TIOL-DDT 1073 · 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 1073</font><br>
18.03.2009<br>
Wednesday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Message; Only Work – New President of CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JUSTICE</strong> RMS Khandeparkar has taken over as President of CESTAT. He brings with him rich experience in the Indirect taxes field having worked as Spl. Public Prosecutor for Central Excise, Customs, FERA etc., in Goa. He was a judge of the Bombay High Court from 1996 till August 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The whole nation celebrates his birthday – August 15. Justice Khandeparkar had delivered several landmark judgements, including many in Income Tax and Customs matters.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> spoke to the new President and asked him for a message to the CESTAT family. He said, “Judges don't give messages; they work”. So his work is going to be his message and surely there is plenty of it in CESTAT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Goanet reported on 08.08.08, “While we wish Justice R.M.S Khandeparkar a Happy retirement, we are sure he will be called upon to serve society, with his vast experience and maturity as a retired High Court Judge. Still, retiring after 12 long years, he can once again relax in the evenings and not have to bury himself in bag loads of Court files in preparation for the next day's hearing.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, he is back into it.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
the <strong><em>Sandvik Asia Ltd </em></strong>, case - </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2004/2004-TIOL-65-HC-MUM-IT.htm" target="_blank">2004-TIOL-65-HC-MUM-IT</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Justice
Khandeparkar observed, <em>“<strong>The statutory authorities have to act in
accordance with the power bestowed upon them under the statute </strong>. Those
authorities can levy and collect the interest on delay in payment of tax provided
the statute provides for such obligation of the assessee under the statute and
not otherwise”</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fact is that the Statutory Authorities often act beyond the powers <em>wasted </em> (not vested) in them with the Departmental adjudication being a joke, the CESTAT is the first point where justice can be expected.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Khandeparkar has about two and half years in the CESTAT and we hope he would be able to bring in the much needed changes in CESTAT. We wish him all the best.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax – TDS and TCS – IT Rules amended</strong></font></p>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Credit for tax deducted at source shall be given to the person to whom payment has been made or credit has been given (deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"> If the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for tax deducted at source shall be given to the other person.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">The declaration filed by the deductee shall contain the name, address, permanent account number of the person to whom credit is to be given.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">The deductor shall issue the certificate for decuction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Credit for tax deducted at source shall be given for the assessment year for which such income is assessable.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Where tax has been deducted at source and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.</font></li>
</ul>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar provisions are made for TCS.</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=35&filename=notification/cbdt/2009/it09not028.htm" target="_blank">CBDT Notification NO. 28/2009, Dated: March 16, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Testing of samples of Hazardous wastes from the laboratories recognised under the Environment (Protection) Act – CBEC instructions</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ministry of Environment and Forests (MoEF) has informed that if Customs authorities need assistance for undertaking sampling and analysis of the hazardous waste consignments, they could utilise the facilities of the recognised laboratories. These laboratories are recognised from time-to-time by the Ministry of Environment and Forests and are authorised to test all kinds of samples of hazardous wastes.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">State Pollution Control Boards (SPCBs) and Pollution Control Committees (PCCs) have been asked to coordinate with the Customs on regular basis for implementation of the provisions of Hazardous Waste (Management, Handling and Transboundary Movement) Rules 2008, especially relating to the import/export of hazardous wastes. Further, the MoEF has informed that information regarding the registered recyclers has also been made available by the SPCBs on their websites, which can be accessed online by Customs, if required.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board wants field formations to consider utilizing the services of these laboratories for getting the consignments of hazardous wastes and substances tested and seek assistance from SPCBs/PCCs in dealing with the import/export consignments of hazardous wastes as and when required.</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=25&filename=notification/custom/2009/cuscir09_009.htm" target="_blank">CBEC Circular No. 9/2009-Customs Dated: February 23, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of restricted item(s) against transferred DFIA – DGFT Clarifies</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT clarifies that restricted items (other than prohibited items and the items reserved for import by State Trading Enterprises or otherwise specifically mentioned for the purpose) can be imported against the transferred DFIAs without the requirement of a separate import licence/authorisation subject to the condition that the exports have been completed prior to the effective date of restriction on imports [unless otherwise mentioned in the notification(s)].</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=46&filename=notification/dgft/2008/dgft08cir070.htm" target="_blank">DGFT Policy Circular No. 70 (RE-08)/2004-2009 Dated: March 16, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Notifies <font color="#FF6600">Handling of Cargo in Customs Areas Regulations</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has notified the Handling of Cargo in Customs Areas Regulations, 2009. These regulations shall be applicable to the handling of imported and export goods in customs areas. “Customs Cargo Services Provider” means any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and export goods and includes a custodian as referred to in section 45 of the Act and persons as referred to in sub-section (2) of section 141 of the said Act;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will CHAs be promoted as CCSPs?</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=24&filename=notification/custom/2009/cnt09_027.htm" target="_blank">CBEC Notification No. 26/2009 - Customs ( N.T. ), Dated: March 17, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC appoints common adjudication authorities for DRI cases</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has notified several adjudicating authorities for certain specified DRI cases.</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=24&filename=notification/custom/2009/cnt09_028.htm" target="_blank">CBEC Notification No. 28 - 35/2009 - Customs ( N.T. ), Dated: March 17, 2009</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Babu
Neta Combo Offer – Rs
3 Cr cash seized at Delhi Airport</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Income Tax Department welcomed a former IAS officer and a politician from
Andhra Pradesh at Delhi airport and seized Rs. 3 Crores in cash from them.
As a follow up, the Department got another One Crore Rupees from the former
IAS officer's residence at Hyderabad. The amount of cash floating around
is mind-boggling. Andhra Pradesh is a rich State and it is expected that
each candidate in an Assembly Constituency will spend Rs. 10 Crores and there
are three major political parties and 294 Assembly Constituencies. And that
is about 9000 Crores, without considering the Parliamentary Constituencies.
There are quite a lot of rich former bureaucrats in the field.</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>See-saw battle on welding electrodes continues – Credit available on welding electrodes used in maintenance and repair of machinery in terms of <em>Hindustan Zinc Ltd. vs. Union of India: </em>CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SIMPLIFICATION </strong>of rules and procedure in Central Excise is a misnomer especially going by the multiplicity of disputes on eligibility or otherwise of CENVAT credit on various inputs, capital goods and input services (after introduction of service tax). Some disputes never refuse to die even after decent burials by Tribunals/High Courts. One such dispute is the eligibility of credit on welding electrodes used in maintenance and repair of machinery.</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>Sec 14A has no application to insurance business which is governed by special provisions of Sec 44; Sec 14A also creates an exception for deductions allowable under Ss 28 to 43B: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION </strong>14A is an interesting provision which gets attracted for making disallowance of expenditure in the case of non-taxable income. However, in an equally interesting and significant decision the ITAT has held that <strong>Sec 14A has no application to insurance companies which are governed by the matrix of provisions of Sec 44 - a special provision coupled with non-obstante clause. </strong> It further rules that Sec 14A contemplates an exception for deductions permissible under Ss 28 to 43B of the Act. Sec 44 applies notwithstanding anything contained within the provisions of the Income-tax Act relating to computation of income chargeable under different heads and that there is no requirement for head-wise bifurcation while computing the income u/s 44 of the Act in the case of a insurance company.</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>Detention of Goods - no liability, civil or criminal, may be attracted so long as power exercised by Customs is in good faith and not in colourable exercise of power – Burden to prove <em>malafide </em> is on importer: Delhi HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is always a presumption in favour of the Administration that its exercise of power shall be in good faith and for public benefit. Therefore, the "burden is on the individual to produce sufficient material to suggest of the mala fides of the authority concerned and it is not easy to discharge the same". There is a presumption of bona fides in favour of the Authority. The burden of proving mala fides is on the individual alleging it. Indeed, it is a heavy burden which can be discharged ordinarily by initiation of civil proceedings.</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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Confusion prevailing in industry on liability of service tax on recipients for services received from offshore service provider prior to 01.01.2005 – Provisions of Sec 80 applicable – No penalty leviable when tax paid before issue of SCN: CESTAT</strong></font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> the Appellant have discharged tax liability from October 2004 to March, 2005 period along with interest, while in view of Tribunal's Judgement in case of M/s. Hindustan Zinc Ltd. (Supra), they were liable to pay the tax only w.e.f, 1.1.05, it would be illogical to impose penalties on them u/s. 76, 77 & 78.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements</font></strong></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 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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