Service Tax Notifications consequent to Finance Act 2009 - Export and import of Services + exemption to manufacture of alcoholic beverages;

Duty-free import of refined white sugar to be allowed beyond Nov, 2009: Pawar;

Allowability of warranty expenses; CBDT moves SC against Karnataka HC decision; Notice issued to Hewlett Packard;

France backs India's inclusion in Security Council;

UN urged to consider imposition of tax on tax havens for damaging global economy ;

Transparent Commissioner (Appeals)?

700 delegates from 90 OECD and non-OECD countries discuss Transfer Pricing and tax treaties in changing world threadbare;

CBDT issues transfer order of 21 AC/DCs;

TIOL COMMENTARY

ddt 24 sept.pdf

Service Tax Notifications consequent to Finance Act 2009 - Export and import of Services;

cobweb.pdf

Leadership is all about responsibility! Will G20 leaders prove it?

oecd story.pdf

700 delegates from 90 OECD and non-OECD countries discuss Transfer Pricing and tax treaties in changing world threadbare;

MIXED BUZZ

mbuzz0882.pdf

UN urged to consider imposition of tax on tax havens for damaging global economy;

CBDT Order 135 2009.pdf

CBDT issues transfer order of 21 AC/DCs;

CASE LAWS

2009-TIOL-510-HC-ALL-IT.pdf

CIT Vs M/s Rawalpindi Flour Mills (Dated: September 3, 2009)

Income tax - Sec 32AB - Assessee is in the business of running flour mills - lets out some of its godowns for commercial purposes - treatment to rental income from warehousing - AO claims it is not business income - CIT(A) and Tribunal disagree with the AO - held, since letting out warehouses is a part of assessee's business, and the AO in the past has allowed it as business income for two AYs, there is no flaw in the Tribunal's order - Assessee entitled to depreciation u/s 32AB - Revenue's appeal dismissed :ALLAHABAD HIGH COURT;

2009-TIOL-509-HC-ALL-IT.pdf

CIT, Lucknow Vs R M L Mehrotra (Dated: September 2, 2009)

Income tax - Search u/s 132 - Assessee and other doctors run a pathology clinic - Revenue conducts search of their premises - notice issued and block assessment order passed on best judgement assessment basis - Tribunal disagrees with the AO - held, as per relevant provisisons of Sec 158BB the block assessment cannot be based on best judgement method - it has to be restricted to income attributable to the materials found during the search - If AO has come to know about escapement of some other income of the assessee the AO is at liberty to initiate action u/s 147 - Revenue's appeal dismissed:ALLAHABAD HIGH COURT;

2009-TIOL-585-ITAT-MUM.pdf + dtaa story.pdf

DDIT, Mumbai Vs M/s Scientific Atlanta Inc (Dated: July 3, 2009)

Income Tax - Indo-USA DTAA - Article 12(4) - Assessee is tax resident of the USA - enters into agreement with Indian Company to provide Satellite Network Communication System and certain installation and commissioning services - AO treats the consideration paid for Project management and engineering support services and Factory acceptance test services as fees for included services under the DTAA - CIT(A) deletes the addition - held, merely rendering some technical services in themselves is not covered under the Article 12 of the DTAA until it is 'made available' to the recipient for further use, even once if not on continuous basis - since in this case the non-resident company has only provided services assoicated with the supply of equipmentm and that too outside India, it is not taxable until the assessee has a PE and the income is attributable to the PE.

Business income - Article 7 - Since the receipt is not fee for included services, it is business profits for the assessee as per Article 7 - however, such income of the enterprise is taxable in the other contracting state only if it is attributable to the PE - but since the assessee has no PE in India, it is not taxable - Revenue's appeal dismissed:MUMBAI ITAT;

2009-TIOL-584-ITAT-DEL.pdf

Harish Dargan Vs DCIT, New Delhi (Dated: June 05, 2009)

Income Tax - Section158 BFA(2) - Search and seizure operation conducted at the residence and business premises of the assessee - books of account, documents and assets found and seized - On Notice u/s 158BC assessee files nil return - On assessment, undisclosed income of the assessee for the block period  computed, comprising of unexplained cash and the value of unexplained investment in gold and diamond stocks - Penalty imposed u/s 158BFA(2) - CIT(A) dismisses appeal - Held, assessee has not obtained the documents in due process of law - there is no affidavit about the manner in which the documents were obtained by the assessee. These documents are not considered for deciding the proceedings. This case relates to the cash and stock found from the assessee. His explanation was examined and was not found to be bona fide right up to the stage of Tribunal in quantum proceedings - CIT(A) order of penalty u/s 158BFA(2) upheld - Assessee's Appeal dismissed.:DELHI ITAT;

2009-TIOL-583-ITAT-MAD.pdf

Lohia Metals Pvt Ltd Vs ACIT, Chennai (Dated: May 29, 2009)

Income Tax - Assessee Company showed long term capital gain on sale of shares which was converted into investments claiming that conversion of stock into capital asset was not a transfer - AO held that stocks acquired the character of capital assets only after conversion and therefore, not a long term capital gain - CIT(A) confirmed AO's order—Held, capital asset came into existence only from the date of conversion before which it was merely a stock in trade and the same cannot be treated as capital asset as per the definition of capital asset and, therefore, the holding period prescribed in sec.2(42A) has also to be reckoned when the shares became capital asset - Assessee's appeal dismissed.:CHENNAI ITAT;

SERVICE TAX SECTION

NOTIFICATIONS

stnot09_039.pdf

Service Tax – Exemption to manufacture or processing of alcoholic beverages;

stnot09_037.pdf + stnot09_038.pdf

Service Tax Notifications consequent to Finance Act 2009 - Export and import of Services;

sercir116.pdf

Leviability of service tax on construction of canals by Government agencies – reg.

CASE LAWS

2009-TIOL-1520-CESTAT-MUM.pdf + force story.pdf

Force Motors Ltd Vs CCE, Pune (Dated: August 5, 2009)

Cenvat Credit - Service Tax paid by Airport Authority of India is an Input Service – CESTAT

Tribunal's observations -

the definition of the input service given in Rule 2(l) of the Cenvat Credit Rules, 2004 is to be read as a whole.

the aircraft which is stationed at airport is used by the appellant for the business activities and this stand is taken by the appellant before the lower authorities, which was not declined by the lower authorities.

in the absence of any contrary evidence that the aircraft was not used for business activities, any service tax paid on the services rendered by the authority on such aircraft needs to be allowed as credit to the appellant

CESTAT decision in appellant's own case Force Motors Limited [ 2008-TIOL-1199-CESTAT-Mum ] followed.

Appeal allowed with consequential relief, if any.:MUMBAI CESTAT;

2009-TIOL-1519-CESTAT-DEL.pdf

CCE, Allahabad Vs Modern Laminators Ltd (Dated: June 23, 2009)

Service Tax - CENVAT credit of service tax paid on outward transportation of finished goods from factory gate to customer's premises available – Larger Bench decision in ABB Ltd & Ors 2009-TIOL-830-CESTAT-BANG-LB followed :DELHI CESTAT;

2009-TIOL-1518-CESTAT-DEL .pdf

M/s Puneet Telecom Vs CCE, Chandigarh (Dated: July 23, 2009)

Service Tax - Business Auxiliary Service - Review - Penalty - Commissioner exercising the powers of review under Section 84 of the Finance Act, 1994 has imposed penalty under Section 78 for suppressing the value of taxable service from the department. There is no material available to prove that the appellants suppressed value of tax from the department. The Assistant Commissioner has rightly exercised the powers under Section 80. Assistant Commissioner's order is restored. (Para 3):DELHI CESTAT;

2009-TIOL-1517-CESTAT-AHM.pdf

M/s PMC Projects (I) Pvt Ltd Vs Commissioner, Ahmedabad (Dated: August 6, 2009)

Service Tax - Demand - Receipt of payment - The appellants contend that balance sheet is prepared on accrual basis and the service tax was paid as soon as the amount was received. It is submitted that what is received from and paid to their client is shown separately and cannot be treated as book adjustment. As this aspect has not been examined by the adjudicating authority matter remanded. (Para 3):AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1516-CESTAT-MUM.pdf + Todi Rubber story.pdf

M/s Todi Rubber Ltd Vs CCE, Nagpur (Dated: August 11, 2009)

Duty collected by assessee from their customers and not paid to Revenue worked out in Show Cause notice – section 11D enforceable as recovery provisions made with retrospective effect by Finance Act, 2000 – CESTAT orders pre-deposit.

Tribunal decision in Katralla Products Pvt. Ltd. vs. Commissioner of Central Excise, Coimbatore – ( 2008-TIOl-1321-CESTAT-MAD ) referred .:MUMBAI CESTAT;

2009-TIOL-1515-CESTAT-AHM.pdf

M/s Goran Pharma Pvt Ltd Vs CCE, Bhavnagar (Dated: August 4, 2009)

Central Excise - SSI Exemption - Suppression of facts - Extended period  - The appellant having intimated the manufacture of the goods under a contract and having disclosed the brand name 'Fresh Moments', cannot be held to have suppressed any fact with malafide intention. The disclosure in the said letter may not be loud and clear enough but nevertheless, the said disclosure takes away the charge of suppression or misstatement with an intent to evade payment of duty from the appellants. No malafide can be attributed to the appellants so as to justify invoking the longer period of limitation. (Para 7) :AHMEDABAD CESTAT;

2009-TIOL-1514-CESTAT-AHM.pdf

M/s Divya Pharma Vs CCE, Daman (Dated: July 8, 2009)

Central Excise - CENVAT - Rejected goods returned - Availment of SED  - The duty paid at the time of clearance is available as credit at the time of return of the goods to the factory in terms of Rule 16 (1) and not the duty payable at the time of receipt of the goods. SED was paid when the goods were originally cleared. Hence, the contention of the Revenue that credit of SED was not available as the duty payable on the disputed goods at the time when they were received back by the appellant was only BED and not SED is not tenable .  (Para 5)

Limitation - Extended period   - The appellant has intimated the Revenue about receipt of the goods and the fact of availing credit of entire duty, and filed invoices indicating credit of two types of duties. Further, there is only one column for duty in Form required to be filed and there being no separate column of BED and SED, they have shown the total cumulative duty availed as credit. In the circumstances, the appellant cannot be foisted with any malafide intent to avail wrong credit. Hence, the demand having been raised beyond the normal period of limitation, is time barred. (Para 6) :AHMEDABAD CESTAT;

CUSTOMS SECTION

NOTIFICATIONS

dgft09not011.pdf

Import Policy of Electrical Energy.

dgft09pn013.pdf

Revalidation of DFIAs

dgft09pn012.pdf

DGFT deletes para 4.54 in HoP and amends Para 4.46;

CASE LAWS

2009-TIOL-1513-CESTAT-DEL.pdf

M/s Crown Milk Specialties Pvt Ltd Vs CC, New Delhi (Dated: June 1, 2009)

Customs -Import - Valuation - Mis -declaration of value - EPCG - Department valuer's report - No cogent evidence or reason has been led by the appellant to rebut any findings of the Department valuer's report.  EPCG covered goods can be subject to the question of valuation when Notification No. 97/2004-Cus. dated 17.9.2004 is issued under Section 25 of the Customs Act 1962. Value determined by the Department is proper. (Para 5.5 & 5.6)

EPCG - Violation of conditions - Eligibility of License - Consequence of this order be communicated to EPCG Scheme licensing authority to do needful under law by that Authority . (Para 6):MUMBAI CESTAT;