TIOL-DDT 1051 · the untouched capture
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<strong><font color="#663399" size="3">TIOL-DDT 1051</font><br>
12.02.2009<br>
Thursday </strong></font></div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs
Duty on Zinc/Copper slag, ash reduced to 5%</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Slag,
ash and residues (other than from the manufacture of iron or steel), containing
arsenic, metals or their compounds, attracting 7.5% Customs duty now for headings
2620 19 00 and 2620.30, will now attract 5% duty. Notification No. 21/2002 is
amended.</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=23&filename=notification/custom/2009/ctariff09_012.htm" target="_blank">Notification
No. 12/2009 – Cus Dated: 10th February 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Newsprint
fully exempted from Customs Duty</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
following goods will now be fully exempted from Customs Duty.</font></p>
<blockquote>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
Newsprint - </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
in strips or rolls of a width not less than 34.92 cm; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii)
in rectangular (including square) sheets with one side not less than 34.92 cm
and the other side exceeding 15 cm in the unfolded state.</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
Uncoated paper of a kind used for the printing of newspapers, of which not
less than 50% by weight of the total fibre content consists of wood fibres
obtained by a mechanical or Chemi-mechanical process, unsized or very lightly
sized, having a surface roughness Parker Print Surf (1 Mpa) on each side not
exceeding 2.5 micro metres (microns) weighing not less than 40 m 2 and not
more than 65 gms/m 2</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
Light weight coated paper weighing upto 70 g/m2 , imported by actual users
for printing of magazines</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is
it an election incentive for the PRESS?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification
No. 13/2009 – Cus Dated: 11th February 2009</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Classification
of tea admixture containing rice flour, tapioca, vitamins – CBEC Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
dispute has been brought to the notice of the Board regarding classification
of ‘tea’ fortified with micronutrients and with tapioca, jaggery,
chicory, rice flour and vitamins. These additives may be to the extent of 30%
with the remaining part being tea. Doubts have been raised as to whether such
an admixture is classifiable under chapter 9 as flavoured tea or as a preparation
with a basis of tea under chapter 21.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
clarifies:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+
The tea admixture containing rice flour, tapioca, vitamins, etc cannot be considered
as flavoured tea particularly when the purpose of addition of various ingredients
is to add to volume and to provide health benefits. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+
Neither can these additives be considered as flavouring material.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+
The expression ‘preparation’ has been used in a number of Tariff
items in Chapter 21 and has also been used to explain the scope of an entry
in the Chapter notes and the supplementary notes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+
From these notes, it is clear that preparations would include products prepared
by addition, mixing, or such other similar processes to the original commodity.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+
Heading 2101 includes preparations with a basis of extracts, essences and concentrates
of tea and preparations with basis of tea. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore,
Board has opined that the tea admixture is a preparation with a basis of tea
and is classifiable under chapter Heading 2101.</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular882.htm" target="_blank">CBEC
Circular No. 882/02/2009-CX Dated: 11th February 2009</a></font></strong></p>
<p align="center" style='text-align:justify'><font size="2"><b><span style='color:#006600'><font face="Verdana, Arial, Helvetica, sans-serif">MAT Credit is nothing
but tax paid in advance - interest under Ss <span class=SpellE>234B</span> & <span class=SpellE>234C</span> to
be charged only after MAT Credit is
set off against tax payable </font></span></b></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><strong>IN</strong> an important decision the Delhi High Court has
held that interest under sections <span class=SpellE>234B</span> and <span
class=SpellE>234C</span> is to be charged only after the tax credit (MAT credit)
available under section <span class=SpellE>115JAA</span> is set off against
tax payable on the total income of the year in question. The Bench also upheld
the Tribunal's decision that rectification could not be made by the Assessing
Officer under Section 154 of the Income Tax Act, 1961 as the issue regarding
charging of interest under Section 234-B of the Act without giving set off
of MAT credit available to the Assessee was highly debatable.
<o:p></o:p>
</span></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'>We
bring you the case today – <strong>See</strong> </span><span
class=MsoHyperlink><b style='mso-bidi-font-weight:normal'><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8594">Breaking News</a></b></span><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8594"><span
style='mso-bidi-font-weight: bold'>
<o:p></o:p>
</span></a></font></p>
<p align="center"><strong><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></strong></p>
<p align="justify"><strong><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">Central
Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT
vs CESTAT - Tribunal has authority to review whether Committee of Commissioners
has formed an opinion or not on legality of orders passed by Commissioners and
given adequate reasons for filing appeals – Tribunals are empowered to
find if orders are reviewed within stipulated time – Order passed by Co-ordinate
bench of Tribunal recalling interim order of Tribunal is per incuriam.</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LAST</strong> week TIOL reported an extraordinary judgment passed by the Bench headed by the
President of CESTAT in CCE, Bhubaneshwar-II Vs M/s Bhushan Ltd<strong><font size="1">
[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2009/2009-TIOL-203-CESTAT-DEL.htm" target="_blank">2009-TIOL-203-CESTAT-DEL</a>]</font>
</strong>wherein the order passed by the East Zonal Bench was recalled. It was
observed that Tribunal is only competent to hear appeals filed against orders
of the Commissioners and it does not have the jurisdiction to review the orders
of the Committee of Commissioners/Chief Commissioners. While analyzing that
decision, we at TIOL raised a pertinent question and commented as follows: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Whether
Miscellaneous Applications can be filed and entertained by another Bench of
the Tribunal for recalling an order passed by a different Bench? Can one Bench
of a Tribunal recall an order passed by another bench of the Tribunal? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While
there are numerous instances where Tribunals have recalled their own earlier
final orders by allowing ROM applications and even Apex Court in Sunita Devi
Singhania Hospital Trust vs. Union of India<font size="1"> <strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2008/2008-TIOL-235-SC-CUS.htm" target="_blank">2008-TIOL-235-SC-CUS</a>]</strong>
</font>observing that the Tribunal has an inherent power to recall its own order
subject to sufficient causes shown in this regard, it is not legally clear as
to whether an order passed by one Bench of the Tribunal can be recalled by another
Bench”.</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"><strong><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer
Pricing – in the OECD guidelines, it is permissible to take profit of
similar transaction or enterprises not only of the period under consideration,
but also for next or previous year or take the average of such profit. This,
however, is not permitted under the Indian Regulations on Transfer Pricing.
The Tribunal should not be prevented from considering questions of law arising
in assessment proceedings, although not raised earlier. - ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
the relevant financial year in which the international transaction took place,
is to be considered for comparability analysis. Under the proviso, data for
period not being more than two years prior to financial year in which international
transaction was entered, may also be considered, if such data reveals facts
which could have an influence on the determination of transfer prices. Under
the proviso, there is no scope to consider data for a subsequent assessment
year. The assessee has not been able to reveal any facts to bring the case within
the above proviso. </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"><strong><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">'Input
Services Distributor' is not like a dealer - eligibility or otherwise of service
tax credit has to be examined at the end of input service distributor only -
Matter remanded for determining eligibility: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong>
appellants are registered under the category of "input service distributor".
During the verification of ST-3 return filed by them, it was found that appellants
were not eligible for credit of service tax incurred in respect of tour/travel,
hotel and other services, in view of the fact that they cannot be related to
the goods manufactured by the appellants. The Original Adjudicating Authority
dropped proceedings but the Commissioner (Appeals) on appeal filed by the Revenue
allowed the appeal holding that services of event management, tour/travel agent,
hotel, courier and other categories like AMC of air-conditioner, recruitment
agency, etc. are eligible for credit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue
is in appeal before the Tribunal.</font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<font color="#663399">See our columns tomorrow for the judgements</font></font></strong></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice Day.</font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font><font color="#FF3333" size="2" face="Verdana, Arial, Helvetica, sans-serif">
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com" target="_blank">vijaywrite@taxindiaonline.com</a></font></p>
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