Cabinet gives nod for Rs 370 Cr security system for Commonwealth Games ;

CCEA okays 5% disinvestment in NTPC;

CCEA Approves Rs 3740 Cr FDI proposal of M/s Unitech Wireless;

CBEC Chairman reshuffles charge of Members - Customs goes to S K Goel; Budget, ST & Computerisation for Y G Parande; No change for others;

Spectrum quagmire: Jaya urges UPA Govt to sack Raja for fair probe by CBI

NTPC hikes electricity prices; Power tariff rate to be hiked across the board

Govt sets up panel of investigators from ED, CBI, SEBI and others to speed up probe into Satyam scam; Addl Secy of MCA to head it;

New perquisite rule: TPL continues to do polish work;

PM meets President; briefs her about his visit to Thailand to attend Indo-ASEAN Summit;

More than one lakh Eco-Clubs are functional in India: Govt;

TIOL COMMENTARY

ddt 19 oct.pdf

The tale of A Central Excise Bhavan;

tiol top.pdf

Scepticism leads to better governance!

spl down.pdf

Taxing virtual property in India!

MIXED BUZZ

mbuzz0944.pdf

CCEA approves proposal for monthly release of inflation data;

mbuzz0943.pdf

CCEA gives nod for 5% disinvestment in NTPC;

mbuzz0942.pdf

CCEA okays Unitech Wireless proposal to bring in Rs 3740 Cr FDI;

mbuzz0941.pdf

Cabinet gives nod for Rs 370 Cr security system for Commonwealth Games;

mbuzz0940.pdf

More than one lakh Eco-Clubs are functional in India: Govt;

mbuzz0939.pdf

Information sharing is vital in fight against human trafficking in Europe: UN Agency;

2009-TIOL-560-HC-MAD-IT.pdf

CIT, Erode Vs Shri K K Palanisamy (Dated: October 6, 2009)

Income tax - Sec 147 - Assessee sells its property - claims exemption u/s 54 for a major part of sale consideration - AO makes inquiry and passes assessment order u/s 143(3) - Notice u/s 148 - reassessment initiated on the premise that taxable income escaped from assessment - held, since there is no failure on part of the assessee to make full disclosure in his return, reassessment is a mere change of opinion particularly in the light of the fact that the AO had made inquiry before passing the assessment order - Revenue's appeal dismissed:MADRAS HIGH COURT;

2009-TIOL-559-HC-HP-IT.pdf

CIT, Shimla Vs M/s Panchratan Hotels Pvt Ltd (Dated: August 26, 2009)

Income tax - Sec 170, 2(47) - Assessee is a company, engaged in the business of running a hotel - 100% shareholding is held by one Kapoor family which sells the shares to a company - CIT for application of Sec 170 for succession of business - Tribunal disagrees - held, merely because the shareholders are changed, it does not change the legal identity of the compay which is different from its shareholders - transfer of shares by Kapoor family may come under the term 'transfer' as defined under Sec 2(47) but so far as the company is concerned there is no change in its identity - no liability can be fastened on the company - Revenue's appeal dismissed:HIMACHAL PRADESH HIGH COURT;

2009-TIOL-557-HC-MAD-IT.pdf + interest story.pdf

Mani Vs CIT-I, Madurai (Dated: September 7, 2009)

Income tax – Rejection of request for waiver of interest – speaking order necessary – Rejection quashed and matter remanded: The recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and assures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. Therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It is however not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or Revisional authority, if it affirms such an order, need not give separate reasons if the appellate or Revisional authority agrees with the reasons contained in the order under challenge.:MADRAS HIGH COURT;

2009-TIOL-636-ITAT-MUM.pdf + aish story.pdf

DCIT, Mumbai Vs Ms Aishwarya K Rai (Dated: September 7, 2009)

Income tax - Is Aishwarya Rai an actor? Father-in-law comes to her rescue - She is indeed an actor eligible for deduction u/s 80RR : The issue was decided in the actor's favour in the case of her illustrious father–in-law, Amitabh Bachchan - 2007-TIOL-03-ITAT-MUM wherein the Tribunal held that if an actor used his skills as an actor or as an artist in anchoring the television show, receipt from such show is income derived by him as an 'artist' and deduction under section 80RR is allowable on such payment. A similar decision was given in the case of Shahrukh Khan .

Powers of the appellate authority: An appeal is a continuation of the process of adjustment of the tax liability to accord with the taxable event in the particular taxpayer's case. There can be no analogy or parallel between a tax appeal and an appeal, say, in civil cases. A civil appeal, like a law suit in the court of first instance out of which it arises, is really and truly an adversary proceeding, that is to say, a controversy or tussle over mutual rights and obligations between contesting litigants ranged against each other as opponents. A tax appeal is quite different. Even as the assessing authority is not the taxpayer's 'opponent', in the strictly procedural sense of the term, so too the appellate authority sitting in appeal over the assessing authority's order of assessment is not strictly an arbitral court deciding a contested issue between two litigants ranged on opposite sides. In a tax appeal, the appellate authority is very much committed to the assessment process. The appellate authority can itself enter the arena of assessment, either by pursuing further investigation or causing further investigation to be done. It can enhance the assessment, taking advantage of the opportunity afforded by the taxpayer's appeal, even though the appeal itself has been mooted only with a view to a reduction in the assessment.

What is meaning of 'foreign exchange'? As per section 2(n) of Foreign Exchange Management Act, 1999, Drafts, traveller cheques, letter of credits or bills of exchange drawn by bank, institutions or person outside India, but payable in Indian currency will also be 'foreign exchange'. The amount received by the assessee was 'foreign exchange'. Original amount was in Swiss Francs which is convertible in rupees. i.e. "Convertible foreign exchange", therefore it can be said that the assessee received amount through above banking channel is a "convertible foreign currency". Thus for getting deduction u/s 80RR , the assessee satisfied the condition that amount was received in convertible foreign exchange.:MUMBAI ITAT;

2009-TIOL-635-ITAT-BANG.pdf

Shri Bernard Hereford Vs ITO, Bangalore (Dated: July 31, 2009)

Income Tax - Assessee an individual, trading and servicing in fire extinguishers and fire safety equipments - claims depreciation on purchase of treadmill - AO notes that the purchase of treadmill not connected with the assessee's business and hence disallows the claim of depreciation - CIT(A) rejects assessee's claim - Held, in the light of the fact that treadmill has been delivered at the house of the assessee, the conclusion of the authorities below that it is for the purpose of personal use is justified and no interference is called for.

On the issue of addition made by AO being the difference in the value of closing stock – Held, since technology is changing at a much faster pace and a lot of imported items are available for sale in the open market, products which are not sold quickly become obsolete. The assessee valued the closing stock at market price. The assessee's valuation cannot be faulted, since assessee has option to value closing stock at market price or cost price, there is no revenue implication, addition restricted, this ground of the assessee is partly allowed. Assessee Appeal partly allowed.:BANGALORE ITAT;

cbecorder219_2009.pdf

CBEC Chairman reshuffles charge of Members - Customs goes to S K Goel; Budget, ST & Computerisation for Y G Parande; No change for others;

SERVICE TAX SECTION

2009-TIOL-1658-CESTAT-MAD.pdf

M/s Savithri Digital Lab Vs CCE, Coimbatore (Dated: June 5, 2009)

Service Tax – Photography service – the value of material consumed in providing the service is not includable in the taxable value in view of the Supreme Court affirming the CESTAT order.:CHENNAI CESTAT;

2009-TIOL-1657-CESTAT-MUM.pdf

R M Dhariwal (HUF) Vs CCE, Pune-III (Dated: August 13, 2009)

Commissioner's observation that appellant was a technocrat without giving any findings on the status of the applicant is unsupported by evidence -Transfer of technical know-how, brand name etc. is covered by Intellectual property service w.e.f.10.9.2004 as held in Navinon Ltd. Vs CCE, 2004-TIOL-710-CESTAT-MUM , CCE Chennai Vs MRF Ltd 2004-TIOL-992-CESTAT-MAD - Prima facie case is made against demand - Waiver of pre-deposit and stay of recovery granted.

Demand for service tax for the period 2001-03 under the head ‘Scientific & Consulting service' in respect of royalty received as consideration for transfer of trade name and certain formulae for the manufacture of pan masala, gutka etc.- Appellants claim for ‘Intellectual Property Right Service and paying service tax w.e.f. 10.9.2004 and relies on Navinon Ltd. Vs CCE, 2004-TIOL-710-CESTAT-Mum , CCE Chennai Vs MRF Ltd 2004-TIOL-992-CESTAT-MAD which held that royalty for transfer of technical know-how could be taxed only under Intellectual Property Right services w.e.f.10.9.2004 – Issue of legality of extensive changes made in impugned order by issue of corrigendum.:MUMBAI CESTAT;

2009-TIOL-1656-CESTAT-DEL.pdf

M/s Bureau Of Indian Standards Vs CC & CCE, Noida (Dated: August 25, 2009)

ST - Commercial Coaching & Training Service - Assessee is a national standard body constituted under the BIS Act - organises training programmes and charges fee from participants - Demand raised and penalty imposed - Assessee pays tax with interest after getting clarification from the Board but contests the penalty - held, since the assessee performs statutory functions and organised such training programmes as part of its consumer welefare objective, it was under the bona fide belief that its activities are not taxable - it is a fit case for invocation of Sec 80 - Assessee's appeal allowed:DELHI CESTAT;

2009-TIOL-1654-CESTAT-BANG.pdf

CCE, Vizag Vs M/s Ex-servicemen Resettlement & Coordinate Cooperative Society Ltd (Dated: May 6, 2009)

Service tax – Ex-servicemen resettlement & coordination cooperative society providing security agency service – Under bonafide belief that only commercial concern liable to pay service – Not liable to pay penalty as there was no willful intention to evade service tax – Impugned order upheld :BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1662-CESTAT-BANG.pdf

M/s Mic Electronics Ltd Vs CCE, Visakhapatnam (Dated: June 30, 2009)

Central Excise – Contract for supply of hardware and software with indication of separate prices in invoices – V alue of software indicated separately in their invoices not liable to excise duty following ratio of Apex Court decision in Acer India Ltd case 2004-TIOL-81-SC-CX-LB – Prima facie case for full waiver of pre-deposit :BANGALORE CESTAT;

2009-TIOL-1661-CESTAT-MUM.pdf

Softesule Pvt Ltd Vs CCE, Mumbai-III (Dated: August 13, 2009)

Exempted goods cleared on payment of duty – Recovery sought of Cenvat credit of Rs.2,20,397/- in respect of inputs used in exempted products - Payment of duty of Rs.31,99,763/- on exempted goods is sufficient compliance – Pre-deposit of duty demand, interest and penalty waived – Stay ordered.:MUMBAI CESTAT;

2009-TIOL-1660-CESTAT-AHM.pdf

M/s Tipco Industries Ltd Vs CCE & CC, Vapi (Dated: July 14, 2009)

Central Excise – Duty demand on shortage of inputs and finished goods and clearance of fork lift without reversal of credit – Shortages found to the extent of 0.3% of total production due to account of handling and other production related hazards - It is well settled law that charges of clandestine removal can not be upheld on the basis of shortages detected but required to be based on positive, tangible and affirmative evidences – Impugned demand and penalties on shortages set aside but upheld on diversion of fork lift:AHMEDABAD CESTAT;

2009-TIOL-1659-CESTAT-AHM.pdf

M/s Welspun India Ltd Vs CCE, Rajkot (Dated: August 4, 2009)

Central Excise – Unutilized amount of duty re-credited in PLA after availing benefit of area based exemption notification 39/2001-CE available as refund - Where appellant is not in a position to utilize credit balance, unutilized balance lying in PLA can be refunded in cash, in as much as notification does not bar such refund – Impugned order liable to be set aside:AHMEDABAD CESTAT;

2009-TIOL-1655-CESTAT-MAD.pdf

The India Cements Ltd Vs CCE, Trichy (Dated: June 23, 2009)

Central Excise – Stay / Dispensation of pre-deposit – CENVAT Credit of service tax on GTA relating to the clearance of final products from the place of removal – recovery stayed in view of the Larger Bench decision in 2009-TIOL-830-CESTAT-BANG-LB :CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-561-HC-DEL-CUS.pdf + cha story.pdf

Deepak Kumar Vs UOI & Anr (Dated: August 7, 2009)

CHA Licence Examination – Department fails to conduct two oral examinations as required because DG, Inspection wanted NACEN to conduct the examination which was not agreed to by the Board. – Petitioner who qualified in the written test allowed to take two oral tests: The Respondents are, of course, trying to justify their failure to hold the written examination and oral examination with the required frequency as postulated by the Regulations on the ground that the Director General of Inspection, Customs and Central Excise requested the Central Board of Excise and Customs that the examination should be conducted by the National Academy of Customs, Excise and Narcotics Control ( NACEN ) but that request was turned down by the CBEC. This contention is untenable because the result of this is that persons like the Petitioner are deprived of seeking employment. Even if the reason is tenable, they would be required to somehow or the other comply with the Regulations and make up for the shortfall in the requisite number of examinations.:DELHI HIGH COURT;

2009-TIOL-558-HC-MUM-CUS.pdf + castor story.pdf

M/s Biotor Industries Ltd Vs UoI (Dated: September 18, 2009)

Customs - Drawback on castor Oil for the period 1989-90; exporters allowed to file claim now: The same Castor Oil was earlier being exported as Castor Oil medicinal by applying the test in terms of Circular of 3rd October, 1964. In these circumstances it will be open to the petitioners ,within 60 days, to apply to the respondents to exercise their powers under Rule 15 of the Rules. It is for the respondents to consider the same and act according to law at any rate not later than six months from the petitioners so applying:BOMBAY HIGH COURT;

2009-TIOL-1664-CESTAT-MUM.pdf + jaipur story.pdf

Jaipur Golden Transport Co Pvt Ltd Vs CC, Mumbai (Dated: September 4, 2009)

Board's notifications and orders should be deemed to be within the knowledge of the departmental officers including the two Commissioners who were appointed adjudicating authority for the same SCN – Later notification dated 28.12.2005 impliedly superseded the earlier assignment order dated 02.05.2005 – Order passed by Commissioner of Customs(Adjudication) without jurisdiction - CESTAT.:MUMBAI CESTAT;

2009-TIOL-1663-CESTAT-MUM.pdf

Shri Yusuf Poonawala Vs CC, Mumbai (Dated: September 17, 2009)

Not only the act of abetment but all acts which render the goods liable to confiscation under section 111 of the Customs Act, 1962 attract penalty u/s 112 of the Customs Act, 1962 – No infirmity in order of lower authority – in the facts and circumstances, penalty reduced and appeal disposed of.:MUMBAI CESTAT;