Govt imposes anti-dumping duty on non-textured yarn, non-POY and flax fabric;

Core sector continues to be soft belly of Indian economy; logs 2.2% growth in Feb ;

Export Warehousing – Thiruvallur included and Kanpur exclusion cancelled;

Indian Premier League: A tale of relocation of venue from India and Service Tax liability of BCCI;

Cyber crime: Cabinet Secy calls for coordination between nations for better cyber security;

Not all outsourced jobs will come back to USA, says Obama;

OECD welcomes Monaco decision on exchange of tax information;

CBDT promotes Arun Kumar of 75 batch as CCIT and posts him to Pune;

TIOL COMMENTARY

ddt 27march.pdf

On-line downloading of GR Forms – RBI Instructions;

stgst.pdf

Which rule should I invoke?

RBI NOTIFICATION

rbi08cir060.pdf

On-line downloading of GR Forms;

MIXED BUZZZ

mbuzz0331.pdf

Core sector continues to be soft belly of Indian economy; logs 2.2% growth in Feb ;

mbuzz0330.pdf

Indian Premier League: A tale of relocation of venue from India and Service Tax liability of BCCI;

mbuzz0329.pdf

Cyber crime: Cabinet Secy calls for coordination between nations for better cyber security;

mbuzz0328.pdf

OECD welcomes Monaco decision on exchange of tax information;

2009-TIOL-45-SC-IT.pdf + SC story.pdf

Income tax - TDS u/s 192 - Assessee is a joint venture of a non-resident and a local company - Non-resident partner seconds few employees to work with the JV - assessee pays salary in India and deducts tax on the same - But no TDS is deducted on Home salary / special allowances paid by the non-resident as retention money - Revenue finds that the entire work was done by the expat employees in India but no TDS was deducted on their Home salaries - takes the view that as per Section 9(1)(ii), the income derived by the expatriates was taxable in India and subject to Section 192(1) - TDS is to be deducted even on the Home Salary paid for services rendered in India - AO holds the assessee in default u/s 201 and levies interest u/s 201(1A) - Tribunal and HC disagree with the AO on the ground that since the Home salary was paid abroad by the non-resident and the fact that the same was not paid by the assesee-deductor it cannot be held liable for any short deduction - held,

++ The TDS provisions in Chapter XVII-B relating to payment of income chargeable under the head "Salaries", which are in the nature of machinery provisions to enable collection and recovery of tax, form an integrated Code with the charging and computation provisions under the 1961 Act, which determines the assessability/taxability of "salaries" in the hands of the employee-assessee.

++ Consequently, Section 192(1) has to be read with Section 9(1)(ii) read with the Explanation. Therefore, if any payment of income chargeable under the head "Salaries" falls within Section 9(1)(ii) then TDS provisions would stand attracted.

++ Section 9 explains the expression "is deemed to accrue or arise to him in India" used in Section 5(2)(b). Section 9 is not only a machinery section, it has the effect of rendering a person liable to tax on income which do not accrue or arise or are not received in India but which are deemed to be taxable by virtue of Section 9 which applies to residents and non-residents. Section 9 is, therefore, a typical example of a combination of a machinery provision which also provides for chargeability.

++ The 1961 Act has extra-territorial operation in respect of the subject-matters and the subjects which is permissible under Article 245 of the Constitution and the provisions are enforceable within the Area where the 1961 Act extends through the machinery provided under it.

++ The tax-deductor-assessees were duty bound to deduct tax at source under Section 192(1) from the Home Salary/special allowance(s) paid abroad by the foreign company, particularly when no work stood performed for the foreign company and the total remuneration stood paid only on account of services rendered in India during the period in question.

++ ++ Section 192(1) is the only section in Chapter XVII-B, unlike other sections in that chapter, which requires deduction of tax at source on estimation of income chargeable under the head "Salary". The act of "estimation" is similar to computation of income. As stated above, the 1961 Act is an integrated Code in which chargeability and computation goes hand in hand. Thus, Section 192(1), which is a stand-alone section in Chapter XVII-B, has to be read with Section 9(1)(ii).

++ AO directed to examine each case to ascertain whether the employee-assessee (recipient) has paid the tax due on the Home Salary/special allowance(s) received from the foreign company. In case taxes due on Home Salary/special allowance(s) stands paid off then the AO shall not proceed under Section 201(1). In cases where the tax has not been paid, the AO shall proceed under Section 201(1) to recover the shortfall in the payment of tax.

++ Similarly, the AO also directed to examine and find out whether interest has been paid/recovered for the period between the date on which tax was deductible till the date on which the tax was actually paid. If, in any case, interest accrues for the aforestated period and if it is not paid then the Adjudicating Authority shall take steps to recover interest for the aforestated period under Section 201(1A).

++ However, no penalty proceedings under Section 271C are to be initiated in any of these cases as the issue involved was a nascent issue.:SUPREME COURT;

2009-TIOL-153-HC-P&H-IT.pdf

CIT, Faridabad Vs Sunil Kumar Goel (Dated: March 3, 2009)

Income tax - penalty under Ss 271D and 271E - Assessee had taken loans in cash - Revenue imposes penalty for violation of Sec 269SS and Sec 269T - CIT(A) and Tribunal set aside the penalty - held, since the lower authorities have found that there was a 'reasonable cause' for non-compliance with the provisions of law but no prejudice was caused to the Revenue's interests and the assessee established so with the help of records and evidence to the CIT(A) and Tribunal, it is not a case of tax avoidance or tax evasion - a fit case for invocation of Sec 273B - No substantial point of law involved - Revenue's appeal dismissed : PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-152-HC-MUM-IT.pdf

CIT, Bombay Vs M/s Rim Textiles Pvt Ltd (Dated: March 18, 2009)

Income tax - Sec 115J - AO takes the view that the term loss does not include depreciation and once the figure of depreciation is ignored in the books, there is no loss in return - Tribunal allows deduction against unabsorbed depreciation from the book profit over and above the loss allowed by the AO as per the provision of Sec 205(1)(b) of the companies Act - held, issue is no longer res integra as Apex Court has held that the word loss as used in the proviso to clause-(b) of Section 205(1) of the Companies Act signifies the amount arrived at after taking into account the amou nt of depreciation and it is to be understood in the context of section 115 J of the Income-tax Act. : BOMBAYHIGH COURT;

2009-TIOL-151-HC-KOL-IT.pdf

Mintri Tea Co Pvt Ltd Vs CIT, Jalpaigudi (Dated: March 17, 2009)

Income Tax - Sec 154 - AO amends intimation issued u/s 143(1)(a) - Held, AO has an obligation to grant a reasonable opportunity to the assessee for hearing but no amendment in intimation order can be made after expiry of four years from the end of the financial year in which the order sought to be amended is passed - Assessee's appeal allowed:CALCUTTA HIGH COURT;

SERVICE TAX SECTION

2009-TIOL-154-HC-KERALA-ST.pdf

M K Thaha Vs Union of India (Dated: March 12, 2009)

ST - Tour Operator - Assessee facilitates Hajj pilgrims in undertaking their journey to religious places like Mecca and Madina - Revenue asks for supporting documents and audited copy of balance sheet - writ - assessee claims it is not providing any tour operator service and only facilitating the pilgrims - Revenue pleads it has only asked for information and a decision is to be taken - Assessee directed to provide information and Revenue to issue show cause notice only as per law - Assessee's petition dismissed:KERALA HIGH COURT;

2009-TIOL-499-CESTAT-DEL.pdf

M/s B M Auto Vs CCE, Meerut (Dated: February 4, 2009)

ST - assessee is a two-wheeler dealer - earns commission on financing - demand raises - held, since the service provided by the appeallant is not properly brought out in the show cause notice, case is remanded as it violates natural principle of justice:DELHI CESTAT;

2009-TIOL-498-CESTAT-MAD.pdf

M/s Elappa Granite, (100% Eou) Vs CCE, Salem (Dated: January 7, 2009)

Central Excise – Refund of input service credit - For export made between 10.9.04 and 14.3.06, claim for refund of duty relatable to inputs were being allowed even though there was no Notification issued under Rule 5 of CCR, 2004. Therefore, there is no justification to deny refund relatable to input service used for production of goods exported during the same period on the ground that during the material period the Central Government had not issued Notification under Rule 5 of CCR 2004 for refund of credit on input services. Appeal allowed. (Para 4):CHENNAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-502-CESTAT-MUM.pdf + twice story.pdf

M/s Tata Hydro Electric Power Supply Co Ltd Vs CCE, Pune (Dated: February 27, 2009)

Order passed twice on same set of appeals – subsequent final order recalled as fault lies with registry – Tribunal:MUMBAI CESTAT;

2009-TIOL-501-CESTAT-MAD.pdf

M/s Yedakadu Tea Manufacturing Company (P) Ltd Vs CCE, Salem (Dated: January 16, 2009)

Central Excise – Exemption Notification 41/99 CE - Fulfillment of Conditions - The exemption was available to the appellants subject to making an undertaking to purchase certain quantity of green leaves from small growers of tea and that the appellants' factory had worked for at least six months during the previous financial year. No reliable evidence has been produced to establish that the appellants had furnished a declaration envisaged in the Notification or that the factory had worked for at least six months during the financial year 2000-2001. Impugned order upheld. (Para 4) :CHENNAI CESTAT;

2009-TIOL-500-CESTAT-AHM.pdf

M/s Aarvee Denim & Exports Ltd Vs CCE, Ahmedabad (Dated: December 15, 2008)

Central Excise – Availability of accumulated CENVAT Credit on inputs utilized in manufacture of yarn prior to 08.07.2004 – Submissions by appellant and findings in OIO contradictory as observed by Appellate Commissioner – Impugned order remanding the matter for proper verification by lower authorities upheld:AHMEDABD CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_030.pdf

Anti-dumping duty on import of Flax fabric imposed;

ctariff09_029.pdf

Govt imposes anti-dumping duty on non-textured yarn and non-POY;

ctariff09_028.pdf

Govt extends Customs exemption to import of pulses upto April, 2010;

CASE LAWS

2009-TIOL-503-CESTAT-MUM.pdf + diamond story.pdf

CC (Import), Mumbai Vs M/s Kiran Jewels (Dated: February 3, 2009)

Unaccounted diamonds not available for confiscation – Wrong averment made in ROM application by Revenue that the said diamonds were released on execution of bond – Tribunal shreds ROM application.

ROM application filed by Revenue against Tribunal's final order dated 25.04.2008 in Revenue appeal [ 2008-TIOL-1153-CESTAT-MUM ] contending that there is an apparent on record inasmuch as –

In the impugned case, the goods were released on execution of bond and in view of Apex Court decision in Weston Components Ltd . [ 2002-TIOL-176-SC-CUS ] ;

As held by the LB in case of Hindustan Lever Ltd [ 2006-TIOL-1111-CESTAT-MUM-LB ] when Supreme Court pronounces on true position of law, any decision rendered by any other authority contrary to that is required to be regarded as an error which is apparent on record and rectification of such an error within period permissible under law and in accordance with provisions of statute was required to be effected.

When a decision rendered by the Apex Court is not considered, it is obvious that non-consideration of such binding precedent would constitute an error apparent on the face of the record.  In the instant case the Tribunal has not considered the judgement of Apex Court in the matter of Weston Components , which was otherwise binding and thus an error has occurred on part of the Tribunal.

Tribunal's observations –

I find that the Supreme Court judgment in the case of M/s Weston Components Ltd. (supra) was never cited by the Revenue in their “Grounds of Appeal” while preferring appeal before the Tribunal against the order passed by the Commissioner.

Even at the argument stage, this judgement was never referred to or relied upon by the learned DR. 

Non-citing of the existing judgment and failure to rely on the same before passing of the Final order would not give rise to any mistake in the Order . 

It cannot be said that the Tribunal has not considered the material evidence on record available before it, while deciding the case.

Hence, error is not apparent from the Tribunal's order and there is no warrant for any rectification.

Even otherwise, there is a report of the Deputy Commissioner of Customs, SEEPZ-SEZ addressed to the Additional Commissioner of Customs, CSI Airport, Mumbai viz. letter F.No.S/1-Misc-46/06-07 SEEPZ-SEZ dated 28.01.2009 informing that no bond was taken by SEEPZ Customs to release these goods . So, there is a wrong averment made in the ROM application and the facts are distinguishable vis-à-vis the Apex Court decision in Weston Components.

No error apparent on record - No merit in ROM application, hence dismissed.:MUMBAI CESTAT;