Dear FM, it's time to merge CBDT & CBEC, and create a Council for Revenue Management as policy catalyst! (See 'Common Basket');

Cabinet gives nod to 5% DA hike from July 1, 2009 + okays 1% interest subvention on housing loans upto Rs 10 lakh;

Union Cabinet gives nod to proposal to set up joint venture company 'Invest India' for promotion of FDI;

North Block, South Block structures are national heritage; Cabinet approves special norms for repair;

RBI clarifies bank financing of SEZ units not to be treated as Commercial Real Estate exposure;

OECD invites comments on revision of Transfer Pricing Guidelines;

India receives USD 3.5 bn FDI in July; up by 56%;

Kolkata DRI seizes 997 kg ganja, two persons arrested;

Chartered Accountants - Research Foundation - Eligible for Exemption under Section 10(23C)(iv) of Income Tax Act: Delhi HC;

TIOL COMMENTARY

ddt 10 sept.pdf

Government notifies the COST INFLATION INDEX FOR 2009 -10;

cobweb.pdf

Dear FM, it's time to merge CBDT & CBEC, and create a Council for Revenue Management as policy catalyst!

MIXED BUZZ

mbuzz0836.pdf

India receives USD 3.5 bn FDI in July; up by 56%;

mbuzz0835.pdf

North Block, South Block structures are national heritage; Cabinet approves special norms for repair;

mbuzz0834.pdf

Union Cabinet okays 1% interest subvention on housing loans upto Rs 10 lakh;

mbuzz0833.pdf

Cabinet gives nod to 5% DA hike from July 1, 2009;

mbuzz0832.pdf

Six new National Institutes of Pharmaceutical Education & Research approved;

mbuzz0831.pdf

OECD invites comments on revision of Transfer Pricing Guidelines;

2009-TIOL-484-HC-DEL-IT.pdf

ICAI Accounting Research Foundation & Anr Vs DGIT (Ememptions) & Ors (Dated: August 28, 2009)

Charitable Purpose - ICAI ACCOUNTING RESEARCH FOUNDATION – Eligible for Exemption under Section 10( 23C )( iv) of the Income Tax Act: DELHI HIGH COURT;

2009-TIOL-483-HC-DEL-IT.pdf + escorts story.pdf

CIT, Delhi-IV Vs Escorts Finance Limited (Dated: August 24, 2009)

Income tax - Penalty u/s 271(1)(c) - Assessee is a finance company - claims deduction u/s 35D for expenses incurred for public issue of shares - AO disallows and initiates penalty - CIT(A) and Tribunal disagree with the AO - held, since deduction u/s 35D is clearly available only to either investment company or industrial undertaking for expansion of the business there cannot be two opinions that the assessee was not eligible for such benefits, and against such clarity in law how can the assessee claim that such a deduction was made based on the opinion of a Chartered Accountat who is supposed to be expert in tax laws - it is not a case of bona fide error - assessee made bogus claim and the same will attract penal provisions - Revenue's appeal partly allowed : DELHI HIGH COURT;

2009-TIOL-482-HC-P&H-IT.pdf

CIT Vs M/s Gemi Motors India (P) Ltd (Dated: September 2, 2009)

Income tax - Sec 154 - Assessee claims deduction for provision for warranty - AO passes an order u/s 154 and disallows the claim by terming it as uncertain liability - CIT(A) deletes the addition - And Tribunal upholds the CIT(A) order - held, the power under Section 154 for rectification of mistake can not be exercised on a debatable issue - it can be exercised only when there is an error apparent on the face of record - Revenue's appeal dismissed: PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-481-HC-HP-IT.pdf

CIT Vs M/s Moon Hotel Pvt Ltd (Dated: July 31, 2009)

Income tax - Search u/s 132 - block assessment - Revenue also conducts special audit u/s 142(2A) - demand - Tribunal cancels block assessment - held, block assessee is not a substitute for regular assessment - it is in addition to the regular assessment and is resorted to in case of undisclosed income - since no undisclosed income was detected even after special audit, no block assessment can be made in this case - Revenue's appeal dismissed: HIMACHAL PRADESH HIGH COURT;

2009-TIOL-557-ITAT-BANG.pdf

M/s Intel Tech India Pvt Ltd Vs ITO, Bangalore (Dated: July 31, 2009)

Income tax - TDS - Tribunal cancels demand u/s 201(1) but upholds the interest u/s 201(1A) till the date the duductee files the return - Assessee files misc application to know whether interest is to be paid upto the date when taxes are paid or till the day the return is filed by the deductee - held, the petition u/s 254(2) filed by the assessee seeks review of the order which is not permissible - Assessee's appeal dismissed: BANGALORE ITAT;

SERVICE TAX SECTION

NOTIFICATION

stnot09_036.pdf

CASE LAWS

2009-TIOL-1437-CESTAT-BANG.pdf + Toyota story.pdf

Toyota Kirloskar Motors Pvt Ltd Vs CCE (LTU), Bangalore (Dated: April 20, 2009)

Service Tax – Service tax on services received from outside India can be discharged from CENVAT Credit A/c – No exclusion provided in the scope of ‘output service' defined in Rule 2(p) of CENVAT Credit Rules, 2004 other than GTA prior to 01.03.2008 – Pre-deposit of Rs. 3.3 crores waived and stay granted:BANGALORE CESTAT;

2009-TIOL-1436-CESTAT-DEL.pdf

Cellebrum.Com Pvt Ltd Vs CC & CCE, Chandigarh (Dated: July 17, 2009)

ST - Business Auxuliary Service - Assessee is an intermediary - receives messages from senders and transmits the same to the recipient by hiring cellular services - demand under BAS - assessee pleads for cenvat credit and proper classification of the service - held, the Govt has introduced another service, Business Support Service, which may be relevant in this case from 1.5.2006 - Pre-deposit of Rs 20 lakh ordered:DELHI CESTAT;

2009-TIOL-1435-CESTAT-DEL.pdf

M/s Bharat Sanchar Nigam Ltd Vs CCE, Chandigarh (Dated: June 19, 2009)

ST - telephone service - provisional assessment under rule 6(4A) - assessee has been filing half-yearly return and adjusting the excess tax paid in one month against the tax due in the next month - demand - held, unless provisional assessment is finalised, there is no ground for fresh demand - issue remanded:DELHI CESTAT;

2009-TIOL-1434-CESTAT-DEL.pdf

M/s AGV Alfab Ltd Vs CST, New Delhi (Dated: July 17, 2009)

ST - Works Contract - Assessee claims benefit of Notification No. 12/2003 for deduction of materials used in the contract - Revenue ignores the books of the assessee and raises demand - held, since the Fiannce Act, 1994 does not intend to tax sale of goods, and lower authorities have failed to consider the case comprehensively, waiver from pre-deposit granted along with stay: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-104-SC-CX.pdf + sc story.pdf

CCE, Bhubaneswar-I Vs M/s Champdany Industries Limited (Dated: September 8, 2009)

Central Excise – Classification – Carpets containing jute, cotton and polypropylene- to be classified on the basis of that textile material which predominates by weight over any other single textile material; Since the goods admittedly fall under Chapter 57 and consist of more than two or more textile materials, it has to be classified on the basis of that textile material which predominates by weight over any other single textile material. As in the goods in question jute admittedly predominates by weight over each other single textile material, the said Carpet could only be classified as jute carpets and nothing else.

Revenue cannot in Court argue a case not made out in its show-cause notice. It is well settled that unless the foundation of the case is made out in the show- cause notice, Revenue cannot in Court argue a case not made out in its show-cause notice.: SUPREME COURT;

2009-TIOL-103-SC-CX.pdf

CCE, Hyderabad-I Vs M/s Charminar Non-Wovens Limited (Dated: September 8, 2009)

Central Excise – Classification – Carpets containing jute, cotton and polypropylene- to be classified on the basis of that textile material which predominates by weight over any other single textile material; Since the goods admittedly fall under Chapter 57 and consist of more than two or more textile materials, it has to be classified on the basis of that textile material which predominates by weight over any other single textile material. As in the goods in question jute admittedly predominates by weight over each other single textile material, the said Carpet could only be classified as jute carpets and nothing else.

Concurrent finding of facts by lower authorities - interference is not called for by this Court: concurrent finding of facts reached by lower authorities in classification on the basis of evidence and on analysis of relevant legal provision interference is not called for by this Court in exercise of its power under Section 35L of the Central Excise Act, 1944.: SUPREME COURT;

2009-TIOL-102-SC-CX.pdf

CCE Vs UNI Products (I) Ltd (Dated: September 8, 2009)

Central Excise – Classification - non-woven floor coverings - classification should be done on the basis of the predominance test, that is to say, on the basis of textile materials which predominate by weight over other single textile material. The tribunal noted that before the adjudicating authorities it has been claimed that the carpets manufactured by the appellants has jute contents of 75% to 85% and the tribunal noted that "the revenue has not disputed this".

Tribunal being the last authority on fact, it is not proper for this Court, to disturb such findings based on evidence: It is well known that the tribunal being the last authority on fact, it is not proper for this Court, in exercise of its power under Section 35 L( b) of the Central Excise Act, 1944, to disturb such findings of the tribunal since such findings are based on evidence.: SUPREME COURT;

CUSTOMS SECTION

NOTIFICATION

dgft09not008.pdf

Free import policy for Carbon black and polyesters;

CASE LAWS

2009-TIOL-1433-CESTAT-AHM.pdf

M/s State Trading Corpn Of India Ltd Vs CC, Kandla (Dated: July 3, 2009)

Customs – Vegetable oil donated by UNWFP and imported by WFP India through STC acting as agent of Govt of India exempt from customs duties – Vegetable oil imported were to be subsequently monetized by WFP India for its India related projects – Import is a free gift though modalities are slightly different due to arrangement between GoI and WFP – Details of transaction explained to CBEC Chairman by Jt. Secretary, Ministry of Agriculture – Letter from Under Secretary detailing transactions ignored by Commissioner – Demand of duty set aside both on merits and limitation : AHMEDABAD CESTAT;

2009-TIOL-1432-CESTAT-MUM.pdf

AL-Saif International Vs CC, Nhava Sheva (Dated: June 18, 2009)

Presumption against passing of penal liability from a person penalized to another operates against department and it is for department to rebut this presumption – Matter remanded.

refund of redemption fine and penalty – Doctrine of unjust enrichment is an equitable doctrine which was given legislative recognition through section 27 of the Customs Act, 1962 – Transfer of penal liability from person to another person is not something recognized in common law nor by statutory law – there is a presumption against passing of penal liability from the person penalized for valid reasons, to any other person – such presumption, by its very nature, operates against the department and it is for the department to rebut this presumption – Orders set aside and Matter remanded to original authority.: MUMBAI CESTAT;