Finance Act gazetted dated August 19 (Full text of Act to follow in NEXT UPDATE TONIGHT);

India, Switzerland to hold talks in December to amend DTAA for allowing probe into Indian slush money parked in Swiss Accounts: FM;

India signs agreement with World Bank for three projects;

Govt mulls amendment to Arbitrartion Act: Law Minister;

Sahar Airport Customs arrests Zambian national with heroin;

Festival Bonanza for Babus - 2nd Instalment of Pay Commission Arrears;

PM asks anti-corruption agencies to make cost of corruption unacceptably high;

Core Sector grows by 1.8% in July; Q1 growth is 4%;

UN Human Rights Chief hails USA probe into alleged CIA abuses;

ACC clears appointments of Padamvir Singh, IAS (MP-77) as Director, LBSNAA + Rudhra Gangadharan, IAS (KL-75) as Secretary, Deptt of Animal Husbandry and N Gokulram, IAS (KN-74) as OSD in Cabinet Secretariat;

TIOL COMMENTARY

ddt 26 aug.pdf

Can CENVAT Credit of Basic Excise Duty be used for payment of Education Cess / Secondary and Higher Education Cess?

spl column.pdf

New Direct Taxes Code: Is curse going to be worse?

CASE LAW + ANALYSIS

2009-TIOL-98-SC-CT.pdf + FCI story.pdf

Food Corporation Of India Vs State Of Punjab (Dated: August 21, 2009)

Sales Tax – Two questions referred to High Court – Only one is answered – HC requested to answer the unanswered question:SUPREME COURT;

SIXTH PAY COMMISSION NOTIFICATION

office_memorandum.pdf

Festival Bonanza for Babus – 2nd Instalment of Pay Commission Arrears;

MIXED BUZZ

mbuzz0790.pdf

India signs agreement with World Bank for three projects;

mbuzz0789.pdf

PM asks anti-corruption agencies to make cost of corruption unacceptably high;

mbuzz0788.pdf

Core Sector grows by 1.8% in July; Q1 growth is 4%;

mbuzz0787.pdf

UN Human Rights Chief hails USA probe into alleged CIA abuses;

2009-TIOL-435-HC-DEL-IT.pdf + search story.pdf

Sonia Magu Vs CIT (Dated: August 11, 2009)

Income tax - Search & seizure - Revenue conducts search of various premises of the Airlines, its Directors, employees and shareholders related to the family - recovers jewellery - Assessees asked to explain the disputed jewellery - Assessee refers to cash withdrawal and purchase of the jewellery - also offers 20% tax on the value of excess jewellery to buy peace with the Revenue and to avoid litigation - notwithstanding the offer of tax, the AO treats the entire value of excess jewellery as undisclosed income and makes additions - CIT(A) accepts the explanation given by the assessee relating to the source of purchase and the gifts but grants only partial relief - Tribunal sustains the CIT(A) order - held, once the assessee has given satisfactory explanation regarding the purchase of the disputed jewellery, the necessary consequence is that there was no unexplained asset in the hands of the assessee. In such a situation, it is neither proper nor legally permissible for the revenue to still fasten the assessee with the liability of tax. It would be clear ground of illegal extraction of tax from the assessee - Assessees' appeals allowed:DELHI HIGH COURT;

2009-TIOL-434-HC-P&H-IT.pdf

CIT, Karnal Vs M/s Unique Autofelts Pvt Ltd, Panipat (Dated: August 17, 2009)

Income tax - Sec 263 - Assessee is a manufacturer-exporter - receives share applicationmoney from various persons - AO raises questions and answers were provided with evidence - AO accepts the same and passes the order - CIT invokes powers u/s 263 - Tribunal allows assessee's appeal - held, power under Section 263 of the Act could be exercised where view taken by an Assessing Officer was erroneous - Revenue's appeal dismissed:PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-433-HC-P&H-IT.pdf

CIT, Chandigarh Vs Investment Trust Of India Ltd, Chennai (Dated: August 11, 2009)

Income tax - Sec 32 - Assessee is allowed to claim depreciation on assets - AO later invokes provisions of Sec 154 to deny the benefits on the ground that the machineries never existed - Held, since the Revenue fails to substantiate its allegation that the purchase of assets was a sham, and the fact that the issue is debatable, rectifiction or alteration cannot be made u/s 154 - Revenue's appeal dismissed:PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-432-HC-P&H-IT.pdf

Sh Rajiv Bhatia, Propeitor Vs CIT, Jammu (Dated: August 12, 2009)

Income tax - Assessee is in the business brick kiln - Survey u/s 133A - adverse materials found - additions made - CIT(A) partly upholds the additions - Tribunal does the same - held, since the assessee fails to provide any evidence as regards to excess stocks counted by the AO and investments outside the book, the Tribunal order is upheld - Assessee's appeal dismissed:PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-431-HC-P&H-IT.pdf

CIT, Ludhiana Vs Rockman Cycle Indusries Pvt Ltd (Dated: August 7, 2009)

Income tax - Sec 36(1)(iii) - Assessee borrows money from sister concern at high interest rate and invests the same in another sister concern - AO disallows interest on the ground of use of colourable device by the assessee - Tribunal allows the same - held, not putting the facts of the case through the test of commercial expediency is not correct on behalf of the Tribunal which simply left it to the wisdom of the assessee to make an investment - matter referred to the Larger Bench:PUNJAB AND HARYANA HIGH COURT;

SERVICE TAX SECTION

2009-TIOL-1330-CESTAT-MUM.pdf

Prithvi Couriers Vs CCE, Pune-II (Dated: May 18, 2009)

Service Tax – Penalty under Section 76 and 77 – no reason has been stated by the appellant for the delay in filing returns or paying the service tax – even any relief under Section 80 of the Finance Act, 1994 has been prayed – penalties sustained.: MUMBAI CESTAT;

2009-TIOL-1329-CESTAT-AHM.pdf

CCE, Surat Vs M/s Star Crane Service (Dated: July 28, 2009)

ST - Penalty under Sec 78 - Commissioner(A) upholds penalty under Sec 75(A) for non-registration and under Sec 77 for failure to file return but sets aside under Sec 78 as there is no allegation of suppression in the SCN - held, since the Commissioner(A) has given categorical finding that there is no suppression, no penalty under Sec 78 can be imposed - Revenue's appeal dismissed : AHMEDABAD CESTAT;

2009-TIOL-1328-CESTAT-AHM.pdf

M/s P Gautam & Co Vs CST, Ahmedabad (Dated: July 1, 2009)

ST - Advertising Service - Assessee is an advertising agency and pays service tax on it - when they place advertisements in print media they avail discount - Revenue for levying service tax on such discounts under BAS - held, since the issue is debatable, a pre-deposit of Rs 3 lakh is ordered : AHMEDABAD CESTAT;

2009-TIOL-1327-CESTAT-AHM.pdf

M/s Amirsh Enterprises Vs CCE, Rajkot (Dated: July 22, 2009)

ST - Manpower recruitment service - Assessee is a small time recruitment agency - fails to deposit tax as there was no bank authorised to collect the same - tax with interest paid after issue of SCN - seeks waiver of pre-deposit for penalty u/s 76 - held, since the assessee was aware of its liability, non-payment is violation of law and authorities have no discretion to reduce penalty if failure to pay tax continues - waiver from pre-deposit denied: AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1333-CESTAT-MUM.pdf + bhusa story.pdf

CCE, Aurangabad Vs M/s Shayona Pulp Conversion Mills Pvt Ltd (Dated: July 7, 2009)

Plastic bhusa used as fuel in Marine Boiler – whether permission from Maharashtra Pollution Control Board was taken or not is immaterial to the issue of availing Cenvat Credit under the CCR, 2004 – CESTAT dismisses Revenue appeal.:MUMBAI CESTAT;

2009-TIOL-1332-CESTAT-MUM.pdf

S D Enterprises Vs CCE, Thane - II (Dated: June 15, 2009)

Assessee opting to the benefit of Notification 10/2003-CE on 01.03.2003 – Cenvat credit on inputs contained in the semi finished goods in stock on 01.03.2003 cannot be denied as finished goods and semi finished goods are on the same footing inasmuch as the finished goods were cleared without payment of duty and the semi finished goods after finishing processes were also cleared like wise – appellate authority allowing credit on inputs contained in finished stock – no reason for denying credit in respect of inputs contained in semi finished gods.:MUMBAI CESTAT;

2009-TIOL-1331-CESTAT-MAD.pdf

CCE, Chennai Vs M/s R V Steels Pvt Ltd (Dated: April 28, 2009)

Central Excise – clandestine removal – demand of duty - The original authority had passed the order in violation of principles of natural justice - It was incumbent on him to have allowed the request for cross-examination of witnesses whose statements had been relied on in passing the order - all the statements relied on as evidence had been rendered by staff of third party and there is no material evidence corroborating the third party statements – revenue appeal has no merit. :CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-436-HC-MAD-CUS.pdf

V S Stalin Vs Deputy Commissioner Of Central Excise, Coimbatore (Dated: July 21, 2009)

Customs – fraudulent availment of ineligible draw back – prosecution – petition to direct the Chief Judicial Magistrate to entertain the discharge petition – Chief Judicial Magistrate has come to the conclusion that the cross-examination of witnesses had clearly showed that there is a prima facie case of fraudulent availment of drawback benefits which is not actually due to him. Hence, the charge of the accused against the Chief Judicial Magistrate is baseless and contrary to the facts - the prosecution case has to be tried necessarily and the Criminal Original Petition is dismissed as not maintainable.:MADRAS HIGH COURT;

2009-TIOL-1326-CESTAT-MAD.pdf

M/s Chandra Maritime Pvt Ltd Vs CC, New Delhi (Dated: April 20, 2009)

Customs – clearance of computer equipment as ship stores - There is no dispute that the dredger in question came from Belgium and that the same returned before dispute on the import could be finally adjudicated - the impugned goods could be transferred from the aircraft in which the same had been imported to the dredger of M/s. Dredging International, Belgium for use as ship stores without payment of duty. There was no requirement that the importer had to file a Bill of Entry for clearing the equipment. The import governed by the Sections 86 and 87 of the Act did not need an importer with an IEC code for its import - The charge of misdeclaration is also not sustainable.:CHENNAI CESTAT;