CBEC is into AGT-mode now; to issue Addl/JCs order this week + one adjustment order of Commissioners; Probationers' posting order issued; What is CBDT waiting for?

Tax haven issue: Arun Shourie rebuts Congress charges; accuses UPA of not doing anything to bring back Indian money;

India successfully launches Israel's spy satellite from Sriharikota; ISRO Chief says it is great new year gift;

Google's British operations accused of resorting to tax avoidance;

USA decides to skip global meet on racism; UN official regrets it;

Govt mulls special audit of Satyam to fix tax liability;

Somali pirates step up offensive; NATO foils attack on Norwegian tanker;

Denmark most networked economy; India slips to 54th place in global ICT survey;

TIOL COMMENTARY

ddt 20 April.pdf

No Service Tax on Bank Deposit Insurance Premium;

tiol top.pdf

Government Audit: Appearance and Reality!

guest.pdf

Levy Of Service Tax On Builders/Developers;

ICT story.pdf

Denmark most networked economy; India slips to 54th place in global ICT survey;

MIXED BUZZZ

mbuzz0403.pdf

Deteriorating situation in Pak a threat to global peace: Antony;

mbuzz0402.pdf

Google's British operations accused of resorting to tax avoidance;

mbuzz0401.pdf

USA decides to skip global meet on racism; UN official regrets it;

mbuzz0400.pdf

Sonalika records massive export growth rate;

2009-TIOL-237-ITAT-MUM.pdf + morgan story.pdf

Morgan Stanley Advantage Services Pvt Ltd Vs ITO, Mumbai (Dated : March 19, 2009)

Income tax – export of software – remittance not received within six months from the end of the year; the requirement under section 10A (3) is that the export proceeds are received in or brought into India within a period of six months from the end of the previous year and not from the date of export. The condition required under sub-section (3) to section 10A would be satisfied if the remittances had been received by 30th of September 2004. The assessee has admittedly received the export proceeds in December 2004.

RBI competent to extend the time; for purposes of section 10A ( 3), the permission of the Reserve Bank of India or any other designated authority is required for extension of time.

Letter from RBI treated as implied extension: the Reserve Bank of India, in response to the request of the assessee to extend the time, having taken the remittances on record, implies that the issuing of a letter extending the time is only a formality. The assessee having applied for extension and having completed all the formalities; and in response the Reserve Bank of India having taken the remittances on record, the non-issue of a formal letter for approval, cannot be held against the assessee for none of its faults. The assessee having applied for extension and the same having been impliedly granted in substance, the benefit of section 10A has got to be allowed to the assessee on the ground that the extension is deemed to have been granted. Once the assessee has completed all the formalities and the request of the assessee for extension of time not having been rejected, if can be presumed after a reasonable time that the extension has been granted. :MUMBAI ITAT;

2009-TIOL-236-ITAT-MUM.pdf

ITO, Mumbai Vs M/s Kirtilal Kalidas Diamond Exports (Dated : September 30, 2008)

Income tax - Indo-UK DTAA - Assessee is a cut and polished diamond exporter - imports rough diamonds from UK - pays commission to a non-resident for facilitating the purchase of rough diamonds - AO for deduction of tax at source - Assessee pleads since the payment was made outside India and the the payment recipient has no PE in India, the commission paid is not taxable - CIT(A) disagrees with the AO and holds the sum paid is not taxable as per provisions of India-UK DTAA - held, since the payment was made to a non-resident outside India and the non-resident having no PE in India, the income is not taxable in India, and even if it is, it will be business income as per India-UK DTAA - Revenue's appeal dismissed:MUMBAI ITAT;

2009-TIOL-235-ITAT-MAD.pdf

ACIT, Chennai Vs M/s Tube Investments Of India Ltd (Dated : January 09, 2009)

Income Tax - Pursuant to a survey action conducted u/s 133A at assessee's premises, an addition is made to his income under the caption 'Income on account of surrendering rights pertaining to transfer of grant provided by Dutch Government - CIT(A) deletes the addition - Held, grant was person specific but given by the Dutch Government as a matter of policy and since it had nexus with the equipment and not with the buyer, it was not possible for the purchaser to transfer the grant amount as such - Revenue's appeal dismissed.:CHENNAI ITAT;

2009-TIOL-234-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s United Breweries Ltd (Dated : February 27, 2009)

Income Tax - Sec 37(1) – Assessee Co pays Guarantee Commission to its own Chairman - claims deduction u/s 37(1) – AO diallows on the ground that it is  payment for consideration other than business - CIT(A) takes the view that since it is not an expenditure wholly and exclusively incurred for business, it cannot be allowed - HC remands the issue to the Tribunal for fresh consideration – Held, since loans were required for business and banks insist on personal guarantee, and the assesee paid commission for the same - Guarantee Commission paid is allowable expenditure - Assessee's appeal allowed:BANGALORE ITAT;

2009-TIOL-233-ITAT-MUM.pdf

M/s Reliance Consolidated Vs DCIT (Dated : January 29, 2009)

Income Tax - Section 14A - dividend income - assessee claims exemption u/s 10(23) - AO for disallowance on two counts - administrative expenses and interest paid on borrowed funds - CIT(A) goes with the AO - Held, no part of the borrowings has been invested in shares, therefore interest paid cannot be disallowed u/s 14A. However, AO's decision to disallow administrative expenses is justified - Revenue's appeal partly allowed :MUMBAI ITAT;

Order 72 of 2009

CBEC issues posting order of probationers;

SERVICE TAX SECTION

2009-TIOL-626-CESTAT-MAD.pdf

M/s LEO Travels Pvt Ltd Vs CCE, Trichy (Dated: January 5, 2009)

Service Tax – Commissioner cannot enhance penalty when appeal is pending:CHENNAI CESTAT;

2009-TIOL-625-CESTAT-MUM.pdf

M/s Prashik Security & Manpower Services Vs CCE, Nasik (Dated: January 20, 2009)

Service Tax – Departmental officers got hold of the bank statements which showed the correct amount collected from clients vis-à-vis the lesser amounts indicated for the purpose for payment of Service Tax – Commissioner(A) dismissing appeal for non-compliance of pre-deposit orders – Matter remanded subject to pre-deposit within 30 days.:MUMBAI CESTAT;

2009-TIOL-623-CESTAT-MAD.pdf

M/s Tamil Nadu State Transport Corportion (Kumbakonam) Ltd Vs CCE, Trichy (Dated: February 17, 2009)

Service tax – Tour Operator Service – deployment of Tamil Nadu State Transport Corporation Limited buses to transport of employees of BHEL from various points – not taxable under Tour Operator service even after the expansion of the definition of tour operator with effect from 10.9.2004 – the activity is taxable only if they are package tours TNSTC did not engage in planning, scheduling, organizing or arranging tours – impugned order set aside.:CHENNAI CESTAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt09_07.pdf

Amendment in central excise commissionerate jurisdiction - Pune II becomes Kolhapur commissionerate;

CASE LAWS

2009-TIOL-177-HC-MUM-CX.pdf + arrear story.pdf

Gharkul Industries Pvt Ltd Vs Superintendent Central Excise (Dated: March 2, 2009)

Central Excise – arrears - If the dues of the Excise Department are not satisfied from the sale proceeds, it cannot follow the property in the hands of the successive purchaser for the remainder of its dues.:BOMBAY HIGH COURT;

2009-TIOL-629-CESTAT-AHM.pdf + interest story.pdf

M/s Mercury Abtibiotics Pvt Ltd And Others Vs CCE, Vadodara (Dated: March 19, 2009)

Central Excise – valuation – related person - for mutuality of interest, there has to be holding of shares of each other between two companies: First question is as to whether the corporate veil should be lifted in this case. The Commissioner has held that since all the shares are held by the families and relatives in one company and the same group holds almost 70% of the shares in other company, they have to be treated as related persons. However what is to be seen is whether this aspect has influenced the price or not and whether there is mutuality of interest. It is not denied that the companies do not have shares in each other. It is also not denied that there are 965 share holders in MLL out of which the majority of them do not belong to family or their relatives. Tribunal in case of M/s Utkal Alloy (P) Ltd - 2005-TIOL-932-CESTAT-KOL has held that for mutuality of interest, there has to be holding of shares of each other between two companies. This factor does not exist in this case.

Common accountant and common Excise manager will not make them related As regards having a common accountant and common Excise manager, in the absence of any evidence of flow back, manipulation of price, manipulation of accounts etc. , these factors do not affect the overall conclusion.:AHMEDABAD CESTAT;

2009-TIOL-628-CESTAT-AHM.pdf + banner story.pdf

M/s Banner Pharma Caps Pvt Ltd Vs CCE, Vapi (Dated: March 19, 2009)

Modvat - Taking duty credit after six months from the date of issue of Bill of Entry – Tribunal allows appeal

Beta Carotene, Vitamin A etc. imported for using the same in the manufacture of medicaments - goods had already been received and entry was made in RG-23A Register, Part-I but because of delay in receipt of copies of bill of entry duly endorsed by the appraiser of the customs, there was delay in taking credit - Inasmuch as the Larger Bench in the MRP Limited case ( 2007-TIOL-91-CESTAT-BANG-LB ) was not concerned with the issue where the inputs were received within a period of 6 months and proper documents were yet to be received hence it could not be said that Larger Bench decision covers the disputed issue

Modvat benefit is to be allowed to the appellant, especially when there is no dispute about the duty paid character of the inputs, their receipt in the appellants' factory and utilization in the manufacture of the final product. The provisions debarring taking of credit after the period of 6 months from the date of issuance of duty paying documents were introduced with intent to avoid misuse of the same, where inputs are obtained after a period of 6 months from the clearance from the factory of the manufacturer or from the premises of the dealer etc. Inasmuch as in the present case admittedly goods were received within a period of 6 months and entries were duly made in their RG 23A part-1, it was only a question of making suitable entries in part-II register of RG-23A format.: AHMEDABAD CESTAT;

2009-TIOL-627-CESTAT-MAD.pdf

CCE, Chennai Vs M/s Sundram Fasteners Ltd (Dated: February 17, 2009)

Central Excise – removal of inputs or capital goods as such - the facility extended to manufactures of excisable goods to discharge their duty liability on final products removed on the 5 th of the succeeding month was available also in respect of inputs and capital goods removed ‘as such'. :CHENNAI CESTAT;

2009-TIOL-622-CESTAT-MAD.pdf

M/s S V Sugar Mills Ltd Vs CCE, Chennai - III (Dated: February 13, 2009)

Central Excise – valuation – related person – mutuality of interest - issue of 0% interest fully convertible debentures by the holding company to subsidiary company - fully convertible debentures cannot be held to be interest free loan extended – In the absence of allegation of mutuality of interest on any other ground, the sale price adopted by the appellant is acceptable – demand set aside. :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn174.pdf

SION rate for textile products: DGFT amends General Note No 18 & 19

CASE LAWS

2009-TIOL-624-CESTAT-DEL.pdf

M/s Honda Siel Power Products Ltd Vs CC, New Delhi (Dated: February 10, 2009)

Customs - refund of duty paid on short shipped goods -  only small quantity was found in the consignment and the said quantity was also cleared on advance license without the need for any payment of duty - the amount deposited in second appraisement system is not attributable to any goods imported by the appellant - the time bar prescribed under section 27 of the Customs Act can not be applied. :DELHI CESTAT;

2009-TIOL-621-CESTAT-MUM.pdf

CCE, Nagpur Vs Indoworth (I) Ltd (Dated: January 14, 2009)

Where Customs duty is exempted, the same is to be added in the Assessable value as ‘Nil' and the countervailing duty is to be determined accordingly – Issue is no longer res integra in view of Tribunal decision in Parasrampuria International [ 2004-TIOL-757-CESTAT-Del ] :MUMBAI CESTAT;