CBEC Chairman issues temporary charge order for new Members; Mr P N Vittal Dass gets (P&V); Mr S D Majumder is new Member (Central Excise) and Mr Y G Parande gets Budget;

Govt exempts import of 10 lakh MTs of white sugar upto March 31, 2010;

Khurshid tables Companies Bill, 2009; No difference in content from lapsed Bill;

Gas Dispute between Ambani brothers: Govt has every right to regulate gas allocation;

Exports further dips by 27.7% in June;

Service Tax on Commission paid to Managing Directors/Directors (Whole-time/Independent - Not liable to Service Tax;

Random thoughts on tax havens: Bringing illegal money back to India;

Happy 62nd Independence Day! Is pension of our freedom fighters taxable?;

Private Airlines finally succumb to Govt pressure; call off strike;

EU's non-tariff barriers trouble Indian exports: FICCI Survey;

TIOL COMMENTARY

ddt 3 aug 09.pdf

Freedom Fighters' Pension - Taxable?;

guest column.pdf

Random thoughts on tax havens: Bringing illegal money back to India;

tiol top story.pdf

Happy 62nd Independence Day! Is pension of our freedom fighters taxable?;

MISC CASE LAW

2009-TIOL-89-SC-GST.pdf + sc story.pdf

ACCT, LTU Vs Amara Raja Batteries Ltd (Dated: July 27, 2009)

APGST - `base turnover' would, therefore, refers to the turnover of the quantity in goods and not its monetary value: The notification used the words `production achieved' and 'maximum capacity expected to be achieved'. It did not use the word `turnover'. It did not provide that the amount of sales tax paid in the earlier years will have any relevance for the purpose of enforcement of the scheme. The said GOMs does not refer to maintenance of local sales. The term `base turnover' would, therefore, refers to the turnover of the quantity in goods and not its monetary value.

An exemption notification should be given a literary meaning. Recourse to other principles or canons of interpretation of statute should be resorted to only in the event the same give rise to anomaly or absurdity. The exemption notification must be construed having regard to the purpose and object it seeks to achieve. The Government sought for increase in industrial development in the State. Such a benevolent act on the part of the State, unless there exists any statutory interdict, should be given full effect. The exemption notification furthermore as is well known should be construed liberally once it is found that the entrepreneur fulfills all the eligibility criteria. In reading an exemption notification, no condition should be read into it when there is none. If an entrepreneur is entitled to the benefit thereof, the same should not be denied.: SUPREME COURT OF INDIA;

MIXED BUZZ

mbuzz0718.pdf

Khurshid introduces Companies Bill, 2009; No difference in content from lapsed Bill, 2008;

mbuzz0717.pdf

Gas dispute between Ambani brothers: Govt has every right to regulate gas utilisation and allocation;

mbuzz0716.pdf

Exports further dips by 27.7% in June;

mbuzz0715.pdf

Half-burnt bodies are main source of river pollution: Minister;

2009-TIOL-384-HC-MAD-IT.pdf + prosecution story.pdf

G S R Krishnamurthy Vs The Income Tax Officer (Dated: June 29, 2009)

Income tax – Prosecution - discretion to withdraw from the prosecution is that of the Public Prosecutor and none else – Court cannot ask for permission from Government to the PP: Therefore the High Court observed that whenever an application is filed by the Public Prosecutor appointed by the Central Government, the duty of the Court is not to ask the Public Prosecutor, as it has been wrongly done in this case by the lower Court Magistrate, to produce the permission or authority from whom he got such instructions for withdrawal.

On the other hand, it is the bounden duty of the Magistrate to apply his mind as to whether such a prayer for getting consent from the Court for withdrawal is genuine or actuated by extraneous considerations and that is the sum and substance of the judgment of the Honourable Apex Court. But in this case, the learned Magistrate has not at all applied his mind in proper perspective.: MADRAS HIGH COURT;

2009-TIOL-383-HC-MAD-IT.pdf

M/s Canara Jewellers Vs Settlement Commission (Dated: July 16, 2009)

Income tax - Sec 245C - Application to Settlement Commission - Assessee is a partnership firm - engaged in jewellery business - reassessment - since the AO finds difference between the closing stock and opening stock, additions are made - Assessee files application before Settlement Commission - After inquiry settlement commission enhances income disclosed by the assessee - Assessee goes in writ - held, although all the powers of the Revenue authorities are vested in the Commission but the condition precedent for entertaining the application is the true and full disclosure of income, and if the income disclosed is enhanced by the Commission, it violates Sec 245C and is beyond its jurisdiction - Assessee's appeal allowed.: MADRAS HIGH COURT;

2009-TIOL-490-ITAT-BANG.pdf

M/s Micro Labs Pvt Ltd Vs ITO, Bangalore (Dated: June 12, 2009)

Income tax - Sec 37 - Assessee is an incorporated company - passes Board Resolution to reimburse medical expenses of its Managing Director - AO treats it as perquisite liable to tax under section 40(c)(iii) - Assessee contends that it is business expenditure - held, since the assessee and the Managing Director having fiduciary relationship and not exactly an employee-employer relationship and the fact that the MD was instrumental in setting up a new factory and procuring orders for the products, taking care of his health was vital for the business of the assessee company and the decision to reimburse his medical expenses is to be treated as a business decision - such expenditure is allowable deduction u/s 37 - Assessee's appeal allowed.: BANGALORE ITAT;

2009-TIOL-489-ITAT-MUM.pdf

Schnell Hans Beauty Clinic Pvt Ltd Vs DCIT, Mumbai (Dated: March 26, 2009)

Income Tax - Assessee  is in the business of running a beauty parlour - AO makes addition on the basis of discrepancy in receipt as shown in the return and the  one collected during  search and seizure action u/s. 132 - CIT(A) upholds additions - Held, the contents of seized paper not disputed by the assessee,  no infirmity in the order of the CIT(A) upholding the addition.

On the issue of CIT(A)  confirming the addition on account of payment made to a service provider - Held, in the absence of any supporting evidence as to the purpose for which the payments have been made and the nature of services rendered.  CIT(A)'s order upheld: MUMBAI ITAT;

2009-TIOL-488-ITAT-DEL.pdf

Sabre Inc Vs DCIT, International Taxation, New Delhi (Dated: July 10, 2009)

Income tax - Indo-USA DTAA - Assessee is a US-based company - maintains CRS system for booking airlines tickets, hotels etc - enters into contract with Air India and Indian Airlines for distribution of its service - its agent installs computer, sotware and other hardware at subscriber's premises - pays certain percentage of income earned in India to its agent - buiness connection u/s 9(1)(i) - AO takes the view that the computer system installed at subscribers' premises is the service PE of the assessee under DTAA - held, the assessee has a service PE and follows the previous ruling of the Tribunal attributing 15% of global income to business generated in India but since the assessee paid more than the receipts to its agent, there is no income left to be charged to tax in India - Assessee's appeal allowed.: DELHI ITAT;

SERVICE TAX SECTION

temp_member_charge_cbec.pdf

CBEC Members get temporary charge;

CASE LAWS

2009-TIOL-1177-CESTAT-DEL.pdf

M/s Raghu Exports (India) Pvt Ltd Vs CCE, Ludhiana (Dated: June 23, 2009)

ST - Cenvat credit - Revenue denies credit on service tax paid on overseas commission for procuring exports orders - held, since the assessee received the services of overseas commission agent for exports of its manufactured goods, it prima facies makes a good case for waiver of pre-deposit - Stay granted: DELHI CESTAT;

2009-TIOL-1176-CESTAT-DEL.pdf

M/s Ramco International Vs CCE, Ludhiana (Dated: June 23, 2009)

ST - Service recipient - Assessee receives services from overseas service providers - Revenue raises demand - assessee argues no tax was payable for services received prior to 18.4.06 - Case remanded for fresh examination by Commissioner (A) without any pre-deposit.: DELHI CESTAT;

2009-TIOL-1175-CESTAT-DEL.pdf

M/s Vodafone Essar Vs CST, Meerut-I (Dated: June 18, 2009)

ST - Stay / Dispensation of pre-deposit - assessee is a telecom company - claims tower and tower materials classified under Chapter 73 are components of goods under Chapter 85 - Revenue argues that if one does not belong to a family cannot be a specie of that family - tower materials of Chapter 73 cannot be treated as component under the definition of capital goods under Rule 2(a)(iii) of Cenvat Credit Rules, 2004 - Pre-deposit of Rs 20 lakh ordered.: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1182-CESTAT-MUM.pdf + bottle story.pdf

Hindustan Coca Cola Beverages Pvt Ltd Vs CCE, Thane I (Dated: June 23, 2009)

Return of empty glass bottles/crates by one bottling unit to another on payment of duty - Availment of Cenvat Credit - CESTAT grants waiver of pre-deposit of Rs.3 Crores

CESTAT decision in Hindustan Coca Cola Beverages Pvt. Ltd. [ 2007-TIOL-712-CESTAT-MUM ] relied upon.: MUMBAI CESTAT;

2009-TIOL-1181-CESTAT-KOL.pdf

M/s Greenply Industries Ltd Vs CCE, Kolkata VII (Dated: March 9, 2009)

Central Excise - No evidence on record to show that imported timber logs on which CENVAT credit was availed and stored outside factory premises, were not used in manufacture of dutiable final products and diverted by appellants – Prima facie case in favour of appellants – Duty paid on defective inputs cleared from storage yard – Pre-deposit of Rs. 80,000 ordered in lieu of penalty and balance amount of Rs. 5.8 crores waived.: KOLKATA CESTAT;

2009-TIOL-1180-CESTAT-MUM.pdf

CCE, Nagpur Vs Indorama Synthetics (I) Ltd (Dated: June 12, 2009)

Penalty under rule 15 of CCR, 2004 - Cenvat Credit – Duty paid furnace oil used for generation of electricity, part of which used in manufacture of excisable goods and part diverted to residential colony – since matter was agitated by respondent for a long period before a hierarchy of judicial fora, there is no question of malafides – during period of dispute, availment of credit cannot be said to have been ill-motivated – Vacation of penalty by lower appellate authority proper in law – Revenue appeal dismissed.: MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_084.pdf

Govt exempts import of 10 lakh MTs of Refined / white sugar upto March 31, 2010;

CASE LAWS

2009-TIOL-1179-CESTAT-MUM.pdf

CC (I), Mumbai Vs Ricoh India Ltd (Dated: June 17, 2009)

Finalisation of provisional assessment – Interest provision came into force only on 13.7.2006 and has no retrospective effect – appellant not liable to pay any interest u/s 18(3) of Customs Act – Revenue appeal dismissed.: MUMBAI CESTAT;

2009-TIOL-1178-CESTAT-BANG.pdf

M/s Hewlett Packard India Sales Pvt Ltd Vs CC, Bangalore (Dated: January 21, 2009)

100% EOUs – allegation that the appellants had exported the goods as such without any manufacture – manufacture as defined under the EXIM Policy is much broader than the definition under Central Excise – the percentage of “as such” exports is very negligible compared to the total imports – Even testing, packing, repacking, lebeling, re-labeling etc. are all amount to manufacture as per the definition of the manufacture in EXIM Policy – demand of duty by denying exemption under Notification 52/2003 Cus and confiscation under Section 111 (o) of the Customs Act is set aside.: BANGALORE CESTAT;