Excise duty on Packaged Software Licenses - Government opens pandora's box yet again;

Revenue sacrifice is almost twice the Revenue Deficit;

FBT: Controversial in birth and controversial in death too!

FM says Govt to review laws to curb illegal trading in shares;

Industrial growth rate continues to hover around 2.7% even in May;

Amendments to various Sections of I-T Act in Budget: With effect from ... ;

On Exploring unstated premisses in collective consciousness of our Constituent Assembly ;

Appointment of judge - Collegium should have members from executive also: Law Commission;

Posting of officers and staff to LTU - Clarification on rotation of Group 'A' officers – CBEC Clarifies ;

Chennai DRI seizes 16 MT red sanders clothed as exports containers at Tuticorin and Chennai;

CBDT issues transfer order of six Addl / JCITs + retains many officers at present places;

ITAT Member T R Sood transferred from Chennai to Mumbai;

TIOL COMMENTARY

ddt 10 July.pdf

WITH EFFECT FROM ...

potpourri_018.pdf

On Exploring unstated premisses in collective consciousness of our Constituent Assembly;

BUDGET ANALYSIS

budgetstory45.pdf

Excise duty on Packaged Software Licenses - Government opens pandora's box yet again;

budgetstory44.pdf

Revenue sacrifice is almost twice the Revenue Deficit;

budgetstory43.pdf

FBT: Controversial in birth and controversial in death too!

MIXED BUZZ

mbuzz0641.pdf

Appointment of judge - Collegium should have members from executive also: Law Commission

mbuzz0640.pdf

Global trade in light weapons reaches USD 3 bn: UN Study

CBDT Order 094_2009.pdf

CBDT issues transfer order of 6 Addl / JCITs;

CASE LAWS

2009-TIOL-18-ARA-IT.pdf + royalty story.pdf

Factset Researach Systems INC (Dated: June 30, 2009)

Subscription fee collected for accessing database located outside India – Not Royalty – computer database falls within the scope of ‘literary work - Business Income taxable in India only if there is a PE; No withholding Tax; no returns: The subscription fee is not taxable in India as royalty. It is liable to be taxed only as business income if at all it is found by the Department that an agency PE exists. At present, on the facts stated by the applicant, it is held that PE is not in existence and therefore the income is not liable to be taxed in India. The customers are not required to withhold the tax, until and unless the Department finds the existence of PE after due enquiry. At present, there is no obligation to file the return in view of the finding that there is no royalty income and on the facts stated by the applicant, there is no PE.:ADVANCE RULING AUTHORITY;

2009-TIOL-332-HC-P&H-IT.pdf + hc story.pdf

CIT, Panchkula Vs Haryana Warehousing Corporation (Dated: July 01, 2009)

Income tax - assessee is a State Warehousing Corporation - earns income from warehousing of agricultural goods, interests on fixed deposts, commission from trading activities, weigh-bridge and cargo handling - files Nil return, claiming exemption u/s 10(29) on all types of income - AO allows exemption on only income earned from warehousing activity - Tribunal agrees with the Revenue - Penalty u/s 271(1)(c) - Tribunal disagrees - held, two essential pre-requisites for levy of penalty are that the assessee should either conceal income or furnish false particulars of income - merely because disallowance of exemption has been made based on conflicting decisions of High Courts, penalty cannot be imposed - Revenue's appeal disallowed :PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-331-HC-UTTRANCHAL-IT.pdf

R B Falcon Drilling CO Vs Addll.CIT, Dehradun (Dated: July 3, 2009)

Income tax - Sec 44BB - AO includes mobilisation charges in gross receipts taxable in India - Tribunal agrees with the AO - held, the fee paid for mobilisation and transporting rigs to desired locations is not actual reimbursement of the expenditure and such charges are includible in the gross receipts taxable under sub-section (2) of Sec 44BB - Assessee's appeal dismissed: UTTARAKHAND HIGH COURT;

2009-TIOL-442-ITAT-MUM.pdf

M/s Meher Foundation & Civil Engineering Pvt Ltd Vs DCIT, Mumbai (Dated: May 12, 2009)

Income Tax - Assessee company, working as contractor ion construction business, sub contracted certain works and made payment to them on that account - AO disallowed the payments on the ground that the notices issued to the sub contractors returned undelivered and assessee failed to furnish evidence or the fresh addresses of such sub contractors - CIT(A) rejected the application filed by the assessee u/s 46A to admit additional evidence in support of the claim of the genuineness of expenses - Held, principles of natural justice warrants that the assessee be allowed an opportunity to produce evidence to support the claim of deduction - Held, the difficulty of the assessee in collecting the evidence from small contractors, who do not have permanent addresses, has got to be appreciated and it would be in the interest of justice to entertain the evidence - Assessee's appeal allowed for statistical purposes. :MUMBAI ITAT;

posting_ltu.pdf

Posting of officers and staff to LTU - Clarification on rotation of Group ‘A' officers ;

CBEC Order 147 of 2009.pdf

CBEC issues transfer order of 9 Addl/JCs;

SERVICE TAX SECTION

2009-TIOL-1040-CESTAT-MUM.pdf + garden story.pdf

GKN Sinter Metals Ltd Vs CCE, Aurangabad (Dated: June 11, 2009)

When the legal position was very plain like daylight, there was no reason for assessee to avail undue benefit of Cenvat Credit on Garden Maintenance Services – Exoneration cannot be claimed from penal liability – CESTAT.

Tribunal decision in Kirloskar Oil Engines Ltd. vs. CCE, Aurangabad [ 2009-TIOL-790-CESTAT-Mum ] relied upon.

Outdoor Catering Services is an Input Service – Cenvat Credit allowed - LB decision in GTC Industries Ltd. [ 2008-TIOL-1634-CESTAT-Mum-LB ] followed.

Stay order reported as 2008-TIOL-1518-CESTAT-Mum :MUMBAI CESTAT;

2009-TIOL-1039-CESTAT-MAD.pdf

Grasim Industries Ltd Vs CCE, Chennai (Dated: May 1, 2009)

Service Tax – Technical inspection and certification service – the charges collected by the BIS towards marking fee is taxable under Technical Inspection and certification service.:CHENNAI CESTAT;

2009-TIOL-1038-CESTAT-BANG.pdf

M/s Birdy Exports Pvt Ltd Vs CST, Bangalore (Dated: February 19, 2009 )

Service Tax – Employee did not bring the order served on the company to management's notice – Copy of order procured by company from the department at a later date and appeal filed immediately thereafter – Sufficient cause to condone delay of 214 days in filing appeal:BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-82-SC-CX.pdf + sc story.pdf

CCE, Pune Vs M/s SKF India Ltd (Dated: July 6, 2009)

Central Excise – Supplementary Invoices – Interest on Differential Duty payable: It is to be noted that the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It, therefore, follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section ( 2B ) of section 11A and attracted levy of interest under section 11AB of the Act.

Interest is leviable on delayed or deferred payment of duty for whatever reasons: It is thus to be seen that unlike penalty that is attracted to the category of cases in which the non-payment or short payment etc. of duty is "by reason of fraud, collusion or any wilful mis - statement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty", under the scheme of the four sections ( 11A , 11AA , 11AB & 11AC ) interest is leviable on delayed or deferred payment of duty for whatever reasons.

Law should state obligations clearly : If the object of the law is to state clearly and unambiguously the obligations of the person whom the law addresses and to spell out plainly and without any confusion the consequences of failure to discharge the obligations cast by the law then the four sections of the Act fall miles short of the desired objective. Even as originally cast the provisions were far from very happily framed and worded. Subjected to amendments from time to time those provisions have now become so complicated that in order to discern their meaning it becomes necessary to read them back and forth several times. We see no reason why the two periods for which interest is leviable may not be put together and dealt with in one consolidated provision instead of being split up in sections 11AA and 11AB . Also, there is much scope to reorganise all the different subsections of section 11A and to present the scheme of that section in a more coherent and readable form. : SUPREME COURT;

2009-TIOL-1037-CESTAT-MAD.pdf

CCE & ST, LTU, Chennai Vs M/s Ashok Leyland Ltd (Dated: April 17, 2009)

Central Excise – CENVAT Credit – credit taken reversed before utilization along with interest – the respondents are entitled for refund of interest paid on such credit reversed – revenue appeal has no merit. :CHENNAI CESTAT;

2009-TIOL-1036-CESTAT-MAD.pdf

CCE, Trichy Vs SRF Ltd (Dated: April 22, 2009)

Central Excise – exemption under Notification 67/95 CE cannot be denied to the grey fabric consumed for manufacture of rubberized textile fabric on the ground that no additional duty of excise is leviable on the final products - the benefit is available unless the final products manufactured out of such inputs are exempt from the whole of the duty of excise or additional duty of excise leviable thereon or are chargeable to nil rate of duty – revenue's conetention that the impugned goods, the intermediate product woven from nylon/polyester filament yarn falls under chapter 54.06 is upheld. :CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-1035-CESTAT-MUM.pdf

CC, Mumbai Vs M/s Kulkarni Powder Metallurgical Industries (Dated: June 4, 2009)

Pursuant to amendment made in section 128A of the Customs Act, 1962 by the Finance Act, 2001 w.e.f 11.05.2001, Commissioner(A) has no power to remand the matter to the Assistant Commissioner – Order remitting the matter to the Asstt. Commr is clearly erroneous – Apex Court decision in MIL India Ltd [ 2007-TIOL-30-SC-CX ] relied upon. : MUMBAI CESTAT;