management Pvt Ltd ( 2008-TIOL-509-ITAT-MUM-SB ), the provisions of Rule 8D of the Act are explanatory in nature and are applicable in all pending assessments - Case remanded to the AO for re-working out quantum of expenditure that is to be diallowed - Assessee's appeal partly allowed:MUMBAI ITAT; |
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| SERVICE TAX SECTION NOTIFICATION stnot09_009.pdf (Sending it again as some Members probably did not get it) Exemption to authorised operations of SEZ developer and units; CASE LAWS 2009-TIOL-110-HC-P&H-ST.pdf + st hc story.pdf Ambuja Cements Ltd Vs UoI (Dated: February 10, 2009) Service Tax – Cenvat Credit - Assessee avails credit for duty paid on Outward Freight – Revenue disallows - held, Assessee is eligible for Credit - Assessee's appeal allowed:PUNJAB AND HARYANA HIGH COURT; CCE, Vadodara Vs M/s Haldyn Glass Gujarat Ltd (Dated: January 15, 2009) ST - Cenvat credit - assessee takes credit for tax paid on catering services and bus services - Issue is no longer res integra as credit on both the services is admissible as per the Larger Bench decision in the DTC Industrial Ltd case:AHMEDABAD CESTAT; Indian Chemicals & Minerals Vs CCE, Salem (Dated: January 29, 2009) Service tax – Stay / Dispensation of pre-deposit - Goods Transport Agency service – the appellant is a proprietorship concern engaged in trading – prima facie case for waiver of pre-deposit. :CHENNAI CESTAT; Narayana IIT Academy Vs CCE, Jaipur (Dated: January 7, 2009) ST - Commercial Coaching Service - Assessee has two units - collects advance payment and pays tax - meanwhile, service tax rate is increased from 8% to 10% from 10.09.2004 and assessee provides service agaisnt the payment received in advance - Revenue raises demand for differential rate and imposes penalty - held, since the payment of tax is related to the period of rendering service, demand for normal period of limitation is justified but penalty set aside as there was no intention to evade tax:DELHI CESTAT;
2009-TIOL-02-ARA-CX.pdf + ara story.pdf M/s CS India Steel Private Limited (Dated : February 13, 2009) Central excise – Classification – Advance Ruling - parts of hulls, cleared over a period of time, for use in the manufacture of hulls, are classifiable under 7308 90 30 and not under 8906 90 00 or 7326 90 80 of the CE Tariff: It is not permissible to ignore the actual condition of the goods cleared and assess them on the basis of anticipated future use because the duty becomes exigible at the point of removal from the factory . The structure of the Central Excise Tariff is based on the internationally accepted nomenclature in Harmonized System of Nomenclature (HSN). When the tariff entry is patterned on HSN, disputes relating to tariff classification must, as far as possible be resolved with reference to HSN Explanatory Notes. In the instant case the conclusion that parts of ships and boats, other than a complete hull, are excluded from Chapter 89 is reinforced by the Explanatory Notes to HSN. The General notes on Chapter 89 mentions that “Hull of any material” are covered by Chapter 89 and elaborates as follows “Complete vessels presented unassembled or disassembled, and hulls, unfinished or incomplete vessels (whether assembled or not), are classified as vessels of a particular kind, if they have the essential character of that kind of vessel. In other cases, such goods are classified in heading 89.06.”: ADVANCE RULING AUTHORITY; 2009-TIOL-30-SC-CX.pdf + sc story.pdf Unison Electronics Pvt Ltd Vs CCE, Noida (Dated: February 13, 2009) Central Excise - SSI Exemption – No exemption to goods bearing the Brand name of another person – Merely because the registered trade mark is not entirely reproduced does not take the respondents out of clause 4 and make them eligible to the benefit of the notification; It is settled law that in order to claim benefit of a notification, a party must strictly comply with the terms of the notification. If on wording of the notification the benefit is not available then by stretching the words of the notification or by adding words to the notification benefit cannot be conferred. Even if the goods are different so long as the trade name or brand name of some other Company is used the benefit of the Notification would not be available. M/s Agro Pack Vs CCE, Surat-II (Dated: November 25, 2008) Central Excise - refund - limitation - the law that limitation in terms of provisions of Section 11B would be applicable in respect of refund claims does not require the backing of any authoritative pronouncement inasmuch as the same is a settled law - refund claim is barred by limitation. :AHMEDABAD CESTAT; M/s KSB Pumps Ltd Vs CCE, Nasik (Dated: September 30, 2008) Central Excise - Stay / Dispensation of pre-deposit - valuation - the contention that the CENVAT Credit was reversed when bought out spares were cleared and also in some cases the same were obtained from exempted units - the annexures to the invoices do not contain the complete details - no case for waiver of pre-deposit - appellants ordered to pre-deposit Rs 15 lakhs.:CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION + CIRCULAR Date of exemption granted to import for defence and internal security extened upto Dec, 31, 2009; Govt amends Schedule I of ITC HS Classification; Notification No 94 (RE-2008)/2004-2009 ; CASE LAWS K N Parekh Vs CC, Chennai (Dated: November 17, 2008) Customs – Import - Smuggling – Deeming Liability - The importer of the goods, authorized persons to attend to matter pertaining to import, provided signed blank letter heads, and certified correctness of declarations made to customs. These are not expected of a law-abiding businessman which, clearly indicates that he didn't mind being a party to whatever foul play others might indulge in. As per sub-section (2) of Section 147 of the Act, it was open to the importer to prove that the misdeeds of his agent in relation to the imports were without his knowledge and consent. No evidence has been adduced by the importer to rule out such knowledge and consent. Thus, it appears, the deeming provisions of sub-section (2) of Section 147 would operate against the importer rendering him liable to appropriate penalty besides duty liability. Hence, the adjudicating authority exonerating the importer from both duty liability and penal liability is not proper. ( Para 10 & 12) Statement – Belated Retraction - Belated retraction in reply to show-cause notice or in subsequent ‘written submissions', whether by way of affidavit or otherwise, cannot be accepted as valid in law. A valid retraction of any ‘forced' confessional statement should be in place as soon as the ‘force' cease to exist. ( Para 11) Person chargeable to duty - For purposes of Sec.28(1) of the Customs Act, “the person chargeable with the duty” is the importer and that, if the duty was not recoverable from him, the show-cause notice must set out this fact and make his agent (if any) liable under the proviso to Section 147 (3). The show-cause notices did not invoke this proviso to make the importer's agent liable for payment of duty. There is no finding of ‘wilful act', ‘negligence' or ‘default' against the authorised agent of the importer in the impugned orders and therefore no duty could be recovered from him without a specific finding to the effect that such duty was not recoverable from the importer himself vide proviso to sub-section 147 (3). ( Para 13) Penalty – Section 114A - No penalty could be imposed on any person under Section 114A of the Customs Act for any offence committed prior to 28.9.1996 - the date on which the said provision of law came into force. The imports were made prior to the said date and, therefore, the penalty imposed on the appellant under Section 114A of the Act cannot be sustained. ( Para 14) Common Order - DRI had issued separate SCNs based on common evidentiary materials against the same persons. The Revenue's case as made out in each of these notices was founded on the same statements and the same documents. In the circumstances, a common order should have been passed by the adjudicating authority in this case to avoid inconsistency and multiplicity of proceedings. Matter remanded to remove inconsistencies. ( Para 15) :CHENNAI CESTAT |
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