Pre-Budget meetings: FM meets agri experts & industry captains - pays attention to demand for lower interest rate (See 'DDT')

Export and import of psychotropic substances between DTA and SEZ: Govt issues clarification;

Govt amends rule 34 of ITAT rules to make orders public;

Govt amends notification imposing Anti-dumping duty on import of cold rolled flat stainless steel products;

Mumbai DRI seizes prohibited Agar wood worth Rs 3 Crore being exported as incensed sticks to Dubai; Exporter & transporter having nexus in N-E arrested;

BoA gives formal nod to 8 and in-principle nod to two new SEZs;

Tobacco consumption 'needless threat' to public health: UN Chief;

UN population award goes to Egyptian doc;

TIOL COMMENTARY

ddt 2 june.pdf

CII wants Investment Budget;

MIXED BUZZ

mbuzz0531.pdf

BoA gives formal nod to 8 and in-principle nod to two new SEZs;

mbuzz0530.pdf

Core sector shows signs of recovery; grows by 4.3% in April;

mbuzz0529.pdf

UN population award goes to Egyptian doc;

mbuzz0528.pdf

Tobacco consumption 'needless threat' to public health: UN Chief;

ITAT_rules20_2009.pdf

Govt amends rule 34 of ITAT rules to make orders public;

CASE LAWS

2009-TIOL-13-ARA-IT.pdf + ara story.pdf

Sri Ramachandra Educational and Health Trust (SREHT)(Dated: May 29, 2009)

AAR - Is TDS deductible on the Annual fee paid by an Indian Trust to Harvard Medical International USA, especially when both the payer and payee are not liable to tax in their respective countries? – On the basis of facts available, this question cannot be answered: The AAR could not give ruling that the applicant is not at all liable to deduct any tax at source in respect of the payments made to HMI. It depends on further scrutiny by the appropriate authority. The applicant may make an application to the assessing officer in terms of sub- section( 2) of Section 195 of the Act for determination of the appropriate proportion of such payment which would be chargeable to tax. Upon such determination, the applicant shall deduct tax on that portion of the payment which is chargeable to tax.: ADVANCE RULING AUTHORITY;

2009-TIOL-290-HC-MAD-IT.pdf + Umayala Ramanathan Story.pdf

Chairman Central Board Of Direct Taxes, New Delhi Vs Umayala Ramanathan (Dated: April 06, 2009)

Income Tax – compounding of offences can be done even after conviction by a court and appeal is pending It is evident from Section 279 (2) of the Act that any offence under this Chapter may either before or after the institution of proceedings, be compounded by the Chief Commissioner or a Director General. The term 'proceedings' is not defined in the Income Tax Act. The term 'proceedings' is a term of wide amplitude and comprehensive and generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a definite meaning attached to it, but one the ambit of whose meaning would be governed by statute. In the case on hand, against the conviction and sentence passed by the trial court, on the complaint preferred by the appellants, the respondent has filed an appeal and the same is pending, which is a prescribed course of action for enforcing a legal right. The said appeal is also a proceeding as contemplated under Section 279 (2) of the Act.: MADRAS HIGH COURT;

2009-TIOL-326-ITAT-PUNE-SB.pdf

M/s Dhariwal Industries Ltd Vs DCIT,Pune (Dated: March 27, 2009)

Income tax - Sec 80I, 80IA - Misc application - Assessee is a gutkha manufacturer - claims benefits for its unit - AO disallows and Tribunal upholds the same on the ground that gutkha is a tobacco preparation and is covered by Item No 2 of Eleventh Schedule of the I-T Act - Assessee alleges mistakes apparent in Tribunal's order - held, while giving an order a court of law does talk about general observations and also various types of facts which may be termed as 'irrelevant material' for basing the final decision in the case and that is how the Special Bench talked about the harmful effect of tobacco as discussed in a debate in Rajya Sabha - however, tribunal did not base its decision on any other facts except those directly relevant to the case and since it is an admitted fact that gutkha is a tobacco preparation it is hit by Eleventh Schedule and the fact that the issue is pending with the jurisdictional HC, the assessee cannot seek a review of its order u/s 254(2) - no mistakes apparent on record - Assessee's appeal dismissed: PUNE ITAT (SPECIAL BENCH);

2009-TIOL-325-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Kas Movie Makers Pvt Ltd (Dated: March 27, 2009)

Income Tax—Assessee claimed deduction u/s 80HHF claiming that it was engaged in the business of manufacture of television film software, for which professional services were provided to foreign parties for shooting cinematographic films in India—AO held that assessee was providing only services to the foreign clients and therefore not eligible to deduction u/s 80HHF—CIT(A) allowed assessee's appeal—Held, assessee did not acquire any proprietary right in the film software as the agreement was for providing various services for production co-ordination at various places in India—Held, the case is one of rendering multi-farious services for production of films by foreign companies in India and handing over the negatives to them in India which neither involves export nor transfer of film software by any means outside India by the assessee—Revenue's appeals allowed.: DELHI ITAT;

2009-TIOL-324-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Woodward Governor India Ltd (Dated: April 30, 2009)

Income Tax - Assessee Company claimed unrealized foreign exchange loss and deduction u/s 80IB on the service income - AO disallowed the same - CIT(A) reversed the order - Held, increase in liability due to foreign exchange fluctuation as per exchange rate prevalent on the last day of the financial year is allowable - Held, as the assessee was engaged in the business of manufacture and sale of high technical precision governors and other control devices, it was incumbent upon the assessee to adequately train the customers' employees to be able to use such products and to provide alter sales service and to such products for their continued efficient use and, therefore, essential ingredient of nexus between the profit and the undertaking got establish for the allowability of deduction u/s 80IB - Assessee's appeal partly allowed.: DELHI ITAT;

sez09ins012.pdf

Clarification on applicability of Narcotics Drug and Psychotropic Substances Act on export / import from DTA and SEZ;

SERVICE TAX SECTION

2009-TIOL-292-HC-MP-ST-LB.pdf + stgst story.pdf

Som Distilleries Pvt Ltd & Ors Vs UOI & Ors (Dated: March 20, 2008)

Service Tax - Bottling of liquor amounts to manufacture – outside the purview of Service Tax: packaging and bottling of liquor come within the ambit and sweep of manufacture within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944 in view of the definition contained in Section 65( 76b ) of the Finance Act especially keeping in view the exclusionary facet and further regard being had to the circular issued by Central Board of Excise and Customs. : MADHYA PRADESH HIGH COURT (LARGER BENCH);

2009-TIOL-843-CESTAT-MUM.pdf

Balkrishna Industries Ltd Vs CCE, Aurangabad (Dated: March 19, 2009)

Cenvat Credit – Input service - Service tax on Insurance premium, Tours and Travels, Factory garden maintenance and Plant Housekeeping services – Prima facie available on Insurance service – however, no evidence to establish that tours and travels or garden maintenance, Plant housekeeping were undertaken for specific business activities directly or indirectly connected with activities of the factory – Pre-deposit ordered.:MUMBAI CESTAT;

2009-TIOL-842-CESTAT-DEL.pdf

CST, Delhi Vs M/s Usha Hydro Dynamics Ltd (Dated: April 27, 2009)

ST - Refund - assessee is charged with providing cleaning activity under maintenance and repair service - SCN issued - tax paid under protest - Commissioner(A) finds that the assessee is not liable to tax during the refund period and since no tax was recovered from customers the refund claim cannot be rejected on the ground of unjust enrichment - Matter remanded:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-846-CESTAT-MUM.pdf + writer story.pdf

Dr Writer's Food Products Pvt Ltd Vs CCE, Pune-II (Dated: March 31, 2009)

Rule 6 of CCR, 2004 - common inputs - reversal of credit, before or after clearance of exempted goods, amounts to not taking any credit - Payment of 10% not required - Tribunal

No specific finding by the Supreme Court in the case of CCE, Bombay I vs. Bombay Dyeing and Mfg.Co.Ltd. ( 2007-TIOL-115-SC-CX ) that if the credit is reversed after utilization and after the clearance of the exempted goods, it would still amount to taking the credit.

Appellant had reversed the credit and paid the interest amount and by doing so had undone the act of taking/utilizing the credit and in the light of the decision of High Courts in Hello Minerals ( 2004-TIOL-57-HC-ALL-CX ) and Maize Products ( 2008-TIOL-596-HC-AHM-CX ) , it amounts to not taking the credit and, therefore, they were not required to pay an amount equal to 10%.

New grounds never raised before the lower authorities and in absence of any findings thereon the same cannot be entertained by the Tribunal.

Commissioner's order set aside and appeal allowed.Ashok Jindal, Member(J):MUMBAI CESTAT;

2009-TIOL-845-CESTAT-MUM.pdf

Hindalco Industries Ltd Vs CCE, Belapur (Dated: April 2, 2009)

Refund – After issuance of debit note by the buyer and the corresponding credit note by seller, the price of the goods stood reduced to the extent of debit/credit and in such circumstances the incidence of duty could not have been assumed to have been passed on to the buyer – Burden placed on the claimant by s. 12B of CEA, 1944 is a rebuttable one – Claim not hit by bar of unjust enrichment – Rajasthan HC decision in A.K.Spintex Ltd. [ 2009-TIOL-12-HC-Raj-CX ] relied upon. :MUMBAI CESTAT;

2009-TIOL-844-CESTAT-MUM.pdf

Godrej Industries Ltd Vs CCE, Mumbai-II (Dated: April 1, 2009)

Since there was no proposal in the show cause notice for imposing penalty u/r 25 of CER, 2002, adjudicating authority could not have imposed any.

Imposition of penalty without putting the appellant to notice is negation of natural justice – Order set aside and appeal allowed.:MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_056.pdf

Govt amends notification imposing Anti-dumping duty on import of cold rolled flat stainless steel products;

CASE LAWS

2009-TIOL-291-HC-MAD-CUS.pdf + interest story.pdf

M/s Tanface Industries Ltd Vs Assistant Commissioner Of Customs (Dated: April 20, 2009 )

Warehousing – interest - goods cleared under DEPB Scheme cannot be treated as exempted goods – interest payable: The difference drawn by the Supreme Court makes it clear that under the DEEC Scheme, the clearance is allowed duty free, whereas under DEPB Scheme, the exporters are issued DEPB scrips which allow them specific amounts to be utilised for payment of Customs duty. Therefore, the importers, who use DEPB scrips , pay duty not by cash but only by way of credit. Therefore, the goods cleared under DEPB Scheme cannot be treated as exempted goods, but they can only be treated to be duty-paid goods and therefore, the interest is payable as per Section 61(2) of the Act. The debit of any amount under the DEPB Scheme is a mode of payment of duty on the imported goods and cannot be treated as exempted goods, unlike the goods under DEEC Scheme:MADRAS HIGH COURT;