Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com HRindiaonline.com
 
LOGIN
Forgot Password |  Register
Thursday , April 17, 2014 | Updated : Apr 17, 00:20 IST
Income Tax    Customs    Excise    Service Tax    FEMA    DGFT    SEZ    Misc    Pitara    Budget   
About Us Contact Us Advertise
Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com
NEWS FLASH
 
EC raps Azam Khan + Amit Shah for making controversial speeches TP: No Cost - No Guarantee? (See 'TII Edit' in Taxindiainternational.com) Indian Industry is used to grow in lax standard environment: Cab Secretary (See 'Mixed Buzz') Kolkata Airport Customs seizes 24 karat gold worth Rs 33 lakhs from two pax CBI sets up dedicated Sports Integrity Unit to probe sports frauds SC observes BCCI should probe IPL fixing scam Several posts of Secretary fall vacant; ACC orders addl charge Six killed in Karnataka bus fire + 476 drowned in South Korean boat mishap COFEPOSA - A Little Delay will not result in quashing Detention Order (See 'DDT' Column) Alleged red sanders smuggler does not get relief in Supreme Court; COFEPOSA Detention confirmed (See 'Breaking News') CBEC hikes tariff value of gold & silver but reduces for Crude Soya oil and RBD Palmolein (See NT 31 'What's New') Income tax - Whether provisions of Sec 10A enlarge ambit of term 'computer programme' by including process of management of electronic data - YES: ITAT (See 'Breaking News') Public Peeing - Not even God could solve - What can a High Court do? (See 'DDT') CX - Refund - assessee gives up right to claim interest before Adjudication authority - Assessee is not barred from claiming interest at appellate stage - No estoppel against law: CESTAT (See 'Breaking News') He/She/? - The Third Gender (See 'DDT') Central Excise - Valuation - cylinder testing charges are not includible in assessable value of liquid chlorine: CESTAT (See 'Breaking News') Applications invited for post of Director (Anti-Smuggling) in CBEC (See 'Deputation' in Pitara) CX - Whether CENVAT credit on inputs can be allowed to be availed and further passed on to buyers despite activity of slitting and pickling on CR coils having been held by HC as not amounting to manufacture - Matter referred to TM: CESTAT (See 'Breaking News') SC grants status of Third Gender to eunuchs; Amnesty welcomes it Govindacharya urges EC to curb use of black money India born poet Vijay Seshadri bags 2014 Pulitzer Prize Secretary, Economic Affairs, Arvind Mayaram, designated as Finance Secretary Kota CBN arrests one person with heroin Just because assessee is liable to pay VAT on sale involved in supply of goods at canteen, it cannot be held that it is not liable to payment of service tax: High Court (See 'Breaking News') Assessee undertakes not to claim interest on refund - No estoppel! (See 'DDT' Column) World Trade to grow by 4.7% in 2014: WTO (See 'Mixed Buzz') Income tax - Whether income from letting out property is to be treated as business income merely because property is commercial in nature and rental is exorbitantly high - NO: ITAT (See 'Breaking News') Arrest under Service Tax - Kanda Rameshbabu Naidu case (See 'ST se GST tak' Column) Provisional Anti Dumping Duty on Cast Aluminium Alloy Wheels (See 'DDT') ST - During audit certain discrepancy was found in tax payment and immediately appellant paid same along with interest - no intention to evade tax - penalties imposed u/s 76, 77 & 78 set aside: CESTAT (See 'Breaking News') CENVAT Credit on inputs contained in scrap generated during manufacture of exempted goods - Assessee is entitled to credit - waste and scrap are 'final products' - Supreme Court (See 'DDT') CX - Notification having character of exemption cannot be forced upon an assessee if it does not suit him - Liberal and strict construction of an exemption provision is to be invoked at different stages of interpreting it: HC (See 'Breaking News') EU, Japan & US protest against Indonesian ban on export of mineral ores (See 'Mixed Buzz') Stay order passed by Bench in matter of applications filed by main appellant cannot be held to lay down any binding precedent of ratio - Pre-deposit ordered - Tribunal by Majority (See 'Breaking News') CBI Cashier in CBI Net (See 'DDT') Various Opinion Polls indicate thin Majority for BJP-led NDA Turkey suspects tax evasion by Twitter; directs Twitter to open office and start paying taxes Parliament competent to impose Service Tax on Restaurants and hotels - Single Judge Kerala HC order cannot be accepted: Bombay HC (See 'Breaking News') Yet another attack on PM; Book by former Coal Secretary describes him as weak PM ST - SC Judgment in Mafatlal cannot be applied to such an extent so as to totally override and brush aside provision like Sec 11B with rule of limitation carved out therein - Refund claim time barred: HC (See 'Breaking News') ST - Works Contract - Appellant cannot be compelled to pay ST under Composition Scheme or value service part by resorting to Rule 2A & thus be held ineligible for CENVAT availed on cement or TMT bars used for factory shed - Appeals allowed: CESTAT (See 'Breaking News') Excise Valuation and Sales Tax Retention ... Oh No, Not again! (See 'Guest Column') I-T - Whether marginal underutilization of FSI can be a valid ground for rejecting assessee's claim for deduction u/s 80IB (See '2014-TIOL-483-HC') UN Chief urges for universal legal climate deal by year-end (See 'Mixed Buzz') CX - Appellant, a manufacturer of tyres - sale of tubes & flaps to dealers in replacement market as trading activity - Credit taken on tubes inserted into tyre an cleared to OEM - no penalty: HC (See '2014-TIOL-556') EC under attack: Pawar says EC going 'overboard'; Azam Khan of SP says EC acting on behest of Congress Party IMF reform becoming major bone of contention between G-20 and USA ST - service provided by appellant to customers by facilitating fore-closure of loans clearly falls outside ambit of business auxiliary service: CESTAT (See 'Breaking News') Major OECD countries trim tax cre
 
Bookmark and Share
AG's Audit Visit to Factories and Premises of Assessees?

TIOL-DDT 1776
17.01.2012
Tuesday

THE Calcutta High Court had recently passed an order restraining the Comptroller and Auditor General (CAG) of India from auditing a private enterprise. We promised to bring this order as soon as possible. We bring it to you today.

The petitioner had submitted that under the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971, audit regarding the accounts of the State and Central authorities or the State companies can be conducted and as it is evident that audit is sought to be conducted regarding a private company, that is, the writ petitioner, prayer is that an interim order may be passed.

The State submitted that since the scope of Section 16 of the said Act is wide and such enactment has been made to secure an effective check on the assessment, collection and proper allocation of revenue and as it relates to assessment of service tax, no interim order may be passed restraining the same.

The High Court held, "let there be an interim order directing that no audit be conducted by the authorities till 16th March, 2012 or until further orders, whichever is earlier"

2012-TIOL-50-HC-KOL-ST

Service Tax - Commercial Training or Coaching service –Pre-deposit - Sri Chaitanya Case - SC grants Rs 60 Cr Relief

THE Commissioner had demanded a Service Tax of more than Rs. 87 Crores and imposed a penalty of Rs. 150 Crores on Sri Chaitanya Educational Committee for the Service Tax payable for the period 2003-2007.

The Tribunal granted full waiver of pre-deposit (2010-TIOL-1306-CESTAT-BANG) on the ground of limitation till the disposal of the appeal. The Department was not impressed and took the matter to the High Court. The High Court of Andhra Pradesh has set aside the order of the Tribunal and remanded the case by holding that the Tribunal ought not to have granted the order of stay or dispensation of pre-deposit without imposing conditions. (2011-TIOL-147-HC-AP-ST)

In remand proceedings, the Tribunal again did not order any pre-deposit keeping in view the fact of attachment of property valued at Rs 27 crores can be considered as enough security to safeguard the interest of revenue. (2011-TIOL-661-CESTAT-BANG)

Against this order, the department filed appeal again in High Court. The High Court held that the order of the Tribunal granting blanket waiver of pre-deposit ex facie constituted a clear erroneous exercise of discretion, warranting interference in appeal under Section 35-G of the 1944 Act.

On behalf of revenue, it was urged that the assessee may be directed to deposit 50% of the service tax liability under Section 35 F of the Central Excise Act, 1944. Having considered the competing interests of the Revenue and the hardship that is likely to be caused to the assessee in case the entire amount of service tax and penalty is directed to be deposited, which is around Rs 240 cores (Rs 87 crores tax liability with Rs 150 crores penalty) the High Court had ordered that the assessee shall deposit 1/3rd of the amount of service tax and penalty, about Rs. 80.00 crores as pre-deposit under Section 35-F of the 1944 Act. (2011-TIOL-694-HC-AP-ST)

So, the Revenue got more than what it pleaded for. It asked for only 50 percent of 87 Crores, but it got 80 Crores!

Obviously, the party had to appeal to the Supreme Court, which it did. In the Supreme Court also, the Counsel for Revenue fairly pleaded for a pre-deposit of 50 percent of the tax and the Supreme Court allowed a pre-deposit of a third of the Service Tax demand, which would come to about Rs. 30 Crores. We bring you the Supreme Court today - 2012-TIOL-02-SC-ST

An aside: Meanwhile the Department attached the property of the assesse under non-existing rules. (Please see DDT 1747 07.12.2011). The assesse challenged this attachment also in the High Court, which was dismissed - 2011-TIOL-800-HC-AP-ST

Utilizing Refunded SAD for Duty Payment (DEPB) - Extended Again

CBEC Circular No 27/2010-Customs, dated 13.08.2010, provided the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD (SAD) refunds for payment of duty in case of re-credited DEPB/Reward Scheme scrips upto 30.12.2010. However several representations have been received from trade and industry to extend the time up to 30th June, 2011 for using re-credited 4% CVD(SAD) amount in DEPB as they have not been able to utilize the re-credited DEPB / Reward Scheme scrips within the stipulated time.

By Circular No.11/2011-Customs, dated 24.02.2011, Government had extended this time till 30.06.2011. Still there were representations that the trade could not use this facility within the stipulated time.

So, a benign Government had extended it till 15.09.2011 by Circular No. 30/2011-Cus dated 19.07.2011, with a rider that no further extension shall be given.

Now they have further extended it till 31.03.2012, with a rider that "No further extension shall be given under any circumstances."

CBEC Circular No. 02/2012-Cus., Dated: January 16, 2012

No Retrospective VAT on Lease of Taxi Cabs/ Buses

IN 2008, the cabs in Hyderabad went off the roads protesting against the notices by the State VAT department levying VAT on lease of cabs, even though they were paying Service Tax. The State Government assured the cab owners that a committee would be formed to look into the applicability of VAT on the business transactions and come out with clear-cut guidelines. If VAT is found applicable by the committee, it will be effective with prospective date to be notified.

But by Ordinance No. 7 of 2011, the State Government imposed VAT with retrospective effect from 1.4.2005. The Government's decision was strengthened by a decision of the AP High Court in 2012-TIOL-49-HC-AP-CT

The agitated Cab owners again approached the State Government. And a benign Government has decided to waive the tax till 7.11.2011.

The Government Memo states:

++ Government has noted that an element of doubt existed among the taxi cab/bus owners about the taxability of the transaction involving transfer of right to use the vehicles in view of differing Court decisions on the issue.

++ Hence keeping in view all the attendant circumstances and legal position on the issue, Government have decided, as a special case, to waive the VAT demand on transactions involving transfer of right to use taxi cabs/ buses up to 7th November, 2011 provided the vehicle owner has paid Service Tax to the Union Government and has not collected VAT from the customer (lessee/ hirer of the vehicle).

++ However, VAT should be levied and collected on all such transactions with prospective effect from 08-11-2011.

++ Cases in which VAT dues have been already paid shall not however be reopened nor the taxes refunded.

So, from 8.11.2011, they have to pay both VAT and Service Tax?

AP Government Memo No. 42596/CT.II(1)/2011-1, Dated: November 11, 2011

Please also see ST Se GST Tak

Jurisprudentiol – Wednesday's cases

Legal Corner IconCentral Excise

Addition and mixing of polymers and additives to base bitumen does not result in manufacture of a new marketable commodity: SC

IT is trite to state that "manufacture" can be said to have taken place only when there is transformation of raw materials into a new and different article having a different identity, characteristic and use. It is well settled that mere improvement in quality does not amount to manufacture. It is only when the change or a series of changes take the commodity to a point where commercially it can no longer be regarded as the original commodity but is instead recognized as a new and distinct article that manufacture can be said to have taken place.

Income Tax

Whether when assessee purchases development rights for construction project and writes off certain payments as bad debt for extra land space detected after five years, and that too without making a claim, same is to be allowed u/s 36(1)(ii) - NO: ITAT

THE assessee, engaged in construction activities, purchased development rights for its projects known as Gangotri & Yamnotri. Payments were made in this respect. Against the outstanding credit balance of Rs 90,165/- as on 1.4.2004, the payment of Rs 9 lacs was made on the ground that the excess land space utilized for the aforesaid project was required to be adjusted. In view of utilization of the land space which was very negligible, the excess amount of Rs 8,09,835/- was written off being non-recoverable with the understanding that it was on account of the cost of extra land space utilization for the aforesaid project. The profitability in respect of the aforesaid project was already offered for taxation in the earlier years. Therefore, the assessee claimed the aforesaid payments as bad debts.

Service Tax

Review by Commissioner - date of passing the order would be date on which order or decision is made public or notified in some form or when it can be said to have left adjudicator's hand - Order passed after two years, not valid: CESTAT

UNLIKE the Tribunals or the courts, where the orders are pronounced in the open court, the orders passed by a Commissioner of Customs/Central Excise as adjudicating Authority or as reviewing authority under Section 84 of Finance Act, 1994 are not pronounced in the open court. Therefore, in such cases, the date of passing the order would be the date on which the order was dispatched to the assessee, not the date on which the decisions was recorded in the review file as on this date it can be said that the adjudicating authority has ceased to have authority to tear it off and draft a different order.

See our columns Tomorrow for the judgements

Until Tomorrow with more DDT

Have a Nice Day.

Mail your comments to vijaywrite@taxindiaonline.com

 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: AG audit of private companies in the name of checking revenue receipts

The Calcutta High Court has belled the cat by banning, even if for the time being, the double audit of CERA visits(along with IA of the department)and intrusive audit of private companies in the name of checking effectiveness of govt rules regarding assessment and control of revenue receipts. The CAG Act does not extend to audit of accounts of private companies. The job of visiting the excise & service tax assesees and auditing their accounts properly belongs to the central excise department only and even here this important power is absent in the Act but found only in the subordinate rules. The rules are lacking in guidelines for audit. It is an unguided power. In major VAT countries such audits are under a charter of powers and duties where the rights of the tax payers subjected to the audit are spelt out clearly. Many companies feel that as compared to CERA the departmental officers are more competent, well-informed and understand the systems and tax practices of the private sector better than the CERA. The departmental auditors sometimes pay heed to settled case laws which the CERA mostly ignores. The CERA audit is unusual when it is seen that the AG teams do not visit the assessees for audit of their private accounts in Customs, VAT and Income tax systems. In these tax cases, their audit is confined to government offices and the records kept there. It is really strange that the state of affairs continued for long decades till an intrepid company decided to take the bull by its horns.

Ravindran Pranatharthy
Advocate

Posted by Ravindran Pranatharthy
 
 
 
TIOL SEARCH
 
TIOL Mobile App
TIOL Subscriptions
 All-In-One Package
 Indirect Tax Package
 Income Tax Package
<< More Packages>>
 
   
             
Income Tax Customs Excise Service Tax FEMA DGFT SEZ Misc Pitara Budget
  • Notifications
  • Circulars
  • SC Cases
  • HC Cases
  • ITAT Cases
  • Instructions
  • Advance Ruling
  • Settlement
  • Other Case
  • Directorate of Income Tax (Systems)
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Settlement
  • Advance Ruling
  • Safeguard Duty Notfn
  • Anti-dumping Notfn
  • Drawback Cases
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Settlement
  • Advance Ruling
  • Excise Amendment
  • Clean Energy Cess Notfn
  • MISC Circulars
  • Commr.(A) Order
  • Notifications
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Miscellaneous
  • Advance Ruling
  • FAQ
  • Finance Act, 1994
  • Commr. (A) Orders
  • Removal of Difficulty
  • VCES
  • Accounting Head
  • Exchange Manual
  • Fema Notifications
  • SC Cases
  • HC Cases
  • RBI Notifications
  • Act
  • Rules
  • Regulations
  • Master Circulars
  • RBI Circulars
  • Notifications
  • Circulars
  • Public Notices
  • Trade Notice
  • FTDR Amendment 2010
  • MISC
  • State Acts
  • Notifications
  • Instructions
  • Act 2005
  • Rules 2006
  • DGEP
  • State Policy
  • SC Cases
  • HC Cases
  • VAT Cases
  • Deputation Posts
  • Service News
  • The Insider
  • Transfer
  • Promotion
  • Recruitment Rules
  • Transfer Policy
  • Training Circulars
  • Service Cases
  • MISC
  • Pay Commission
  • Cadre Review
  • Budget Circular 2013-14
  • Union Budgets
  • Economic Surveys
  • Budget Speeches
  • Finance Acts
  • Finance Bill
  • TRU - D. O. Letter
  • A Taxindiaonline Website. Copyright © 2014 Taxindiaonline.com Pvt.Ltd. All rights reserved. | Powered by 4th Dimension