Four newly-elected MPs take oath in Rajya Sabha;

ACC journey begins for approval of four names for CBEC Member panel - Mr P N Vittal Dass, Mr S D Majumder, Mr Y G Parande & Mr S K Goel;

Health Ministry issues travel advisory for Indians visiting Swine flu affected countries; Special counters set up at airport for screening of pax coming from such countries;

Former Indian Bank CMD M Gopalakrishnan sentenced to seven years RI with Rs 70 lakh fine by CBI Court;

Govt approves 22 FDI proposals worth Rs 541 Crore;

Sahar Airport Customs arrests pax coming from Dubai with dutiable goods worth Rs 10.86 lakhs;

Satyam saga: Raju's favourite modus operandi was to generate false invoices to inflate sales, says CBI;

TIOL COMMENTARY

ddt 28 April.pdf + rbi.pdf

Policy Guidelines for issuance and operation of Prepaid Payment Instruments in India – RBI instructions;

CASE LAW + ANALYSIS

2009-TIOL-57-SC-CT.pdf + tn story.pdf

Sree Krishna Electricals Vs State Of Tamil Nadu (Dated: April 21, 2009)

ANGST - Where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealers' turnover disallowing the exemption, penalty cannot be imposed:

No interference on factual findings: the authorities have factually adjudicated the issues. The High Court has observed that the factual scenario was identical. The conclusions arrived at by the revenue authorities and the High Court that in fact what was sold was a complete wet grinder which was a new commodity and not merely parts thereof. This being a factual finding, there is no scope for interference in these appeals so far levy of tax is concerned.:SUPREME COURT;

MIXED BUZZZ

mbuzz0428.pdf

University College Dublin and INTERPOL launch e-crime investigation training initiative;

mbuzz0427.pdf

Activation of VAS: TRAI directs telecom Cos to convey same in writing;

mbuzz0426.pdf

Swine Flu spread: UN puts global pandemic alert level to phase 4;

2009-TIOL-201-HC-DEL-IT.pdf + hc story.pdf

CIT Vs Pawan Gupta (Dated: April 15, 2009)

Income tax - notice u/s 143(2) - search and seizure - block assessment - return filed u/s 158BC - AO conducts his own inquiry and completes assessment without serving a notice u/s 143(2) - Tribunal sets aside assessment following Guwahati HC decision on the same issue - held, if the AO accepts the block return and does not embark on any investigation he is not required to issue any notice u/s 143(2) and can complete the assessment and pass the order under section 158 BC (c). But if he declines the return, it is mandatory for him to issue notice u/s 143(2) as giving an opportunity to the assessee to present materials relevant for assessment is not an empty formality but a substantive right which cannot be denied to the assessee. And if the AO skips the notice u/s 143(2) it does not merely render the assessment irregular but invalidates it.

Section 158 BC (b) itself requires that the provisions of section 143 (2) be followed. The intention of the legislature is quite clear inasmuch as specific provisions have been mentioned. The qualifying words “so far as may be” have already been construed to indicate situations where a notice under section 143(2) would or would not be required. The main point is that section 143 (2) has been specifically incorporated in the scheme of block assessment proceedings and that cannot be ignored. Denying a right of representation to the assessee would amount to a travesty of justice apart from being in violation of the statutory prescription of section 143(2) and 143(3) read with section 158 BC (b) of the said Act.: DELHI HIGH COURT;

2009-TIOL-200-HC-MAD-IT.pdf

CIT, Tiruchirapalli Vs P Madhavan (Dated: March 18, 2009)

Income tax - voluntary retirement benefits - Issue is no longer res integra as assessee is entitled to deduction under both Sec 10(10C) and Sec 89(1) - Revenue's appeal dismissed:MADRAS HIGH COURT;

2009-TIOL-199-HC-MAD-IT.pdf

CIT, Chennai Vs M/s Futura Polyester Limited (Dated: April 16, 2009)

Income tax - Sec 80HHC benefits - Assessee is a manufacturer-exporter of polymer products - while computing the profit u/s 115JA the assessee claims deduction u/s 80HHC - AO disallows - CIT(A) allows Assessee's appeal and Tribunal upholds the same - held, AO is not entitled to touch the P&L account prepared as per provisions of Companies Act while arriving at profit u/s 115J and the book profit thus calculated should be the basis for taxation - deduction u/s 80HHC to be limited only to profits of eligible category only - no infirmity in the Tribunal's order - Revenue's appeal dismissed: MADRAS HIGH COURT;

2009-TIOL-257-ITAT-BANG.pdf

Hewlett-Packard Globalsoft Pvt Ltd Vs DCIT, Bangalore (Dated : March 25, 2009)

Income tax - penalty u/s 272B - Assessee files TDS return with 93% PANs of total number of deductees - AO disagrees and levies penalty u/s 272B - CIT(A) agrees with the AO - held, since the assessee has relied on the CBDT press release which enhances the limit from 90% to 95% from the quarter ending 31.3.2008, the assessee complies with the condition laid down which is 90% for the concerned quarter and, therefore, penalty is not sustainable - Assessee's appeal allowed: BANGALORE ITAT;

2009-TIOL-256-ITAT-BANG.pdf

M/s 3D Networks Pvt Ltd Vs DDIT, Bangalore (Dated : March 31, 2009)

Income tax - Sec 44C - Assessee is a branch office of a Singapore-based company - engaged in providing integrated networking solutions - fails to claim deduction for head office expenses u/s 44C - At the time of scrutiny assessee files application for rectification u/s 154 - AO disallows - held, as per Sec 139(5) if any assessee finds any omission or wrong statement in the return it can file a revised return within one year from the end of assessment order but since the assessee failed to do so, the AO's order is justified - Assessee's appeal dismissed

Assessee pays services charges to non-resident company - AO disallows the same under sec.40(a)(i) for non-deduction of TDS u/s 195 - held, if the payee's income was not taxable in India, the assessee should have filed an application to the Department for issuing a certificate u/s 195(2) or if it was only partially taxable, it should have applied to the Revenue to decide the same - it cannot decide the same suo moto - Issue remanded to the AO: BANGALORE ITAT;

Non Functional upgradation for officers .pdf

Good news for Officers of organised Group 'A': Govt allows non-functional upgradation in Pay Band-3 and PB-4;

SERVICE TAX SECTION

2009-TIOL-202-HC-P&H-ST.pdf + stgst story.pdf

CCE, Panchkula Vs M/s Kulcip Medicines (P) Ltd (Dated: February 24, 2009)

Service Tax – C & F Agent; it is 'clearing and forwarding agent, not 'clearing or forwarding agent; Reading the word 'and' as 'or' would amount to doing violence to the simple language used by Legislature which cannot be imputed ignorance of English language; By necessary intendment the expression 'a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner' contemplates only one person rendering service as 'clearing and forwarding agent' in relation to 'clearing and forwarding operations'. To say that if, one person has rendered service as 'forwarding agent' without rendering any service as 'clearing agent' and he be deemed to have rendered both services would amount to replacing the conjunctive 'and' by a disjunctive which is not possible. The counsel for the revenue has not been able to bring on record any material to show the word 'and' should be construed as disjunctive. He has not shown any 'trade practice' which may lead to a necessary inference that service of one kind rendered by one is invariably considered to comprise both. No argument has been advanced before us by him to canvass that the legislature intention is discernible from the scheme of the statute or from any other relevant material. Therefore the word 'and' should be understood in a conjunctive sense.

If we read the word 'and' as 'or' then it would amount to doing violence to the simple language used by Legislature which cannot be imputed ignorance of English language.

Orchestra of the Larger Bench in Medpro Pharma not impressive: We have not been able to understand with utmost respect to the Tribunal as to what is 'Orchestrated nature of work' involved in the present transaction. The dealer in the present case as per the arrangements reached between the parties has to receive goods which are already got 'cleared' by the manufacturer. The dealer is to store those goods and forward to the buyer of the goods as per direction received. The example of 'wheat and rice' grocery shop is obviously wholly mis -appropriate and does not fit in the context.

Mahavir generics upheld: The view taken by the Tribunal in M/s Mahavir Generics's case (supra) has been accepted by the revenue as no appeal has been filed. Moreover we are not able to persuade ourselves to accept the view taken by the larger Bench of the Tribunal in the case of Medpro Pharma Pvt. Ltd. which has been fascinated by musical notes of symphony:PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-673-CESTAT-BANG.pdf

M/s C Ahead Info Technologies India Pvt Ltd Vs CST, Bangalore (Dated: January 2, 2009)

Service tax – Tax paid before issue of SCN with interest covered by s. 73 (3) – Assessee under bonafide belief of non levy established on record – Penalty not leviable under Ss. 76, 77 and 78 of Finance Act, 1994:BANGALORE CESTAT;

2009-TIOL-672-CESTAT-AHM.pdf

M/s Krunal Catering Service Vs CCE, Vadodara (Dated: March 27, 2009)

ST - Outdoor Catering Service - Assessee runs a canteen in a factory located in rural area - fails to register and pay tax due to ignorance of law - on being pointed out he pays tax with interest - Commissioner(A) confirms penalty u/s 78 - held, since the penalty has been confirmed only on the ground that ignorance of law is no excuse, it goes to confirm that the assessee was under bona fide impression that a canteen was not covered under the taxable service and that makes it a fit case of invocation of Sec 80 - besides, since the credit for the tax paind on this service was available, that goes to prove that the intention was not to evade tax - Assessee's appeal allowed :AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

NOTIFICATION

etariff09_05.pdf

Merger of Bongaigaon Refineries and Petrochemicals Limited with IOCL – Central Excise recognises;

CASE LAWS

2009-TIOL-676-CESTAT-BANG.pdf

CCE, Thrissur Vs M/s Apollo Tyres Ltd, Chalakkudy (Dated: December 3, 2008)

Central Excise – Dutiability of waste polythene films – Polythene films used for wrapping of inputs and intermediate used in the course of manufacture of final products – No ground to suggest waste arising in the course of manufacture of final products – Waste thereof not liable to duty – No merits in Revenue appeal:BANGALORE CESTAT;

2009-TIOL-675-CESTAT-MUM.pdf

CCE,Thane-II Vs Conwood Pre-Fab Pvt Ltd (Dated: March 5, 2009)

Paver blocks classified under SH 6810 11 90 and benefit of exemption claimed under notification 10/2006-CE, Sr.no.23 as ‘hollow building blocks, including aerated or cellular light weight concrete blocks and slabs' – Revenue contends goods are correctly classifiable as ‘solid concrete blocks other than building blocks' under SH 6810 99 90 and denying benefit of Notification 10/2006-CE – Commissioner(A) allowing appeal of assessee – Revenue appeals before Tribunal.

Tribunal's observations - One has got to ascertain as to how 'building blocks' are understood in the common parlance. According to the assessees, the common people understand these goods to be blocks used for building activity. On the contrary, it is the argument of the appellant that 'building blocks' are blocks used in a building as vertical structure. This view of the Revenue reverberated in Court by the learned JCDR does not appear to be in keeping with how the common populace understand similar expressions such as building materials, sewing machine, cooking gas, cutting board, drinking water and the like. It cannot be in dispute that a sewing machine is a machine used for sewing, that cooking gas is a gas used for cooking, that cutting board is a board used for cutting, that drinking water is water used for drinking. Building materials (cement, bricks, steel wires etc.) ere materials used for building structures. These structures, in our view, need not be vertical structures only. They can be multidimensional - some may be vertical like the buildings visualized by JCDR, some be horizontal like footpaths, courtyards of buildings etc. some can even be subterraneous like water tanks etc. Materials used for constructing all these structures are known as building materials in common parlance. When the common man understands a sewing machine to be a machine used for sewing, cooking gas to be a gas used for cooking, cutting board to be a board used for cutting, it would be rather unconventional to hold that he does not count building blocks / bricks as materials used for building structures.

We hold that the paver blocks in question, used for paving roads, footpaths, parking areas, and other open spaces like courtyards of buildings, is classifiable as 'building blocks' under SH 6810 11 90, which entry is specific enough to cover 'building blocks'. There is no question of classifying paver blocks under the residuary entry (SH 6810 99 90) suggested by the Revenue.

Held - Assessees are entitled to the benefit of concessional rate of duty under the relevant Notification 10/2006-CE as rightly held by the lower appellate authority. Revenue appeals are dismissed.:MUMBAI CESTAT;

2009-TIOL-674-CESTAT-MUM.pdf

Aarti Steel Industries Vs CCE, Nashik (Dated: December 29, 2008)

No penalty can be imposed on a firm in terms of Rule 26 of the CER, 2002 - it can only be imposed on an individual - Penalty set aside.:MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08cir082.pdf

Import of waste paper.;

instruction09_003.pdf

Implementation of the provisions of Phytosanitary requirements under the Plant Quarantine (Regulation of Import into India ) Order, 2003 - regarding.

CASE LAWS

2009-TIOL-56-SC-CUS.pdf + sc cus story.pdf

CC, New Delhi Vs Euroasia Global (Dated: March 23, 2009)

Customs – seizure of cash - High Court ought not to have granted unconditional release: the case involves seizure of Rs. 23.90 lakhs, the main ground of the Department was that there was some hawala transaction going on and that the said amount appeared to have been acquired in such a transaction. Under Section 110, the competent officer is authorized to seize such goods in respect of which he has reason to believe that they are liable to confiscation. The word "goods" is defined under Section 2(22) to include currency. Under Section 122, adjudication in respect of confiscation is provided for. Section 124 provides for show cause notice before confiscation. Under Section 110A provisional release of goods seized, pending adjudication is provided for.

Before adjudication, in exercise of writ jurisdiction, the High Court ought not to have granted unconditional release of the cash.:SUPREME COURT;

2009-TIOL-197-HC-DEL-CUS.pdf

B S Industries, Orissa Vs UoI (Dated: April 16, 2009)

Customs - export of chrome concentrate - canalizing the export of chrome concentrate/chrome ore through MMTC - prayer for interim relief on the ground that the contracts were entered into on 21st February, 2009 and 23rd February, 2009 based on MOU with foreign buyer on 1st April 2008 - Both these contracts have been entered into well after the policy of canalization come into force - relief prayed for by the Petitioner cannot be granted particularly since it affects the export policy of the government.:DELHI HIGH COURT;

2009-TIOL-671-CESTAT-DEL.pdf

M/s Vikem Metalkat Pvt Ltd Vs CC, New Delhi (Dated: November 18, 2008)

Customs – Mere shareholding in Indian importer-company by foreign supplier not a ground for rejection of transaction value – No evidence shown by Revenue to correlate payment of technical know how with import of raw materials – Imported goods to be assessed at the time and place of importation and payments for post importation services not includible in AV – Impugned order set aside :DELHI CESTAT;