Govt grants service tax exemption to service providers to SSI cycle parts manufacturers;

Compliances for Service Providers under GST - A gargantuan exercise;

CVC initiates major penalty against 111 officers

UPSC Chairman calls for replacing Civil Services Prelims by Aptitude Test;

USA, India identify areas for energy cooperation;

Intergrated Goods And Service Tax - An innovative proposal!

Delhi DGCEI arrests Director of Kanpur-based M/s Vinay Wires & Poly Products Pvt Ltd for alleged duty evasion of Rs 15 Cr; Also detects alleged evasion of Rs 20 Cr duty from manufacturer of 'Wah' brand Gutka;

Strengthening coastal security: Navy acquiring 80 Fast Interceptor for Sagar Prahari Bal

TIOL RUN UP TO GST

gst_story_1.pdf

Integrated Goods And Service Tax - An innovative proposal!

gst_story_2.pdf

Compliances for Service Providers under GST – A gargantuan exercise;

TIOL COMMENTARY

ddt 13 nov.pdf

I am not very popular with Departmental Officers – Revenue Secretary Bhide;

stgst.pdf

Service tax on residential complexes: Board proposes ... Department disposes!

MIXED BUZZ

mbuzz1026.pdf

CVC initiates major penalty against 111 officers;

mbuzz1025.pdf

USA, India identify areas for energy cooperation;

mbuzz1024.pdf

UPSC Chairman keen to replace Civil Services Prelims by Aptitude Test;

mbuzz1023.pdf

German Bank to provide Rs 622 Cr to SIDBI for MSMEs to adopt energy efficient tech;

2009-TIOL-703-ITAT-MAD-TM.pdf + stay story.pdf

Shri G Venkateswaran Vs ACIT, Chennai (Dated: March 5, 2009)

Income Tax – Stay of Penalty – when High Court had granted conditional stay, same proceedings cannot continue in Tribunal – Stay petition dismissed after 18 years: In this case, 17/18 years have passed without any grant of stay. This clearly shows that nobody is interested on behalf of the assessee in the stay of recovery of demand. Otherwise all possible steps would have been taken by the legal representatives. It is well settled that stay of demand is a discretionary relief and is to be granted to persons seeking the same. Therefore, this is not a fit case in which the discretionary power should be exercised. :CHENNAI ITAT (THIRD MEMBER);

2009-TIOL-702-ITAT-DEL.pdf

ACIT, New Delhi Vs Sh Hidechito Shiga (Dated: September 25, 2009)

Income tax - Sec 10(10CC) - Assessee is an employee - employer pays tax on his behalf - AO grosses up the income and treats the tax paid as monetary perk - held, the issue is no longer res integra as decided by the Tribunal in favour of the assessee in an earlier case and also by the Special Bench in the case of RBF Rig Corpn - Revenue's appeal dismissed:DELHI ITAT;

2009-TIOL-701-ITAT-DEL.pdf

ACIT, New Delhi Vs M/s Centitech India Pvt Ltd (Dated: April 22, 2009)

Income tax - capital expenditure vs revenue expenditure - assessee enters into an agreement with a non-resident company for the exclusive use of technical knowhow - agrees to pay 1.8% of net sales of products as running royalty - AO holds 25% of the expenditure is of capital nature - CIT(A) disagrees - held, it is settled law now that since it is not a lumsum payment but a running royalty which is to be paid to the non-resident and is allowable expenditure - Revenue's appeal dismissed:DELHI ITAT;

2009-TIOL-618-HC-DEL-IT.pdf

CIT Vs Bonanza Portfolio Ltd (Dated: August 27, 2009)

Income Tax - Section 36(1)(vii),  36(2) - Assessee claims bad debt - AO disallows it on the ground that conditions for allowability of the amount as bad debt as stipulated in s. 36(1)(vii) r/w s. 36(2) not satisfied - CIT(A) confirms AO's order - Tribunal allows the appeal and holds that the amount should have been allowed as bad debt by the AO as conditions stipulated in s. 36(1)(vii) and s 36(2) have been satisfied - Held, the money receivable from the client has to be treated as 'debt' and since it became bad, it was rightly considered as 'bad debt' and claimed as such by the assessee in the books of account. Since this bad debt occurred in the year in question, it was shown by the assessee in that manner. Since the brokerage payable by the client is a part of the debt and that debt had been taken into account in the computation of the income, the conditions stipulated in sub-s. (2) of s. 36 r/w s. 36(1)(vii) stand satisfied. Revenue Appeal dismissed.:DELHI HIGH COURT;

2009-TIOL-617-HC-P&H-IT.pdf

CIT, Patiala Vs M/s Rieta Biscuit Co P Ltd (Dated: November 4, 2009)

Income tax - Sec 32A - Assessee purchases machinery and leases out the entire plant - AO disallows investment allowance on the ground that the machinery was not used for the assessee itself - held, as long as the machinery is owned by the asessee and the same is leased out for the purpose of business and the income derived from such leading is assessed as business income, investment allowance benefit cannot be denied as the law does not insist on use of the machinery by the assessee itself - Revenue's appeal dismissed:PUNJAB AND HARYANA HIGH COURT;

SERVICE TAX SECTION

NOTIFICATION

stnot09_042.pdf

Govt grants service tax exemption to service providers to SSI cycle parts manufacturers;

CASE LAWS

2009-TIOL-1855-CESTAT-BANG.pdf + st story.pdf

M/s Canara Bank Vs CST, Bangalore (Dated : September 24, 2009)

Service Tax - Tax on Services rendered as agent of RBI – prima facie, not taxable – Rs. 12 Crores Demand against Canara Bank stayed:BANGALORE CESTAT;

2009-TIOL-1854-CESTAT-AHM.pdf

M/s Gujarat Test House Vs CST, Ahmedabad (Dated : August 28, 2009)

ST - Penalty - Assessee is engaged in providing technical tests and Inspection services - tax with interest deposited - penalty - assessee argues the penalty for delayed payment of tax was only Rs 100 per day during the relevant period and an amendment to hike the same to Rs 200 per day came subsequently in Sec 76, and there was no provision for levy of penalty for filing late return which also came later - held, since the lower authorities have not examined the amendment aspects of the issue, the case is remanded : AHMEDABAD CESTAT;

2009-TIOL-1853-CESTAT-DEL.pdf

M/s Convoy Security Pvt Ltd Vs CCE, Jaipur (Dated : September 16, 2009)

ST - penalty - Revenue levies penalty under Sec 78, 77 and 76 after finding mismatch in service charges declared in Income Tax return and to the service tax authorities - held, since tax with interest paid before passing of the adjudication order and the fact that the demand was raised only on the basis of audit objection and no statement was recorded and also the fact that the assessee admits of a possible clerical error in accounting of income, penalty reduced for lack of additional materials brought on record by the Revenue - Assessee's appeal allowed: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-119-SC-CX .pdf

CCE, Goa Vs M/s Funskool India Ltd (Dated: November 12, 2009)

Central Excise - "Scrabble" is a board game. It is not a puzzle; it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA . - 2009-TIOL-118-SC-CX - followed: SUPREME COURT;

2009-TIOL-118-SC-CX.pdf + sc story.pdf

M/s Pleasantime Products Vs CCE, Mumbai (Dated: November 12, 2009)

Central Excise - "Scrabble" is a board game. It is not a puzzle; it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA . – in a game there is a trial of skill or chance between two or more contesting parties according to some rule(s) by which one may succeed or fail. It is a contest for success, for a trial of chance or skill and it embraces every contrivance which has for its object sport, recreation or amusement. Applying the dictionary meaning, held that "Scrabble" is a board game. It is not a puzzle. In the circumstances, it falls under Heading 95.04 and not under sub-heading 9503.00 of the CETA .

The difference between a "game" and a "puzzle" is brought out by three distinct features, viz., outcome, clue-chance and skill. In a puzzle, outcome is pre-determined and fixed. It is not so in "Scrabble". For example, in crossword, outcome is pre-determined or fixed. In a crossword puzzle, there is a grid of squares and blanks into which words crossing vertically or horizontally are written according to clues. Similarly, a jigsaw puzzle is a contrivance for testing ingenuity. In jigsaw puzzle there is a set of varied, irregularly shaped pieces, which when properly assembled form a map or picture. These are examples to demonstrate that in a puzzle the outcome is fixed or pre-determined which is not there in "Scrabble". A person solving a puzzle, unlike games, does not aim at wining by scoring more points but aims at arriving at the solution by finding the correct answer or by putting it together properly, and winning or losing can only come by way of time taken in solving the puzzle.

Extended period of limitation : Firstly, the case of the assessee was that they had annexed a list of items manufactured by them which included items falling under Headings 94.03 and 95.04 of the CETA . This has not been proved. The list is not there on record. In the circumstances, the authorities below were right in rejecting this contention of the assessee. Secondly, in the declaration(s) even though the assessee had doubts about the excisability of the said item and even though the assessee had sought clarification as far back on 5th September, 1994; they did not mention the word "Scrabble" in the body of the declaration(s) filed with the Department. They did not mention the details of the game "Scrabble". Therefore, this conduct of the assessee clearly indicates that the assessee herein deliberately declared branded goods under sub-heading 9403.00 of the CETA to avoid any enquiry in the matter by the Department. For the above reasons, held that the Department was justified in invoking the proviso to Section 11A (1) of the 1944 Act.: SUPREME COURT;

2009-TIOL-1850-CESTAT-MUM.pdf + bharati story.pdf

M/s Bharat Petroleum Corpn Ltd Vs CCE, Nashik (Dated : June 17, 2009)

Central Excise – Import Parity Price (and mark up thereon) between Oil Marketing Companies only a notional price and has no relationship with actual selling price to independent buyers, not to be regarded as transaction value – Exchange of petroleum products between OMCs amounts to barter with pre-conditions and supplying a product in a supply driven market without taking into consideration any profit element, clearly indicates that it is not a commercial transaction and not at an arm's length – MOU price based on reciprocity, both in terms of quantity involved in the transaction and value, hence, cannot be considered as the sole consideration for sale – Important facts and facets of transactions not brought before CESTAT which delivered HPCL case 2005-TIOL-405-CESTAT-BANG , hence distinguishable – Board's letter dated 14.02.2007 also states each case has to be dealt with based on facts and circumstances surrounding each case – Goods being transferred to OMC at a notional value and around same time identical goods were being sold at transaction value to independent dealers of appellants, Rule 4 of Central Excise Valuation Rules, 2000 applicable – Differential duty demand upheld – Appellants being PSU cannot feign ignorance of law, liable to mandatory penalties as suppression/mis-statement of facts is clearly brought out by not informing department of contents of MOU - Impugned order upheld :MUMBAI CESTAT;

2009-TIOL-1849-CESTAT-MUM.pdf

Vidyut Metallics Pvt Ltd Vs CCE, Mumbai-II (Dated : July 31, 2009)

Interest under Section 11AB is payable for delayed payment of duty under sub-section 2B of Section 11A as held by Supreme Court in SKF India Ltd. 2009-TIOL-82-SC-CX

SCN for demand of interest and penalty was result of an earlier order of duty demand which has been accepted by making payment – claiming exemption now is precluded even otherwise such a claim is extraneous to the present appeal.

Penalty provisions in SCN was raised for violation of provisions of Rule 7(4) whereas the Appellate Authority justified the penalty on the ground of undervaluation which is beyond the scope of SCN – matter remanded for limited purpose of penalty – Interest to be paid within 30 days.:MUMBAI CESTAT;

2009-TIOL-1848-CESTAT-MAD.pdf

M/s Rajshree Sugars & Chemicals Ltd Vs CCE, Madurai (Dated : September 3, 2009)

Central Excise – CENVAT Credit on welding electrodes used for maintenance and repairs in the factory – issue attained finality at the level of Supreme Court in case of M/s. SAIL – Credit not admissible – Penalty set aside .:CHENNAI CESTAT;

2009-TIOL-1847-CESTAT-MAD.pdf

CCE, Tirunelveli Vs M/s Sicgil India Ltd (Dated : August 31, 2009)

Central Excise – Valuation – rental charges and cylinder service charges are not includable in the assessable value.:CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-1852-CESTAT-MUM.pdf

Arkema Catalyst India Pvt Ltd Vs CC, Mumbai (Dated : August 5, 2009)

Payment of licence fee by appellant to technical collaborators was not a condition of sale of the capital goods by the foreign company but has a relation to the process of manufacture of aluminium chloride – Prima facie, demand of duty based on addition of licence fee to transaction value of capital goods u/r 9(1)(c) of Customs Valuation Rules is untenable – Pre-deposit waived and stay granted.:MUMBAI CESTAT;

2009-TIOL-1851-CESTAT-MAD.pdf

M/s Tamil Nadu Newsprint & Papers Ltd Vs CC, Tuticorin (Dated : August 31, 2009)

Customs – classification – non coking coal imported by classifying under CH 2701.19 – demand of duty at 25% by classifying under CH 2701.12 – department has no basis to classify the goods under Chapter 2701.12 without any chemical test – demand set aside.:CHENNAI CESTAT;