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Centre sets up High Level Panel to develop roadmap for accelerating industrial growth; Rajya Sabha also adjourns sine die after a month-long session; Patel, Dikshit discuss one more exit from IGI Airport through Dwarka; India, ADB sign pact for fund two key projects; Govt sets up Task Force to suggest steps to combat music, film piracy; Refund of service tax paid on foreign agent commission by exporters - CBEC Clarifies; SSC announces CBEC + CBDT Tax Assistants' results; Valuation issues pertaining to Customs House Agents Service - TRU Clarifies; Indian corporate again on spree of raising loans from overseas; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY CHA - Customs Speed Money attracts service tax? Service tax on import of services - Can refund be claimed for tax paid prior to 18.4.2006? Railways should get out of the rut; MIXED BUZZ SSC announces CBEC Tax Assistants' results; Patel, Dikshit discuss one more exit from IGI Airport through Dwarka; Centre sets up High Level Panel to develop roadmap for accelerating industrial growth; India, ADB sign pact for fund two key projects; |
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CIT Vs Ms Sushma Kapoor (Dated: October 26, 2009) Income tax - Sec 14A - AO finds the assessee had taken interest-bearing loan and given interest-free advances to certain parties - disallows proportionate interest - CIT(A) gives the findings that the interest-free advances were paid advances and were made in the previous year, much before taking the bank loan - Tribunal finds that the AO had made disallowance of a sum on ad hoc basis which is not proper and was also without placing any evidence on record - held, no infirmity in the Tribunal's order - Revenue's appeal dismissed: DELHI HIGH COURT; 2009-TIOL-793-ITAT-DEL.pdf + maersk story.pdf Maersk Co Ltd Vs ACIT, Dehradoon (Dated: October 30, 2009) Income tax - Indo-Danish DTAA - MAERSK Co. Ltd.(MCL), a foreign company resident of the UK, entered into a contract for supply of Platform Vessel (PSV) to ONGC - Hire charges were received by MCL with regard to this supply of PSV - Under the contract, MCL was also to provide crew members - MCL obtained such crew from one Rederiet A. P. Motor (RAPM), a group company, resident of Denmark which does not have a PE in India - The salary of the crew members are thus paid by the sister concern - whether salary income of the crew is taxable in India To tax their salary income, the A.O issued a notice under section 163 to MCL proposing to treat it as an agent. The assessee contended that it was a non-resident and hence could not be treated as an agent. It was also contended that the stay of the crew members being less than 183 days, the salary was exempt from taxation in India by virtue of Article 16(3) of the Indo-Danish DTAT. The plea was not accepted by the A.O. He held that the salary income is taxable in India and that para 2 of Article 16 rather than para 3 was applicable in this case in as much as the salary was indirectly borne by MCI which did not cooperate and produce any documents to prove that the salary of the crew was not paid out of the amounts received against the contract with the ONGC and that the crew members were under the administrative control of MCL who was the real employer . The contract agreement provided that it was the responsibility of MCI to provide the crew , their replacement and also to bear salary/ remuneration of the crew. On appeal, the CIT(A) opined that the A.O had the option to choose between MCL, RAPM and ONGC to be appointed as agent and he having chosen MCL, the same could not be faulted with. On further appeal, the Tribunal held that: ++As per sec. 163(1)(c) of the Act., 'agent', in relation to a non resident, includes any person in India from or through whom the non resident is in receipt of any income, whether directly, or indirectly. It was in furtherance of MCL's contract with ONGC, that MCL arranged for supply of a crew of technicians/personnel, from its group concern, RAPM to ONGC. It has been contended that no written agreement was drawn up for this purpose, since the arrangement for supply of crew was between two group companies. Undisputedly, payments to the crew were made by RAPM and not by MCL. ++"Sec 163(1)(c) states that it is any person 'in india' from or through whom the non resident is in receipt of any income, whether directly, or indirectly, who can be treated as an agent in relation to a non resident. Now, MCL itself is a non resident company and as such, it could not have been treated as an agent of the non resident expatriate personnel. Therefore, on this score itself, the whole assessment goes." ++ Apropos the payment aspect, the salary paid to the expatriate personnel was not borne by MCI. MCL was also not having any permanent establishment in India. The income of the expatriate personnel was assessed in Denmark. That being so, Article 16(3) of the Indo-Denmark DTAA was applied. The expatriate personnel were employees of RAPM. They were tax residents of Denmark. It has not been established by the department that their contention that it was MCL who was actually controlling the working of the expatriate personnel while on service in India, stands buttressed or substantiated by any material on record. ++ Revenue has also failed to prove that it was MCL which was responsible for the entire operation of the PSV. It has not been shown that MCL was having rights on the work produced and bearing the relative responsibility and risks of the service of the expatriate personnel. Even para 2 of the OECD Commentary, as relied on by the AO, states that each case should be examined to see whether the functions of employer were exercised mainly by the intermediary, or by the user. In this case, no such thing has been established. There is no circumstance whatsoever indicating that it was MCL who was the real employer of the expatriate personnel. What MCL did was under its obligation to carry out the terms of its agreement with ONGC. This agreement has nowhere been put to challenge by the department. Rather, it is the terms of this very agreement that the department is referring to to hold MCL to be the actual employer of the expatriate personnel.: DELHI ITAT; Rural Electrification Corporation Ltd Vs ACIT, New Delhi (Dated: July 17, 2009) Income tax - Sec 147 - Assessee alleges re-assessment being initiated after a period of four years - also argues it is based on mere change of opinion - held, AO has recorded reasons that the assessee has overstated deductions and understated total income to make excessive claim, and the assessee fails to prove that it had truly and fully furnished all materials to the Revenue at the time of original assessment - invocation of powers u/s 147 upheld - Assessee's appeal dismissed: DELHI ITAT; M/s Telco Construction Equipment Co Ltd Vs CIT, Bangalore (Dated: September 11, 2009) Income tax - Sec 115JB - CIT invokes revisionary powers u/s 263 to make additions under three heads of provision for warranty, Bhavishya Kalyana Yojana and provision for doubtful debt - CIT takes the view that additions for these three items need to be made while computing profit under MAT provisions - held, it is settled law that the deduction from total income is available against the provision for warranty. As regards the Bhavishya Kalyana Yojana, the case is decided against the Revenue, and merely because the Revenue has gone in appeal, deduction not to be allowed. And finally, for provision of doubtful debts, Revenue has no case. Assessee's appeal allowed: BANGALORE ITAT; |
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SERVICE TAX SECTION 2009-TIOL-2100-CESTAT-DEL.pdf + st story.pdf CCE, Indore Vs M/s Anant Commodities Pvt Ltd (Dated: October 21, 2009) Service tax – Exports – refund of service tax – Notification No. 41/2007 – refund cannot be denied by reviewing the correctness of service tax payment at the end of service providers: Cenvat credit cannot be denied to a receiver of duty paid inputs, by the Central Excise authorities having jurisdiction over the input receiver, by revising the assessment of duty at the supplier's end. The same principle will be applicable to this group of cases and unless and until, the service tax payment by the service providers is revised by the jurisdictional service tax officers, the service tax refund available to the exporters, who had received those taxable services in connection with export of goods, cannot be revised.:DELHI CESTAT; 2009-TIOL-2099-CESTAT-BANG.pdf CC & CCE, Visakhapatnam Vs M/s Artos Breweries Ltd Godavari District (Dated: August 26, 2009) Service Tax – Eligibility of abatement of 75% of value of GTA service – Commissioner (Appeals) not empowered to remand cases to original authority – No findings on certificate given by transporter – Matter to be considered afresh by adjudicating authority: BANGALORE CESTAT; M/s Korea Plant Service & Engg Co Ltd Vs CCE, Jaipur-I (Dated: September 24, 2009) ST - Repair & maintenance service - Assessee enters into contract with a company for providing operation and maintenance of power plant - pays tax on composite sum received for operation and maintenance service - claims input service credit for unloading charges - Revenue disallows - held, when the tax is levied on the composite fee collected, the service cannot be bifurcated for allowing input service credit - Assessee's appeal allowed:DELHI CESTAT;
CENTRAL EXCISE SECTION M/s Asstt Executive Engineer, PCC Poles Vs CCE, Chandigarh-I (Dated: December 1, 2009) Question of limitation is a mixed question of fact and law – CESTAT dismissing appeal and rectification application by holding that refund claim should be filed before the expiry of six months from payment of duty is proper in law – in fact it is the duty of CESTAT to act in accordance with statutory provisions – no question of law arises – P&H HC. 2009-TIOL-2097-CESTAT-BANG.pdf M/s KCT Steels Pvt Ltd Vs CCE, Calicut (Dated: September 10, 2009) Central Excise – Refund claim of excess duty paid due to downward revision of annual capacity of production – No evidence adduced by assessee to prove that excess duty not passed on to consumers – No merit in appeal: BANGALORE CESTAT; 2009-TIOL-2096-CESTAT-BANG.pdf M/s SE-KA-RA Organics Pvt Ltd Vs CCE (Appeals-II), Bangalore (Dated: April 2, 2009) Central Excise – Eligibility of SSI benefit under Notification 8/2003-CE for units I & II of assessee manufacturing branded and un-branded goods – Value of clearances of both units below Rs. 1 crore – Location of both units in rural area as certified by Tahsildar – Benefit of SSI exemption available even for branded goods – Duty not demandable even for branded goods – Impugned order set aside : BANGALORE CESTAT; 2009-TIOL-2095-CESTAT-MAD.pdf + sree vishnu electronics story.pdf CCE, Chennai Vs M/s Sree Vishnu Electronics (Dated: September 9, 2009) Central Excise – Appeals – Appeal under Section 35B(2) can be filed by the Chief Commissioner as the he can exercise the power of his subordinate officer under Rule 3 of the Central Excise Rules 2002 – objection of the respondents is not sustainable. Clandestine removals – weight of evidence given a go bye by the Commissioner (Appeals) with scanty regard to the principles of preponderance of probability – matter remanded for reappraisal and evaluation of evidence.: CHENNAI CESTAT;
CUSTOMS SECTION M/s Transport Logistics Vs CC, Chennai (Dated: August 12, 2009) Custom – CHA – Penalty imposed on CHA for short shipment of export goods – There is no evidence on record to establish that the CHA had by any act of commission or omission rendered the goods liable to confiscation – Penalty set aside. : CHENNAI CESTAT; |
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