TIOL-DDT 1019 · 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 1019</font><br>
26.12.2008<br>
Friday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Reduction in duty rates across the board - Shouldn't abatement rates and rule 6 amount payment follow suit?</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Abatement reduced</strong></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=8275" target="_blank">DDT 1008 - 10 12 2008</a></strong>, we had reported,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">"We have been receiving calls from anxious assessees as to whether the abatement rates for MRP based assessment, had been reduced consequent to 4% reduction in excise duties across the board. They wondered why there is no simultaneous amendment in the notification <a href="http://taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MzY0NA==" target="_blank"><strong>14/2008 CE (N.T)</strong></a> dated 01.03.2008 prescribing various rates of abatement for commodities subjected to MRP based valuation. Since the duties have been reduced by four percentage points, shouldn't these abatement rates be also reduced?</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">We were surprised that the assessees were so concerned instead of enjoying the benefit; then a soft drinks giant informed us that what he really wanted to know is whether such a notification had been issued and we had not carried it. He also told us, "the trade is happy; don't remind the government about this."</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, the government has heard and the joy of the trade is short lived - just about a fortnight.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government had late Wednesday evening issued a notification (and we were the only ones around to cover it) amending Notification No. <strong><a href="http://taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MzY0NA==" target="_blank">14/2008 CE(NT)</a></strong> reducing the abatement rates - by 3% points for most of the commodities covered under the scheme; 35% abatement is reduced to 30%, 38% to 35% and 31.5% also to 30%. Manufacturers of aerated waters should be happy that there is only a marginal reduction from 40.5% to 40%.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is the point in reducing the abatement from 40.5% to 40%? Is it a mistake?</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=30&filename=notification/excise/2008/exnt08_49.htm" target="_blank">Notification No. No. 49/2008-Central Excise ( N.T. ) - Dated 24 December 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rule 6 Amendment yet to Come. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had also noted in that <strong>DDT</strong>,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">This 10% payment made its appearance when the CCR, 2002 gave way to CCR, 2004 on 10.09.2004. Earlier, it was 8% since the day such a rule came into being on 01.09.1996 in the form of rule 57CC, 57AD of CER, 1944, rule 6 of CCR, 2001. Incidentally, when it was made 10% on 10.09.2004, the 2% Education Cess was already in vogue since 09.07.2004. Although the Secondary & Higher Education Cess of 1% came to be imposed since 01.03.2007, the percentage of 10% amount still continued.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> The Union Budget, 2008 also failed to address this 10% factor suggesting that it is an "amount fixed" and would remain constant, come what may.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> Now, that the CENVAT duties have been reduced by four percentage points across the board, except, of course in respect of petroleum products, this 10% amount to paid on the value of the exempted goods certainly needs a correction.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This correction is yet to come.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>10% Ethanol blended petrol - Notifications</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exempted from excise duty: </strong>10% Ethanol blended petrol consisting of by volume, of 90% Motor spirit, (commonly known as petrol), on which the appropriate duties of excise have been paid and, of 10% ethanol on which the appropriate duties of excise have been paid; and conforming to Bureau of Indian Standards specification 2796, is exempted from the whole of excise duty. -<br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_64.htm" target="_blank">Notification No. 64/2008-Central Excise - Dated 24 December 2008</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exempted from additional excise duty: </strong>The above kind of Ethanol blended petrol is exempted from special additional excise duty - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_62.htm" target="_blank">Notification No. 62/2008-Central Excise - Dated 24 December 2008</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exempted from special additional excise duty: </strong>The above kind of Ethanol blended petrol is exempted from special additional excise duty - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_63.htm" target="_blank">Notification No. 63/2008-Central Excise - Dated 24 December 2008</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Value for petrol used in ethanol blended petrol to be the factory price - </strong>exempted from so much of the duty of excise leviable thereon under the said Schedules, as is in excess of the duty that would have been leviable on such goods under the said Schedules, if sold by the manufacturer for delivery at the time of removal of such goods or at any other time nearest to the removal of such goods, where the manufacturer and the buyer are not related and the price is the sole consideration. -<br>
<strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_61.htm" target="_blank">Notification No. 61/2008-Central Excise - Dated 24 December 2008</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see our stories <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=83&filename=newsch/oil.htm">'Duty Concession for ethanol mixed petrol - Lapse or lapsed' </a></strong>and <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1564">Lapsed Lapse Rectified : Ethanol Blended Petrol Exempted</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cement Clinker to attract Rs. 300 duty</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Effective rate of duty on Cement Clinker has been fixed at Rs. 300/- PMT</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=30&filename=notification/excise/2008/etariff08_64.htm" target="_blank">Notification No. 64/2008-Central Excise - Dated: 24 December 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Duty Exemption for EPCG imports</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3% Customs Duty for imports under EPCG Scheme to Common Service Providers designated by the Director General of Foreign Trade or Department of Commerce in Towns Of Export Excellence. - The following goods are allowed,</font></p>
<blockquote>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Capital goods for pre-production, production and post production including second hand capital goods.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Capital goods in Semi Knocked Down (SKD)/Completely Knocked Down (CKD) conditions to be assembled into capital goods by the importer.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Spare parts of goods specified at Serial Nos.1 and 2 as actually imported and required for maintenance of capital goods so imported, assembled, or manufactured.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Spare parts for the existing plant and machinery imported under this scheme.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_136.htm" target="_blank">Notification No. 136/2008-Customs - Dated 24 December 2008 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SHIVAKANT JHA's Legal Potpourri - our new feature </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
are indeed privileged to present the great Crusader and Legal Luminary Shivakant
Jha, a former Chief Commissioner of Income Tax, equally at ease with Bhagavad
Gita and Double Tax Avoidance Agreements, in our new feature - <strong>SHIVA
KANT JHA's Legal Potpourri. </strong>Our <strong>AZADI BACHAO </strong> column
is renamed as <strong>SHIVA KANT JHA's Legal Potpourri </strong>and will
contain incisive analyses by Mr. Jha. We present our new feature today which
Mr Jha ends with, <strong><font color="#FF6633">"In life's frustrating criss-cross,
Goddess of Justice assures some soothing vernal breeze. More she reigns with
majesty, higher we ascend in culture and civilization."</font></strong></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 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>Central Excise - CENVAT Credit - reversal of credit amounts to non-taking of credit on the inputs - the issue is well settled - High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken the credit of the duty paid in the inputs used in manufacture of these goods. Since the Tribunal has correctly applied the law laid down by the Supreme Court and the issue is well settled, Departmental appeal dismissed.</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>Transfer Pricing - if assessee gets dividend from associated enterprise which is taxable in India, can Revenue even then make adjustments under TP provisions? - Will it not amount to double taxation? - Tribunal says no deduction to extent of dividend income admissible under TP laws - no double taxation</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRANSFER</strong> Pricing provisions come into play in case of cross-border transactions between a company and its associated enterprises (AEs). The issue which came up before the Tribunal recently was - if the assessee company receives dividend from its AEs which is taxable in India, can Revenue make additions on account of TP provisions? If the Revenue does so, will it not amount to double taxation?</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Stay order - Subsequent decision can be basis of modification - pre-deposit order modified - CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANY</strong> subsequent decisions rendered by the Courts deciding disputed issue should be made basis of modifications as held by the Larger Bench of Tribunal in the case of <em>Hindustan Lever Ltd. vs. CCE <strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-1111-CESTAT-MUM-LB.htm"><font size="1">2006-TIOL-1111-CESTAT-MUM-LB</font></a>)</strong></em>. Further, it stands recorded in judgment of Bombay High Court in the case of <em>Sarla Performance Fibers Ltd. vs. UOI <strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2008/2008-TIOL-516-HC-MUM-CX.htm"><font size="1">2008-TIOL-516-HC-MUM-CX</font></a>) </strong></em> that modification of stay order is an inherent power of the Tribunal.</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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