NSDL working on SEZ Online Project: All applications to be filed online soon + MoC lays down procedure for consideration of operational issues of SEZs;

CBEC revises tariff value of poppy seeds + brass scraps;

CBEC amends Customs Notifications to notify FTP benefits for status holders from marine sector + exempts capital goods imported under Status Holders Incentive Scheme;

PM favours creation of new-age cop plus National Police University;

Delhi to host first meeting of WHO-Framework Convention on Tobacco Control;

Restrictive practices while accepting bank notes - RBI guidelines;

EC orders suspension of DM and SP of Bhind in MP on ground of partisan behaviour during polls;

Kolkata Income Tax (Investigation) raids leading stock broker + glass manufacturer; Assessees surrender Rs 61 Crore;

Govt constitutes Task Force to address issues of MSME Sector;

TIOL COMMENTARY

ddt 15 sept.pdf

Central Excise Commissioner tries to bribe CBI through his Inspector - Supreme Court clears prosecution – No need of prior sanction;

stgst.pdf

Meaning of 'used outside India' in Export of Services;

CASE LAW

2009-TIOL-105-SC-SERVICE.pdf

State Through Central Bureau Of Investigation Vs Parmeshwaran Subramani & Anr (Dated: September 11, 2009)

No prior Sanction required for prosecuting for abetment of bribery - CBI allowed to prosecute Customs Commissioner and Inspector: The inevitable conclusion is that the High Court fell into error in reading into Section 19 of the Act, the prohibition not to take cognizance of an offence punishable even under Section 12 of the Act without previous sanction of the Government which is not otherwise provided for. The language employed in Section 19 of the Act is couched in mandatory form directing the courts not to take cognizance of an offence punishable under Sections 7, 10, 11, 13 and 15 only, alleged to have been committed by a public servant, except with the previous sanction of the Government. The legislature consciously in its wisdom omitted the offence of abetment of any offence punishable under Section 7 or 11 of the Act thereby making its intention clear that no previous sanction as such would be required in cases of offence punishable under Section 12 of the Act. The High Court read something into Section 19 on its own thereby including Section 12 also into its ambit, which in our opinion is impermissible.

It is settled law that where there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to undertake any exercise to read something into the provisions which the legislature in its wisdom consciously omitted. Such an exercise if undertaken by the courts may amount to amending or altering the statutory provisions.: SUPREME COURT;

RBI CIRCULAR

rbi09cir008.pdf

Foreign Currency Account by diplomatic missions - Credit of Visa Fees;

Press Release 1.pdf

Restrictive practices while accepting bank notes – RBI guidelines;

Press Release 2.pdf

Reserve Bank of India (Note Refund) Rules, 2009;

DEPUTATION

post_advisor.pdf

Filling up of the post of Advisor (Broadcasting & Cable Services) In TRAI.

MIXED BUZZ

mbuzz0852.pdf

PM favours creation of new-age cop plus National Police University;

mbuzz0851.pdf

Delhi to host first meeting of WHO-Framework Convention on Tobacco Control;

mbuzz0850.pdf

India, Hong Kong sign Mutual Legal Assistance pact in criminal matters;

2009-TIOL-565-ITAT-MUM.pdf + tata story.pdf

DDIT, Mumbai Vs M/s Tata Iron And Steel Co Ltd (Dated: August 13, 2009)

Income Tax - Indo-UK DTAA - Assessee brings out Euro Issue of convertible bonds - hires lead managers - pays commission, underwriting and management fees - AO for TDS u/s 195 as he takes the view that the services provided by the non-resident are technical services as per Explanation 2 to Sec 9(1)(vii) and also under Article 13 of DTAA - payments are liable to TDS u/s 195 - CIT(A) disagrees except for the payments made to solicitors' firm based on Hong Kong which had no DTAA with India during the relevant time - held, no TDS is applicable as no technical knowledge or skills or service is 'made available' to the Indian company which can be used over a period of time - however, payments made to Hong Kong-based solicitors' firm is liable to TDS as the legal services provided are very much technical service as held by the Special Bench in Mahindra & Mahindra Ltd case and there is no substance in the assessee's argument that legal services are not technical services as they are covered under Sec 44AA or Sec 194J because legal services are specifically covered under technical services as per Expl 2 to Sec 9(1)(vii) as held by the Special Bench - Assessee's appeal partly allowed:MUMBAI ITAT;

2009-TIOL-564-ITAT-MUM.pdf

M/s Sheorey Digital Systems Ltd Vs ACIT, Mumbai (Dated: March 09, 2009)

Income Tax - Section 147 - Assessee files return declaring loss under the normal provisions but pays tax u/s 115JA - order u/s 154 is issued on the same date on which the intimation is issued. Proceedings u/s 147 - AO makes an assessment u/s 144 r/w 147 - Though several grounds of appeal has been raised, the CIT(A) has decided the legality of the notice issued u/s 148 as well as the notice issued u/s 143(2). About the other grounds raised the CIT(A) held that the additions has been challenged merely on technical grounds..-Held, the AO has reopened the assessment merely for the purpose of verification of the claim which is not permissible in law. The validity of the reopening of assessment has to be seen in the light of the facts available on records and on the date of satisfaction whether there was any evidence supporting the additions made in the year under appeal or not could not be ascertained by the AO on the date of recording of reasons for reopening of assessment. Prior period expenses and preliminary expenses written off is also not a ground on which the AO could have reasons to believe that the income of the assessee had escaped assessment. Section 147 is not a tool for verification of the claim made by the assessee. The reopening of assessment is permissible only if a case falls within the parameters of section 147 read with section 148. The statue has provided a separate mechanism for verification of the returns and the claims made by the assessee. Section 147 is meant to assess escaped income. The reopening of the assessment is not valid. Assessee Appeal allowed.:MUMBAI ITAT;

2009-TIOL-563-ITAT-MUM.pdf

WNS Global Services Private Limited Vs ITO (Dated: July 30, 2009)

Income tax – Perquisite u/s 17(2) – Assessee, a BPO, debited expenses for pick-up and drop-down facilities to its employees as car hires charges during the night and bus hire charges during the day from point to point and conveyance allowance is given to employees – AO treated the expenses for pick up and drop down facilities as taxable perquisite u/s 17(2) subject to TDS and treated the assessee as a defaulter u/c XVII-B – CIT(A) reduced the rate of TDS calculated by the AO for TDS but considered the facility as taxable perquisite – Held as per explanation to section 17(2) the transportation facilities provided by an employer to an employee from his residence to office and office to residence is not a perquisite. Further, the transport facility is not taxable since computation of value of facility is not possible in individual hands of the assessee as it is in the nature of composite service collectively provided. Appeal is the assessee allowed.:MUMBAI ITAT;

2009-TIOL-562-ITAT-BANG.pdf

M/s VRSG Bulk Carriers Vs ACIT, Hubli (Dated: May 22, 2009)

Income tax – Assessee claimed expenses for Rs. 18,13,200/- as ‘driver's entry' which are incurred to the drivers of the transport to attract the drivers and ensure timely lifting of ore from the railway-yard – AO disallowed 50% of the expenses stating that assessee is having agreement with lorry owners and has paid advances to such lorry owners and there are no payment vouchers for such expenses duly signed by the payee – CIT(A) observed that the expenditure is incurred for commercial expediency. However as no proper evidences were found disallowance is made for 10% of the expenses – Order of the CIT (A) is upheld as the disallowance is to be based only in respect of non-verifiable nature of expenditure and not on the ground that the expenditure was not incurred for the purpose of business.

Section 68 - AO made addition for credits entries in the partners accounts in the firm stating that the assessee failed to furnish the account extract from individual records to show from where the money is transferred to the firm – CIT (A) confirmed the addition calculating the peak credits of the partners – Held that no details have been filed to ascertain the creditworthiness of the partner or the genuineness of the transaction and as the amounts have been credited in the books of the firm and as per section 68, these amounts can be added in case the assessee is not able to offer an explanation – Addition as upheld by the CIT (A) is confirmed.

Capital or Revenue Expenditure – AO treated the expenses incurred by the assessee for developing the plot belonging to the railway in order to give strength to the base and facilitate the transportation of the iron ore as capital expenditure – CIT (A) allowed the appeal of the assessee and treated as revenue expenditure – Held that for allowing expenditure, one has to see whether the expenditure has been made for the purpose of its business and to take into consideration question of commercial expediency and if the expenditure is incurred for the purpose of the business of the assessee, it does not matter that the payment made is for the benefit of the third party. As the plot was not belonging to the assessee, the pit digged by the assessee will not be an asset in the hands of the assessee to be used endlessly and hence, no capital asset has come into existence – Revenue's appeal is disallowed.

Disallowance of expenses claimed as provision of wheel loader expenses – AO disallowed the expense Rs. 3,40,010/- stating that provisions are not allowable – CIT (A) confirmed the disallowance – Held that simply on the basis of nomenclature, the learned CIT(A) should not have confirmed the disallowance. In case the expenditure of this nature has been allowed in the immediately preceding year then following the principle of consistency, the expenditure will be allowable – Issue is restored back to the AO. : BANGALORE ITAT;

SEZ - INSTRUCTION

sez09ins039.pdf

Procedure for consideration of operational issues regarding SEZs. ;

sez09ins038.pdf

NSDL working on SEZ Online Project - all applications to go online soon ;

SERVICE TAX SECTION

2009-TIOL-1463-CESTAT-AHM.pdf

M/s Amee Castor & Derivatives Ltd Vs CCE, Ahmedabad (Dated: July 30, 2009)

ST - Refund - assessee is a manufacturer-exporter - files refund claim for two services of CHA and transporation availed for exports - Since claims filed beyond the period of 60 days as prescribed in the exemption Notification, Revenue rejects it - assessee pleads it may be allowed by invoking provisions of Sec 11B of Central Excise Act - held, since the limitation period has been prescribed in the Notification, a general provision cannot be invoked - even amendment carried out to extend the period of refund claim makes it clear that it is prospective and does not cover the past periods - Assessee's appeal dismissed:AHMEDABAD CESTAT;

2009-TIOL-1462-CESTAT-KOL.pdf

M/s Agarwal Agency Vs CC, CCE & ST , Patna (Dated: July 27, 2009)

ST - C&F Service - Penalty imposed for suppression of facts under Sec 78 - Assessee is registered with the Revenue as a service provider - however, when Revenue officers visits its premises they find assessee has been providing services to many other clients not disclosed to the Revenue - held, it is a clear case of suppression and Sec 80 benefits cannot be granted - assessee's appeal dismissed:KOLKATA CESTAT;

2009-TIOL-1461-CESTAT-DEL.pdf

M/s Cherry Hill Interiors Ltd Vs CST, New Delhi (Dated: July 17, 2009)

ST - renovation of old building - demand - assessee claims 80% deduction towards material cost from total value of contract and pays tax on rest 20% - also pleads financial hardship - held, issue to be examined later - Rs one crore pre-deposit ordered:DELHI CESTAT;

CCE, Chennai Vs M/s Tamilnadu Petroproducts Ltd (Dated: May 29, 2009)

Service Tax – Clearing and Forwarding Agent service – the activity of mere procurement of purchase order for the principal is not taxable under C&F Service – This activity is taxable under BAS only with effect from 1.7.2003.:CHENNAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1467-CESTAT-MUM.pdf + Ispat story.pdf

M/s Paris Ispat Vs CCE & CC, Nasik (Dated: August 10, 2009)

Meaningful interpretation to be given to the provisos contained in section 11AC of the CEA, 1944 – since appellant has already reversed the CENVAT credit and paid interest, penalty imposable u/s 11AC is 25% of duty – Reduced penalty of 25% to be paid within one month failing which full amount of penalty shall be payable – CESTAT – Appeal disposed of accordingly.:MUMBAI CESTAT;

2009-TIOL-1466-CESTAT-MAD.pdf

CCE, Coimbatore Vs M/s Rajaguru Spinning Mills (P) Ltd (Dated: May 25, 2009)

Central Excise – Valuation – realisation of higher amounts and evasion of duty – third Party records are not reliable when no direct links could be established between the records and the offending transactions – no merit in revenue's appeal.:CHENNAI CESTAT;

2009-TIOL-1465-CESTAT-MAD.pdf

CCE, Trichy Vs M/s Sowbagyalakshmi Silicate (Dated: June 19, 2009)

Central Excise – Refund – Unutilized credit on closure of unit - Refund of unutilized balance of Cenvat Credit is admissible when an assessee surrendered licence. ( Para 3) :CHENNAI CESTAT;

2009-TIOL-1464-CESTAT-MAD.pdf

M/s India Cements Ltd Vs CCE, Trichy (Dated: June 16, 2009)

Central Excise – exemption under Notification 4/2006 CE to Cement cleared to industrial/institutional buyers – the appellants are eligible for exemption under Notification 4/2006 CE.:CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

Tariff value of edible oils.pdf

CBEC revises tariff value of poppy seeds + brass scraps;

ctariff09_105.pdf

Exempts capital goods imported under Status Holders Incentive Scheme;

ctariff09_104.pdf

CBEC amends Customs Notifications to notify FTP benefits for status holders from marine sector;

CASE LAWS

2009-TIOL-1469-CESTAT-MUM.pdf + stpi story.pdf

M/s Converge Labs Software Technologies Pvt Ltd Vs CCE, Gurgaon (Dated: July 27, 2009)

Customs – Duty free goods imported by STPI unit installed in MTNL premises for testing and possible sale – STPI scheme misused – exemption not allowed – confiscation, duty and penalty upheld – even the foreign supplier penalised for abetment:MUMBAI CESTAT;

2009-TIOL-1468-CESTAT-MAD.pdf

M/s Tata Cellular Ltd Vs CC, Chennai (Dated: June 15, 2009)

Customs – exemption under Notification No 17/2001 – Cus to Base Station Controller – the imported item does not contain the essential components of a Base Station – there is no dispute that the items imported are for upgrading the existing Base Station Controller – exemption rightly denied by the lower authorities. :CHENNAI CESTAT;