Sahar Airport Customs seizes dutiable goods worth Rs 20 lakh (LMV) from pax coming from Hong Kong + arrests one for smuggling in three primate specifies from Thailand;

CBDT refunds Rs 17600 Cr in Q1; net direct tax mop-up logs 3.65% growth rate upto June;

Revenue wins major case; SC decides expenditure incurred on replacement of machineries is not revenue in nature (Look for detailed analysis tomorrow)

Implementation of Sixth Central Pay Commission recommendations - replacement of the pre- revised S-30 pay scale (Rs.22400-24500) by a new HAG scale (Rs.67000-79000);

Non-performing assets for banks jump to Rs 43676 Crore;

FIR registered against American airlines Continental for carrying out pre-embarkation body check of former President Dr A P J Kalam;

Sunil Mitra, IAS (WB-1975) appointed as new Disinvestment Secretary;

FICN: Note sorting machines to be installed at all currency chest branches;

TIOL COMMENTARY

ddt 22 july.pdf

No More Stimulus - Montek;

stgst.pdf

The Transition to GST Regime;

spl down.pdf

Budget - exemption to tour operators - Why is this special interest towards point-point bus operators?;

office_memorandum.pdf

Implementation of Sixth Central Pay Commission recommendations - replacement of the pre- revised S-30 pay scale (Rs.22400-24500) by a new HAG scale (Rs.67000-79000);

MIXED BUZZ

mbuzz0679.pdf

Ludhiana is best among 17 cities in India for business-doing!;

mbuzz0678.pdf

CBDT refunds Rs 17600 Cr in Q1; net direct tax mop-up logs 3.65% growth rate;

mbuzz0677.pdf

Non-performing assets for banks jump to Rs 43676 Crore;

mbuzz0676.pdf

UN panel deliberates on new forms of discrimination against women;

CASE LAWS

2009-TIOL-472-ITAT-MUM.pdf + 6dd story.pdf

DCIT, Mumbai Vs OCS Services (India) Pvt Ltd (Dated: May 7, 2009)

Income Tax – cash payments in excess of Rs. 20,000/- made to employees working in rigs - covered by the exceptions provided in rule 6DD (j) and not liable to be disallowed under section 40A (3); As far as the other conditions stipulated in rule 6DD (j) are concerned, there is no dispute that all the employees in the present case were posted for a continuous period of 28 days on Rigs, which was more than the minimum period of 15 days stipulated in rule 6DD (j) and they were not maintaining any bank there. As such, considering all the facts of the case, the payments in question made by the assessee-company in cash in excess of Rs. 20,000 were duly covered by the exceptions provided in rule 6DD(j) and this being so, the same were not liable to be disallowed under section 40A(3).: MUMBAI ITAT;

2009-TIOL-471-ITAT-MUM.pdf

M/s Goenka Papers & Synthetics Pvt Ltd Vs ITO, Mumbai (Dated: March 4, 2009)

Income Tax - Section 40A(3) - Assessee makes cash purchases from waste paper dealers known as raddiwalas - AO makes addition of 20% of the cash payment on the ground that the  cash purchases  so arranged to circumvent the mandate of the provisions of section 40A(3) - CIT(A) confirms it – Tribunal  held that the assessee had not discharged its liability of providing the addresses or making the parties available and remanded issue back to AO  with a specific direction to the assessee to render full assistance while providing the address of the parties or producing them. AO  initated proceeding but no evidence produced by  assessee and hence AO stick to the earlier disallowance of 20% -  Held, the assessee not having challenged the findings recorded in the earlier order of the Tribunal, the order has become final. AO was to take evidence from the assessee as directed by the Tribunal and decide the issue on the basis of such evidence. The assessee has admittedly not produced any evidence before the AO. Not a single person has been produced before the AO for verification. On facts the Order of the Revenue authorities upheld. Assessee's Appeal dismissed.: MUMBAI ITAT;

2009-TIOL-470-ITAT-MUM.pdf

M/s Sahara India Media Communication Ltd Vs ACIT, Mumbai (Dated: February 19, 2009)

Income Tax - Assessee claimed deduction u/s 80HHF on the export turnover - AO rejected assessee's claim on the ground that the transactions claimed for export have been taken place after close of financial year - CIT(A) upheld AO's order - Held, since the consignments were sent and the same were telecasted before the end of the previous year and the consideration on account of telecasting the serials were also received within the permissible time by the competent authority, therefore, the assessee is eligible for deduction u/s 80HHF as the conditions provided u/s 80HHF have been satisfied - Assessee's appeal partly allowed.: MUMBAI ITAT;

2009-TIOL-469-ITAT-MUM.pdf

Shemaroo Video (P) Ltd Vs ITO, Mumbai (Dated: May 5, 2009)

Income tax - Sec 194C - Assessee is in the business of trading cassettes, VCDs and DVDs - Survy u/s 133A - Assessee is alleged to have not deducted tax at source on payments made to jobworkers for replication / manufacturing of DVDs and also on expenses towards packing material and designing - Assessee held to be in default - Order u/s 201(1) and u/s 201(1A) passed - CIT(A) agrees with the AO - held, since jobworkers manufacture DVDs in their own premises albeit as per technical specifications of the assessee but also incur the raw material costs and pay excise duty and sales tax and the the property is transferred to the assessee only when they are bought by the assessee, it is a contract for sale and not 'works contract' covered under Sec 194C - Assessee's appeal allowed.: MUMBAI ITAT;

2009-TIOL-468-ITAT-MUM.pdf

M/s Zenith Fibres Ltd Vs ITO, Mumbai (Dated: February 9, 2009)

Income Tax--Assessee claimed amount of sales tax exemption (incentive) as capital receipt—CIT(A) held that the nature of such notional sales tax collected but exempted is nothing but sales proceed and therefore revenue in nature—Held, the incentive was given in several instalments depending on the setting up and expansion of the industrial unit and object of the said subsidy is in nature of sales tax exemption was to fund the cost of setting up an industry—Held, what is of vital significance is the purpose and object of the scheme and merely because the monies are received after production commences, it cannot be said, irrespective of the purpose and object of the scheme, that the receipt is of revenue nature—Assessee's appeal allowed. :MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-1103-CESTAT-MAD.pdf + ST story.pdf

M/s Prince Foundations (P) Ltd Vs CST, Chennai (Dated: May 14, 2009)

Service Tax – Construction service – Service to self not taxable – appellants employed its own labour for execution of the various projects and are not a contractor doing construction work for another person. In respect of constructed property sold by the appellants to various buyers it cannot be held that PFL rendered ‘commercial or industrial construction service' and ‘construction of complex service' to the buyers. Appellants rendered such services to itself .

No tax on ‘works contract' prior to 1.6.2007 – Appellants carried out the construction activity, finishing work etc., in respect of which demands have been raised, in execution of works contracts. ‘Works contract service' was brought under tax net on 1.6.2007, after the impugned activities were undertaken by PFL . As rightly argued by the appellants, the Tribunal had held in Diebold Systems case that activity such as erection/commissioning forming part of a works contract could not be taxed under erection/commissioning service prior to 1.6.2007. The contracts basic to the construction of commercial premises/residential premises were indivisible and involved a service element. In view of the ratio of the decision of the Tribunal, prima facie, the impugned demand is not sustainable.

Matter remanded - However, these two legal arguments were not taken before the Commissioner during the adjudication proceedings. In the circumstances, the matter has to go back to the adjudicating authority to examine the issue in the light of these important arguments raised before Tribunal for the first time.: CHENNAI CESTAT;

2009-TIOL-1102-CESTAT-BANG.pdf

M/s Kerala State Electricity Board Vs CCE, Thiruvananthapuram (Dated: April 27, 2009)

Service Tax – Taxability of charges received for usage of grid in transmission of power/electricity – Prima facie assessee has not made out a strong case on merits – Pre-deposit of Rs. 1 crore ordered.: BANGALORE CESTAT;

2009-TIOL-1101-CESTAT-BANG.pdf

M/s Coromandel Shipping Agencies Pvt Ltd Vs CCE & CC, Visakhapatnam (Dated: April 22, 2009)

Service Tax – Engaging personnel on behalf of clients for activities like stevedoring etc do not come under Port service – Full waiver of pre-deposit and stay granted.: BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-358-HC-MUM-CX.pdf + cx story.pdf

CCE & CC Vs M/s Shri Ram Aluminium P Ltd (Dated: June 30, 2009)

Central Excise – No jurisdiction with the authorities to impose penalty lesser than mandatory penalty, which has to be co-extensive with the duty payable – Judgments of Supreme Court in M/s Dharamendra Textile Processors 2008-TIOL-192-SC-CX-LB and M/s.Rajasthan Spinning & Weaving Mills, 2009 (239) E.L.T. 3 (S.C.) = 2009-TIOL-63-SC-CX followed.: BOMBAY HIGH COURT ;

2009-TIOL-1100-CESTAT-DEL.pdf

M/s Euro Cotspin Ltd Vs CCE, Chandigarh (Dated: May 8, 2009)

Central Excise – 100% EOU – Evidence on record to show clearances to DTA in excess of permissible limits – While deemed export to be treated at par with physical exports for determining quantum of clearances permitted to DTA, no evidence forthcoming in de novo proceedings – Plea to treat clearance value to DTA as cum duty price agreed – No evidence put forth on record to support claim of financial hardship – Pre-deposit of Rs. 50 lakhs ordered.: DELHI CESTAT;

2009-TIOL-1099-CESTAT-DEL.pdf

M/s Cosmos Ispat Pvt Ltd Vs CCE, Raipur (Dated: March 26, 2009)

Central Excise – Compounded levy introduced during closure of factory – Option exercised for compounded levy on re-opening of factory applicable only prospectively – Duty demand for prior period not sustainable – Impugned order modified and held that duty payable only from date of re-opening of factory.: DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt09_100.pdf

Adjudicating authority notified for M/s. Clarrity Intermediates and Pesticides;

cnt09_99.pdf

Adjudicating authority notified for M/s Sundram;

cnt09_98.pdf

Adjudicating authority notified for Shri Manoj Garg;

cnt09_97.pdf

Adjudicating authority notified for M/s. Indo Gulf International;

cnt09_96.pdf

Adjudicating authority notified for M/s. Rifle Association of India;

cnt09_95.pdf

Adjudicating authority notified for M/s. Imam International;

cnt09_94.pdf

Adjudicating authority notified for Firoj Usman Memon;

cnt09_93.pdf

Adjudicating authority notified for M/s. Neeru Trading Company;

cnt09_92.pdf

Adjudicating authority notified for M/s. EDAG Technologies India Private Limited;

dgft08not191.pdf

India revises rupee value to Rs 66-57 for Special Currency Basket;

dgft08not190.pdf

New address of FIEO in Mumbai notified ;

dgft08not189.pdf

DGFT amends list of agencies in Gujarat authorised to issue certificate of origin ;

CASE LAWS

2009-TIOL-1098-CESTAT-BANG.pdf

M/s Rashtriya Ispat Nigam Ltd Vs CC, Visakhapatnam (Dated: January 5, 2009)

Customs – Import of low silica limestone within permissible CIF value prior to enhancement of value in value based advanced license– Any subsequent changes in license imposing quantitative restrictions will not have retrospective effect – When imports are within permissible value limits as per original license and no violation of license or customs notification during that period, duty liability does not arise due to subsequent changes imposing quantity restrictions – Duty and penalty not sustainable – Impugned order set aside.: BANGALORE CESTAT;