Multiple state GST rates - politics overtaking economics? (See 'Common Basket')

Service Tax: A journey from 28 to 36! (See 'Common Basket')

Mr S Dutt Majumder hands over charge of DG, Directorate of Revenue Intelligence, to Ms Vijai Laxmi Sharma after 28 months; Ms Sharma is first lady IRS officer to become DG of DRI;

FM approves 13 FDI proposals worth Rs 394 Crore;

Safeguard duty on import of Soda Ash: Govt extends deadline for submission of investigation report;

Global financial crisis takes heavy toll on ECB flows last fiscal;

Bid for NELP-VIII: The show goes on at Perth;

PM compliments ISRO team for successful launch of Oceansat-2 Satellite;

UN treaty on maritime goods transportation to be signed in Rotterdam;

Govt levies Rs 32 Cr penalty on cellular operators for not complying with subscriber verification guidelines;

PM to leave today for G20 Summit at Pittsburg in USA;

TIOL COMMENTARY

ddt 23 sept.pdf

Ex-CESTAT Member practising in CESTAT – Does it not lower Stature of the ex-Member & CESTAT?

stgst.pdf

Multiple state GST rates - politics overtaking economics?

spl down.pdf

Service Tax: A journey from 28 to 36!

FDI

FDI.pdf

FM approves 13 FDI proposals worth Rs 394 Crore;

MIXED BUZZ

mbuzz0881.pdf

Global financial crisis takes heavy toll on ECB flows last fiscal;

mbuzz0880.pdf

Bid for NELP-VIII: The show goes on at Perth;

mbuzz0879.pdf

Digital advances threaten intellectual property rights: UN expert;

mbuzz0878.pdf

UN treaty on maritime goods transportation to be signed in Rotterdam;

2009-TIOL-508-HC-ALL-IT-LB.pdf + lb story.pdf

CIT, Kanpur Vs Shri Mohd Farooq, Kanpur (Dated: September 3, 2009)

Income Tax – Appeal to High Court – Limitation Act not applicable - Hongo India - 2009-TIOL-48-SC-CX-LB - followed: appeal has to be presented according to the procedure prescribed. The remedy of appeal is a statutory right and hence it has to be presented in accordance with the procedure, the manner and within the time prescribed by the Statute, and the principles of natural justice are not remotely attracted so far as the question of limitation is concerned.:ALLAHABAD HIGH COURT LARGER BENCH;

2009-TIOL-507-HC-ALL-IT.pdf

Doctors X'Ray & Pathology Institute (P) Limited Vs Director Of Investigation, Kanpur (Dated: August 26, 2009)

Income tax - Sec 132 - Assessee is a company - its Directors are doctors - Revenue searches various premises of the Directors and the assessee - legality of search challenged - assessee alleges Revenue had not reason to believe that the assessee had undisclosed income - held, going by the fact that the Revenue had information from external source and the same secret information being verified by officials themselves which indicated business practices being followed by the assessee, resulting in black money, there was valid ground for conducting search and seizure - sufficiency of reasons for search need not be gone into at the time of initiation of search operations - Assessee's writ petition dismissed: ALLAHABAD HIGH COURT;

2009-TIOL-582-ITAT-DEL.pdf

ACIT, New Delhi Vs M/s Citi Finance Consumer Finance (I) Ltd (Dated: August 21, 2009)

Income Tax - Section 147 /148 - Reopening of assessments after lapse of four years from the end of relevant A.Y which under the proviso to section 147 could not be done – CIT(A) cancels assessment - Held, assessment is sought to be reopened on three counts. That in respect of all these three issues, the A.O. has raised queries in original assessment before allowing respective claim/loss by the assessee. It cannot be said that there was any failure on the part of the assessee to disclose fully and truly all material facts relevant for assessment for that year. Instant reopening is covered by proviso to section 147. Revenue's appeal dismissed. : DELHI ITAT;

2009-TIOL-581-ITAT-MUM.pdf

Warden International (Agencies) Pvt Ltd Vs DCIT, Mumbai (Dated: April 17, 2009)

Income tax – Section 263 – Assessee claimed interest free Lease Rent/License compensation deposit of Rs. 35,20,000/- following cash accounting method as rent paid to the sub-lessor for a period of 25 years which was to be adjusted and appropriated every year for a entire period of 25 years – CIT invoked provisions of section 263 considering that cash system of accounting could never extend to include allowance for any sum which was liability for a future period and therefore, assessment order in this regard was erroneous in so far as it was prejudicial to the interest of Revenue – Held that there was no dispute that the assessee was following cash method of accounting, whole amount was paid by the assessee to the sub-lessor, copy of sub-lease agreement was placed before the AO, as per the agreement the amount was to be adjusted / appropriated for 25 years, the assessee was not having any right to terminate the lease at any time before expiry of 25 years and the assessee paid the amount with no right to recovery. Therefore, it cannot be stated to be an erroneous treatment especially since assessee was following cash system of accounting. The provision of Section 263 could not be invoked to correct each and every type of mistake or error committed by an AO and it was only when an order was erroneous, the section would be attracted and as there was no error which was prejudicial to the interest of the revenue, CIT was not justified in invoking section 263 of the Act.

Assessee declared a short term capital gain of Rs. 1,61,36,066/- on sale of shares – the assessee submitted the details of purchases and sales alongwith the bills, contract notes and a statement from NSDL. Though the AO was having full details, he had not taken the view that the transactions of sale and purchase be taken as a business venture – CIT invoked section 263 considering the transactions as business transactions – Held that cryptic order of the AO would not mean that there was lack of enquiry. It is not that the AO had simply accepted entries in the statement of the account of the assessee but on the other hand, he had called for the supporting materials and therefore, application of mind is obvious. The view taken by CIT as well as by AO is possible. As there is no error in the order, CIT was not justified in invoking section 263.

Travelling and conveyance expenses – CIT invoked section 263 stating that AO did not make scrutiny of the details submitted by the assessee regarding the foreign travelling which requires to be examined and held the assessment as erroneous – Held that during the assessment proceedings assessee was asked to provide the details of the travelling and conveyance expenses and was asked why disallowance should not be made for the personal element in the expenses incurred. This shows that AO allowed the claim of the assessee considering the details and records produced by the assessee. Order is not erroneous and appeal of the assessee is allowed.

Assessee claimed expenses towards STT which was wrongly allowed by the AO though it was not an allowable expenditure u/s 40(ib) – Assessee stated that it is a rectifiable mistake and as the assessee was eligible to get rebate u/s 88E, there is no error which is prejudicial to the interest of the revenue – Held that rebate u/s 88E is allowable only in case the income is shown under the head ‘profits and gains of business or profession' and it is not for the assessee to claim or assert that an authority should invoke only one particular set of powers when a different set of powers are also allowable to it. CIT rightly invoked the provisions of section 263 as the error for allowing the STT was prejudicial to the interest of the revenue: MUMBAI ITAT;

2009-TIOL-580-ITAT-MUM.pdf

DDIT, Mumbai Vs M/s Ciba Speciality Chemicals Inc Dasle (Dated: August 4, 2009)

Income tax - India-Swiss DTAA - Assessee enters into agreement with an Indian company for providing engineering services - royalty income - assessee offers the income for taxation @ 10%, relying on the understanding that the Germany where the rate is 10% and Swiss Confederation are members of the OECD and only lower rate is applicable to the OECD Member countries - AO applies 20% rate as per Article 12(2)(a)(i) - Also levies penalty u/s 271(1)(c) - CIT(A) deletes penalty - held, given the fact that the assessee has disclosed all the facts and had a bona fide belief to apply lower rate, it does not call for levy of penalty - Since neither concealment of income nor incorrect income particulars are funished in this case, penalty is not imposable - Revenue's appeal dismissed: MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-1512-CESTAT-BANG.pdf

Indian Institute of Chemical Technology Vs CC, CCE & ST, Hyderabad (Dated: May 19, 2009)

Service tax – In the absence of suppression of facts with an intention to evade payment of service tax, service tax demand invoking extended period not sustainable – As demand is set aside on limitation no finding given on items classified under grant-in-aid category by assessee:BANGALORE CESTAT;

2009-TIOL-1507-CESTAT-DEL.pdf

M/s Clique Vs CCE, Bhopal (Dated: July 14, 2009)

Service Tax - Commercial Training & Coaching - Vocational Course - Stay /Dispensation of pre-deposit - The appellant deserves consideration at this stage in view of nature of activity carried out to prepare candidates for examination by IRDA, under sponsorship of Insurance Companies. Submissions of both sides required to be tested on the touch stone of law. However, considering the precedent case laws, waiver of pre-deposit ordered. (Para 4):DELHI CESTAT;

2009-TIOL-1506-CESTAT-DEL.pdf

M/s Nitin Ahuja Vs CST, Delhi (Dated: August 3, 2009)

Service Tax - Works Contract - Composition Scheme - Exercising option -   Stay / Dispensation of pre-deposit - Appellant may be governed by composition scheme after the period 1.6.07 in view of option exercised. There is no embargo in the law that an option cannot be exercised. As an interim measure, to protect interest of Revenue, appellant to make pre-deposit of Rs.5 lakhs . (Para 4):DELHI CESTAT;

2009-TIOL-1505-CESTAT-BANG.pdf

CCE, Hyderabad Vs Hindustan Coca Cola Beverages (P) Ltd (Dated: May 4, 2009)

Service Tax - CENVAT - Input Services - Mobile Phones - As per Cenvat Credit Rules, 2004 service tax paid on mobile phone services falls under the definition of input service and hence credit is available. (Para 4, 5):BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1511-CESTAT-MUM.pdf + prakash story.pdf

CCE Vs Prakash Industrial Corpn (Dated: August 24, 2009)

Bogus invoices allegedly issued by non existing manufacturing units – first stage dealer issuing invoices based on these invoices and second stage dealer following suit – Revenue failing to conduct investigations and gather evidence in respect of invoices issued by first stage dealer – CESTAT upholds Commissioner(A)'s order setting aside penalty.

Supreme Court decision in Amrit Foods vs. CCE, UP 2005-TIOL-164-SC-CX . Relied upon. Tribunal's observations –

“11. …, the department did not bother to investigate the matter relating to the other seven invoices. Moreover, the department did not bother to investigate the actual vehicle numbers used in transportation of goods to the place of the respondent. The decision arrived at by the original adjudicating authority arrived at although the goods under the cover of eight invoices is on the strength of the bogus invoices. No evidence was brought on record by the revenue in this regard. On the other hand, the respondent has taken out care to find out the identity and reliability of the supplier of the goods after examining the proper documents under duty paid invoice and the payment was also made by cheque also.

12. The Revenue has failed to bring the evidence on record that “the respondent has contravened the provisions of law”. The revenue arrived on the conclusion without investigation and evidence.”:MUMBAI CESTAT;

2009-TIOL-1510-CESTAT-MAD.pdf

Dharmapuri Dist Co-Op Sugar Mills Ltd Vs CCE, Chennai (Dated: April 29, 2009)

Central Excise – remission of duty on molasses stored in open masonry tanks and lost during the rains – the place of storage was not approved by the Commissioner under rule 47 – the loss occurred due to negligence and willful act of the assessee, but not due to natural causes – remission rightly rejected by the lower authorities. :CHENNAI CESTAT;

CCE, Chennai Vs M/s Star Drive Bus Duct (P) Ltd (Dated: June 15, 2009)

Central Excise – SSI Exemption – Brand Name - There is no dispute that the brand name ‘STARDRIVE' was registered by another person for use on various products manufactured by it and one of the products manufactured by it is bus ducts. In the circumstances the bus ducts manufactured and cleared by the appellants using the brand name ‘STARDRIVE' during the material period were not eligible for SSI exemption in terms of Notification No. 1/93-CE. ( Para 4):CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATIONS

cnt09_145.pdf

Safeguard duty on import of Soda Ash: Govt extends deadline for submission of investigation report

dgft09not010.pdf

DGFT amends ITC entry relating to tallow, fat and oils of any animal origin;

CASE LAWS

2009-TIOL-1508-CESTAT-MUM.pdf + jindal story.pdf

M/s Jindal Drgus Ltd Vs CC, Nhava Sheva(Dated: August 4, 2009)

Menthol Crystals BP/USP manufactured from peppermint may also be called “Mint” and is liable to Export Cess under the Spices Cess Act, 1986 – CESTAT orders pre-deposit of Rs.50 lakhs.: MUMBAI CESTAT;