Govt lifts ban on export of wheat;

CBEC revises tariff value of brass scraps + poppy seeds;

India will have 500 mn internet users by 2012: MAIT

Govt to take steps to check entry of fake Chinese textiles;

OMCs directed to draw up state-wise roadmap for releasing 5.5 crore new LPG connections;

Steel consumption goes up by 5.2 % during April-June '09;

Green investment is legal responsibility and not a luxury: UNEP;

Budget 2009 - amendment to MAT - harsh nullification of SC ruling

Lok Sabha passes Finance Bill with voice vote

Dr Amit Mitra-led Panel calls for setting up Institute of Valuation Professionals

TIOL COMMENTARY

ddt 15 July.pdf

Anti-Dumping Duty on viscose rayon filament yarn - Continued;

spl down.pdf

Is Cestat justified in taking U-turn on principle of exporting taxes;

BUDGET ANALYSIS

budgetstory49.pdf

Budget 2009 - amendment to MAT - harsh nullification of SC ruling;

Mixed Buzz

mbuzz0658.pdf

Govt to take steps to check entry of fake Chinese textiles;

mbuzz0657.pdf

OMCs directed to draw up state-wise roadmap for releasing 5.5 crore new LPG connections;

mbuzz0656.pdf

Steel consumption goes up by 5.2 % during April-June '09;

mbuzz0654.pdf

Green investment is legal responsibility and not a luxury: UNEP;

2009-TIOL-83-SC-IT.pdf + itat member story.pdf

Mahesh Chandra Vs UoI (Dated: July 6, 2009)

Appointment of ITAT Member, who had not practiced as an advocate for even a day, as High Court Judge upheld: “eligibility” is a matter of fact whereas “suitability” is a matter of opinion. In cases involving lack of “eligibility” writ of quo warranto would certainly lie. One reason being that “eligibility” is not a matter of subjectivity. However, “suitability” or “fitness” of a person to be appointed a High Court Judge: his character, his integrity, his competence and the like are matters of opinion. At the end of the day “trust” in the decision-making process is an important element in the process of appointment of Judges to the Supreme Court and the High Court, which is the function of an integrated participatory consultative process. :SUPREME COURT;

2009-TIOL-336-HC-MAD-IT.pdf

M/s Vira Properties Madras Pvt Ltd Vs ACIT, Chennai (Dated: July 1, 2009)

Income tax - Sec 147 - Assessee files returns - refund granted - Notice u/s 148 - Reassessment order passed - Writ - HC directs no action to be taken for two weeks of investigation - Held, since the Revenue did not give any chance of hearing to the assessee, it violates basic principles of natural justice - Case remanded for fresh hearing - Assessee's appeal allowed.: MADRAS HIGH COURT;

2009-TIOL-454-ITAT-MUM.pdf

Raja Shreepal Co-Operative Housing Society Ltd Vs ITO, Mumbai (Dated: March 9, 2009)

Income Tax - Assessee, a housing society, was assessed by reopening u/s 148 - deduction u/s 80P was allowed - CIT(A) held the order of AO as erroneous and prejudicial to the interest of revenue and set aside the same u/s. 263 - also held that the interest income received on fixed deposit with Syndicate Bank and the bonds with ICICI Bank is chargeable to tax under the head 'Income from other sources' and not eligible for deduction u/s 80P - Held, interest income from fixed deposit and bonds / deposits were made out of the earmarked funds - Held, since no amount was received from any non-member, interest and dividend income from investments could not be treated as transactions with non-members so as to loose the benefit of the exemption on the basis of principles of mutuality - Held, an order cannot be revised on the ground that there is a possibility of prejudice to the interest of revenue - Assessee's appeal allowed.: MUMBAI ITAT;

2009-TIOL-453-ITAT-MUM.pdf

ACIT, Mumbai Vs M/s Nufab India Ltd (Dated: April 13, 2009)

Income Tax - Assessee showed purchase of trading export through certain exporters of Tuticorin and claimed deduction u/s. 80HHC —AO found that exporters directly purchased and sold sea foods and concluded that the assessee company has not exported sea food but has only shown the purchase and sale in its profit and loss account - CIT(A) allowed assessee's appeal - Held, in order to show that the assessee had to carry out the transaction without any commercial benefit, the primary onus lays upon the assessee to bring material to that effect, which the assessee failed to discharge - Revenue's appeal partly allowed.: MUMBAI ITAT;

2009-TIOL-452-ITAT-MUM.pdf

M/s G M Breweries Ltd Vs ACIT, Mumbai (Dated: March 26, 2009)

Income tax - penalty u/s 271(1)(c) - assessee is into manufacture and sale of liquor - sells a flat - AO for short-term capital gains tax - CIT(A) and Tribunal confirm the AO's view - Penalty proceedings initiated - held, the explanation of the assessee is that it had purchased the properties for business but the same could not be used and no depreciation was claimed and when the properties were sold in part, the sale consideration was deducted from the block asset and in the year of full sale, the short term capital gain u/s 50 was offered for taxation and the same was accepted in assessment - since there was no intention to conceal any income as the assessee had ultimately paid taxes, penalty is not called for - assessee's appeal allowed.: MUMBAI ITAT;

ceib_br.pdf

Central Economic Intelligence Bureau - Recruitment Rules for DG;

SERVICE TAX SECTION

2009-TIOL-1063-CESTAT-DEL.pdf + air travel story.pdf

M/s Bajaj Travels Ltd Vs CCE, New Delhi (Dated: June 19, 2009)

Service Tax – Air Travel Agent – Tax collected on the Basic Fare, but paid to the Government – What has happened in this case is that throughout during the period of dispute, the appellant was actually paying the service tax at the prevailing rate under Section 66 on the net commission instead of on the gross commission and that has resulted in short payment of tax. While doing so, in the ST-3 returns, instead of showing the gross and net commission and calculation of service tax on that basis, the tax payment shown was as if it was on the 'basic fare' basis at the rate appearing under Rule 6 (7) of the Rules.

Separate Penalty under Section 76 and Section 78 imposable – in view of Kerala High Court's judgment in case of Asstt . Commissioner, Central Excise vs. Krishna Poduval reported in 2006-TIOL-77-HC-KERALA-ST . It was held in that case that incidents of imposition of penalty under Section 76 and 78 are distinct and separate under two provisions and even if the offences are committed in the course of the same transaction or arise out of the same act, penalty would be imposable both under Section 76 as well as Section 78.

Tax paid before Adjudication –penalty should be 25% - Therefore , in accordance with the ratio laid down by the Hon'ble Delhi High Court in case of K.P. Pouches P. Ltd. vs. Union of India ( 2008-TIOL-240-HC-DEL- CX ), the benefit of first proviso to Section 78 should be extended to the appellant. Accordingly penalty is required to be confined to 25% of the service tax and not equal to the service tax. Appellant also pleaded that the benefit of this provision has not been allowed by the Commissioners.: DELHI CESTAT;

2009-TIOL-1062-CESTAT-KOL.pdf

M/s Hindusthan Steel Works Construction Ltd Vs CCE, CC & ST, BBSR-I (Dated: April 20, 2009)

ST - Industrial Construction - assessee constructs chimney for a power plant - pleads it is a works contract which was brought under service tax w.e.f. 01.06.2007 - held, the chimney was constructed during the period 10.09.2004 to 31.07.2006 and during this period the industrial construction service includes construction of new building or a civil structure - prima facie Applicants had not made out a case for total waiver of pre-deposit of Service Tax - in view of financial hardship pleaded, a pre-deposit of Rs 20 lakh ordered. : KOLKATA CESTAT;

2009-TIOL-1061-CESTAT-DEL.pdf

M/s Shiv-Vani Oil & Gas Exploration Services Ltd Vs CST, Delhi (Dated: May 22, 2009)

ST - defective appeal memo - Appela memorandum signed by Jt MD - Revenue objects and pleads Registry needs to verify the person whose letter accompanies the appeal memo is duly authorised - held, as per Rule 8(3) of Cestat Procedure Rule 1982, the word 'duly' presupposes that the person signing the document must have been given authority by a document - it is a mandatory condition and Registry needs to scrutinise the appeal memo before it is heard. :DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1060-CESTAT-DEL.pdf

M/s Pahwa Chemicals Pvt Ltd Vs CCE, Delhi-IV (Dated: April 29, 2009)

Central Excise – Appellate authority has inherent power of granting interim relief in exercise of its appellate jurisdiction – Tribunal fully empowered to pass such order as it may find necessary to secure ends of justice – Tribunal's direction to pay interest & penalty during hearing of stay application cannot be subjected to review subsequently – Once a point has been held against appellant during pendency of appeal, it is not open for appellant to file successive applications in relation to same point – Mere failure to mention correct procedure of law regarding liability to pay interest would not be fatal - Merely because authorities had sought to levy interest under provisions other than it was disclosed in the show cause notice, it cannot be a ground to contend that there would be justification for stay of recovery of interest during the pendency of appeal :DELHI CESTAT;

2009-TIOL-1059-CESTAT-DEL.pdf

M/s PNC Construction Co Ltd Vs CCE, Lucknow (Dated: April 29, 2009)

Central Excise – Essentiality certificate under Notification 108/95-CE received subsequent to purchase of goods – Relevant date for claim of refund of duty paid is date of purchase of goods and not the date of issue of essentiality certificate – No infirmity in impugned order. :DELHI CESTAT;

CUSTOMS SECTION

NOTIFACATION

cnt09_091.pdf

CBEC revises tariff value of brass scraps and poppy seeds;

dgft08not118.pdf

Exemption for export of 500 MTs of Yellow Split Peas (Matar Dal) to Nepal for United Nations World Food Programme- Regarding. ;

dgft08not117.pdf

Govt lifts ban on export of wheat;

CASE LAWS

2009-TIOL-337-HC-MUM-CUS.pdf + penalty story.pdf

Ranjeet Sanghvi Vs CC , Mumbai (Dated: July 1, 2009)

Customs – Goods imported under ‘Actual User' condition, diverted – penalty justified: the Government of India formulated and announced the export and import policy for the period from April, 1992 to March, 1997. Clause 25 of the Export and Import Policy provides that all second hand capital goods, having a minimum residual life of 5 years, may be imported by the Actual Users, without a license, subject to “Actual User” condition. The Actual User was also required to furnish to the Customs at the time of clearance of the goods, self-declaration to the effect that the second hand capital goods being imported had minimum residual life of 5 years. In view of these provisions, it is clear that such second-hand capital goods could not be imported unless they were to be imported for actual user by the importer. That itself was a prohibition against import. However, the import would be exempted from the prohibition subject to “Actual User Condition”. If that condition is violated, provisions of S.111 ( o) of the Customs Act would be attracted. :BOMBAY HIGH COURT;