Partnership In Customs Academic Research and Development - PICARD;

Central Excise exemption regime for Jammu & Kashmir - CBEC notifies conditional exemption for more goods;

Customs exemption for sugar import extended upto Dec 31, 2010;

Govt allows IRFC to float tax-free bonds for Rs 5000 Crore;

PC offers funds, arms to States to enhance internal security;

Bi-Valent vaccine for Polio introduced in UP and Delhi;

TIOL COMMENTARY

ddt 8 feb.pdf

Sugar - SMP – SAP - Income Tax - Supreme Court;

budget story.pdf

Infrastructure: Budget needs to continue with support for driver of Indian economy;

MIXED BUZZ

mbuzz1292.pdf

Govt allows IRFC to float tax-free bonds for Rs 5000 Crore;

mbuzz1291.pdf

Bi-Valent vaccine for Polio introduced in UP and Delhi;

2010-TIOL-09-SC-IT.pdf

DCIT, Nashik Vs Shri Satpuda Tapi Parisar SSK Ltd (Dated: January 20, 2010)

Income Tax - Sugar – Difference between SAP and SMP – whether expenditure or distribution of profits – matter remanded: the Assessing Officer will take into account the manner in which the business works, resolutions of the State Government, the modalities and the manner in which S.A.P. and S.M.P. are decided, the timing difference which will arise on account of the difference in the accounting years, etc. : SUPREME COURT;

2010-TIOL-62-ITAT-MAD-TM.pdf + tm story.pdf

M/s Everwin Export Corpn Vs ITO, Tiruppur (Dated: September 18, 2009)

Income tax – hyper technical objections – Members of the Bench differ even on the points of difference - Even oral plea can also be made for raising an additional ground – The two Members of the ITAT Bench did not agree on an issue. As there was a difference of opinion, it had to be referred to a third Member. The two members also did not agree on what the difference of opinion was. It is well known that there is no prescribed proforma to raise an additional ground. There is no specific procedure to be followed to raise an additional ground. What all is required is that the appellant needs to take leave of the Tribunal before raising additional ground and the Tribunal needs to give an opportunity of being heard to the affected party.

Order by one Member of the Bench cannot be given effect to: the J.M. did not adjudicate on the merits of the issue as he did not admit the additional ground. On the other hand, since the ld. A.M. admitted the additional ground, he adjudicated on the merits as well. There is nothing wrong in what the ld. A.M. has done. However, so far as granting of relief is concerned, it cannot be granted in the absence of a decision by the Bench. .: CHENNAI ITAT {THIRD MEMBER };

2010-TIOL-63-ITAT-BANG.pdf

M/s Herbalife International India Pvt Ltd Vs ITO, Bangalore (Dated: December 23, 2009)

Income tax - Sec 195(2) - Assessee is a subsidiary of a US-based parent company - files application u/s 195(2) for no TDS certificate for payment of administrative service fee to its parent company - Revenue rejects it and holds that the full payment is liable to TDS - out of three AYs involved, for one AY the Assessing Officer holds that only 90% payment is to be treated as income for levying TDS - Assessee argues that for earlier AYs, the assessee and the Revenue had gone for MAP and only 25% of the administrative service fee was determined to be the income - CIT(A) goes with the AO - held, since both the assessee and Revenue had opted for MAP in earlier years and even for the latest AYs they have agreed for only 25% of the payment as income, there is no valid reason for a different treatment being meted out for certain AYs in between these two cases - unless there is a reason for deviation, there should be consistency in approach on part of the Revenue - Case remanded :BANGALORE ITAT;

2010-TIOL-111-HC-MAD-IT.pdf

CIT, Madras Vs Shri Panchu Arunchalam (Dated: February 1, 2010)

Income tax - Sec 254(2), 271(1)(c) - Assessee is a proprietor - makes a film in Tamil - AO makes assessment and finds that the assessee failed to disclose royalty received for the film - issues notice read with Sec 271(1)(c) - CIT(A) and Tribunal dismiss assessee's petition - ROM filed - Tribunal dismisses it - Assessee files another misc application for rectification of mistake apparent - Tribunal this time allows it - Appeal to High Court - held, when once the power for rectification of the earlier order is exercised and an order is passed , such order merges with the earlier order of the Tribunal. On the ground that a mistake apparent from the record had occurred, another application for rectification of the original order passed in the appeal may not lie. Whatever power conferred on the authorities must be exercised and orders passed thereon should have a finality attached to it, as otherwise the parties aggrieved by such orders would be entitled to file any number of such applications seeking for rectification and the same would amount to reviewing of the earlier order, which power does not vest in the Tribunal under Section 254 of the Act. Once an application seeking for rectification is disposed of, be it the revenue or the assessee, if aggrieved, should have the recourse to the provisions of appeal before this Court and either of them cannot invoke the provisions of Section 254(2) by filing another application for rectification which cannot be entertained under that section - Revenue's appeal allowed: MADRAS HIGH COURT;

2010-TIOL-110-HC-DEL-IT.pdf

DTTDC Ltd Vs ACIT (Dated: January 25, 2010)

Income tax - Sec 147 - Assessee is a State Govt run undertaking - Govt authorises it to run liquor vends - assessee also required to set aside a sum of Rs 5/- per bottle for Transport Infrastructure Utilisation Fund (TIUF) which is to be utilised for construction of flyovers and pedestrian facilities - AO treats the same as taxable - Tribunal disagrees with the AO - Revenue continues to take similar stand for other AYs in view of pending petitions before the HC - reopens assessment - assessee questions the same - held, in view of the fact that the AO has applied its mind and the assessee furnishing detailed answers, reassessment would amount to change of opinion - AO is allowed to initiate re-assessment on satisfaction of certain conditions but has no power to 'review' its own decision - Assessee's appeal allowed:DELHI HIGH COURT;

2010-TIOL-109-HC-DEL-IT.pdf

CIT Vs Aero Traders (P) Ltd (Dated: January 25, 2010)

Income tax - Sec 271(1)(c) - assessee is a manufacturer and exporter of shoe uppers primarily to the erstwhile USSR - due to disintegration of the USSR, assessee suffers huge losses - decides to file no return - notice u/s 148 issued - Assessee files huge loss return - AO calls for records which assessee fails to furnish as the same was seized by the police authorities - additions made - CIT(A) estimates nominal income - Tribunal goes with the CIT(A) - AO initiates penalty proceedings - CIT(A) deletes the same on the ground that penalty cannot be levied on estimated income - Tribunal again upholds the CIT(A) order - held, no infirmity in Tribunal's decision - Revenue's appeal dismissed: DELHI HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-222-CESTAT-BANG.pdf

M/s IVRCL Infrastructures And Projects Ltd Vs CCE, Hyderabad (Dated: September 22, 2009)

Service Tax – Commercial or Industrial Construction Service – Laying of pipelines for drinking water supply projects, prima facie not leviable to tax under Commercial or Industrial Construction Service – Full waiver of pre-deposit and stay granted :BANGALORE CESTAT;

2010-TIOL-221-CESTAT-BANG.pdf

M/s Cairn Energy India Pvt Ltd Vs CCE, Visakhapatnam (Dated: October 23, 2009)

Service Tax – Port Service – Taxability of pilotage charges recovered from public sector oil companies for services rendered by appellants at Ravva Port through contractors – Activities undertaken at port by any person would be taxable as port services only if they are based on an authorization issued under Section 42(3) of Major Port Trusts Act – Impugned demand of service tax and imposition of penalties not in accordance with law – Complete waiver of pre-deposit ordered and stay granted:BANGALORE CESTAT;

CENTRAL EXCISE SECTION

NOTIFICATION

etariff10_01.pdf

Exemption regime for Jammu & Kashmir - CBEC notifies conditional exemption for more goods;

CASE LAWS

2010-TIOL-113-HC-DEL-CX + excise story.pdf

Ashwani Tobacco Co Pvt Ltd Vs UoI (Dated : January 29, 2010)

Central Excise – 25% penalty under Section 11AC is not applicable for proceedings before the Settlement Commission An order of settlement is obviously distinct from an adjudication order of a Central Excise Officer, who has no power to accord immunity from prosecution while determining duty liability under the Excise Act. The order of settlement is in the form of a package and takes into consideration all the aspects of the case in a holistic manner before determining the issues of penalty and interest as well as the extent of immunity therefrom . Therefore, once the Petitioner has adopted the course of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit under the proviso to Section 11AC of the said act which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement undertaken under the provisions of Chapter-V of the Excise Act.:DELHI HIGH COURT;

2010-TIOL-112-HC-AHM-CX.pdf

Sal Steel Limited & Anr Vs UoI (Dated : October 28, 2009)

Central Excise – Validity of Notifications 16/2008-CE and 33/2008-CE amending Area Based Exemption Notification 39/2001-CE – Reducing the quantum of exemption benefit granted under original notification 39/2001-CE before the expiry of five year period, by changing the basis of calculation of exemption benefit, not sustainable – When foregoing certain amount of revenue by Central Government, contention that loss occurs to Central Government by virtue of operation of an exemption notification and hence it is required to be modified or varied or rescinded, not sustainable – Once power under Section 5A of the Act has been exercised and exemption granted, a larger/superior public interest has to be shown for curtailing/modifying/withdrawing an exemption already granted – Notifications 16/2008-CE and 33/2008-CE to the extent they curtail/modify/substitute the basis laid down in Notification No 39/2001-CE declared to be bad in law: GUJARAT HIGH COURT;

2010-TIOL-224-CESTAT-MUM.pdf + perfect circle story.pdf

M/s Perfect Circle India Ltd Vs CCE, Nasik (Dated: November 24, 2009)

Benefit of sub-section (2B) to section 11A of the CEA, 1944 is not available where the duty became payable before 11.05.2001 – declarations u/r 173C were being filed and exercise revenue neutral, hence penalty u/s 11AC set aside – CESTAT. :MUMBAI CESTAT;

2010-TIOL-223-CESTAT-MAD.pdf

CCE, Madurai Vs Somasundaram Chemicals Company (P) Ltd (Dated: September 22, 2009)

Central Excise – small scale exemption – computation of the value of clearances – in respect of a commodity which becomes specified under SSI Notification, not at the commencement of the year, but only later, the value should be from the date on which they are specified in the Notification as held by the Larger Bench.:CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff10_008.pdf

Customs exemption for sugar import extended upto Dec 31, 2010;

CASE LAWS

2010-TIOL-220-CESTAT-BANG.pdf

CC & CCE, Guntur Vs M/s Asian Peroxide Ltd (Dated: March 17, 2009)

Customs – 100% EOU – Catalysts only accelerate chemical reactions and remain uninfluenced/unaltered and independent of final products – Consumables are materials utilized as inputs in the manufacturing process but not identifiable in the final product by reason of the fact that it has got consumed therein – Catalysts used by appellants in the manufacture of hydrogen peroxide are consumables and not raw materials – Benefit of Notifications 293/88-CE or 8/97-CE by a 100% EOU not deniable – Duty demand and penalty imposed not sustainable, set aside :BANGALORE CESTAT;