TIOL-DDT 1031 · 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 1031</font><br>
14.01.2009<br>
Wednesday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Refund Panel Reconstituted for Tobacco and Pan Masala units in North East</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has reconstituted the panel that verifies the investments made by the units manufacturing tobacco products in the North East. The Committee consisting of the “Chief Commissioner of Central Excise, Shillong, the Principal Secretary in the Department of Industry of the State concerned in which the unit is located and the Principal Secretary in the Department of Industry of the State in which the investment is being made” is modified as the “Chief Commissioner of Central Excise, Shillong, the Principal Secretary or the Secretary or the Commissioner in the Department of Industry of the State concerned in which the unit is located and the Principal Secretary or the Secretary or the Commissioner in the Department of Industry of the State in which the investment is being made”.</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/2009/etariff09_01.htm" target="_blank">Central Excise Notification No. 01/2008-CX., Dated: January 12, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>‘Tableware'/‘Kitchenware' category not entitled for VKGUY benefits</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has amended Public Notice No. 115(R2008)/2004-09 dated 15.12.2008 to delete references to certain tableware/kitchenware from the list of items eligible for VKGUY benefits. A note is inserted to clarify that all items used for cooking and dining purposes are not ‘Handicraft' items. Accordingly, all such items including those falling in the ‘Tableware'/‘Kitchenware' category shall not be entitled for VKGUY benefits under Table 15. This is applicable for exports from April 1, 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier vide PN No. 115 dated 15.12.2008, Table 15 titled ‘New Gram Udyog and other Products was added after Table 14 of Appendix 37A of HBP V. I with an annexure listing out seventy product categories. Now with this latest amendment four product categories viz., 15.2, 15.4, 15.5 and 15.6 (utensils of brass, copper, copper alloys and other household utensils & their parts) stand deleted for VKGUY benefits with effect from April 1, 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the inserted note clarifies that all items for cooking and dining purposes are not ‘handicrafts' it goes on to further state that<font color="#FF6633"> <strong>‘all such items including those falling in tableware/kitchenware category shall not get VKGUY benefits'</strong></font> . This means in addition to the four deleted product codes any other item meant for cooking and dining purpose may not be entitled for VKGUY benefits. For e.g. items under product codes 15.7, 15.11, 15.14, 15.15, 15.18, 15.45 to 15.48, 15.53 and 15.55 of Table 15 may not get VKGUY benefits.</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/dgft08pn128.htm" target="_blank">DGFT Public Notice No. 128 (RE-2008)/2004-2009, Dated: January 6, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exim Bank's Line of Credit of USD 25 million to the Government of Ghana</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export-Import Bank of India (Exim Bank) has concluded an Agreement dated September 02, 2008 with the Government of Ghana making available to the latter, a Line of Credit (LOC) of USD 25 million (USD twenty five million) for financing eligible goods and services including consultancy services from India for three projects viz:- (i) ICT and Good Governance project (USD 5 million), (ii) Railway Corridors project (USD 13 million) and (iii) Agro Processing Plant (USD 7 million) in Ghana.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The goods and services, including consultancy services from India , for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services of the value of at least 85 per cent of the contract price shall be supplied by the seller from India, and the remaining 15 percent goods and services (other than consultancy services) may be procured by the seller for the purpose of Eligible Contract from outside India.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Credit Agreement under the LOC is effective from December 18, 2008 and date of execution of Agreement is September 02, 2008. Under the LOC, the last date for opening of Letters of Credit and disbursement will be 48 months from the scheduled completion date(s) of contract(s) in case of project exports and 72 months (September 01, 2014) from the execution date of the Credit Agreement in case of supply contracts.</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=280&filename=notification/rbi/2008/rbi08cir047.htm" target="_blank">RBI/2008-09/348 A. P. (DIR Series) Circular No. 47 January 06, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commerce Ministry's Report Card on SEZs and Job Creation</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SEZs have created employment for large number of unemployed rural youth. Even in the services sector, 12.5 million sq meters space is expected in the IT/ITES SEZs which as per the NASSCOM standards translates into 12.5 lakh jobs. It is, therefore, expected that establishment of SEZs would lead to fast growth of labour intensive manufacturing and services in the country. The total investment in the SEZs, as on September 30, 2008 were Rs. 93,507.23 crores and the total employment generated so far is 3,62,650 persons.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Out of the 531 formal approvals given till date, 174 approvals are for sector specific and multi product SEZs for manufacture of Textiles & Apparels, Leather Footwear, Automobile components, Engineering etc. which would involve labour intensive manufacturing. Exports from SEZs during the year 2007-08 was to the tune of Rs.66,638 crore with a growth of 92% over 2006-07 (overall growth of exports of 381% over past four years (2003-04). The export projection for 2008-09 is Rs.1, 25,950 crore.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti-dumping Investigations during 2008</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the year 2008, the Directorate General of Anti Dumping has so far initiated 18 fresh anti-dumping investigations (till 8.12.2008). The products involved are Cable Ties, All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester, Plain Medium Density Fibre Board, Power Steering Gear System, Thyionyl Chloride, Plastic Processing Machinery, Cathode ray Television Picture Tube – III, Nylon Tyre Cord Fabrics, Flax Fabrics, Ceramic tiles, Tyres Curing Presses, Radial Tyres, Pencillin – G, Phosphoric Acid, Diethyl Thio Phosphoryl Chloride, Cold Rolled Products of Stainless Steel, Hot Rolled Steel Products and Axle Beam and Steering Knuckles. The countries involved in these investigations are China PR, Thailand, Vietnam, Malaysia, New Zealand, Sri Lanka, European Union, Indonesia, Belarus, Hong Kong, Korea RP, Japan, South Africa, Taiwan, USA, Iran, Kazakhstan, Saudi Arabia, Russia, Romania, Turkey and Ukraine.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Korean Tax Chief under investigation for bribing predecessor</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Han Sang- ryule , head of the National Tax Service, is suspected of having given an expensive painting to the wife of predecessor Jeon Goon- pyo in January 2007. Prosecutors are looking into whether Han was seeking a promotion in exchange of the gift. Jeon's wife recently put the painting on auction. The value is estimated at USD 22,000.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally the former Tax Chief is currently in jail serving a three and a half year sentence for taking bribes worth 7,000 won and $100,000 from the Busan tax commissioner.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Has the e -filing facility been restored?</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi service tax Commissioner had informed on 1.1.2009 that,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A NUMBER OF REQUESTS HAVE BEEN RECEIVED FOR THE E FILING FACILITY FOR RETURNS. HOWEVER THE FACILITY IS PRESENTLY NOT FUNCTIONAL AT PRESENT DUE TO TECHNICAL REASONS.</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">THE INCONVINIENCE IS REGRETTED. WE HOPE TO RESOLVE THE PROBLEMS SOON.</font></strong></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Has the facility been restored? We have no information.</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>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income tax - assessee earns lease rental by financing motor vehicles - it is not 'clothes' of transactions but real substance to decide taxability - interest income earned in form of lease rental is taxable under Sec 2(7) of Interest Tax Act: ITAT Special Bench</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> verdict has gone against the assessee with the Special Bench subscribing to the views of the Special Bench decision in the Gujarat Gas Financial Services Ltd and held that it is only the substance of the transaction which is to be reckoned with and not the nomenclature given to it. Since it was a simple case lease rental, the income earned by the assessee can be brought to tax as “interest” u/s 2(7) of Interest Tax Act. It did not find any substantive reason to differ with the views of the Special Bench in Gujarat Gas Financial Services case as the transactions of the assesee were already held to be the transactions in the nature of finance/loan transaction and, such findings have attained finality.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Excise</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether the expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value of the goods where such expenses are incurred by, or on behalf of, the buyer – matter referred to Larger Bench</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NEARLY</strong> a year and a half ago, when we reported the Tribunal decision in Albright & Wilson Chemicals India Ltd. [<strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2007/2007-TIOL-858-CESTAT-MUM.htm"><font size="1">2007-TIOL-858-CESTAT-Mum</font></a></strong>] , with the caption "Gypsum transported from appellant's yard to buyer's cement factories by contractor hired by buyer - Only amounts which buyer is liable to pay to assessee are includible in transaction value: Tribunal", a netizen while appreciating our "google-photogenic" story had expressed his reluctance to go along with the decision.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENVAT
Credit – shortage of inputs – seizure - Mere allegation or mere initiation of investigation does not justify detention of goods. Not completing the investigation after seizure does not rule out malafides on the part of the officers – Finance
Secretary directed to file an affidavit</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a case which apparently boomeranged on the Excise Department. They seized some goods on the ground that there was some discrepancy in the CENVAT Credit inputs account. Though receipt was shown in the register, it was not shown in the excel sheet maintained in the computer. Now the excel sheet entries can be easily changed, not the entries in the hard copy – that did not deter the Department from going ahead with the seizure.</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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