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Govt finally imposes Safeguard Duty on import of Aluminium Flat Rolled products + Dimethoate Technical (See 'Customs'); Stimulus Package working for SMEs: CII Survey; Cabinet Secretary to inaugurate CBI meet on cyber crime, organised in association with Council of Europe; Delhi DRI seizes 10 kg heroin + currency worth Rs 4 lakh in Amritsar; Macao, China decide to implement OECD norms for exchange of tax information; UN-backed 2009 summit on world food crisis gains support; Collapse in demand to contract gobal trade by 9% in 2009; President appoints three Addl Judges in Bombay HC + three in Kerala HC; President notifies general elections for 124 LS seats in first phase; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Cargo handling in Customs – Handling of Cargo in Customs Areas Regulations 2009 - CBEC clarifies; UPA Govt's indecisiveness spoils its self-congratulatory bash! RBI CIRCULAR Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR; MIXED BUZZZ Collapse in demand to contract gobal trade by 9% in 2009; Stimulus Package working for SMEs: CII Survey; UN-backed 2009 summit on world food crisis gains support; Macao, China decide to implement OECD norms for exchange of tax information; |
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2009-TIOL-184-ITAT-MUM.pdf + tp story.pdf UCB India Pvt Ltd Vs ACIT, Mumbai (Dated : February 06, 2009) Income tax - Sec 92E - Assessee is a 100 per cent subsidiary of a Belgian pharma company - imports bulk drugs from its AE - files return with Form 3CEB u/s 92 - AO refers it to TPO for determination of ALP - TPO rejects the applicaiton of TNMM used for arriving at operational profits - takes the view that CUP method be used first and if it fails other methods may be resorted to - recommends adjustments of profits on various ground - AO agrees with the TPO - CIT(A) grants partial relief to the assessee - held, ++ the assessee was in error in comparing the operational margin at entity level and terming it as 'Transaction Net Margin Method Adoption of such method is rejected; ++ the adoption of CUP method by the revenue, cannot be considered as the most appropriate method as the same suffers from many deficiencies and infirmities and specifically lack of information and data on comparables; ++ issue remanded to the file of the assessing officer for fresh adjudication in accordance with law after giving adequate opportunity to the assessee, with the following directions: ++ The assessee to file a fresh transfer pricing study report and any other document or evidence, which he may seek to furnish, for the first time, in support of his report and the AO shall take the same on record and examine the same. ++ The assessee is free to adopt any method as prescribed by law, if it considerrs that method as the most appropriate method. ++ TNMM may also be considered, if the transaction or a class of transaction are properly evaluated in accordance with law. In case external comparables are not available due to lack of data in public domain, the AO may accept internal comparables including segmental data or internal TNMM.:MUMBAI ITAT; M/s Welex Laboratories Pvt Ltd Vs ITO, Mumbai (Dated : January 29, 2009) Income tax - Sec 10B benefits with Sec 80HHC benefits - Assessee is an exporter - claims deduction u/s 80HHC for one month and u/s 10B for 11 months as it changes its status into 100% EoU - AO disallows on the ground that the old machinery was used by the EoU - CIT(A) declines to admit additional ground for allowing double benefits - held, matter remanded and CIT(A) directed to admit additional ground:MUMBAI ITAT; ACIT, Mumbai Vs Supreme Industries Ltd ( Dated : December 12, 2008) Income Tax—Assessee filed return and claimed set off of unabsorbed depreciation and investment alloance—AO disallowed part claim holding that it has lapsed and initiated penalty proceedings u/s 271(1)(c)—CIT(A) deleted the penalty—Held, assessee made a claim with out any support of the law in existence or the order of the BIFR and also against the express provisions of section 72A(3) or 32A(6)—Held, AO is not under obligation to prove the wilful attempt of the assessee in matter of concealment or the explanation of the assessee in this regard is not bona fide because it is the assessee's responsibility to meet the above requirements—Revenue's appeal allowed.:MUMBAI ITAT; DCIT, Mumbai Vs Unimed Technologies Ltd (Dated: November 28, 2008) Income tax - Assessee is a pharma manufacturer - purchases excise duty paid inputs - does not claim expenditure of excise duty for inputs not used in manufacturing process - AO makes addition to the closing stock for unutilised modvat credit balance u/s 145A - held, it is already settled that whatever adjustment is made in the valuation of closing stock, the same to be reflected in the opening stock also irrespective of any consequences on the computation of income for tax purposes. Section 145A starts with the non-obstante clause "Notwithstanding anything to the contrary contained in section 145". Therefore, to give effect to section 145A, the opening stock in this case will have to be increased by an tax, duty, cess or fee actually paid or incurred with reference to such stock if the same has not been added for the purpose of valuation in the accounts - Case remanded to the AO:MUMBAI ITAT; M/s Durr India Pvt Ltd Vs ACIT, Chennai (Dated: November 18, 2008) Deduction – Claim for liquidated damages – claim not made – only contingent liability – Not deductible while computing income – There is no concealment involved in making such claim As per contract, assessee was responsible for all the activities relating to the procurement and supply of materials at the site of HMIL. In the event of delay, the contract provided for liquidated damages by way of penalty. The purchase order is issued by HMIL directly to suppliers and goods are supplied directly by such suppliers and payments also done directly to such suppliers. – Since there was delay in some supply, assesse made provision of Rs. 74.50 lakhs towards liquidated damages and claimed deduction for the same. On appeal Tribunal held that though the agreement provided for liquidated damages in the event of default on the part of the assessee in executing the contracts, this was an enabling clause available in the hands of HMIL. The liability would arise only when HMIL invoked the enabling provision and made demand to the assessee. Since HMIL did not demand any damages from assessee, it was only an apprehension on the part of the assessee and it never partook the character of ascertained liability. Hence not deductible in computing the income. Assessee took extreme precaution and provided for liquidated damages which was otherwise enforceable in law and claimed the same as deduction. This extreme case of precaution taken by assessee could not be compared with concealment of income. Penalty levied u/s 271(1)© deleted. |
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SERVICE TAX SECTION M/s KMB Granites (P) Ltd Vs CCE, Salem (Dated: January 6, 2009) Service Tax – Goods Transport Agency – Commercial Concern vis-à-vis person - Stay / Dispensation of pre-deposit - The appellants hold that the truck operators who transported their goods in all cases did not own a fleet of trucks or operated as an established agency of transporters and hence were not a ‘commercial concern' which alone could attract levy under GTA. Only when the definition of GTA was amended on 1.5.2006 by substituting ‘commercial concern' with ‘any person' the impugned services became exigible to service tax. Prima facie case has been made out for grant of stay. (Para 2) :CHENNAI CESTAT; Capital Color Lab Vs CCE, Salem (Dated: January 9, 2009) Service Tax – Review Proceedings – Appeal pending before Commissioner (Appeals) - Penalty - Section 84(4) of the Finance Act, 1994 bars Commissioner of Central Excise from adjudging a higher penal liability when the dispute is pending before the appellate Commissioner. Penalty not imposed by the original authority in exercise of his discretion could not be imposed by the Commissioner in review proceedings. Hence, the order imposing penalty under Section 76 of the Act by way of review proceedings on the appellants is not sustainable. ( Para 3):CHENNAI CESTAT; CCE, Coimbatore Vs M/s A P Vivekanandan & Co (Dated: January 16, 2009) Service Tax – Penalty - The respondent had claimed that they were under a bonafide belief that their activity did not attract service tax and therefore did not apply for registration. They paid the service tax amount with interest before the issue of the show-cause notice and had no malafide intention of evading payment of service tax. The provisions of Section 76 of the Finance Act, 1994 are subject to Section 80 thereof and there is discretion to reduce penalty vested in the authorities. In the circumstances, the reduction of penalty by Commissioner (Appeals) is upheld. ( Para 3):CHENNAI CESTAT;
2009-TIOL-483-CESTAT-MUM.pdf + Kirloskar Pneumatic Story.pdf Kirloskar Pneumatic Co Ltd Vs CCE, Pune III (Dated: February 11, 2009) Amount paid under Rule 6 of the CCR, 2004 recovered from customer – no cause for action under Section 11D of the CEA, 1944 – Tribunal grants stay. Larger Bench decision in Unison Metals 2006-TIOL-1337-CESTAT-Del-LB relied upon; Board's Circular no. 870/08/2008-CX, dated 16.05.2008 referred.:MUMBAI CESTAT; M/s Ircon International Ltd Vs CCE, Bhopal (Dated: January 28, 2009) Central Excise - refund - refund claims are subject to limitation under Section 11 B of the Central Excise Act - the assessee is bound within four corners of the law and the limitation prescribed in the Act.:DELHI CESTAT; M/s Haver Standard India Pvt Ltd Vs CCE, Vadodara (Dated: November 26, 2008) Central Excise - classification - plastic woven wire meshes- whether classifiable under 59.09 or 39.02 - Tribunal remanded the matter to classify the goods after taking the assistance of the Chemical Examiner - After conducting the test the revenue sought to classify under a new heading on which the assessee was not put to notice - the proper procedure to follow was to treat it as a fresh case and issue a fresh show cause notice and consider the show cause notices earlier issued as per the limitations.:AHMEDABD CESTAT;
CUSTOMS SECTION NOTIFICATION Govt finally imposes Safeguard Duty on import of Aluminium Flat Rolled products; Govt imposes Safeguard Duty on import of Dimethoate Technical; DGFT allows import of metal scrap from all ports; CASE LAWS 2009-TIOL-484-CESTAT-AHM-LB.pdf + hzl story.pdf CC, Kandla Vs M/s Hindustan Zinc Ltd (Dated: February 24, 2009) Customs - refund - provisional assessment - refund arising consequent to finalisation of provisional assessments - Bar of unjust enrichment is not applicable for the period prior to 13.7.2006, when the provisions of Section 18 of the Customs Act, 1962 were amended. :AHMEDABD CESTAT( Larger Bench); |
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