TIOL-DDT 1053 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1053</font><br> 16.02.2009<br> Monday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Construction Equipment under EPCG Scheme- DGFT clarifies</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Representations have been received from Regional Authorities and individual firms seeking clarification on import of Construction Equipment viz. Crane & Mobile Cranes etc under Export Promotion Capital Goods (EPCG) Scheme.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The DGFT clarifies that import of construction equipment is not allowed only for construction activities for building factory/project by the EPCG authorization applicant. The import of construction equipments shall only be permitted to Service providers subject to following conditions:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) Such equipments are used to provide Services as mentioned in Appendix X of Handbook of Procedures-vol-1; and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Payments for the services rendered through construction equipments are received in Free Foreign Exchange or in Indian Rupees which are otherwise considered as having being paid for in free foreign exchange by RBI, as per Sub Para (iv) of Para 9.53 of Foreign Trade Policy.</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=46&filename=notification/dgft/2008/dgft08cir061.htm" target="_blank">DGFT Circular No. 61 (RE-2008/2004-09) Dated: February 13, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Prohibition on export of wheat – exemption for wheat flour to Maldives</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prohibition imposed by Notification No. 33(RE-2007)/2004-2009, dated 08.10.2007, as amended from time to time on export of wheat flour shall not be applicable to export of 29,177 MT of wheat flour during 2009-10, to Maldives through M/s. PEC Limited.</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/dgft08not085.htm" target="_blank">DGFT Notification No. 85(RE-2008)/2004-2009, Dated : February 13, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cut down on soup woup – Save Service Tax - Lalu</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a live telecast function, Railway Minister Lalu Yadav told the then Finance Minister P. Chidambaram, “I want to improve the Railway catering but you imposed a 12% Service tax”. The very fact that Railway catering suffers a Service Tax is known to the Minister shows his acumen.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent interview to Times Of India he said, “What has happened is that P Chidambaram as Finance Minister imposed service tax on railway caterers. And since we would not allow them to increase prices, contractors could make profit only at the cost of quality and quantity. Some of them even withdrew from the business. But now I have suggested them to cut down on frills like soup/woup and to ensure that the there is no compromise on the essentials. Sada do lekin solid ho, that is the instruction.”</font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Interim Budget Today</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the Budget is interim, expectations are intense and if these expectations are not met, the stock exchange may play monkey and if they are met, they would be already discounted.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, we know, you are interested in the budget – interim or otherwise, than DDT. We will bring you the interim budget as it unfolds, though there is not much to unfold.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was the traditional photo session in the North Block showing the FM giving finishing touches to his budget.</font></p> <p align="center"><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/budget_09.jpg" alt="Legal Corner Icon" width="420" height="267" hspace="5" border="0" align="center"></b></strong></strong></strong></strong></strong></strong></strong></font></strong></font></p> <p align="justify"> </p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There will be another one tomorrow with the FM outside the North Block.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL asked one of our contributors to send in his comments immediately after the Interim Budget. He sent in his comments even before, “The interim budget is disappointing. The UPA Govt has failed to assure a decent living to the aam admi. blah blah blah....”</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 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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption – ‘Used within the same factory' does not mean that the goods which were to be used must be manufactured in the same factory – Revenue Appeal dismissed with costs – Supreme Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> short question which arises for consideration is: Does the `nil' rate of duty, as provided for in the notification No. 4/2006 dated 1.03.2006, subject to the condition that the same are used in the same factory would mean that the goods which were to be used must be manufactured in the same factory?</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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Demand raised on PSU - recovery - As soon as a reference is made to CoD, recovery process automatically gets suspended - grant of any stay by Tribunal at this stage will only be an academic and parallel exercise which is unwarranted: ITAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Public Sector Undertakings constitute a different class so far as their litigation with Revenue is concerned. Since they are also treated as one of the arms of the Government, the Committee on Dispute (CoD) in the Cabinet Secretariat was devised, following the Apex Court order in the ONGC case. But despite such a system being in place, it is not uncommon to see aggrieved PSUs moving the Tribunal for a stay or the Revenue taking hasty and impatient steps to recover the demand raised in order to meet their own revenue collection target. But, is it a legal act on part of the Revenue to issue garnishee notices to bank to make recovery and freeze the accounts of the PSU even as their application to the CoD has been pending for a decision?</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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation - once nature of goods has been mis-declared, value declared on imported goods becomes unacceptable - Chief Commissioner's Standing Order is only for guidance, not mandatory: Supreme Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> does not in any way affect the legal position that the burden is on the Customs Authorities to establish the case of mis- declaration of goods or valuation or that the declared price did not reflect the true transaction value. Once transaction value is rejected on valid grounds, the Customs Authority has to proceed to determine the value of goods by following Customs Valuation Rules and on the basis of contemporaneous import. However, in the absence of any evidence with regard to contemporaneous import, reference to foreign journals that may indicate the correct international price for the purposes of Section 14 may not be irrelevant and relying upon such journal cannot be said to be altogether unreasonable.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></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 t</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">o <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p> </body> </html>