Service Tax – Renting of immovable property – tax is on any service in relation to renting not renting per se; Service tax is a value added tax – no tax on renting – Legislative Competence not examined: Delhi HC (See 'Breaking News' + original version of HC order '2009-TIOL-196-HC-DEL-ST')

TDS - Does an assessee become an 'assessee in default' for merely not deducting tax at source? - NO is latest verdict from ITAT Special Bench (Look for decision on Monday);

Yacht import case: Mumbai Customs (General) recovers Rs 25 Crore from Anil Ambani Group Company;

CBEC puts Addl/JCs AGT order in 'top loop'; Commissioners' order to take time;

'Voice of CAs' to be launched tomorrow;

India, Poland trade can reach USD 5 bn in next five years: CII Report;

35 drown after smuggler's boat capsizes off Yemen: UN;

TDS comes to CBDT's rescue; net direct tax mop-up likely to log 10% growth rate;

TIOL COMMENTARY

ddt 24 April.pdf

Rule 6 in a fix – Full CENVAT Credit on specified input services allowed in Rule 6(5) gets reduced in Rule 6(3A);

MIXED BUZZZ

mbuzz0416.pdf

'Voice of CAs' to be launched tomorrow;

mbuzz0415.pdf

India, Poland trade can reach USD 5 bn in next five years: CII Report;

mbuzz0414.pdf

35 drown after smuggler's boat capsizes off Yemen: UN;

2009-TIOL-10-ARA-IT.pdf + ara story.pdf

Canoro Resources Ltd (Dated: April 23, 2009)

Income tax - The apprehension of price manipulation is real even in international transactions between partners and firm, who are associated persons. Therefore, transfer pricing provisions should apply to such transactions: The residential status of the said partnership firm is a question of fact which can be determined by the assessing officer at the relevant point of time. If the proposed partnership is assessed as a firm, then the share of the partners in the total income of the firm shall not be included in the total income of such partners.:ADVANCE RULING AUTHORITY;

2009-TIOL-195-HC-DEL-IT.pdf

Printer House Pvt Ltd Vs Nishi Singh (Dated: March 23, 2009)

Income tax - Ss 276C and 277 - Assessee is into printing business - claims depreciation on a new machine installed at the factory premises - AO disallows the same on the ground that no machine was purchased and installed for the business and a false claim for depreciation u/s 32 has been made only to reduce its taxable profit - penalty proceedings initiated u/s 271(1)(c) - criminal complaint filed and prosecution launched - Tribunal allows the assessee's appeal and finds the claim in order and sets aside penalty - held, although adjudication proceedings and prosecution can go together but once the assessee has been exonerated of all the charges of false return and a culpable state of mind, continuing with the prosecution proceedings will not serve any purpose - Criminal proceedings quashed - Appellant's appeal allowed:DELHI HIGH COURT;

2009-TIOL-194-HC-MAD-IT.pdf

CIT, Chennai-III Vs M/s Panasonic Home Appliances (Dated: March 23, 2009)

Income tax - provision for leave encashment - AO disallows on the ground that it is a contingent and not ascertained liability - Tribunal follows Apex Court decision in Bharat Earth Movers case 2002-TIOL-123-SC-IT and allows assessee's appeal - held, Tribunal's decision does not call for interference - Revenue's appeal disallowed:MADRAS HIGH COURT;

2009-TIOL-250-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s B4U Multimedia International Ltd (Dated : February 16, 2009)

Income tax - Business loss - Assessee provides services and supplies contents to TV channel - also exports film rights - claims deduction for business loss - AO treats it as short-term capital loss - held, since the Revenue has been treating the income from sale of film rights as business income in the past AYs, and there has been no change in the method of accounting of the assessee, the losses arising from sale of film rights are to be treated as business loss - Revenue's appeal dismissed: MUMBAI ITAT;

2009-TIOL-249-ITAT-MUM.pdf

DDIT, Mumbai Vs M/s Reliance Industries Ltd (Dated : January 20, 2009)

Income tax - Indo-USA DTAA - Assessee brings out Euro issues to raise funds - pays fees to Lead Managers for arranging roadshows, underwriting and other services - AO for deduction of tax at source u/s 195 as it is technical u/s 9(1)(vii) and also under Article 12 of DTAA - held, as already decided by the Tribunal in the case of Raymond Ltd such payments cannot be treated as fees for included services under DTAA but provisions of Article 7 are attracted. However, since the assessee has no PE in India, the fees received by the non-resident are not taxable in India - Revenue's appeal dismissed: MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-196-HC-DEL-ST.pdf + renting story.pdf

Home Solution Retail India Ltd Vs UoI (Dated: April 18, 2009)

Service Tax – Renting of immovable property – the tax is on any service in relation to renting not renting per se ; no tax on renting: we have to understand as to whether renting of immovable property for use in the course or furtherance of business or commerce by itself is a service. There is no dispute that any service connected with the renting of such immovable property would fall within the ambit of Section 65(105)(zm) and would be exigible to service tax. The question is whether renting of such immovable property by itself constitutes a service and, thereby, a taxable service.

Service tax is a value added tax – it is apparent that service tax is a value added tax. It is a tax on value addition provided by a service provider. It is obvious that it must have connection with a service and, there must be some value addition by that service. If there is no value addition, then there is no service. Service tax is a value added tax. It is a tax on the value addition provided by some service provider. Insofar as renting of immovable property for use in the course or furtherance of business or commerce is concerned, we are unable to discern any value addition. Consequently, the renting of immovable property for use in the course or furtherance of business of commerce by itself does not entail any value addition and, therefore, cannot be regarded as a service. Of course, if there is some other service, such as air conditioning service provided along with the renting of immovable property, then it would fall within Section 65(105)(zzzz).

Legislative Competence not examined; it has not examined the alternative plea taken by the petitioners with regard to the legislative competence of the Parliament in the context of Entry 49 of List 11 of the Constitution of India. Such an examination has become unnecessary because of the view it has taken on the main plea taken by the petitioners.:DELHI HIGH COURT;

2009-TIOL-650-CESTAT-MAD.pdf

M/s SRC Projects Pvt Ltd Vs CCE, Trichy (Dated: February 17, 2009)

Service tax - adjustment of excess service tax paid against the liability for later period - in view of divergent views held in different decisions of the Tribunal cited by the parties, it was appropriate and necessary that the Commissioner (Appeals) had heard the appeal without insisting on any predeposit - matter remanded.:CHENNAI CESTAT;

2009-TIOL-649-CESTAT-MAD.pdf

M/s Bayforge Ltd Vs CCE, Pondicherry (Dated: January 01, 2009)

Service Tax - an agent engaged to procure orders and not entrusted with the work of clearing and forwarding of the goods, was a commission agent and not a ‘Clearing and Forwarding Agent.' :CHENNAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-652-CESTAT-AHM.pdf

M/s Trans Global Agencies Pvt Ltd Vs CCE, Daman (Dated: March 17, 2009)

Central Excise – Order to be first served by RPAD and only thereafter to be served by affixation in terms of s. 37 C (b) – Matter remanded to Appellate Commissioner to ascertain the facts and decide the case :AHMEDABAD CESTAT;

2009-TIOL-651-CESTAT-MAD.pdf

CCE, Chennai Vs Sundaram Fasteners Ltd (Dated: February 18, 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;

CUSTOMS SECTION

2009-TIOL-653-CESTAT-MUM.pdf + videocon story.pdf

M/s Videocon Industries Ltd Vs CCE, Aurangabad (Dated: February 23, 2009)

LCD panels having multi-use in Televisions and computer monitors are correctly classifiable under Chapter heading 9013 8010 and not 8529 9090, rules Tribunal.

Tribunal's observations –

++ The revenue is admitting that LCD panels are squarely covered by Chapter Heading 90.13 but this heading will include only those LCD panels which are meant for general use and are interchangeable and not those which are principally meant for use in TVs.

++ We find that tariff entry 90.13 refer to LCD's which do not constitute articles provided for more specifically in other headings.

++ The competing entry canvassed by the revenue is 8529, which deals with parts suitable for use solely or principally with the apparatus of heading 8525 to 8528. This entry is not confined to LCD panels meant for use in TVs only but to several other parts which go into the making of LCD TV like TV tuner, PCB board, switches, connectors, speakers etc., all of which will be classifiable under heading 8529. Heading referring to parts cannot be treated as heading covering the LCD's more specifically.

++ In view of this, the description under heading 8529 appears to be general and not specific, whereas description under heading 90.13 is more specific.

++ The Supreme Court decision in G.S. Auto International Ltd. is in the context of Section XVII, Note 2 and 3 and since these notes are missing from Section XVI they are not relevant.

++ The classification has to be determined with reference to section and chapter notes of section to which the goods belongs i.e. Section XVI and the section note 2(a) and 2(b) relating to Section XVI are contrary to the Section Notes of Section XVII.

++ Thus, according to Section Note 2(a) of Section XVI the parts which are goods included in any of the headings of Chapter 84 or 85 are in all cases to be classified in their respective headings and it is only when the parts are not classifiable as per the Section Note 2(a) that Section Note 2(b) becomes applicable.

++ Therefore, a part even if it is suitable for use or solely with a particular kind of machine finds mention under any of the headings of Chapter 84 or 85, then it will get classified under that heading only and not as a part of apparatus or a machine.

++ This is the settled position in the law and it is for this reason that items like transmission shafts, even though meant for principal use for textile machinery falling under heading 84.43 has been held classifiable under heading 84.83 by application of Note 2(a) in the case of New Standard Engineering Co.; Mather & Platt and Dhananjay Industries Engg.

++ We have already held earlier that the only way LCD panels can be considered to be falling under Chapter 85 is by holding that parts of TV is a more specific heading as compared to the LCD itself, which unfortunately is not the case.

++ Once LCD's has been referred to in Chapter Heading 90.13 specifically, it cannot be excluded from there as a part of TV, as this description is general and not specific and covers a variety of parts.

++ Unless LCD panel was described by name under Chapter Heading 8529 as has been done in the case of indicator panel under Chapter Heading 8531, the same cannot be held to be classifiable under Chapter Heading 8529 and the more specific entry has to be considered under Chapter Heading 9013.

Order of Commissioner(A) set aside and Appeal allowed.:MUMBAI CESTAT;

2009-TIOL-654-CESTAT-BANG.pdf + Bharti Airtel stroy.pdf

M/s Bharti Airtel Ltd Vs CC, Bangalore (Dated: October 22, 2008)

Customs – Import of Telecom hardware & related software in CDs and inclusion of value of software for discharge of duty – Prima facie case in favour of assessees in view of Tribunal decision in ITI Ltd 2009-TIOL-302-CESTAT-BANG – Pre-deposit of Rs.440 Crore waived & stay granted:BANGALORE CESTAT;