Finance Bill 2009 finally goes to Rashtrapati Bhawan for final enactment;

MoC clarifies if SEZ developer, co-developer and unit are the same, no need for separate lease agreement;

Clearance of used capital goods from SEZ into Domestic Tariff Area - Clarification;

Some interesting Definitions in the Direct Taxes Code (See 'DDT' Column);

CBEC fine-tunes jurisdiction of Kolhapur (Pune II) and Chandigarh II (Jalandhar) commissionerates;

FM approves FIPB proposals worth Rs 1123 Crore; Dish TV India proposal worth Rs 750 Cr + United Breweries proposal of Rs 218 Cr also given nod;

Steel Minister expecting a rebound of steel demand; asks SAIL to expedite expansion;

Union HRD Minister moots wide-spread education reforms;

New Foreign Trade policy is scheduled to be unfolded on Aug 27;

TIOL COMMENTARY

ddt 18 aug.pdf

Customs Commissioner charged with false TA Claim!

stgst.pdf

What will GST look like? Where have we reached in terms of backroom preparations?

fdi.pdf

10 FDI proposals approved;

MIXED BUZZ

mbuzz0765.pdf

Steel Minister expecting a rebound of steel demand; asks SAIL to expedite expansion;

mbuzz0764.pdf

Union HRD Minister moots wide-spread education reforms ;

2009-TIOL-412-HC-AHM-IT.pdf

Guj. Mineral Development Corpn Ltd Vs ITAT Thro' Deputy Registrar (Dated: February 19, 2009)

Income Tax - Tribunal refuses to admit appeals of the Assessee and the Revenue on the ground of non-approval by the Committee of Dispute - Held, Tribunal being a creature of the Statute, having been constituted under the provisions of the Act cannot exercise any powers beyond the powers available under the Act, and cannot discharge functions not provided under the Act, as well as the ITAT Rules which deal with the procedural part of filing and hearing an appeal. The Tribunal, therefore, cannot arrogate to itself the powers and jurisdiction which the Tribunal does not possess. The Tribunal has assumed powers which it does not have, for determining whether the appeal is to be admitted or not. The Tribunal has lost sight of the fact that, both the assessee and the Revenue, are statutorily vested with a right by virtue of Section 253(1), 253(2) and 253(4) of the Act to file an appeal or cross-objections. Such right granted by the Statute cannot be divested by the Tribunal on an erroneous assumption of powers arrogated to itself under a mistaken belief of law. No such requirement in the facts of the case to approach the Committee as the assessee herein and the I.T Department cannot be asked to go and obtain clearance from a Committee which has no jurisdiction over them. Even the provisions of the Act and the ITAT Rules do not permit exercise of such powers by the Tribunal. Tribunal to decide Appeals of the Assessee and the Revenue.:GUJARAT HIGH COURT;

2009-TIOL-519-ITAT-DEL.pdf + penalty story.pdf

M/s Ahujasons Shawlwale Pvt Ltd Vs DCIT, New Delhi (Dated: April 30, 2009)

Income tax - Penalty u/s 158-BFA(2) - Assessee is a trader - Revenue conducts search & seizure u/s 132 - finds excess stock, unaccounted purchases and cash - Assessee asked to file block return - return filed but NIL undisclosed income shown - AO makes additions and initiates penalty u/s 158-BFA(2) - held, the first proviso to section 158-BFA (2) offers a concession to the assessee to escape penalty by admitting undisclosed income in the block return and paying taxes. Since the assessee had filed Nil undisclosed income and the AO had rightly make additions for undisclosed income through unaccounted stocks, the second proviso to the Sec 158-BFA(2) comes into force as what is required to be established is only the undisclosed income in excess to the one disclosed in the block return - concealment of income like in Sec 271(1)(c) is not a pre-condition under this Section for imposing penalty - this is more so in view the Apex Court decision in Dharmendra Textiles case where it is held that penalty is a civil liability and no mens rea is required to be established for imposing it - Assessee's appeal dismissed:DELHI ITAT;

2009-TIOL-518-ITAT-BANG.pdf

ACIT, Hubli Vs M/s BDK Process Equipments Inc (Dated: June 26, 2009)

Income Tax - Section 80HHC - AO makes additions on the ground that the assessee, which is  a trader exporter and is entitled to the DEPB benefits, passed on the DEPB entitlements to its manufacturer sister concern for availing the benefits - CIT(A) deletes the addition - Held, AO is to verify that no income arose or accrued to the assessee on the basis of the very same licences which stood transferred to the sister concern and were fully utilized for their own purpose of manufacturing the goods ultimately exported by the assessee - Revenue's Appeal allowed. :BANGALORE ITAT;

2009-TIOL-517-ITAT-MUM.pdf

ITO, Mumbai Vs M/s Encon Fan [India] Pvt Ltd (Dated: April 15, 2009)

Income Tax - Assessee company pays commission to sister concern pursuant to an agreement - AO disallows on the ground of diversion of income through commission route - CIT(A) deletes disallowance - Held, payment of commission is based on an agreement which has been accepted by the AO as no disallowance was made in earlier years - Held, assessee proved that the payment of commission was made on account of commercial expediency and since AO partly allows the commission, it indicates that the agreement is genuine - just because payment of commission is partly paid, it doesn't mean that it's not genuine - Revenue's appeal dismissed.:MUMBAI ITAT;

2009-TIOL-516-ITAT-MUM.pdf

M/s Aristocrat Luggage Limited Vs DCIT, Mumbai (Dated: April 27, 2009)

Income Tax - Additions made for foreign travel expenses, closing stock and Y2K expenses - AO initiates penalty u/s 271(1)(c) - CIT(A) cancels penalty for first two types of expenses but confirms the same for the third one - held, penalty is levied where Assessee has concealed or furnished inaccurate particulars of income. In the present case, the Assessee has disclosed all the material facts relating to Y2K expenses and the same were disclosed at the time of filing of return along with certificate issued by the Auditor in form 3BA - so no concealment of material facts - Assessee's appeal allowed: MUMBAI ITAT;

SEZ - INSTRUCTION

sez09ins032.pdf

Clearance of used capital goods into Domestic Tariff Area;

sez09ins031.pdf

Requirement of lease agreement when Developer/Co-Developer and unit are the same – clarification;

SERVICE TAX SECTION

2009-TIOL-1274-CESTAT-DEL.pdf

Hindustan Aeronautics Ltd Vs CCE, Lucknow (Dated: July 2, 2009)

ST - Maintenance and Repair Service - Demand raised - Assessee writes to the Ministry of Finance to grant it exemption as it is providing maintenance and repair service to the defence sector - Application rejected - Assessee takes registration and deposits major part of tax - held, extended period cannot be invoked as a PSU working under a public policy cannot be alleged of tax evasion - waiver from pre-deposit granted:DELHI CESTAT;

2009-TIOL-1273-CESTAT-DEL.pdf

CCE, Indore Vs M/s Hindustan Motors Ltd (Dated: July 15, 2009)

ST - Service recipient - No demand is sustainable for period prior to 18.4.2006 - Revenue's appeal dismissed:DELHI CESTAT;

2009-TIOL-1272-CESTAT-AHM.pdf

M/s N J Devani Builders Pvt Ltd Vs CST, Ahmedabad (Dated: June 22, 2009)

ST - works contract - assessee provides commercial and industrial construction service - credit availed by claiming benefit of Notification No. 1/2006-ST dated 1.3.2006 - Pre-deposit of Rs two lakh ordered:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt09_19.pdf

CBEC fine-tunes jurisdiction of Kolhapur (Pune II) and Chandigarh II (Jalandhar) commissionerates;

CASE LAWS

2009-TIOL-414-HC-MUM-CX.pdf + ssi story.pdf

CCE, Mumbai Vs M/s Ramply India Ltd (Dated: June 11, 2009)

Central Excise - SSI Exemption – Use of brand name – Non–declaration of use of brand name – a manufacturer who uses the brand name of another manufacturer who was not entitled to exemption would not be entitled to the benefit of exemption under the Notification.

Extended period invokable: In the instant case it may be that the mark Ram's belongs to the sister company of the respondent. However, the sister company was not eligible for exemption nor could the respondent knowing that the mark belongs to another use the same. This really cannot be said to be contentious. This was clearly a case of ‘suppression'.:BOMBAY HIGH COURT;

2009-TIOL-1279-CESTAT-AHM.pdf

M/s Midco Ltd Vs CCE, Ahmedabad (Dated: July 2, 2009 )

Central Excise – Default in payment of duty by due date – Rule debars utilization of CENVAT A/c and payment of duty consignment wise by cash till outstanding amount is paid with interest – Prima facie case in favour of revenue – Pre-deposit of entire duty amount ordered:AHMEDABAD CESTAT;

2009-TIOL-1278-CESTAT-BANG.pdf

M/s M G Automotives (P) Ltd, Medak District (AP) Vs CC, & CCE, Hyderabad (Dated: March 31, 2009 )

Central Excise – Body building on duty paid chassis whether liable to duty under Rule 10A of Central Excise Valuation Rules, 2000 – Pre-deposit of Rs. 32 lakhs ordered and stay granted:BANGALORE CESTAT;

2009-TIOL-1277-CESTAT-BANG.pdf

M/s Handum Industries Ltd Vs CC, & CCE, Hyderabad (Dated: March 26, 2009 )

Central Excise - Allegation of clandestine removal of finished goods corroborated by certain statements recorded by authorities - Prima facie assessee has not made out a strong case on merits - Owing to financial hardship pre-deposit of Rs. 75 lakhs ordered:BANGALORE CESTAT;

CUSTOMS SECTION

2009-TIOL-413-HC-DEL-EXIM.pdf + exim story.pdf

Padam Exports Vs UoI (Dated: July 17, 2009)

EXIM – Petition for compensation on failure to issue VABAL licences under EXIM Policy – Alleged delay in processing of applications by exporter for issue of export licences, applications rejected by the competent authority and Grievances Redressal Committee – Petitioner directed by Mumbai High Court to approach competent authority who is directed to resolve the controversy in a fair manner – Applications rejected by competent authority by speaking order; Held - Order passed by Mumbai High Court to dispose of suit for recovery of damages does not permit and allow the petitioner for another round of litigation to claim damages – Earlier Petitions invoking Writ Jurisdiction already dismissed by Division Bench Writ Petitions dismissed

Contempt of Court – Proceedings initiated consequent to alleged non-compliance of Mumbai High Court judgement – Sweeping and general allegations not a ground to initiate contempt proceedings – Delhi High Court has no jurisdiction to take up proceedings – Petitioner at liberty to initiate proceedings before Mumbai High Court Contempt Petition disposed of : DELHI HIGH COURT;

2009-TIOL-1276-CESTAT-BANG.pdf

CC, Cochin Vs M/s Rajeswari Graphics, Maharashtra (Dated: February 4, 2009 )

Customs – Import of second hand photocopiers in violation of import policy – Reduction of redemption fine to 10% and penalty to 5% of the value of goods respectively by lower authority justified – No merit in Revenue appeals: BANGALORE CESTAT;

2009-TIOL-1275-CESTAT-DEL.pdf

CC, New Delhi Vs Shri Dharmi Chand (Dated: March 26, 2009)

Customs – When goods of foreign origin accepted as smuggled without payment of duty and statement under s. 108 is not retracted, such evidence is conclusive – Appellate Commissioner's finding that Revenue failed to discharge the onus of burden to prove under s.123 of Customs Act, 1962 not sustainable – Redemption fine and penalty found to be on higher side, reduced:DELHI CESTAT;