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ST - Payment of overriding commission to appellant for promoting sale of goods of manufacturers by making available marketing network & adding brand value to products to attract customers - appellant to pay ST under BAS - demand and penalty upheld: CESTAT (See 'Breaking News') Central Excise - Valuation - Promotional discount paid from dealer's margin whether includible in assessable value - Maruti ordered to pre-deposit Rs 150 Crores: CESTAT (See 'Breaking News') CX - Valuation - Maruti case – Another Fiat in the making? (See 'DDT') Income tax - Whether sale of immovable property through medium of MoU falls within meaning of transfer as per Sec 2(47) - YES: HC (See 'Breaking News') Is Rule 14 ultra vires Central Excise Act? (See 'ST se GST tak') Service Tax - Appeals - Pre-deposit of  Rs. 20 Crore ordered by Tribunal on Agency of State, waived: High Court (See 'Breaking News') Six Months time for taking CENVAT Credit - Applicable for invoices issued prior to 31.08.2014? (See 'DDT') Why People don’t pay taxes? (See 'DDT' Column) CX - Commissioner has no jurisdiction to reallocate CENVAT distributed by ISD - assessee is not entitled to take credit on services mentioned in rule 6(5) which is attributable to trading as during material period it was neither taxable nor exempted: CESTAT (See 'Breaking News') I-T - Whether commission paid to foreign agent for liaisoning and monitoring work outside India would be allowed deduction u/s 35: HC (See '2014-TIOL-1851') Growing use of armed drones in domestic jurisdiction may violate rights of citizens: UN Experts (See 'Mixed Buzz') CX - Commissioner has no jurisdiction to reallocate CENVAT distributed by ISD - assessee is not entitled to take credit on services mentioned in rule 6(5) which is attributable to trading as during material period it was neither taxable nor exempted: CESTAT (See 'Breaking News') I-T - Whether commission paid to foreign agent for liaisoning and monitoring work outside India would be allowed deduction u/s 35: HC (See '2014-TIOL-1851') Growing use of armed drones in domestic jurisdiction may violate rights of citizens: UN Experts (See 'Mixed Buzz') Diwali celebrations in Srinagar: PM announces Rs 745 Cr relief package for J&K India to sign MoU in Beijing as founding member of Asia Infrastructure Investment Bank PM flays attack on Canadian Parliament Rising NPAs - Fault lies with our lax Regulator! (See 'The Cob (Web)' Column) Income tax - Whether any adjustment to value of property as on 01.04.1981 can be made based on the DVO's Report of 2012 - NO: ITAT (See '2014-TIOL-760') Mega Diwali Gift - FM approves promotion of 2162 Group B officers of CBEC to Group A on in-situ basis (See order in 'Promotion' in 'Pitara') Maritime trade - Somalian pirates continue to be a serious risk to shipping business, says UN (See 'Breaking News') WHO Report 2014: 9 mn New TB patients in 2013; 1.5 mn died; calls for more research funding (See 'Breaking News') ST - Inclusion of reimbursement of expenses - Amounts received by way of reimbursement from HPCL - reimbursement like electricity charges, calendar printing & others are deductible from gross value (See '2014-TIOL-2068') MSME Ministry bags ISO certification(See 'Mixed Buzz') TIOL wishes all Netizens a very Happy Diwali! Congress dares Modi Govt to release names of black money hoarders and not to resort to 'selective leakage' Justice Virender Singh of J&K HC appointed as Chief Justice of Jharkhand HC Govt appoints former Chief Election Commissioner N Gopalaswami as Chairman of Kalakshetra Foundation, Chennai North Block invites applications for post of DG, CEIB (See 'Pitara') Customs - LNG imported for Generation of Electricity – Time limit to produce certificate extended (See 'DDT' Column) Interest on differential duty paid due to price escalation - Issue covered by SC decision in SKF India Ltd - No reason to take different view by following Karnataka HC decision in BHEL case: HC (See 'Breaking News') Reforms in I-T Settlement Commission Recruitment Rules needed (See 'Guest' Column) Income tax - Whether when Revenue has failed to establish that business was so arranged that more profit could be attributed to eligible unit, even then benefit of Sec 80IA can be denied - NO: HC (See 'Breaking News') Cold rolled flat products of stainless steel – India initiates Safeguard Investigation (See 'DDT' Column) Cus - Notfn. 64/88 - It is a settled position in law that it is for person who is claiming benefit of exemption Notification to lead evidence to show that he is entitled for same - Appellant has completely failed in this regard: CESTAT (See 'Breaking News') PM calls for synergy between Digial India & Urban Renewal Missions (See 'Mixed Buzz')
 
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Income Tax - How to find out the difference between trader in stocks and investor in stocks

TIOL-DDT 366
19 05 2006
Friday

The CBDT proposes to issue guidelines to determine whether a person is a trader in stocks or an investor in stocks. One of the guidelines is the time devoted and to the extent to which it is the means of livelihood. Board invites comments from the public on this.

Deduction under 80HHC – Cascading effect of amendment in other statutes

The Income Tax Department has encountered a strange problem. As per Section 80HHC certain deductions are allowed on income earned from profits from exports. The Section mentions the Customs and Central Excise Duty Drawback Rules, 1971. But these rules have been replaced by the Customs and Central Excise Duty Drawback Rules, 1995. Now there are some smart officers who wanted to deny the benefit of 80HHC on the ground that there is no Duty Drawback Rules, 1971.

Now the CBDT has clarified that by virtue of the General Clauses Act, the benefits of Section 80HHC cannot be denied just because the Section mentions the 1971 Rules and not the 1995 rules.

This is what happens with too many enactments finding place in too many other acts and too many amendments with no clue as to what is mentioned where.

CBDT Circular No. 5/2006, dated May 15, 2006

Customs and Central Excise  amendments

Re-import of exported goods – Exemption Notification No. 94/96-Cus. grants exemption to various categories of exported goods when reimported. Now cut and polished precious and semiprecious stones exported for treatment abroad is included in the list.

Cut and polished diamonds Cut and polished diamonds when reimported after certification/grading by certain agencies are exempted. Now one more agency “Diamond Trading Company U.K.” is included in the list of grading agencies.

Exemption to EOUs – Conditions relaxed Notification No. 52/2003-Cus. dated 31-3-2003 allows exemption to goods imported by EOUs, STP and ESTP. Under the scheme certain conditions are now relaxed:

1) Goods may be transferred to other EOUs/SEZ under intimation to the proper officer - no need of permission.

2) Goods may be removed for test, repair etc under intimation to the proper officer  - no permission required.

3) Exemption is now allowed for import of promotional materials like brochures, literatures, pamphlets, hoardings, catalogues and posters.

Similar changes are made in the Central Excise exemption for procurement of goods by EOUs.

Notification No. 44/2006-Customs and 31/2006-C.E., dated May 17, 2006

FTP Amendments - The DGFT had amended the Hand Book of Procedures

1) In Para 2.12 the validity period of 24 months for DFIA is deleted.

2) Certain sea ports/air ports/ICDs/LCS added to the list of ports for imports and exports under the advance authorisation and DEPB.

3) The period of fulfilling export obligation in case of import of spices is restricted to 120 days.

Vehicles imported for R&D – Registration

As per Notification No. 2 dated 7.4.2006 vehicle manufactures and auto component manufacturers were allowed to import vehicles for R & D purposes. One of the conditions for such imports was that the vehicle will not be registered under the CMVR Rules in the country and will not ply on Indian roads. Now DGFT clarifies that the condition is applicable only for use as a passenger vehicle. For the limited purpose of carrying out endurance test, evaluation test and for other testing purposes, the vehicle may be registered as provided for in the CMVR Rules.

POLICY CIRCULAR NO. 06(RE-06)/2004-2009 Dated: May 18, 2006

non obstante - Notwithstanding. (any statute to the contrary)

In absence non obstante clause allowing prevailing of Narcotic Drugs and Psychotropic Substances Act, 1985 over Evidence Act, 1872 such statements could only be treated as previous statements under Section 145 ibid and not as substantive evidence

Retrospective amendment of excise rules empowering Revenue to recover duty - Even in such a case, demand has to be within limitation prescribed under Section 11A of Central Excise Act, 1944, in absence of non-obstante clause in amendment

Although a non obstante clause is used in Article 253 of the Constitution of India, it only explains and provides for the legislative competence of the Parliament for the whole or any part of the territory for the purpose of implementing any treaty or agreement with any other country or any decision made at any international conference etc. If the Parliament or the State Legislature are competent to lay down the guidelines and leave the implementation of the guidelines to the rule making authority, such a law cannot be held to be ultra vires because of a non obstante clause in Article 253.

Until Monday with more DDT

Have a nice Weekend.

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