TIOL-DDT 1000 · the untouched capture
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<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1000</font><br />
27.11.2008<br />
Thursday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YES, WE CAN</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last week, I was driving past Lumbini Park in Hyderabad, where a bomb blast had killed more than ten innocent people in a blast last year. I could see hundreds of people going into the Park – the blast had no effect. We are a people who can easily get over tragedies and carry on with our lives – and Mumbai will surely recover soon from yesterday's mad terrorist strikes. As Obama said, <font color="#FF6633">“ yes, We can;</font> <font color="#FF6633">Yes, we can heal this nation. Yes, we can seize our future.”</font></font></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt1000/mumbai_taj.jpg" alt="Taj Hotel, Mumbai" width="400" height="282" border="1" /></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Heritage under fire – the burning Taj in Mumbai</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the Government seems to be helpless against the mindless terrorism, what we the Citizens can do is perhaps to ignore the terrorists and carry on with our lives – of course it is not easy when some of us get blown up – but the terrorist should not have a feeling of success in bringing life to a standstill. It is really sad that some of the top encounter specialists of the Mumbai Police are dead. And they were not wearing bullet-proof jackets. Sometime back around 40 specially trained greyhound cops of Andhra Pradesh were killed by Naxalites, while they were travelling in an open boat. The best of cops should be trained not to be complacent – we can't afford to lose them.</font></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt1000/ddt_1000_icon.gif" width="161" height="192" /></p>
<p align="center"><font color="#006600" size="5" face="Verdana, Arial, Helvetica, sans-serif"><strong>YES, WE CAN – DDT is 1000</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When <strong>TIOL </strong> started this Column, even our most ardent supporters did not give us a chance for more than a hundred editions. “What will you write every day and that too on taxation?” was the doubt expressed by many.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We started with the sole intention of translating into understandable English the notifications, circulars, clarifications, amendments and several other forms of laws which torment the tax payer. Today complying with tax laws is more difficult than paying taxes and understanding the tax laws is almost an impossible task. Through <strong>DDT, </strong> we planned to build a bridge between the North Block and the multitude of tax payers; but after we started construction, we realised that North Block alone is not enough; there are many other Blocks and Bhavans which actually block information and leave the tax payer in perpetual confusion. Then we realised that a simple bridge is not enough, but we have to build complicated flyovers and walkovers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though there was initial resistance from the Authorities in Government, slowly many of them realised that what we do help them too. <strong>DDT </strong> claims no great success in changing the laws, though many a time the Government was very responsive and several issues have been resolved, but the basic purpose of bringing to you the law as it unfolds, has been to a large extend appreciated. A senior officer told me, “you have made us lazy; now we don't need to read anything other than <strong>DDT </strong> to keep ourselves well informed about what is happening”. It is not as if it was bouquets all through; we had our share of brickbats and there were occasions when on the same issue both the Revenue officers and the assessees were unhappy with our views.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> is not supposed to be a column to criticise the Government; it is all about informing and if possible correcting lapses – to make the life of both the tax payer and the tax collector less miserable. We are very positive and incorrigibly optimistic and to quote Obama again,<font color="#FF6633"> And where we are met with cynicism and doubt and fear and those who tell us that we can't, we will respond with that timeless creed that sums up our spirit in three simple words -- <strong>yes, we can</strong>.</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not always easy to get information from the maze of Government and somehow the babus are very reluctant to part with even public notifications. This is something we have perhaps inherited from the British Rulers. In “Yes, Minister”, the Minister asks his Secretary about the people working in the Department and he replies, <em>"Well briefly, Sir, I am the Permanent Under Secretary of State, known as the Permanent Secretary. Woolley here is your Principal Private Secretary, I too have a Principal Private Secretary and he is the Principal Private Secretary to the Permanent Secretary. Directly responsible to me are 10 Deputy Secretaries, 87 Under Secretaries and 219 Assistant Secretaries. Directly responsible to the Principal Private Secretary are plain Private Secretaries, and the Prime Minister will be appointing 2 Parliamentary Under Secretaries and you will be appointing your own Parliamentary Private Secretary."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Minister asks, <em>"Do they all type?"</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Government, <strong>Restricted </strong> means it was in the papers yesterday. <strong>Confidential </strong> means it won't be in the papers until today. “<strong>Under consideration</strong>” means they lost the file, <strong>under active consideration </strong> means they are trying to find it.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Democracy is all about asking the government awkward questions and government is all about not answering them.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tremendous feedback which we receive everyday with a mix of praise and flak serves as a reminder for us to be on our toes while bringing you the latest in the field of taxation. <strong>With the same zeal and enthusiasm we bring to you today our 1000th version of DDT. </strong>TIOL sincerely thanks all the netizens for their kind hearted support all through the 1000 DDTs.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just before midnight, I had a surprise visit from two friends who came with a bouquet and a cake to celebrate <strong>DDT 1000</strong>.</font></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt1000/ddt_cake1.JPG" alt="DDT 1000" width="450" height="338" border="1" /></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt1000/ddt_cake2.JPG" alt="DDT 1000" width="450" height="338" border="1" /></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt1000/ddt_cake3.JPG" alt="DDT 1000" width="450" height="338" border="1" /></p>
<p align="justify"><strong><font color="#FF6633" size="4" face="Verdana, Arial, Helvetica, sans-serif">DDT is grateful to all the Netizens for the tremendous support and the government for making it possible. YES WE CAN.</font></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC notifies exchange rates for December 2008</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has notified the Exchange Rates for Imported Goods and Export Goods with effect from 1st December 2008. Notification NO.115/2008 (NT)-CUSTOMS, Dated: 29th October, 2008, is superseded.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_130.htm" target="_blank">Notification NO. 130/2008 (NT)-CUSTOMS, Dated: November 25, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Problems faced by new units under Advance License and EPCG licenses.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is a genuine problem faced by an assessee because of lack of co-ordination between Revenue and Commerce Departments.</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">We have set up a new manufacturing facility for processing of Poly Tetra Fluoro Ethylene (commonly known as PTFE or Teflon) Powder into products such as PTFE Rods, Tubes, Sheets and Films. We import entire requirement of raw material from Russia and Europe for our export production as the quality raw material is not available in India.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT had deleted the condition of furnishing of 100% Bank Guarantee equivalent to import duty from the advance license on achieving exports of Rs. 3.00 Crores but the Customs Authorities are not accepting the deleted condition and are insisting on BG to be furnished equivalent to 15% of Customs duty + Interest.Being a new company and facing considerable difficulty in getting orders from overseas market due to recessionary conditions in Europe & US, we are finding it difficult to furnish for 1 year of commercial operations 15% BG on all imports for export production.The Board circular no. 58 of 2004 - Cus wherein it has been specified that ‘the manufacturer exporter registered with Central Excise who have been exporting during the previous two financial years and have minimum export of Rs.1 Crore or more during the preceding year are exempted from furnishing BG. A new unit which has achieved exports of Rs. 5 Crores in the current year are exempted from furnishing BG on imports against EPCG/Advance License.In the current financial situation, medium size units like ours who have achieved exports of Rs.3.00 Crores in the current year are in a difficult situation to provide/furnish BG of 15% of import duty + interest on imports for export production.It is unfortunate, that the raw materials we import from Russia are subject to anti dumping duty and we are required to furnish BG for basic customs duty + countervailing duty + anti dumping duty + interest on duty.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">We find that there has been no amendment to the Board's Circular No. 58/2004. It is earnestly requested to kindly amend the above circular and reduce the eligibility of ‘Nil' Bank Guarantee security for exporters who have achieved Rs.3 Crores or more instead Rs.5 Crores or more in the current year or first year of operations.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the CBEC look into this?</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Import of Fungus infected Garlic – Supreme Court directs destruction by fire</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is strong risk of this fungus (at present totality absent in India) affecting the future cultivation in India for the reason that the scales of such infected garlic are peeled off for its use, thrown into dust bins as garbage and used a manure. This is one of the ways by which some of the fungus got introduced in countries including India and elsewhere and caused permanent damage to the crops which the agricultural experts found difficult to solve.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court ordered destruction of the infected garlic. And today, we bring you this Supreme Court judgement delivered yesterday. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8209" target="_blank">Breaking News</a></strong>.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Gift Wrapper</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I got this mail from a regular contributor to TIOL.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">As I was having fun with my little kid, I hugged him and said “You are God's gift my son”. My wife shouted from behind “Then, who am I?” A Gift Wrapper. I said instantaneously. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600">– Tomorrow's cases</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left" /></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Utilization of CENVAT Credit for payment of duty during forfeiture period - Commissioner(A) has shown considerable leniency in reducing penalty - Tribunal orders pre-deposit</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER </strong>Rule 8 of the Central Excise Rules, 2002, an assessee is required to pay Central Excise duty on the clearance effected in a particular month by 5th day of the succeeding month. Duty can, however, be paid along with interest within a further period of 30 days from due date, but in case the duty is paid after the expiry of 30 days, then under the provisions of Rule 8(3A) <em>[as it existed prior to 1.6.2006]</em>, the facility of paying duty in monthly instalments can be forfeited and duty is required to be paid on each consignment through PLA and no payment can be made through Cenvat credit account.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Relief under two provisions of law – Section 80 HHE or 10B - if in an earlier year assessee waived his right then he cannot be stopped to claim benefit in subsequent year; Withdrawal of claim is mandatory, it can be done before assessment is complete: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LEGALITY</strong> has to be seen in the year in which the claim is preferred and if in an earlier year the assessee waived his right then he cannot be stopped to claim the benefit in the subsequent year. There is no reason as to why the assessee could be denied deduction under section 10B for the A.Ys 2003-04 & 2004-05 when no material has been brought on record to establish against the assessee who continued with the same business except the change in share holding which does not indicate any reconstruction in the assessee's business. In view of the assessee choosing to claim deduction u/s. 10B only by way of a revised return although was entitled to claim deduction under section 10B but was allowed deduction u/s. 80HHE would not disentitle the assessee to claim the deduction under section 10B of the Income Tax Act.</font></p>
<p align="justify"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Reward to Informers - contraband seized two months after information was given, but same quantity and from same ship as furnished by informer - Department claims seizure was based on intelligence gathered later by an officer - Single Judge orders reward - Revenue appeal dismissed: Madras High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>fact, this case in writ appeal is not based on any question on law and is dependent on the question of facts, particularly the question of fact as admitted by parties. The Department is in appeal against a Single Judge's order allowing reward to an informer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns tomorrow for the judgements</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with the <font color="#663399" size="7">1001st</font> edition of <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> <p> </p>
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