TIOL-DDT 1025 · 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 1025</font><br>
05.01.2009<br>
Monday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Debit from DEPB for Imports under EPCG - <em><font color="#FF6633">Revenue</font> </em> ignores <em><font color="#FF6633">Commerce</font> </em> promise</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per para 4.3.1 of the Annual Supplement 2008 of the Foreign Trade Policy 2004-09, DEPB scrips can also be utilised for payment of duty against imports under EPCG scheme with effect from 01.01.2009. The Policy may say anything, but it has meaning only when the Revenue Department issues notifications to make the Policy workable. For example, when the Commerce Minister announced that the EPCG duty is being reduced from 5% to 3%, it could be put into effect only after the Revenue Department issued Notification No.64/2008 dated 09.05.2008. Now, if an importer, assuming there has been so much stimulus in the economy, and anyway the policy states that from 01.01.2009 EPCG duty can be paid from DEPB credit, tries to do so at any Customs Station, it will simply be not allowed. The Customs will ask for the Notification. Sadly, there is no such notification.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In these times of deep financial crisis, many importers will have to pay cash instead of utilising their DEPB, which would cause them irreparable fiscal damage.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has been doing so much of good work in the recent past, and we hope they will continue the good work in this new year - to start with, may be they should immediately amend Notification No.64/2008 to provide for debit from DEPB.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, the trade associations should also keep track of these deadly datelines and remind the Board well in advance.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti-dumping duty on NBR - dies in Oct 2008 - resurrected in Jan 2009</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here is the first case, in the New Year, of resurrection of a dead anti-dumping duty and it took place on the second day of the New Year. Anti-dumping duty on Acrylonitrile Butadiene Rubber known as NBR falling under Chapter 40 of the Tariff, was imposed by Notification No.111/2002-Cus dated, 10th October, 2002. This would have expired on 09.10.2007. On 09.10.2007, just in the nick of time, the Government extended this duty till 09.10.2008. But, there was nobody to remind on 09.10.2008, and the Notification apparently had a happy death.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, by the first notification of the new year, the government has resurrected the duty on NBR originating in or exported from Korea RP. This notification is effective from 02.01.2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti-dumping duty is imposed when there is a strong likelihood of imports of articles at dumped prices leading to consequential injury to the domestic industry. Now, does this mean there was dumping from Oct. 2002 to Oct. 2008 and later from January, 2009 and there was no dumping during Oct - Dec., 2008?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <strong>Indian Reminder Service </strong> should have a proper mechanism to keep track of the sunset provisions in the laws they dish out.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_001.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 1/2009 – Cus., Dated, the 2nd January, 2009.</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Second
Stimulus - Customs exemptions</strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) CVD exemption to import of Cement withdrawn.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Exemption to Naphtha imported for generation of electricity. Earlier this exemption was available only for electrical undertakings owned by the Central and State Governments or State Electricity Boards or those licensed under the Electricity Act or permitted under the Electricity (Supply) Act. Now, it is applicable for a generating company as defined in the Electricity Act, 2003. Earlier, the exemption was not available, if the naphtha was used for generation of electricity for captive consumption. Now, it is not available, if the naphtha is used for generation of electricity by captive generating plants.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Customs duty exemption on Ferro Alloys is withdrawn, and all Ferro alloys will now attract 5% Customs duty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) CVD exemption for Thermo Mechanically Treated (TMT) Bars and Structurals withdrawn.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Customs duty exemption for Zinc withdrawn, which will now attract 5% Customs duty.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These measures are supposed to be for providing a level playing field to the domestic industry.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 2/2009 – Cus Dated, the 2nd January, 2009.</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Drawback changes</strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) Drawback to be allowed on boots/half-boots/shoes/sandals of leather-cum-synthetic/textile materials.</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_001.htm" target="_blank">Notification NO. 1/2009 – Cus (NT) Dated, the 2nd January, 2009.</a></strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Drawback rates and value caps on several textile articles enhanced. Drawback rates revised in case of texturized/twisted yarn manufactured out of yarn on which the central excise duty has been paid. These changes are retrospectively effective from 01.09.2008.</font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_002.htm" target="_blank">Notification NO. 2/2009 – Cus (NT) Dated, the 2nd January, 2009.</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of New Vehicles - DGFT amends Policy</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As of now, the import of new vehicles shall be from the country of manufacture and the imports can take place only through the Customs Ports at Nhava Sheva, Kolkatta, Chennai, ICD Tuglakabad, Delhi Air Cargo and Mumbai Port. Now, the <em>country of manufacture </em> restriction is removed and Cochin Port is added to the list of eligible ports. </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=45&filename=notification/dgft/2008/dgft08not074.htm" target="_blank">DGFT Notification No. 74 (RE - 2008) /2004-09 dated, 30th December, 2008.</a></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">– Tomorrow'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>Central Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Common inputs and exempted final products – 10% not required to be paid on waste generated – Tribunal Larger Bench Decision in 2006-TIOL-1641-CESTAT-MUM set aside – High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong>writ petition is filed to challenge the Larger Bench decision of the CESTAT dated 13-12-2006 - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-1641-CESTAT-MUM-LB.htm"><strong><font size="1">2006-TIOL-1641-CESTAT-MUM-LB</font></strong></a>. The Larger Bench was constituted because of the conflicting decisions rendered by the Tribunal in the case of <em>Rama Industries Ltd. V/s. C.C.E. </em> reported in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2004/2004-TIOL-213-CESTAT-DEL.htm"><strong><font size="1">2004-TIOL-213-CESTAT-DEL</font> </strong></a>and in the case of <em>Binani Zinc Ltd. V/s. CCE </em> reported <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2005/2005-TIOL-1653-CESTAT-BANG.htm"><strong><font size="1">2005-TIOL-1653-CESTAT-BANG</font> </strong></a>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question referred to the Larger Bench was:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Whether 8% of the amount as per erstwhile Rule 57CC of Central Excise Rules, 1944 (now Rule 6 of Cenvat Credit Rules, 2002) is required to be discharged, before removal of by products/subsidiary products when such products are exempted from whole of duty therein in light of the conflicting view in the above decisions."</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>Aishwarya
Rai / Bachchan wins IT case - Assessee's income subjected to TDS in UK
and USA - claims credit for the same - AO disallows - Since Articles of
DTAA override provisions of domestic law, tax credit cannot be denied against
Indian tax payable for such income: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSE</strong>, Aishwarya Rai , is an actress. She carries out assignments outside India and files a return of Rs 16.24 Crore. AO processes it u/s. 143(1) and a demand of Rs.76,88,239 was raised. The assessee applied for the rectification u/s. 154 of the said intimation on the ground that credit for tax deducted at source on foreign income was not given. The Assessing Officer considered the provisions of sections 4, 190 and 191 and came to the conclusion that no credit for such TDS certificate could be given because the assessee had failed to pay tax in respect of the foreign income under the provisions of the Income-tax Act, 1961.</font></p>
<p align="justify"><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>Attempted export of antique Buddha - Penalty on CHA upheld: Bombay High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> High Court held, “we, sitting in writ jurisdiction, cannot interfere with the concurrent findings of fact by the departmental authorities, and those findings, which are reasoned and based on relevant materials, cannot be called perverse either.”</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more<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>
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