ER-1 returns not filed on time - SCN issued after 4 years for penalty (See 'DDT');

Have you ever heard of Government losing money by introducing a new tax? Government loses lottery - service tax if any on lottery only from May 2008: Supreme Court (Look for SC's landmark decision tomorrow in 'Breaking News');

Security Council to discuss crisis in Nepal;

CBEC Commissioners' transfer order only after Minister comes back next week;

WCO offers fellowship for English-speaking Customs officers;

CII projects 6.1% growth in economy for fiscal 2009-10;

Rakesh Mohan, Dy Governor of RBI, quits; going to join Stanford University as Consulting Professor;

Tax haven issue: SC to hear case on July 20 after new Govt takes over;

SEBI airs views against India setting up sovereign wealth fund;

TIOL COMMENTARY

ddt 5 May.pdf

Obama's Tax Reforms - Pfizer, Oracle, Microsoft, etc, to be affected – INDIAN angle?

FEMA CASE LAWS

2009-TIOL-221-HC-MUM-FEMA.pdf

Shri Vivek Kumar Pukhraj Jain Vs UoI (Dated: April 23, 2009)

FERA - retraction of confessional statements - not only there were confessional statements which were retracted later on, the Enforcement Directorate also recovered the chits and diary in the handwriting of the appellant and the said documentary evidence provided corroboration to the confessional statements of the present appellant and others - the concurrent finding of facts of both the authorities below cannot be interfered by the Court. No question of law is involved. :BOMBAY HIGH COURT;

MIXED BUZZ

mbuzz0447.pdf

UN now better equipped to give proper publicity to own work;

mbuzz0446.pdf

CII projects 6.1% growth in economy for fiscal 2009-10;

2009-TIOL-223-HC-MAD-IT.pdf

M/s Universal Cold Storage Limited Vs DCIT, Chennai (Dated: April 6, 2009)

Income tax - Sec 80HHC - Assessee claims deduction of exports profits - AO disallows on the ground that after deduction the net profit becomes negative - CIT(A) allows assessee's appeal - Tribunal reverses the CIT(A) order - held, for arriving at profits earned from export of both self manufactured goods and trading goods, the profits and losses in both trades have to be taken into consideration. If after such adjustments there is a positive profit the assessee would be entitled to deduction under Section 80HHC(1). If there is a loss the assessee would not be entitled to deduction. The word "profit" in sub-sections (1) and 3(a) and (b) of Section 80HHC means a positive profit - Assessee's appeal dismissed:MADRAS HIGH COURT;

2009-TIOL-222-HC-DEL-IT.pdf

CIT, New Delhi Vs D S Promoters & Developers Pvt Ltd (Dated: May 1, 2009)

Income tax - Business income - assessee owns several buildings - it is into the business of buying property, furnishing them or taking properties on lease and letting them off - AO treats the income as 'Income from Other Sources' - Tribunal holds that it is business income as it is a regular business of the assessee - held, since the assessee's income in the past has been treated as business income, the rule of consistency demands that it should not be treated differently unless there is substantial evidence for the same - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-271-ITAT-MAD.pdf + windmill story.pdf

M/s Elgitread (India) Ltd Vs ACIT, Coimbatore (Dated: March 18, 2009)

Section 80 HHC – income from electricity generated by windmill is business income; It is an admitted fact that the energy generated by the Wind Mill was used by the assessee in its factory and the balance requirement was met by the supply from the TNEB . Since the assessee had to use the grid and the transmission lines of the TNEB the methodology of billing and payment had to be provided in the agreement between the assessee and the TNEB . The assessee had the option of either to buy its entire requirement of energy from the TNEB or to generate it, in order to meet its full or part requirement, by installing Wind Mills. The assessee chose to install one Wind Mill in order to meet part of its requirement of electrical energy, and in such a situation the Wind Mill became an integral part of its manufacturing facility. It cannot be the case of the AO that the assessee should buy its entire requirement of electricity from the TNEB .

AO cannot decide how business has to be done: The assessee has the liberty to choose its business model. In a complex manufacturing process it is the assessee who decides as to what to produce in the factory, what to buy and what to outsource. The AO cannot justifiably claim to put himself in the arm-chair of the businessman and assume the role to decide how to do the business having regard to the circumstances of the case. The AO has to put himself in the shoes of the assessee and see how a prudent businessman would act. He should not look at the matter from his own view point but from that of a prudent businessman.:CHENNAI ITAT;

2009-TIOL-270-ITAT-DEL.pdf

M/s Mayur Developers Pvt Ltd Vs CIT, New Delhi (Dated: February 19, 2009)

Income Tax - Sec 263 - Assessee engaged in the business of builder and developer - AO accepts nil income  return - CIT invokes jurisdiction u/s  263 on the ground that assessment is erroneous and prejudicial to the interest of revenue - Assessee contends  that  CIT has not reached proper conclusion because there is no sale of land and assessee has followed complete contract method - Held, it is easy for one to conclude that the order is without application of mind but how the assessee is responsible for drawing the cryptic order by the AO. After all it is not for the assessee to guide how the AO should elaborately write his order. The balance sheet, which depicts all the expenditure in question as work in progress. Difficult to hold that the order of the AO is erroneous or has caused any prejudice to the revenue. The assessee is only a builder and claims to have been following the complete contract method. The assessment of any income in respect of the project before it is fully complete will only result in a double addition. The CIT not justified in exercising his revisionary jurisdiction - Assessee's appeal allowed.:DELHI ITAT;

2009-TIOL-269-ITAT-DEL.pdf

M/s Asia Satellite Telecommunications Co Ltd Vs DCIT/ACIT, New Delhi (Dated: March 27, 2009)

Income tax - stay on recovery of interest u/s 234B - Assessee is a Hong Kong based satellite provider - its main business is to lease satellite put in orbit above equator - claims has no office in India - AO for royalty u/s 9(1)(vi) - demand for interest u/s 234B - assessee seeks stay on recovery of interest and argues that since its case is covered u/s 195, Sec 234B is not applicable to its case - held, in view of the fact that the assessee has deposited the disputed tax and the earlier order of the Tribunal has gone in its favour on the same issue and the assessee is an intervener in a case being heard before the Special Bench on a similar issue, it is a fit case for grant of stay - Revenue restrained from initiating any recovery process - Assessee's appeal allowed : DELHI ITAT;

vacancies_wco.pdf

WCO offers fellowship for English-speaking Customs officers;

SERVICE TAX SECTION

2009-TIOL-709-CESTAT-BANG.pdf + stgst.pdf

M/s Nipuna Services Ltd Vs CCE, CC & ST, Hyderabad (Dated: November 4, 2008)

Service Tax – export – refund - receipt of payment in convertible foreign exchange – prior to 01.03.2007, there was no such requirement under the Export of Service Rules 2005 to treat the services as exported – the amendments in 2005 and 2006 did not alter the position.: BANGALORE CESTAT;

2009-TIOL-708-CESTAT-DEL.pdf

M/s Guru Teg Bahadur Metal Works Vs CCE, Chandigarh (Dated: March 31, 2009)

ST - Repair and maintenance service - assessee is a small service provider - takes voluntarily registration and pays tax after two years - seeks waiver of penalty - since the assessee has on its own taken registarion and paid tax it shows evasion was not its intention, and the fact that there is no evidence indicating collection of tax, penalty under Ss 76 and 78 are waived off but under Sec 77 confirmed: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-712-CESTAT-MUM.pdf + scrabble story.pdf

Pleasantime Products Vs CCE, Mumbai-I (Dated: September 24, 2008)

‘Scrabble Junior' and ‘Scrabble Dice' are also classifiable under heading 9504.90 as they are similar to ‘Scrabble original' – ROM application fetches ‘unpleasant' results at the hands of the Tribunal.

Tribunal's orders on ROM application filed in the matter of Tribunal order in Pleasantime Products [ 2008-TIOL-552-CESTAT-Mum ].

Classification of 'Scrabble Junior' and 'Scrabble Dice' were not determined while passing the earlier order. Scrabble Junior' which is meant for children is also a word game which is similar to the conventional 'Scrabble Original' but with an added printed word side to the board. Therefore, 'Scrabble Junior' is also classifiable like 'Scrabble Original' under CET sub-heading 9504.90.

'Scrabble Dice' is also a word game similar to the conventional 'Scrabble Original' but with an added dice section, and, therefore, falls for classification under CET sub-heading 9504.90.

Applicants are seeking to have the classification issue reviewed in guise of rectification application which is not permissible as the Tribunal admittedly has no power to review its own order.

Assessees were guilty of suppression in not disclosing the basic information, namely, viz. name of the game manufactured by them i.e., Scrabble hence plea of bonafide belief not available.

No penalty under Section 11AC can be imposed for the period prior to 28.09.1996; applicants are liable to penalty equal to the duty payable for the period subsequent to 28/09/1996 up to January, 2001 and this amount is required to be re-computed.
As regards the submission that the value of the goods has to be considered as cum-duty price and the duty liability, since no such submission was raised during the course of hearing and hence no error arises in not recording a finding on a plea not raised before the Bench.

ROM disposed of accordingly. :MUMBAI CESTAT;

2009-TIOL-711-CESTAT-MAD.pdf

M/s EID Parry India Ltd Vs CCE, Trichy (Dated: February 13, 2009)

Central Excise – CENVAT – Capital goods - Captive power plant – denial of credit on the ground that the power plant is immovable property and is not excisable - Credit admissible in respect of goods used to set up captive power plant which in turn is used to generate electricity which in turn goes to manufacture of sugar, dutiable final product. ( Para 2):CHENNAI CESTAT;

2009-TIOL-710-CESTAT-MAD.pdf

M/s Chennai Petroleum Corporation Ltd Vs CCE, Trichy (Dated: March 25, 2009)

Central Excise – Valuation – Related buyer – Interconnected undertaking – In terms of Rule 10(a) of the Valuation Rules, when the excisable goods are not sold except through an interconnected undertaking, the value should be determined as per Rule 9 of the Valuation Rules. As per this rule, the assessable value shall be the price charged by the related person when the excisable goods are arranged to be sold through a related person. The appellants have followed the above provisions and paid duty on clearances of HSD during the material period correctly. There is no legal sanction to demand duty from the appellant in cases where the price charged on related buyer is higher than the corresponding sale price of related buyer. (Para 2):CHENNAI CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft08cir087.pdf

Export of Sugar – reintroduction of the system of export release orders w.e.f. 1.1.2009 for export under OGL – reg.;

dgft08cir086.pdf

Clarification regarding applicability of 36 months Export Obligation Period (EOP) under Duty Free Import Authorisation (DFIA) Scheme – regarding;

CASE LAWS

2009-TIOL-707-CESTAT-DEL.pdf + cus story.pdf

M/s Jain Grani Marmo Pvt Ltd Vs CCE, Jaipur-II (Dated: February 17, 2009)

Customs – 100% EOU – Import of rough marble blocks without payment of customs duty and serpentine blocks without payment of duty – Serpentine cannot be regarded as marble as HSN classification for the two are different – Separate input – output norms prescribed by DGFT for serpentine blocks/tiles and marble blocks/tiles – Goods sold by an EOU into DTA must be 'similar' to the goods exported – In case of multiproduct 100% EOU manufacturing products A and B, it is not open for the unit to exclusively export product A and keep product B exclusively for DTA sale, unless products A and B are similar – Customs exemption for import of marble blocks not available as products cleared for export not similar to products cleared in DTA

Customs – Demand hit by limitation as all relevant correspondence with DGFT regarding import/export/DTA clearance available with department, stuffing of containers and clearance to DTA under Excise supervision – Penalty imposed under s. 114A liable to be set aside – Redemption fine set aside as goods are not available for confiscation and such goods were not released against provisional bond – Penalty on appellant company and director upheld in view of violation of import condition – Clearance of marble tiles to DTA not leviable to excise duty as cutting of marble blocks to slabs/tiles does not amount to manufacture during relevant period :DELHI CESTAT;