Submission of trade statistics of EDI and Non-EDI compliant ports to the DGCI&S, Kolkata;

Govt to provide free legal service to Sr citizens hit by terrorism;

CBI has registered 517 corruption cases in past five years;

No proposal to relax compulsory norms for use of jute bags: Govt

Govt to set up 71 Addl Special Courts to clear backlog of CBI cases;

Ignoring CVC's 2nd stage advice: No of bodies comes down ;

TIOL COMMENTARY

ddt 26 nov.pdf

Bank Street should be kept dull in order to keep Main Street safe An insight into Boring Banking;

cobweb.pdf

Bad time for quasi-judicial bodies; Wake up time for Ministry of Corporate Affairs!

MIXED BUZZ

mbuzz1064.pdf

Govt to provide free legal service to Sr citizens hit by terrorism;

mbuzz1063.pdf

CBI has registered 517 corruption cases in past five years;

mbuzz1062.pdf

Govt to set up 71 Addl Special Courts to clear backlog of CBI cases;

mbuzz1061.pdf

Ignoring CVC's 2nd stage advice: No of bodies comes down;

2009-TIOL-732-ITAT-DEL.pdf + trust story.pdf

Parivar Sewa Sanstha Vs Asstt/Dy Director Of Income Tax , New Delhi (Dated: August 28, 2009)

Income Tax – salary of Rs. 14 Lakhs in 1997 to employee of charitable Trust held to be excessive: The intent is to ensure that the funds of the trust is not spent on prohibited persons, which have otherwise to be used for the benefit of public at large. The salary paid to her amounted to Rs.11 ,17,600 /- in assessment year 1998-99. As against this amount, she was paid an amount of Rs.14 ,06,500 /- in assessment year 1999-00. There was an increase of 25.85% as against increase in revenue by 19.46% and surplus by 14.23%. It may be interesting to examine similar figures for assessment year 1998-99. In that year, the increase in salary was 58.70% against increase in revenue by 21.26% and increase in surplus by 49.51%. The aforesaid increase of 58.70% was held to be excessive by the Tribunal in that year and it was mentioned that there was nothing on record to show that Mrs. Sudha Tewari rendered extraordinary service for which substantial increment was allowed to her in salary. Her salary has been further increased disproportionately vis -a- vis the increase in the revenue and the surplus.:DELHI ITAT;

2009-TIOL-731-ITAT-DEL.pdf

M/s Oil Industry Development Board Vs ACIT, New Delhi (Dated: March 31, 2009)

Income Tax - Section 36(1)(xii), 37(1) - assessee  is a Public Sector Undertaking constituted by an Act of Parliament - grants financial assistance to various entities - AO disallows payment of grants and royalty on the ground that these grants are mere application of income - Held, the grants given by the assessee even though they are in accordance with the objects stated in the  Act and even if they are made or disbursed as per directions of Central Government and in the public interest, but the same does not fulfill the criteria as laid down in Section 37 to come within the purview of allowability as the same cannot be said to be an expenditure incurred wholly and exclusively for the purpose of business. The assessee's claim of allowability u/s 37(1) cannot be accepted. The grants and payment of royalty claimed under the head "expenses on direct operations, grants are not allowable u/s 37(1), but they are allowable u/s 36(1)(xii). Assessee's appeal partly allowed.:DELHI ITAT;

2009-TIOL-730-ITAT-MUM.pdf

DDIT, Mumbai Vs M/s Chubb Pacific Underwriting Management Services Pte Ltd (Dated: October 15, 2009)

Income tax - TDS u/s 195 - Assessee is a tax resident of Singapore - Chubb Corporation USA holds stake in the assessee's share capital and also HDFC Chubb in India - Assessee offers income from technical services and network charges to tax - From Audit Report, AO notices purchase of software licences for HDFC Chubb - whether payments made on behalf of HDFC Chubb is taxable income for the assessee

Assessee, a promoter of HDFC Chubb pays for the software purchase to a third party on behalf of HDFC Chubb - argues although it was a purchase of software, TDS was deducted and deposited for this transaction - CIT(A) finds that since HDFC Chubb had not got IRDA licence to operate in India, it had requested the assessee to make the payment on its behalf to the software company in Singapore and after commencement of its business, HDFC Chubb reimbursed the same to the assessee - holds reimbursement is not taxable - On department's appeal held,

++ The payment is made on behalf of HDFC Chubb and it is a case of reimbursement.

++ Further tax has also been deducted and if the software selling company is to be taxed in India, the payment has already been subjected to withholding tax.:MUMBAI ITAT;

2009-TIOL-729-ITAT-BANG.pdf

United Distilleries Vs ACIT, Bangalore (Dated: July 24, 2009)

Income Tax - Section 40A(7) - Assessee is in the business of manufacture and sale of IMFL - AO disallows gratuity paid to the employee who is 99% partner in the assessee firm - CIT(A) agrees with the AO - Held, the expenditure is allowable to the employer in respect of his employee in case the payment is made by an approved gratuity fund. It is not disputed that the payment to the gratuity fund has been made in respect of the employees of a company and not that of the assessee. If the assessee is not an employer then the expenditure relating to gratuity cannot be allowed in the case of the assessee.

Assessee debits a sum paid to a marketing agent as sales promotion remuneration  and expenses - AO disallows on the ground that the payment is in the nature of commission and TDS is required to be deducted u/s 194H – CIT(A) confirms AO's order - Held, it is seen that such bills are being raised at the fixed rate. If it was reimbursement of expenses then the assessee could have asked the marketing agent to furnish the details for which the reimbursement is being sought. No evidence produced before the lower authorities to establish that the amount paid was the reimbursement of expenses. CIT(A) justified in holding that the amount paid is commission though it is termed as Scheme/Marketing Expenses in the bill. Assessee's appeal dismissed.:BANGALORE ITAT;

SERVICE TAX SECTION

2009-TIOL-1933-CESTAT-MUM.pdf + st story.pdf

Modern Co-Op Bank Ltd Vs CCE & CC, Nasik (Dated : October 22, 2009)

Collecting Service Tax from customers but not depositing with Revenue is a grave error on part of appellant which cannot be ignored – CESTAT upholds mandatory penalty.:MUMBAI CESTAT;

2009-TIOL-1932-CESTAT-BANG.pdf

M/s IVL India (P) Ltd Vs CCE & CC, Thiruvananthapuram (Dated : May 22, 2009)

Service Tax – Induction training program covering ERP (SAP), quality software engineering and personality development techniques for prospective employees not taxable under Commercial Training or Coaching Service – Impugned order set aside:BANGALORE CESTAT;

2009-TIOL-1931-CESTAT-BANG.pdf

M/s Gac Shipping (I) Pvt Ltd Vs CCE & CC, Cochin (Dated : June 29, 2009)

Service Tax – Tribunal finding on limitation in remand order when not appealed against becomes final – Commissioner in de novo proceedings cannot reopen question of limitation and invoke extended period – Any tax liability to be restricted only to normal period of limitation – In the absence of finding on willful suppression and show cause notice not alleging the same penalty under Section 78 not imposable – Inconsistencies in approach of Commissioner in dealing with claims of deductions shown in P & L A/c – Reimbursable and excess miscellaneous reimbursable expenses not liable to service tax – Availment of input credit on input services certified by CA not deniable unless revenue adduces contrary evidences –Impugned order set aside:BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1937-CESTAT-MUM.pdf + ispat story.pdf

CCE, Aurangabad Vs M/s ISPAT Industries Ltd (Dated : October 7, 2009)

Since the goods are not sought to be held liable to confiscation, penalty under Rule 26 deserves to be dropped – Penalty is also not imposable under non-existent Rule 26(2) as period involved is prior to 01.03.2007 - CESTAT:MUMBAI CESTAT;

2009-TIOL-1936-CESTAT-AHM.pdf

M/s Monarch Metals Pvt Ltd Vs CCE, Ahmedabad/Bhavnagar (Dated : August 7, 2009)

Central Excise – Allegation of irregular availment of CENVAT Credit without actual receipt of inputs – Statement of transporter being a co-accused cannot be sole evidence unless corroborated by other evidences – Contrarily assessee produced ample evidence for receiving inputs from first stage dealer and making payments by demand draft – Burden to prove non-receipt of inputs requires to be discharged by revenue with sufficient evidence – Credit not deniable: AHMEDABAD CESTAT;

2009-TIOL-1935-CESTAT-MUM.pdf

CCE & CC, Aurangabad Vs Ramdas Ispat & Metals Pvt Ltd (Dated : July 24, 2009)

It is not open to the lower authority to reduce the penalty on the assessee, who is liable to pay penalty equal to duty under section 11AC – Apex Court decision in UOI Vs. Dharmendra Textile Processors – [ 2008-TIOL-192-SC-CX-LB ] relied upon – Order to extent it reduced quantum of penalty set aside and Revenue appeal allowed.:MUMBAI CESTAT;

2009-TIOL-1934-CESTAT-BANG.pdf

M/s GTN Textiles Vs CCE, Cochin (Dated : March 19, 2009)

Central Excise – Wax used for grazing by 100% EOU in manufacture and clearance of cotton yarn in DTA is a consumable – Issue no longer res integra – Impugned order not sustainable, liable to be set aside:BANGALORE CESTAT;

CUSTOMS SECTION

INSTRUCTION

instruction09_011.pdf

Submission of trade statistics of EDI and Non-EDI compliant ports to the DGCI&S, Kolkata;

CASE LAWS

2009-TIOL-1930-CESTAT-MUM.pdf

M/s Reliance Silicones (India) Pvt Ltd Vs CC, Nhava Sheva (Dated : July 22, 2009)

Mere fact that the applicants are registered with the BIFR as a sick unit cannot make them entitled to full waiver from the requirement of pre-deposit u/s 129E of the Customs Act, 1962 – safeguarding the interest of Revenue equally weighs consideration – Modification application dismissed, however extension of time given to make the pre-deposit.: MUMBAI CESTAT;

2009-TIOL-1929-CESTAT-MUM.pdf

Vadilal Industries Ltd Vs CC, Nhava Sheva (Dated : July 30, 2009)

Principles of unjust enrichment are not attracted in case of refund of redemption fine – Bombay High Court decision in United Spirit ltd. vs. CC [ 2009-TIOL-316-HC-MUM-CUS ] relied upon – Appeal allowed with consequential relief.: MUMBAI CESTAT;