New TDS Regime - A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'! (See in "Common Basket")

CVC launches prosecution against five CBEC officers; imposes major penalty on three CBDT officials (See in "Common Basket")

Income tax - assessee is NIIT franchisee - payments made for providing copyrighted material, proprietory information and technical knowhow are hit by provisions of Sec 194J but no TDS on royalty, courseware consumables and educational aids provided by lincensor: ITAT (See in "Direct Tax Basket")

Jurisdiction under Section 263 cannot be utilized as an instrument for reopening concluded proceedings on flimsy grounds or on assumptions: ITAT (See in "Direct Tax Basket")

Central Excise – another Revenue appeal fails for lack of jurisdiction of Review Committee – An authority is vested power in manner known to law through an Official Gazette, any deviation there to makes appointee powerless to exercise jurisdiction:CESTAT (See in "Indirect Tax Basket")

One or even more illegalities by one or by some persons cannot create any right in favour of others to commit or to insist for commission of similar illegality by others - In an appeal, issues cannot be decided on hypothetical basis: Tribunal (See in "Indirect Tax Basket")

IRS Officer Sudha Koka selected for World Bank Institute's prestigious course starting today (See 'DDT')

NDA emerging as front runner to manage majority; Bihar CM Nitish Kumar fast becoming more acceptable within NDA as leader;

HRD Ministry denies making appointments in violation to EC's norms;

India joins Montreat Convention as 91st country;

NTPC, ADB and GE Energy join hands for renewable energy projects;

India's trade deficit rises to USD 119 bn; Anti-dumping fails to deter imports;

TIOL COMMENTARY

ddt 11 May.pdf

Modus Operandi for Irregular Utilization of CENVAT Credit by Hotel Chains – CBEC Issues Alert Circular!

tds story.pdf

New TDS Regime - A grand fiasco for CBDT; Is outgoing FM 'aware' of policy change, richly contributing to 'Tax Misery Index'!

guest.pdf

Reorienting The Mind (Set)!

cvc story.pdf

CVC launches prosecution against five CBEC officers; imposes major penalty on three CBDT officials;

MIXED BUZZ

mbuzz0464.pdf

India joins Montreal Convention as 91st country;

mbuzz0463.pdf

HRD Ministry denies violation of EC's norms in appointments;

mbuzz0461.pdf

NTPC, ADB & GE Energy join hands for renewable energy projects;

2009-TIOL-232-HC-AHM-GT.pdf

Asst Commissioner of Gift Tax Vs Synbiotics Ltd (Dated: April 8, 2009 )

Gift tax - Sec 4(1)(a) - Assessee is a bulk drug manufacturer - sells drugs to sister concern at retention price fixed by Central Govt - Since the drugs were not sold at pooled price, the difference between the pooled price and retention price was treated as deemed gift by Revenue - Tribunal disagrees - held, the pooled price is not market price, and secondly, the difference between the pooled price and the retention price was to be deposited in the Drugs Price Stabilisation Account of the Govt and it cannot be said that the difference between the two prices was available as a benefit either to the seller or the purchaser of drugs - Provisions of Section 4 (1)(a) of the Gift Tax Act are not attracted - Revenue's appeal dismissed :GUJARAT HIGH COURT;

2009-TIOL-231-HC-AHM-IT.pdf

Vahid K Ravji Vs CBDT (Dated: March 2, 2009)

Income tax - Writ - Condonation of delay - Search - documents seized - Assessee belatedly files returns for several assessment years - seeks condonation of delay - Revenue rejects the application - held, if the Revenue did no find it desirable or expedient as a case of genuine hardship, it cannot be alleged that the said order suffers from any legal infirmity. The contention that the Revenue order does not contain any reasons, does not merit acceptance because the order categorically states that on the facts and circumstances of the case, the reasons offered by the assessee have not been found fit to warrant condonation of delay - Assessee's appeal dismissed:GUJARAT HIGH COURT;

2009-TIOL-230-HC-MUM-IT.pdf

Sudhakar T Pendse Vs ITO,Mumbai (Dated: April 22, 2009 )

Income tax - Search u/s 132 - assessee is a Director in a property dealing company - shares profit in the ratio of 60% and 40% for the company - Block assessment order passed u/s 158BC - AO makes addition for a tidy sum not disclosed to tax - Assessee argues that he was following cash accounting system and that is how it failed to offer the sum to tax - AO finds that assessee was following mercantile system of accrual - assessee files appeal but sumbits a letter to treat the sum as undisclosed income - Tribunal upholds the CIT(A) order - assessee files appeal - held, once the assessee has admitted that the sum be treated as undisclosed income, it has no fresh ground to challenge the order on merit - Assessee's appeal dismissed:BOMBAY HIGH COURT;

M/s Frontline Software Services Pvt Ltd Vs ACIT, Bhopal (Dated: June 20, 2008)

Income tax - Sec 194J - Assessee is a franchisee of NIIT, Delhi - enters into agreement for providing a variety of services and purchase of course materials - AO treats the payment made to the licensor as fee for technical services u/s 9(1)(vii) and takes the view that they are hit by the TDS provisions of Sec 194J - CIT(A) partly allows the appeal of the assessee - held, the payments made by the assessee to NIIT for allowing the use of trade mark and providing copyrighted material, proprietory information and a substantial body of technical knowhow relating to the location, design and operation of the computer education centres are hit by the provisions of Sec 194J as such services do qualify as technical service as per Explanation 2 of Sec 9(1)(vii) - It is also a settled law that technical services also include professional services - However, the payments made for courseware consumables, educational aids and royalty cannot be subjected to TDS provisions - Revenue's appeal partly allowed:INDORE ITAT;

2009-TIOL-286-ITAT-MUM.pdf + review story.pdf

M/s Development Credit Bank Ltd Vs CIT, Mumbai (Dated: January 15, 2009)

The jurisdiction under Section 263 (Review) cannot be utilized as an instrument for reopening concluded proceedings on flimsy grounds or on assumptions - the order passed by the CIT u/s. 263 is bad in law as the assessment order passed by the AO under section 143(3) is not erroneous in so far as it is not prejudicial to the interests of the revenue and therefore order passed by the CIT u/s. 263 should be quashed.:MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-738-CESTAT-MUM.pdf

Deccam Mechnanical & Chemical Industry Pvt Ltd Vs CCE, Pune-II (Dated: March 24, 2009)

Service Tax – Penalty u/s 76 of the Finance Act, 1994 - Assessee paid tax with interest before issuance of show cause notice – Prima facie, s. 76 of the Finance Act, 1994 is not comparable to the s.11AC of the CEA'44 – Apex Court decisions in Dharmendra Textile Processors 2008-TIOL-192-SC-CX-LB not applicable to facts of present case.:MUMBAI CESTAT;

2009-TIOL-737-CESTAT-DEL.pdf

M/s Shubam Security Service Vs CCE, Meerut (Dated: January 22, 2009)

ST - Security service - assessee enters into a contract with PSU telecom company for guarding, manning of the exchanges and handling of generators in case of power failure - demand and penalty confirmed - held, going by the contract details the assessee is providing security service but penalty is not called for as there is no mala fide intention - Appeal partly allowed:DELHI CESTAT;

2009-TIOL-734-CESTAT-DEL.pdf

CCE, Rohtak Vs M/s Miglani Taxi Service (Dated: March 3, 2009)

ST - Rent-a-Cab or Tour Operator Service - assessee enters into a contract for providing vehicles for fixed destination - Since the vehicles were used for a particular destination on demand of client, such service is not taxable - Revenue's appeal dismissed:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-741-CESTAT-KOL.pdf + ezb story.pdf

CCE, Dibrugarh Vs M/s Khushi Aromatics (Dated:December 18, 2008)

Central Excise – Another Revenue appeal fails in EZB due to lack of jurisdiction of Review Committee for filing appeal before Tribunal – Review order was passed by a Committee which is contrary to one set up by notification - An authority is appointed and vested power in the manner known to the law through an Official Gazette, any deviation thereto makes the appointee powerless and incompetent to exercise jurisdiction under law – When review order has no locus standi, revenue appeals are liable for dismissal at the threshold

Objects of the Central Excise Act, 1944 and the Customs Act, 1962 are to be fulfilled by appointing officers in the manner laid down by these two statutes. Central Excise Officers who are appointed under the law are defined under Section 2(b) of the Central Excise Act, 1944. They are invested with power by the Board constituted under the Central Board of Revenue Act, 1963. Such Officers exercise powers as conferred by law and discharge duties as required under various provisions of the Central Excise Act, 1944. Appointment of such Officers is to be made by Notification in Official Gazette and their jurisdiction is to be defined by Notification under Rule 3 of the Central Excise Rules, 2002 and requirement of publication of such Notification in the Official Gazette under Rule 2(f) of such Rules is indispensable to make known to the public as to appointment of such public functionaries. This mode of appointment is duly known to law and is a conclusive evidence of following of due process of law which enables them to act as statutory authority thereby within the jurisdiction defined. On failure to so appoint, an authority fails to be invested with statutory powers under law and acts done by such authority shall be nullity…. Para 15:KOLKATA CESTAT;

2009-TIOL-740-CESTAT-AHM.pdf

M/s Sterlite Technologies Ltd Vs CCE & CC, Vapi (Dated: February 5, 2009)

Central Excise - Exemption under Notification 108/95 CE - separate certificates from the competent authority are not required for separate units of the same manufacturer - the exemption is provided to the manufacturer  but not to the different units - orders placed on one unit and goods supplied from another units of the same manufacturer - impugned order demanding duty is set aside.:AHMEDABAD CESTAT;

2009-TIOL-739-CESTAT-MUM.pdf

CCE, Pune Vs Bajaj Auto Ltd (Dated: March 26, 2009)

Appeal of the assessee allowed by Tribunal on 15.10.2003 and pre-deposit refunded on 22.06.2006 – Assessee's claim for Interest for the period 15.01.2004 (three months from the date of the Tribunal order) till 22.06.2006 correctly upheld by the Commissioner(A) – Board Circular dated 8.12.2004 instructing departmental officers to return pre-deposit within three months from date of order passed merely clarified the legal position – date of Circular is irrelevant - Revenue appeal dismissed.:MUMBAI CESTAT;

2009-TIOL-736-CESTAT-MUM.pdf

Finolex Cables Ltd Vs CCE, Pune-I (Dated: March 26, 2009)

Penalty u/s 11AC of the CEA'44 cannot be avoided by mere reason of duty having been paid prior to issuance of show cause notice – Apex Court decision in Dharmendra Textile Processors 2008-TIOL-192-SC-CX-LB followed – Appeal dismissed.:MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_045.pdf

India extends Customs concessional tariff regime to Sudan;

CASE LAWS

2009-TIOL-742-CESTAT-DEL.pdf + bhomi story.pdf

M/s Bhomia Buttons Pvt Ltd Vs CC, New Delhi (Dated: March 24, 2009)

One or even more illegalities by one or by some persons can not create any right in favour of others to commit or to insist for commission of similar illegality by others - In an appeal, the issues cannot be decided on hypothetical basis – Tribunal.

Tribunal's observations –

Notification 21/2002-Cus, Sr. no. 257 - The expression 'designed for use' clearly discloses that the goods specified in List 34 in order to avail the benefit under the Notification should necessarily be for use in the industry described therein.

An exemption notification is to be strictly construed is well settled law.

In order to understand the meaning of an expression under an item in the list of a notification, the same cannot be read independently and to the exclusion of the other items in the list and totally ignoring the serial No.257.

In an appeal, the issues can not be decided on hypothetical basis. The notification on the basis of which exemption is claimed nowhere relates to the class of persons who would be entitled for exemption there under. It essentially speaks of the goods designed for use in leather industry. Once the records nowhere disclose the goods imported were designed for use in leather industry, all other issues are rendered redundant.

Assuming that the Department has granted such exemption in some of the cases either intentionally or otherwise, or negligently or carelessly or illegally that would not create any right in favour of the appellant to claim the benefit under the said exemption notification contrary to law. One or even more illegalities by one or by some persons can not create any right in favour of others to commit or to insist for commission of similar illegality by others. Rule of parity cannot be invoked to claim illegal gratification.

Benefit of Notification no. 21/2002-Cus, Sr. no. 257 not available to button making machinery which is not designed for use in leather industry or the footwear industry.

Appeal dismissed as being without any substance.:DELHI CESTAT;

2009-TIOL-735-CESTAT-AHM.pdf

M/s Nova Petrochemicals Ltd Vs CC, Ahmedabad (Dated: February 6, 2009)

Customs - confiscation of second hand draw twister machine on the ground that the same is more than 10 years of age - year of manufacture found on a small component of whole machinery does not lead to the conclusion that the entire machinery was manufactured in that particular year - revenue's contention that the machine was manufactured more than 10 years ago is not correct. :AHMEDABAD CESTAT;