CESTAT President orders sealing of room occupied by 'discharged' Member (J) P K Das;

Dispute Resolution Panel Rules notified;

India keen on legally-binding agreement at Copenhagen;

India-ASEAN FTA to grant addl access to Indian exporters (List of tariff lines to follow in NEXT MAIL TONIGHT);

Tiger killings double to 59 this years as compared to 28 last year; MP tops list with 13 killings: MInister;

Anti-terrorism agency registers first case on siphoning off funds;

iWith OECD aid, African Tax Administration Forum launched;

Indian women peacekeepers in Liberia praised by UN Secretary General

Child marriage: India accounts for one in every three women married as children - UNICEF;

Indian Economist Siddharth Tiwari appointed as Secretary of IMF

India lags behind China even in terms of courts - 14000 Vs 1.3 lakh courts; Chief Justice calls for more funds to set up addl courts

President urges for consensus on anti-terror laws by international legal community;

TIOL RUN UP TO GST

gst story.pdf

GST - Only a delayed reality!

TIOL COMMENTARY

ddt 23 nov.pdf

Central Excise valuation – Cost of Production – How to Compute?

tax forum story.pdf

With OECD aid, African Tax Administration Forum launched;

MIXED BUZZ

mbuzz1052.pdf

Indian Navy deploys offshore vessel to patrol EEZ of Mauritius against pirates;

mbuzz1051.pdf

India-ASEAN FTA to grant addl access to Indian exporters;

mbuzz1050.pdf

Anti-terrorism agency registers first case on siphoning off funds;

mbuzz1049.pdf

Indian women peacekeepers in Liberia praised by UN Secretary General;

mbuzz1048.pdf

Child marriage: India accounts for one in every three women married as children - UNICEF;

NOTIFICATION

it09not084.pdf

CBDT notifies Income Tax Dispute Resolution Panel Rules, 2009;

CASE LAWS

2009-TIOL-28-ARA-IT.pdf

M/s Sumitomo Mitsui Construction Co Ltd (Dated: November 20, 2009)

India-Japan DTAA - Applicant is a Japanese company - engaged in construction and provides architectural and civil engineering services to its Indian subsidiary - receives royalty payments for transfering technical knowhow - TDS @ 20% deducted as per Article 12 of the tax treaty - Amendment in DTAA to reduce withholding tax rate - whether new rate of 10% will be applicable from AY 2008-09

Applicant initially receives royalty @ 5% of the subsidiary's total turnover from domestic and export markets under licence for technical knowhow - Fresh licence agreement entered into by the parties for 10 years - Amendment in Article by Article III of Protocol to reduce maximum TDS rate from 24.2.2006 - Applicability of new rate - held,

++ It is clear from the wording of clause (ii) or para 2(b) of Article V that the amended rate of tax of 10 % will be applicable for the previous year beginning on or after 1st April 2007 (relevant to the assessment year 2008-09).

++ There is no doubt nor any dispute on the point that the payments received by the applicant from the SMCI are in the nature of royalties within the meaning of Article 12(3) of the DTAA. The Technical Collaboration Agreement makes it clear that the applicant (licensor) will be furnishing to the licensee the know-how and technical information and assistance for the marketing and provision of contract services.

++ The Revenue has agreed with the contention of the applicant that the reduced rate of 10% will be applicable, while making it clear that the said rate will be applicable only for the assessment year 2008-09 onwards but not 2007-08.

++ The question is answered in the affirmative holding that the income by way of royalty accruing to the applicant is liable to be taxed in terms of Article 12 of the DTAA at a rate not exceeding 10% from the assessment year 2008-09 onwards.: ADVANCE RULING;

2009-TIOL-635-HC-P&H-IT.pdf

CIT, Hisar Vs Smt Shakuntala Devi (Dated: July 21, 2009)

Income tax - Sec 147, 143(2) - AO invokes powers u/s 147 during pendency of assessment - CIT(A) and Tribunal hold that when the assessment was not done, the AO should have issued Sec 143(2) notice rather than Sec 148 notice during the pendency and hold the notice invalid - held, the lower appellate authorities have overlooked the amendment carried out in Sec 147 by way of Explanation 2(b) which imposes no bar on Revenue to initiate proceedings u/s 143(2) even if Sec 147 proceedings are not valid in this case - Issue remanded: PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-724-ITAT-MAD-TM.pdf + 43b story.pdf

M/s Dynavision Ltd Vs ACIT, Chennai (Dated: July 3, 2009)

The prescription of sec.43B ( Certain deductions to be only on actual payment .) can be invoked only if the assessee claims deduction from the taxable income. Since the assessee has not reduced its profits by making deduction/allowance of the customs duty from the taxable profits, the provisions of sec.43B cannot be applied. The basic fact that entire amount was not claimed as deduction, was not considered by the Assessing Officer. When the amount is not claimed, there is no question of applying the prescription of sec.43B .: CHENNAI ITAT (THIRD MEMBER ) ;

2009-TIOL-723-ITAT-AHM.pdf

Gujarat Toll Road Investment Co Ltd Vs ACIT, Gandhinagar (Dated: May 15, 2009)

Income Tax - Section 43B - Assessee is a public limited company engaged in the business of providing infrastructure facility -  claims that the interest accrued on deep discount bonds, even though not actually paid, is deductible in view of the CBDT Circular - AO observes that the  details of the CBDT Circular not produced before him  and hence the claim is  not correct and the amount is  disallowed u/s 43B - CIT(A) upholds disallowance - Held, neither the AO is justified in disallowing the deduction nor the CIT (A) is justified in confirming such disallowance. The amount of provision made by the assessee in respect of interest accrued on Bonds is not in dispute as excessive or not relating to the year under consideration. Disallowance deleted. Assessee's ground allowed.: AHMEDABAD ITAT;

2009-TIOL-722-ITAT-MUM.pdf

Shri Prerak Goel Vs ACIT, Mumbai (Dated: August 10, 2009)

Income Tax - Section 2(24)(iv) - AO treats the amount as deemed income in the hands of the assessee and makes addition in respect of expenses incurred by a Company  on higher studies of the assessee abroad and on business party thrown after the marriage of the assessee who happen to be  a relative  of the Director - CIT(A) upholds the AO's order - Held, the expenditure met by the company on the education of the assessee squarely falls within the scope of Section 2(24)(iv).

On the issue of marriage expenditure - Held, the dinner is hosted on the occasion of marriage of the assessee by giving it the colour of business meet. The said expenditure cannot be termed as a  business expenditure. The initial booking was done at a personal level towards marriage reception, which was later converted into a company's obligation by passing a resolution. CIT(A) order upheld. Assessee's appeal dismissed.: DELHI ITAT;

SERVICE TAX SECTION

2009-TIOL-1910-CESTAT-AHM.pdf

M/s Fascel Ltd Vs CST, Ahmedabad (Dated : October 22, 2009)

ST - telecom services - assessee provides telephone services - Revenue raises demand on the basis of the fact that the assessee has paid tax on lower amount than the sum declared in the P&L Account - penalties imposed - Commissioner (A) agrees with the assessee that its total income comprises of income from other non-taxable sources also and drops substantial portion of demand - held, going by the facts that the Revenue has not found out any facts on its own but everything is declared in the P&L account, and the assessee has been paying huge amount of service tax regularly and as against the tax regularly paid, the short payment of less than Rs one crore is a paltry sum which cannot be sought to be evaded it is a difficult propopsition to make that the assessee had mala fide intention to evade tax. Further, the assessee has paid excess service tax in one month and also short paid in another month but could not have adjusted on its own for lack of provisions in the law. Duty demand with interest confirmed but penalty set aside by invoking Sec 80 - Assessee's appeal partly allowed:AHMEDABAD CESTAT;

2009-TIOL-1909-CESTAT-AHM.pdf

M/s Sahjanand Travels Vs CST, Ahmedabad (Dated : August 25, 2009)

ST - Tour Operator service - Revenue raises demand relating to pre and post 10.9.2004 - it is settled law that for pre 10.9.2004 when definition of Tour Operator was changed, it was mandatory for the vehicle to be registered as a tourist vehicle - For the post period limitation is pleaded, and prima facie, the assessee's case is strong on merit as well as limitation - waiver of pre-deposit granted and stay of recovery during pendency ordered:AHMEDABAD CESTAT;

2009-TIOL-1908-CESTAT-MUM.pdf

Kirloskar Oil Engines Ltd Vs CCE, Aurangabad (Dated : July 30, 2009)

Cenvat credit of service tax paid on garden maintenance service - In earlier case of the appellant [ 2009-TIOL-790-CESTAT-Mum ] , cenvat credit was denied by holding that the input service has no nexus with the manufacture and clearance of goods and penalty was dropped on ground that demand was raised within normal period of limitation hence Section 11AC of the CEA, 1944 not invokable – same reasoning applicable to case on hand - Appeal partly allowed.:MUMBAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1914-CESTAT-MUM.pdf + cosmo story.pdf

M/s Cosmo Films Ltd Vs CCE, Aurangabad (Dated : October 7, 2009)

When SCN does not allege suppression, imposition of penalty u/s 11AC of the CEA, 1944 is ruled out – CESTAT

Tribunal's observations –

In the absence of allegation of suppression of facts with intention to evade payment of duty, the extended period of limitation is not invokable and consequently the provisions of section 11AC of the Act imposing penalty are not applicable.:MUMBAI CESTAT;

2009-TIOL-1913-CESTAT-MUM.pdf

CCE, Nagpur Vs Indorama Synthetics (I) Ltd (Dated : July 20, 2009)

Waste and scrap of various cenvatted inputs and packaging material viz. mixed plastic scrap, corrugated box scrap, used paper tube scrap, used transformer oil, oil liner, mixed kachara, paper waste scrap, used lubricant oil is not excisable goods and will not call for reversal of credit – SC decision in West Coast Industrial Gases 2003-TIOL-03-SC-CX relied upon – Stay petition filed by Revenue rejected.:MUMBAI CESTAT;

2009-TIOL-1912-CESTAT-MUM.pdf

CCE, Pune-II Vs Helios Food Additives Pvt Ltd (Dated : July 24, 2009)

Where any appeal of an assessee is allowed by Tribunal or lower appellate authority, the assessee is entitled to refund of any amount pre-deposited under section 35F of the CEA, 1944 along with interest u/s 11BB for the period immediately succeeding the period of 3 months from the date of appellate order to the date of refund of pre-deposit – Revenue appeal dismissed.:MUMBAI CESTAT;

2009-TIOL-1911-CESTAT-MAD.pdf

CCE, Madurai Vs M/s Aruna Alloy Steels Pvt Ltd (Dated : August 7, 2009)

Central Excise – Interest on differential duty paid on supplementary invoice – in view of the SC order in SKF India Ltd, Commissioner (A) order is set aside and revenue appeal allowed.:CHENNAI CESTAT;

2009-TIOL-1907-CESTAT-MUM.pdf

Indian Explosives Ltd Vs CCE, Nagpur (Dated : August 19, 2009)

Recovery of interest on payment of differential duty on determination of cost of production in terms of CAS-4 in respect of clearance to sister unit – Revenue neutrality cited - Prima facie case made by the applicant - Waiver granted of pre-deposit of interest and stay ordered.: MUMBAI CESTAT;

CUSTOMS SECTION

2009-TIOL-636-HC-DEL-CUS.pdf + cus story.pdf

Directorate Of Revenue Intelligence Vs Harsh Vasant & Anr (Dated: November 16, 2009)

Customs – Offence – Bail - an order granting bail cannot be disturbed except for compelling reasons: A bail would normally be cancelled if the accused tries to interfere with the course of justice by influencing the witnesses or he evades the process of the Court by remaining absent during investigation or otherwise tries to abuse the concession of bail granted to him. But, an order granting bail cannot be disturbed except for compelling reasons and the superior Court ought to interfere only in a case where gross injustice has been done on account of grant of bail. The superior Court will not be justified in setting aside an order of bail merely because had it been the Court concerned, it would not have granted bail in the case before it. The petitioner seeking cancellation of bail or setting aside of an order granting bail must make out a strong case and must show that the order granting bail was manifestly illegal, unjust or improper.: DELHI HIGH COURT;

2009-TIOL-634-HC-MUM-CUS.pdf + settlement story.pdf

M/s Arora Fibres Ltd Vs UoI (Dated: August 5, 2009)

Settlement Commission – Penalty without Notice, not valid; the powers of the Settlement Commission to pass an order must be in accordance with the provisions of the Act, in matters covered by the application and any other matter relating to the cases not covered by the application but referred to in the report of the Commissioner of Customs or the Commissioner (Investigation) under sub section (1) of section 6. Thus the orders can only be in respect of the matter covered by the application or included in the report of the Commissioner in answer to the application. Further under sub section (9) the order made under sub section(3) must make provision for the terms of settlement, manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective.

No penalty for inconsistent disclosure; In the instant case, the only reason given by the Commission in imposing penalty is the purported inconsistent stand of the Petitioner. No notice was issued by the commission to the Petitioner assuming it could have done so. Because an inconsistent stand is taken before the Commission, assuming it to be so, that cannot result in imposing penalty, because no provision is made under the Act for imposing penalty on that count. Penalty could only be imposed in terms of the Act and in terms provided by the Act. There being no power and even assuming there is power, there was failure to comply with the provisions of the Act.: BOMBAY HIGH COURT;