TIOL wishes all Netizens a very Happy and Colourful Holi !

CBEC Member V Sridhar to launch 'Automation of Central Excise & Service Tax' Project at Chennai tomorrow;

PM meets President for 30 minutes today; discusses various issues of national and international importance;

BJD wins trust vote in Orissa Assembly by voice vote today; Opposition stages walk-out;

UN decides to terminate all 'direct' contract to Satyam;

Govt may not notify recent amendment in Cr PC giving discretionary powers to police not to arrest: Law Minister;

India, US relations to consolidate under Obama Administration, says Congressional Report;

TRAI reduces IUC charges by 33%; STD/Local call rates to further go down;

SC admits Revenue's petition against British Airways TDS case;

CBEC Chief Commissioners' promotion-cum-posting file stuck for at least 10 days; Ministerial approval awaited;

TIOL COMMENTARY

2009-TIOL-37-SC-CT.pdf + boc story.pdf

M/s BOC India Ltd Vs State Of Jharkhand (Dated: March 5, 2009)

Is Oxygen gas used (which gets burned up)in manufacture of steel, raw material – Question cannot be decided on the basis of Wikipedia alone – matter remanded to AO to decide the issue: Oxygen gas when used would admittedly be burnt up. Would it mean that it ceases to be a raw material is the question? In Collector of Central Excise, New Delhi vs. M/s Ballarpur Industries Ltd . - 2002-TIOL-42-SC-CX , Venkatachaliah , J. (as His Lordship then was) speaking for a bench was considering a case where the input of sodium sulphate in the manufacture of paper was held to continue to be a "raw material" by reason of the fact that in the course of the chemical reactions this ingredient is consumed and burnt up.

Yet again, in the case of Tata Engineering & Locomotive Company Limited vs. State of Bihar & Anr , the Supreme Court while interpreting the provisions of Section 13(1)(b) of the Act itself, held that batteries, tyres and tubes which are by themselves finished products would be raw-material when they are fitted in a vehicle.

However, the question as to whether the oxygen gas is a raw material or not had not been raised before the Assessing Authority. For the first time, before the Supreme Court, a question of fact has been raised. The Court cannot, for arriving at such a finding as to whether the same is correct or not, rely on Wikipedia alone, on which reliance has been placed. {See Commissioner of Customs, Bangalore vs. ACER India (P) Ltd. - 2007-TIOL-192-SC-CUS and Ponds India Limited vs. Commissioner of Trade Tax, Lucknow - 2008-TIOL-116-SC-CT}: SUPREME COURT OF INDIA;

spl down.pdf

DTA clearances by EoUs: Impact of exemption notifications;

RBI CIRCULAR

rbi08cir057.pdf + annex47_2009.pdf

Memorandum of Instructions governing money changing activities;

MIXED BUZZ

mbuzz0273.pdf

Global crisis calls for new economic governance partnership: UN;

mbuzz0272.pdf

Markets alone cannot provide adequate housing for all: UN expert;

mbuzz0271.pdf

International trademark reaches a new high in 2008: UN;

mbuzz0269.pdf

DCs face large financing shortfall due to crisis: World Bank;

mbuzz0268.pdf

South Asia can weather economic crisis: ADB;

mbuzz0267.pdf

Global financial market losses reach USD 50 trillion, says ADB Study;

2009-TIOL-116-HC-UTTRANCHAL-IT.pdf

CIT, Dehradun Vs M/s Iqbalpur Cooperative Cane Development Union Ltd (Dated: February 12, 2009)

Income tax - Penalty u/s 271B - Assessed is a cooperative society - fails to gets its account audited u/s 44AB out of ignorance - AO imposes penalty u/s 271B - Tribunal sets aside penalty - held, since the assessee's income is deductible u/s 80P, and the Tribunal has found that there was no intention to evade tax as its income was not taxable, there is no infirmity in the Tribunal's order - Revenue's appeal dismissed: UTTRANCHAL HIGH COURT;

2009-TIOL-151-ITAT-MUM.pdf + revenue story.pdf

Schenectady Specialities Asia Pvt Ltd Vs ACIT,Mumbai (Dated: January 6, 2009)

Sales tax collected from customers, not deposited with the Government under a deferral scheme. Future liability settled for a lesser amount – Difference is Revenue Income and chargeable to income tax the sales tax collected by the assessee from its customers form part of trading receipt and chargeable to tax on account of its non-payment to the Government nor refund to the customers, but, it was not charged to tax because the assessee has availed the benefit of deferral scheme and this statutory liability was converted into a loan liability to be payable in five annual equal instalments from April 2010 and the statutory liabilities was deemed to have been discharged under section 43B of the Act.

The sales tax collected by the assessee being a trading receipt was required to be deposited with the sales tax department. Otherwise it would be chargeable to tax. But, it was not deposited and benefit of section 43B was claimed by the assessee on account of deferral scheme of the State Government and the Circular of the CBDT and this sales tax liability which is a trading liability was converted into a loan liability payable from April 2010 in five annual equal instalments. But, in fact, the entire amount of liabilities was not at all paid by the assessee and it was settled on payment of lesser amount. On payment of the lesser amount, the entire trading liabilities seized to exist. the entire sales tax deferral liability from the loan liability has been discharged on payment of a lesser amount. Whatever difference is there, it would be the income of the assessee for the assessment year in which the liability is discharged: MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-409-CESTAT-DEL.pdf

CCE, Ludhiana Vs M/s Pannu Property Dealer (Dated: February 3, 2009)

ST - Real Estate Agent - Penalty - Once penalty under Sec 78 is imposed, there is no need to levy penalty under Sec 76 and it is already a decided issue but penalty under Sec 77 is leviable as suppression has been established and there is no appeal against it - Revenue's appeal allowed: DELHI CESTAT;

2009-TIOL-408-CESTAT-DEL.pdf

S N Sunderson & Co Vs CCE, Delhi-I (Dated: January 22, 2009)

ST - C&F Service - Assessee supervises despatch of coal from colliery to Delhi Vidyut Board - Going by the agreement, the assessee is a coal agent and prima facie their activities appeal to be C & F Service - Pre-deposit ordered: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-410-CESTAT-AHM.pdf

BASF India Ltd Vs CCE, Vapi (Dated: January 21, 2009)

Central Excise – Testing for quality assurance, pasting of labels showing trade name, generic name, company logo, batch number, date of manufacture and expiry, cap ceiling/lead ceiling of containers and palletisation amounts to manufacture for goods falling under Chapters 29, 38 – CENVAT credit not deniable on inputs used in manufacture and export of such finished goods – Impugned order set aside: AHMEDABAD CESTAT;

2009-TIOL-407-CESTAT-DEL.pdf

CCE, Ghaziabad Vs M/s Sharda Forging & Stamping Pvt Ltd (Dated: October 15, 2008)

Central Excise – Excess amount collected under guise of duty reversed in CENVAT A/c and also paid in cash – Duty paid twice re-credited to CENVAT A/c not hit by s. 11B as it is mere account adjustment – No infirmity in impugned order: DELHI CESTAT;

CUSTOMS SECTION

CASE LAWS

2009-TIOL-38-SC-CUS.pdf + SC Cus story.pdf

M/s Alex Enterprises Vs UoI (Dated: March 5, 2009)

Customs – Pre-deposit - the appellants adopted various dilatory methods and the present appeal is nothing but an abuse of the process of law. The conduct of the appellant disentitles them from any relieF: SUPREME COURT OF INDIA;

2009-TIOL-39-SC-NDPS.pdf + NDPS story.pdf

Shiv Kumar Mishra Vs State of Goa (Dated: February 23, 2009)

NDPS – Conviction - the weight of the contraband would be the weight taken at the time of seizure – no allowance for moisture content: On 9th December, 2004, the appellant was found in possession of 1.61 Kgs. of Ganja. Under the provisions of the NDPS Act, 1 Kg. of Ganja has been defined to be "small quantity" and 20 Kgs. and above has been defined as "commercial quantity": As far as exclusion of the moisture content of the seized Ganja is concerned, there is nothing in the NDPS Act to suggest that when the weight of a quantity of Ganja is to be ascertained, the moisture content has to be separately ascertained and excluded. On the other hand, the weight of the contraband would be the weight taken at the time of seizure: SUPREME COURT OF INDIA;

2009-TIOL-117-HC-MUM-CUS.pdf + vodafone story.pdf

Vodafone Essar South Ltd Vs Union of India (Dated: March 4, 2009)

Spot Recovery - The conduct of the D.R.I. officers in seizing three consignments of Optic Fibre Cables imported and cleared by the petitioners on payment of duty even before initiating reassessment proceedings is totally high handed and in gross abuse of the process of law – Costs awarded - The high Profile is DRI is again at the receiving end – for its highhandedness in illegal recovery by threat of arrest. The High Court found the the conduct of the D.R.I. officers is not only high-handed but it is in gross abuse of the powers vested in them under the Customs Act . It is apparent that the D.R.I. officers in utter disregard to the order passed by the Commissioner of Customs (A), Mumbai have forced the petitioners to pay the amount by threat and coercion which is not permissible in law. Thus, the conduct of the D.R.I. officers in the present case in collecting the amount from the petitioners towards the alleged differential duty is wholly arbitrary, illegal and contrary to law. Having terrorised the petitioners with the threat of arrest, it is not open to the D.R.I. officers to contend that the amount has been paid by the petitioners voluntarily. The high handed action of the D.R.I. officers in totally flouting the norms laid down under the Customs Act in relation to reassessment proceedings and purporting to collect the amount even before reassessment, strongly condemned. It is hoped that such incidents do not occur in the future: BOMBAY HIGH COURT;