TIOL-DDT 1015 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1015</font><br>
19.12.2008<br>
Friday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Toys – Tough Measures if Conditions are not Fulfilled</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Board's Circular No. 32/2001-Customs dated 31.5.2001, import of packaged products covered by the Standards of Weights & Measures Act, 1976 (SWMA) or the Rules made there under or any other law, cannot be allowed clearance into the country unless the Maximum Retail Price (MRP)/ Retail Sale Price in India and certain other particulars have been declared on the package.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, certain products have also been specified in Appendix-V to the Notification No.44 (RE-2000)1997-2002 dated 24.11.2000 issued by the DGFT which are subjected to compliance of mandatory Indian quality standards along with the requirement of registration of exporters of these products with Bureau of Indian Standards (BIS).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry of Consumer Affairs and Public Distribution, Department of Consumer Affairs has again brought to the notice of the Board about the need to comply with the requirement of Standards of Weights and Measures (Packaged Commodities) Rules, 1977, in specific reference to import of toys.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board reiterates that import of all pre-packaged commodities, inter alia, import of toys in packaged form, shall be subjected to compliance of all the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may also be ensured that import of toys or similar imported packaged commodities is not allowed clearance for home consumption unless such pre-packaged toys carry the mandatory declarations as specified in the DGFT's above mentioned notification.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case, it is found that the importers are unable to fulfill the requirement of mandatory declarations under Rule 6 before clearance by Customs for home consumption, the imported goods shall either be <strong>confiscated absolutely </strong> or allowed re-export only as well as necessary <strong>penal action taken against the importer </strong> for non-compliance with the existing legal provisions as applicable on import of goods.</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=25&filename=notification/custom/2008/cuscir08_21.htm" target="_blank">CBEC
Circular No.21/2008, Dated: December 18, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEPB Benefit for Milk and Milk Products Restored</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has amended the “Schedule of DEPB Rates” as “DEPB Benefit against export of Milk and Milk Products & Casein stands restored for shipments with immediate effect.”</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=47&filename=notification/dgft/2008/dgft08pn117.htm" target="_blank">DGFT PN No. 117 (RE-2008)/2004-2009, Dated: December 16, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Allocation of work to Minister of State (Revenue)</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Prime Minister has approved the allocation relating to following items of work in addition to the work already allocated to the Minister of State for Revenue in the Ministry of Finance.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Creation of posts below the level of Joint Secretary.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Cadre review involving Group A, B, C and D posts.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Proposals to be placed before the Cabinet Committee on Accommodation.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Proposals relating to revision of salaries and allowances consequent to the recommendations made by the 6th Pay Commission.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Answering all Starred and Unstarred Questions (after Minister i/c has been briefed on replies for starred questions) and all Parliamentary work including verification and authentication of notifications, other documents reports, etc. which are required to be laid on the Table of either House.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Disposal of VIP references.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Cases of training/deputation abroad.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Cases relating to premature retirement under FR 56 and Rule 48 of Pension Rules.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Administration of Excise in the Union Territories including all questions relating to alcoholic liquor for human consumption, opium, cannabis and other narcotic drugs and narcotics.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Matters relating to the Customs, Excise and Service Tax Appellate Tribunal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Anti-evasion income Tax searches-cum-seizure matters.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. Matters relating to cultivation of opium poppy, manufacture of opium derivates, sale of opium and opium derivates and control thereof.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. Administration of Narcotic Drugs and Psychotropic Substances Act, 1985.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All other matters not specifically delegated to the MOS will be submitted directly to FM that is the Prime Minister.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Maharashtra VAT - submission of Audit Report in Form-704 – Last Date Will NOT be Extended</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prescribed date for submission of Audit Report in Form-704 in respect of the year 2007-08 is 31st January, 2009. All reports, therefore, will have to be submitted on or before this date. The Maharashtra Sales tax Commissioner has informed that <strong>The date will not be extended in any circumstances.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The existing Form-704 was replaced by the New Form-704 published in the Official Gazette on the 10th November, 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations were received from the Western India Regional Council of the Institute of Chartered Accountants of India and The Institute Of Costs and Works Accountants of India. The Regional Council has raised several important issues regarding the New Form-704 and has sought clarifications. Meetings have been held with the representatives of both the Institutes. The required clarifications will be issued separately. The representatives of the Western Council have also requested that the due date for filing the Report is 31st January, 2009 and as little time is left for preparing the Report in the New Form, the old Form-704 may be permitted to be used even after the 10th November, 2008 for submitting the Audit Report in respect of the year 2007-08.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner has accepted this request. Accordingly, he clarifies that Audit Report in the Old Form-704 in respect of the year 2007-08 will be accepted even after the 10 th November, 2008. In some instances Audit Reports have been filed in Old Form-704 after the 10 th November, 2008. It is clarified that these reports will be treated as valid. This concession is <strong>applicable only for the audit report upto the year 2007-08.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Reports filed in the new form will also be valid.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mumbaicircular.htm" target="_blank">Maharashtra Sales Tax Commissioner's Trade Circular No. - 41 T of 2008 Dated 18th December, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Illogical Fixing of Tariff Value for Brass Scrap - Jamnagar Chamber Of Commerce protests</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Jamnagar is having approximately 4000 small brass parts manufacturing units. Their major source of raw material of brass is brass scrap which is imported. Import duty levied on brass scrap is on tariff rates and CBEC is deciding those tariff rates frequently.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Jamnagar Chamber of commerce and Industry has submitted a representation to the Prime Minister that “internationally the price of brass scrap is approximately 1800 USD even though till 15/12/2008 the import duty was payable on import of brass scrap is at 3525 USD per MT with effect from 17.11.2008. However surprisingly and shockingly CBEC has revised the rates upward from 3525 USD to 4082 USD per MT as per non tariff notification dated 15.12.2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are really shocked to say that at present the customs duty payable by importer on tariff price of 4082 USD Per MT when Internationally those goods are available at price of 1800 USD per MT. This shows that duty is payable 2.5 times more than what should have been payable at transaction price.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of above, the Chamber submitted that, “fixation of brass tariff rates in such a fashion which is Illogical, shocking and would be death knell in units solely based on import of this raw material. Therefore we request you to kindly revise downward this tariff rates linked with international rates.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chamber also requested the PM <em>to kindly provide us the basis on which the tariff of brass scrap is fixed.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2762" target="_blank">TIOL-DDT 222, 17-10-2005</a>, </strong>we had explained how tariff values are fixed.</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">– Monday's cases</font></strong></font></p>
<p align="justify"><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><font color="#663399" 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>Confiscated gold sold during pendency of appeal - sale proceeds to be paid to successful appellant - since what is returned is cash and not gold, no duty: Bombay High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SINCE</strong> the petitioner is seeking redemption of the confiscated gold, he cannot escape payment of fine and penalty. As regards payment of duty is concerned, duty would be payable only if the gold was actually allowed to be redeemed. In the present case, what is being given is the sale proceeds and not the gold as such. In such a case, the question of paying duty in respect of the sale proceeds would not arise. In this view of the matter, the customs authorities are liable to return the entire sale proceeds without deducting therefrom the duty but subject to deduction of fine and penalty.</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>Deemed dividend can be taxed only in hands of a person who is a shareholder of lender company and not in hands of non-shareholders; ITAT Special Bench</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION
2(22)(e) </strong>in the Income Tax Act is related to dividend income.
From the AY 1988, the CBDT also introduced the concept of deemed dividend.
And the objective was to curb the mischief of closely-held group companies
making loans and advances to another concern only to benefit the shareholders
having substantial interest in that. However, for the assessing officer
it became a rampant practice to invoke the deeming fiction to bring all
sorts of payments under the tax net. One such case was referred to the
Special Bench which has in an interesting and lucidly explained decision,
held that <strong> deemed dividend can be assessed only in the hands of
a person who is a shareholder of the lender company and not in the hands
of a person other than a shareholder.</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise (and allied laws)</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Public Interest Litigation instigated by Central Excise Supdt against Hyundai Motors alleging large scale evasion – Petition vexatious; launched purely with a view to wreck vengeance – dismissed – High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The <em>Dramatis Personae:</em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>The petitioner </strong> in this PIL claims itself to be a Trust registered under the Trust Act. It is stated to have taken up a tirade against corruption in public life.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>The Respondents </strong> –</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The Secretary, Department Of Revenue,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The Chairman, CBEC,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The Chief Commissioner, Central Excise Chennai Zone</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The Commissioner of Central Excise Chennai-IV,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The Managing Director, Hyundai Motors India Limited.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>The <em>Agent provocateur </em> :- </strong>Samuel C. Wilson, a Superintendent of Central Excise</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a public interest litigation unless a strong case is made out as regards the irregularity or illegality in the action of any party against whom such a complaint is raised and such a complaint discloses that illegality or irregularity was carried out against public interest or the interest of the nation, it would be travesty of justice if the Courts were to still countenance such a prayer of the petitioner and order any roving investigation to be made by any public authority.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more<strong> DDT</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend.</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>
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