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CBDT notifies u/s 90A 'specified Territory' and 'Specified Association' in Taiwan + amends jurisdictions of CITs in Jaipur + Kota ; Govt imposes anti-dumping duty on import of Cathode Ray Colour TV Tubes from Indonesia; DGFT adds many more ports / airports / ICDs to approved list ; CENVAT Credit on outward transport - CESTAT Larger Bench decision in ABB Ltd stayed by Karnataka HC - Matter to be heard on January 29th, 2010; Swaminathan for stern enforcement of Coastal Regulations; PM urges States to speed up setting up of SEIA Authorities; Corruption kills development: UN official; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Leviability of duty on capital goods cleared after being put into use for over 10 years CBEC clarifies; No economic meltdown for 'fakes'! - Booming counterfeit industry crosses USD 250 bn-mark; CASE LAW M/s Orissa State Financial Corporation Vs CCT (Dated: December 3, 2009) Orissa Sales tax - Sec 13B - Sales tax dues to have precedence over the mortgage created in favour of banks against loans - Appellant's appeal dismissed: SUPREME COURT; RBI CIRCULAR External Commercial Borrowings (ECB) Policy; MIXED BUZZ ICSI makes recommendations for improvement in corporate governance Swaminathan for stern enforcement of Coastal Regulations; PM urges States to speed up setting up of SEIA Authorities; Corruption kills development: UN official; |
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NOTIFICATION CBDT amends jurisdictions of CITs in Jaipur + Kota; CBDT notifies u/s 90A 'specified Territory' and 'Specified Association' in Taiwan ; Commonwealth organisers' broadcasting income exempted; CASE LAWS The Peerless General Finance And Investment Co Ltd Vs CIT, West Bengal-III, Calcutta (Dated: October 28, 2009) Income tax - AY 1989-90 - Sec 143(1), 154, 43B - Assessee claims deductions u/s 43B and Sec 80G - AO makes adjustments by issuing an intimation u/s 143(1)(a) for lack of evidence - Application for rectification u/s 154 - Some corrections done but disallowance validated - CIT(A) allows the appeal - Tribunal disallows the deduction u/s 43B but allows the same u/s 80G - held, merely because the Tax Auditor did not provide a proper break-up of delayed payments of bonus and PF, disallowance cannot be made - Tribunal order deleting disallowance u/s 80G upheld - Assessee's appeal allowed: CALCUTTA HIGH COURT; CIT, Delhi-XI Vs Standing Conference Of Public Enterprises (SCOPE) (Dated: September 25, 2009) Income Tax - Sec 148 - Principle of Mutuality - Assessee is a registered society - set up to improve the performance of public enterprises and to improve its total role in conveying such information and advice to community and the Government - owns a building - earns income from interest on deposits with bank, rent from use of convention centre and from letting out of the part of the premises of the aforesaid building as well as subscriptions received from members - Assessee claims the entire income is exempt from tax on the 'principle of mutuality' - AO holds that, the activities of the assessee society are not limited to the members only, but encompasses the community at large - forms opinion that the activities of the society are tainted with commerciality which destroys the principle of mutuality and thus the judgment of the Supreme Court in Bankipur Club is clearly applicable and makes various additions - Tribunal holds that income in the form of rent and licence fee received from non-members is eligible to tax. However, other income, viz., interest income from surplus funds deposited with banks, rental income from the members, rental income from the use of convention centre and other premises is treated as exempted by applying the principle of mutuality - Held, simply because some incidental activity of the assessee is revenue generating, it does not provide any justification to hold that it is tainted with commerciality and reaches a point where relationship of mutuality ends and that of trading begins. Revenue Appeal dismissed.:DELHI HIGH COURT; 2009-TIOL-763-ITAT-DEL.pdf + van story.pdf M/s Van Oord Acz India (P) Ltd Vs DCIT, New Delhi (Dated: October 30, 2009) Income tax - Sec 195 - Assessee executes dredging contract at Port Dahej - reimburses non-resident for incurring expenses towards mobilisation and de-mobilisation of dredger and other equipments - whether reimbursements of such expenses are subject to TDS u/s 195 - whether assessee-payer can sit in judgement to decide taxability of income in the hands of non-resident payee Assessee claims deduction for expenses reimbursed to various non-residents who provided the dredger and survey equipment and their transportation costs to India and back to places of origin - AO disallows the sum u/s 40(a)(i) as the assessee fails to deduct tax at source u/s 195 - Since the issue is already decided against the assessee for other AYs, the assessee's appeal dismissed - counsel for assessee argues that since the Tribunal had not taken into account the various decisions relied upon by the assessee in its order, the issue may be referred to the Special Bench - held, since the assessee has already gone in appeal agains the Tribunal's decision for other AY, and the law point has been admitted by the High Court, the judicial propriety demands that the issue need not be referred to the Special Bench - Assessee's appeal dismissed:DELHI ITAT; RSM & Co Ambit RSM House Vs ACIT, Mumbai (Dated: October 12, 2009) Income tax - Sec 37(1) - Assessee is a CA Firm - it pays certain sum over a period of time to one of its retiring benefits - claims deduction for the contractual payment made - AO disallows the same - Assessee pleads before the CIT(A) that the sum paid to the retiring partner is not taxable on the principles of diversion of income overriding the title - CIT(A) disallows the appeal - held, as per the clause of the partnership deed, the sum paid as retirement benefits to one of the partners of the firm is a charge on the profits of the assessee firm and it is a diversion of income to the extent of the retirement benefits paid. The retirement benefit paid cannot be included in the total income of the assessee firm as to that extent, the income has never reached in the hands of the assessee. Assessee's appeal allowed :MUMBAI ITAT; DCIT, Mumbai Vs M/s Gujarat Oleo Chem Ltd (Dated: April 29, 2009) Income tax - Sec 32 - Assessee is in the business of manufacturing of castor oil derivatives - claims depreciation - AO notices huge addition to the fixed assets during the year - calls for evidence regarding acquisition and use of assets - Assessee talks about massive fire gutting the factory, godown and plants - shows some papers but the AO disallows the claim - CIT(A) admits Technology Development Board papers, FIR and other relevant papers and allows the appeal - held, since the CIT(A) did not given any opportunity to the AO to examine all these evidences, Rule 46A was violated - CIT(A) order set aside and case remanded :MUMBAI ITAT; |
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SERVICE TAX SECTION 2009-TIOL-2020-CESTAT-BANG.pdf CST, Bangalore Vs M/s Atria Convergence Technologies Pvt Ltd (Dated: May 11, 2009) Service Tax Levy of service tax on activities as cable operator and MSO No malafide intention to evade tax, penalty not leviable No infirmity in Appellate Commissioner's order :BANGALORE CESTAT; 2009-TIOL-2019-CESTAT-BANG.pdf CCE, Cochin Vs M/s Kerala Back Waters P Ltd (Dated: June 17, 2009) Service tax Provisions of Section 86 of Finance Act, 1994 different from provisions of Section 35B (2) of Central Excise Act, 1944 or Section 129A (2) of Customs Act, 1962 An authorization passed by the Committee of Commissioners to file an appeal enough for Department to file an appeal before CESTAT since it is in the public interest Preliminary objections of assessees against delayed filing of appeal by revenue not sustainable:BANGALORE CESTAT; M/s Larsen & Toubro Ltd Vs CCE & CST, Bhubaneswar-II (Dated: November 11, 2009) ST - Cenvat credit - Revenue denies credit for service tax paid on GTA service relating to outward transportation of manufactured goods - held, since the demand is in respect of Cenvat credit, a deposit of Rs 5 lakh from Cenvat account by way of reversal is compliance to the stay order passed by Commissioner(A) - matter remanded:KOLKATA CESTAT;
CENTRAL EXCISE SECTION 2009-TIOL-672-HC-P&H-CX.pdf + maruti story.pdf CCE Vs M/s Maruti Udyog Limited (Dated: August 17, 2009) Central Excise Irregular CENVAT Credit - penal clause would not be attracted to the facts of every case unless a categorical finding of fraud, collusion, willful-mis statement etc. with the intention to evade payment of duty have been recorded: penalty under section 11AC , as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. It is evident that penal clause would not be attracted to the facts of every case unless a categorical finding of fraud, collusion, willful-mis statement etc. with the intention to evade payment of duty have been recorded. In the absence of such a finding, the imposition of penalty is not automatic and cannot be levied: PUNJAB AND HARYANA HIGH COURT; M/s Sulzer Processors Pvt Ltd Vs CCE, Jaipur (Dated: August 13, 2009) Central Excise Compounded Levy Exemption - Conditions - Valuation of plant and machinery - To be eligible for exemption notification No. 32/01, the original value of the investment in the plant and machinery installed in the factory of independent textile processor of the goods, commencing production for the first time in the new factory coming into existence after 1.5.01 shall not exceed Rs.3 crores irrespective of whether such plant and machinery is used or not, in working condition or not. The method to be adopted for the purpose of determining the value of plant and machinery is as per AS 10. The certificate issued by the cost accountant appointed by the department clearly specifies that the valuation has been done in terms of AS 10 method. As value of plant and machinery exceeds Rs. 3 Crore, the appellants are not eligible for benefit of the notification. (Para 7.5 & 9):MUMBAI CESTAT; CCE, Nagpur Vs Chaman Metalics Pvt Ltd (Dated: July 30, 2009) Cenvat credit on welding electrodes used in the factory for repair and maintenance of capital goods allowable in view of Rajasthan High Court decision in M/s Hindustan Zinc Ltd. Vs UOI [ 2008-TIOL-408-HC-RAJ-CX ] , UP State Sugar Corporation Ltd, Vs. CCE, Meerut 2009-TIOL-452-CESTAT-DEL and CCE, Nagpur Vs. Shri Sidhbali Ispat Ltd. 2009-TIOL-782-CESTAT-MUM Summary dismissal of appeal SLP is not law - Revenue appeal dismissed.:MUMBAI CESTAT; CCE & CC, Aurangabad Vs M/s Ahmednagar Forgings Ltd (Dated: August 21, 2009) Interest is payable on differential duty paid on supplementary invoice issued on revision of price but penalty not leviable Apex Court decision in SKF India Ltd. 2009 TIOL-82-SC-CX relied upon. :MUMBAI CESTAT;
CUSTOMS SECTION NOTIFICATION Govt imposes anti-dumping duty on import of Cathode Ray Colour TV Tubes from Indonesia;
DGFT adds many more ports / airports / ICDs to approved list; CASE LAWS 2009-TIOL-674-HC-AHM-CUS.pdf + sez story.pdf Essar Steel Limited & 1 Vs UoI & 5 (Dated: November 4, 2009) No Export Duty on clearances to SEZ ; Export Duty can be levied only under the Customs Act, not SEZ Act; In the absence of any amendment of the definitions of the terms 'Export' and 'India' in the Customs Act, 1962, or any amendment in the charging section i.e. S.12 or insertion of a charging provision contemplating movement of goods from the Domestic Tariff Area to the Special Economic Zone as a taxable event entailing a levy of Export Duty as in the case of export, the levy of Export Duty cannot be justified under the provisions of the Customs Act, 1962. Definition under SEZ Act cannot be imported into the Customs Act to levy duty; The contention that levy of Export Duty is impliedly contemplated under the SEZ Act, principally on account of the fact that unlike other levies, the levy of Export Duty has not been specifically exempted under the provisions of the said Act, is wholly misconceived. In the first place, there cannot be a levy of tax by implication. Secondly the necessity for exemption would arise if the subject is liable to tax in the first place. In any case an overall view of the provisions of the SEZ Act and the Rules would establish that levy of Export Duty on the movement of goods from the Domestic Tariff Area to the Special Economic Zone is not at all provided for or contemplated thereunder . The term 'export' having been defined in the Customs Act, 1962, for the purposes of that Act, there is no question of adopting or applying the meaning of the said term under another enactment for any purpose of levying duty under the Customs Act, 1962. In other words, a definition given under an Act cannot be displaced by a definition of the same term given in another enactment, more so, when the provisions of the first Act are being invoked. Even in the absence of a definition of the term in the subject statute, a definition contained in another statute cannot be adopted since a word may mean different things depending on the setting and context. In fact, the interpretation canvassed by the department is not merely the adoption of a definition of another Statute, but the incorporation of a taxable event itself, which is impermissible under the law. The movement of goods from the Domestic Tariff Area to the Special Economic Zone has been treated as export by a legal fiction created under the SEZ Act, 2005. A legal fiction is to be restricted to the statute which creates. SEZ is not outside India : Section 53 provides that the Zone would be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations. In any case, various provisions of the SEZ Act would be rendered redundant and unworkable if the Special Economic Zone was to be considered an area outside India. This is apart from the fact that such a declaration would be constitutionally impermissible.:GUJARAT HIGH COURT ; 2009-TIOL-673-HC-MUM-CUS.pdf + forged story.pdf CC, Mumbai Vs M/s Vaibhav Exports (Dated: July 31, 2009) Forged licences, in law are no licences; Even goods attempted to be cleared on the strength of forged licences, are liable to be confiscated; the goods imported by these parties were liable to be confiscated under Section 111(d) of the Customs Act as they were imported against the forged licences, which in law were no licences. Same comments will be applicable in respect of the past imports also. As in those cases, goods were not available for confiscation, only penalty could be imposed. As far as goods, in respect of which bills of entries were submitted and attempt was made to get them cleared on the strength of forged licences, are liable to be confiscated. Redemption fine amount should not be just sufficient to wipe out the profits but it should be more than that; where import is not prohibited, adjudging officer has no choice or discretion and it is mandate of law that he shall give an offer to the party to pay fine in view of the confiscation. Even if the option of payment of redemption fine may be given to the importer, the fine amount should not be just sufficient to wipe out the profits but it should be more than that. If the person is required to pay only the amount which he has saved by not paying the premium for securing genuine replenishment licence, he will never feel pinch of being caught. He may commit same wrongs repeatedly and as and when he is caught, he may pay amount equivalent to the premium. In our considered opinion, redemption fine should be more than that. .:DELHI HIGH COURT; |
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