Service Tax - What is Export of Services? - Microsoft ordered to pre-deposit Rs 70 Crores - CNTRL + ALT + DELETE (See 'DDT')

Admissibilitv of credit of Service Tax paid as recipient under section 66A of the Finance Act. 1994;

Import of paper and paper board: CBEC clarifies on implementation of certain provisions of Hazardous Waste Rules

Tripura lawyers demand separate HC; strike work today;

UNIDO to launch USD 9 mn scheme to benefit Indian industry;

Asst Commissioner of Central Excise, Varanasi, shot dead by two unidentified gunmen;

Slush money in Swiss bank accounts: India not welcome on name-fishing trip, says Swiss Bankers Association;

TIOL COMMENTARY

ddt 24 aug.pdf

Section 66A not a Charging Section – Tax paid by reverse charge eligible as input credit if service is an input service;

tiol top.pdf

Mr Deora, Gas pricing, taxation and marketing need durable reforms;

guest column.pdf

New I-T Code proposes automatic reopening of assessments on basis of mere observations in audit by CAG;

MIXED BUZZ

mbuzz0782.pdf

UNIDO to launch USD 9 mn scheme to benefit Indian industry;

2009-TIOL-531-ITAT-MUM-SB.pdf + depb story.pdf

M/s Topman Exports Vs ITO, Mumbai (Dated: August 11, 2009)

IT – Computation of deduction u/s80 HHC - entire amount received on sale DEPB not to be taken – only profit on sale of DEPB to be considered – Whether the entire amount received on sale of DEPB entitlements represents profit chargeable under section 28(iiid) of the Income Tax act, is concerned, answered in negative and the second part of the question or the profit referred to therein requires any artificial cost to be interpolated is replied in affirmative to the extent that the face value of DEPB shall be deducted from the sale proceeds.

The subsequent sale of DEPB is a step divorced from export and such profits are not export profits: It is noticed that export incentive is provided by way of the face value of DEPB. It is this value, which has relation with the export business. The subsequent sale of DEPB is a step divorced from export. The relation between the act of exporting goods and DEPB exists only upto the stage of its acquisition and not thereafter. Once the DEPB is acquired pursuant to exports, the subsequent events of its utilization for self consumption or making imports for resale or the sale of DEPB as such, are independent transactions unrelated to export.

Profit on transfer of DEPB well as the DEPB entitlement itself is in the nature of income Section 80HHC provides deduction in respect of income from export business. Considering the text of section 80HHC and the manner of computation of deduction it has been noticed that though the face value of DEPB is profit from export business, but the profit on sale of DEPB is not covered within the scheme of this section inasmuch as the DEPB has only a local market from the point of view of its sale. When DEPB is sold, the sale proceeds will form part of total turnover but not export turnover for the reason that the sale proceeds are not received in or brought into India in convertible foreign exchange. In that situation the sale proceeds of DEPB will be included in the total turnover but not the export turnover and resultantly the deduction to the extent of profit on sale of DEPB will be automatically denied when the profits of business are proportionately reduced in the ratio of export turnover to total turnover. Since profit on transfer of DEPB well as the DEPB entitlement itself is in the nature of income, the same requires to be included within the general meaning of income even if it is not specifically enshrined in section 2 (24).:MUMBAI ITAT (SPECIAL BENCH);

2009-TIOL-530-ITAT-MUM.pdf

MIG Cricket Club Vs ACIT, Mumbai (Dated: April 24, 2009)

Income tax - Assessee, a registered society, applies for grant of registration u/s 80G - Revenue grats it and also renews it later - AO reopens assessment and holds that assessee is not a charitable trust and, therefore, not entitled for exemptions u/s. 11 & 12 - CIT(A) sustains reopening of assessment - Held, no exemption u/s. 11 can be allowed in respect of interest, dividend, rent, capital gains and income from other sources if such income are received from non-members of mutual concerns of clubs - Held, receipt on account of sports sponsorship is not tainted with commerciality and it only goes to reduce the cost of the members on a particular event and such reduction of cost cannot be termed as income and brought to tax - Assessee's appeal partly allowed.:MUMBAI ITAT;

2009-TIOL-426-HC-DEL-IT.pdf

CIT, Delhi-VI Vs Whirlpool Of India Ltd (Dated: August 19, 2009)

Income tax - Assessee is incorporated as financial enterprise - main job is to finance consumer goods - hires employees for execution of the business - claims deduction for salary paid to employees - AO disallows on the ground that although the business was set up during the priod but the commencment of business took place later - Tribunal takes the view that the expression “setting up of the business in the previous year” as per Section 3 of the Income Tax is different from commencement of the business - held, Tribunal's order is justified in allowing deduction after the business is st up - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-425-HC-DEL-IT.pdf

CIT Vs Sportking India Limited (Dated: August 19, 2009)

Income tax - Sec 80-IA - assessee is a manufacturer - loses goods on account of fire in the factory - receives insurance claims - Sec 80IA deduction claimed - AO disallows - held, a restricted connotation cannot be given to the expression ''derived from any business of an industrial undertaking'' and the facts that a nexus exists between the goods destroyed in the factory and the insurance claims, the Sec 80IA benefits cannot be denied on the sum received as insurance claim - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-424-HC-UTTRANCHAL-IT.pdf

M/s Western Geco International Ltd Vs ACIT, Dehradun (Dated: August 7, 2009)

Income tax - Sec 10 (10CC) - employer paying tax on behalf of employees - exemption - Is employer entitled to exemption of tax paid?

Assessee pays tax on behalf of employees - claims exemption u/s 10 (10CC) - AO disallows the same - CIT(A) partly allows the assessee's appeal - Tribunal dismisses the assessee's appeal - held, since the Division Bench of this court has already remanded the issue to the Tribunal to examine the same in the light of Special Bench order, all these appeals also remanded:UTTARAKHAND HIGH COURT;

SERVICE TAX SECTION

st_credit.pdf

Admissibilitv of credit of Service Tax paid as recipient under section 66A of the Finance Act. 1994;

CASE LAWS

2009-TIOL-1317-CESTAT-DEL.pdf + st story.pdf

M/s Sayaji Hotels Ltd Vs CCE, Indore (Dated: June 23, 2009)

Service Tax – No provision under CESTAT (Procedure) Rules, 1982 directing the Principal Officer filing appeals to provide/attach the requisite authorization to file appeals before CESTAT – Appeals filed before CESTAT scrutinized by the authorized officers of Registry – Preliminary objection of Revenue to dismiss appeal for lack of proof of authorization in favour of person filing appeal, liable for rejection:DELHI CESTAT;

2009-TIOL-1316-CESTAT-KOL.pdf

M/s Paharpur Cooling Towers Ltd Vs CST, Kolkata (Dated: June 16, 2009)

ST - Consulting Engineer's Service - Assessee pays royalty for use of technical knowhow to non-resident - claims IPR service was notified to be taxable only from 18.04.06 - Revenue raises demand - held, since the foreign service provider has provided services relating to civil design, construction technique and hydraulic process design for cooling tower, the assessee has not prim facie made a strong case for waiver of pre-deposit - A pre-deposit of Rs 6 lakh ordered:KOLKATA CESTAT;

2009-TIOL-1315-CESTAT-DEL.pdf

M/s Punjab Steels Vs CCE, Chandigarh (Dated: June 25, 2009)

ST - Cenvat Credit - Assessee is a manufacturer of non-alloy steel ingots - avails credit of raw materials, capital goods and input services to pay central excise duty - later, removes certain raw materials as such and reverses the cenvat credit availed except the credit availed on GTA service availed for transporation of raw materials - Revenue raises demand - held, it is already settled that since there is no provision for reversal of cenvat credit availed on services, the demand is not sustainable - Assessee's appeal allowed:DELHI CESTAT;

2009-TIOL-1314-CESTAT-AHM.pdf

CCE, Rajkot Vs M/s Shree Natraj Ceramics & Chemicals Ind Ltd (Dated: June 5, 2009)

ST - GTA Service - Assessee is a manufacturer - gets registered under GTA - avails abatement of 75% under exemption notification no 32/2004-ST - Revenue denies exemption on the ground that the assessee has not filed declaration from Goods Transport Agency regarding non-availment of credit - Demand raised and penalty imposed - Commissioner(A) confirms the same - Matter remanded by Tribunal for fresh examination - Assessee produces declaration in some cases - Commissioner (A) confirms demand but invokes Sec 80 to grant waiver from penalty - held, since the tax with interest was paid before issue of SCN and some declarations about non-availment of credit was also filed, there was no mala fide intention to evade tax - valid ground for invocation of Sec 80 - penalty set aside - Revenue's appeal dismissed:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1313-CESTAT-AHM.pdf + welspun story.pdf

M/s Welspun India Ltd Vs CCE, Rajkot (Dated: August 4, 2009)

CE – Refund of Unutilized amount in PLA - the money is that of the assessee and can be claimed by him without attracting the provisions of refund claim: the money lying in PLA is actually the money belonging to the assessee. The fact that the same was re-credited in PLA will not make a difference, inasmuch as the same was originally paid by the assessee and utilized at the time of first clearance of the goods. The same has been again credited in terms of the Notification. The fact that Notification allows re-credit of duty paid is not to be interpreted in a manner that the re-credit amount would not belong to the assessee. Undisputedly, the re-credited amount is owned by the assessee and the Provisions of Para 2A of Notification are only to the effect that the said re-credited amount may be utilized for further payment of duty in the subsequent months. Where the appellant is not in a position to utilize the credit, the balance lying in PLA can be refunded to him in cash, inasmuch as the Notification does not bar such refund. As held in the above referred judgments, the money is that of the assessee and can be claimed by him without attracting the provisions of refund claim. It is like an account book maintained in the banks and indicative of the fact as to how much money stands deposited by the assessee for utilization towards payment of duty in future. If duty is not required to be paid and the assessee is not able to utilize at for payment of duty, the amount lying unutilized is available for withdrawal by the assessee. :AHMEDABAD CESTAT;

2009-TIOL-1312-CESTAT-MAD.pdf

M M Forgings Ltd Vs CCE, Trichy (Dated: May 15, 2009)

Central Excise – CENVAT Credit – the appellants are eligible for credit on catering services – issue stands settled by the larger bench.:CHENNAI CESTAT;

2009-TIOL-1311-CESTAT-DEL.pdf

CCE, Ludhiana Vs M/s Prem Industries (Dated: May 13, 2009)

Central Excise – Textile fibre, yarn and fabrics bought from market deemed to be duty paid – Processed knitted or crocheted fabrics manufactured out of unprocessed/grey fabrics purchased from market eligible for concessional rate of duty under Notification 14/2002-CE – No infirmity in impugned order, upheld:DELHI CESTAT;

CUSTOMS SECTION

instruction09_006.pdf

Implementation of certain provisions of the Hazardous Waste (Management, Handling and Transboundary) Rules, 2008 in respect of import of paper, paper board and paper product wastes;

CASE LAWS

2009-TIOL-1310-CESTAT-BANG.pdf

Neptune Trade Links Pvt Ltd Vs CC, Cochin (Dated: February 17, 2009)

Customs – Clearance of goods under purchased DEPB scrips based on fake telegraphic release advices by Custom House – Proper procedure not followed in procuring TRA by appellants to ascertain genuineness of DEPB registration at the designated port – Duty and interest demand confirmed but penalty set aside as appellant was victim of circumstances:BANGALORE CESTAT;

2009-TIOL-1309-CESTAT-KOL.pdf

MD Kamal Haque Vs CC, Kolkata (Dated: February 25, 2009)

Customs – Confiscation of palm oil of foreign origin and til seed bags used for concealment upheld – No merit in appellants contention regarding evidence not adduced for smuggled nature of goods by Revenue, penalty upheld – No incriminating evidence against godown owner, penalty set aside:KOLKATA CESTAT;