TIOL-DDT 1075 · 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 1075</font><br> 20.03.2009<br> Friday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Drawback on Exports to Myanmar, Nepal, and Bhutan – Govt amends a 32 year old Notification</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Notification No. 208/1977-Customs, dated the 1st October, 1977, drawback of import duty shall not be allowed in respect of goods exported to Burma, Nepal, Bhutan etc.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Because the Central Government is of the opinion that the goods, if exported under claim for drawback, are likely to be smuggled back into India.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently not much has changed in the last three decades.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amendments are only technical like ‘‘Burma' is changed to “Myanmar”, “Burmese'' to “Myanmarese”, “euro” is added and “Austrian Schillings”, ‘‘Belgian Francs'', ‘‘Danish Kroners'', “Deutsche Marks'', ‘‘French Francs'', ‘‘Italian Lira'', ‘‘Netherlands Guilders'', ‘‘Norwegian Kroners'', ‘‘Swedish Kroners'', and ‘‘Swiss Francs'' are deleted.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Did these changes happen yesterday? It takes time to realise what is happening around.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally the Notification says it amends Notification No. 208/1977-Customs <strong>(N.T.). </strong>In those days there were no NT Notifications.</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_024.htm" target="_blank">Notification No. 24/2009-Cus (N.T.) Dated: March 3, 2009</a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Shifting of factory – What about Input Service Credit?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On Tuesday - <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8758" target="_blank">TIOL-DDT-1072</a></strong>, we had carried a question sent by a netizen enquiring what he is supposed to do about the finished goods lying in stock when he is shifting his factory.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Immediately, we received another mail pointing out that Rule 10 of the CENVAT Credit Rules, 2004 concerning transfer of CENVAT Credit has chosen to maintain a stoic silence about the <strong><em>fate of the CENVAT Credit on Input Services availed </em></strong> by a manufacturer or an output service provider and which could be lying unutilized in his CENVAT Credit account.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What would be the fate of this CENVAT Credit quantum if the manufacturer or an output service provider shifts or transfers his business? Should it be considered as lapsed or should the assessee reverse the proportionate quantum? Or, on an optimistic note, should this credit on input services be allowed to be carried forward?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since Rule 10 CCR, 2004 does not provide any answer it is expected that the now proactive Board looks into the issue and does the needful before any damage is done.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We hope that the Board is reading this.</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Election fallout – No Pension Scheme for all citizens</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New employees of the Central Government were brought into NPS w.e.f. January 1, 2004. Government transferred the accumulated funds along with its matching contribution to the three Fund Managers appointed by PFRDA for investment management on 1st April, 2008.<br> <br> In August, 2008, Government advised PFRDA to extend the New Pension System (NPS) to all citizens. Since considerable preparatory work was involved, PFRDA decided to extend NPS to all citizens from <strong>April 1, 2009</strong>. As part of that exercise, PFRDA has already appointed six new Fund Managers and 23 Points of Presence for managing NPS contributions pertaining to all citizens, including workers of the Unorganised Sector. PFRDA had also brought to the notice of the general public the fact of NPS being made available to all citizens through an advertisement released on 28th February, 2009.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, keeping in view the Model Code of Conduct for Elections, it has not been possible for PFRDA to continue this information campaign and undertake other preparatory activities as originally scheduled. It has, accordingly, been <strong>decided to defer the date of the extension of the NPS to other citizens</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">–Monday'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>Loss of raw materials during course of storage in factory premises – Appeal against order of Commissioner (A) does not lie before Tribunal: Tribunal dismisses appeal</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEPARTMENTAL</strong> Representative raised a legal point on the maintainability of the appeal by contending that the appeal involves loss of raw materials during the course of storage in factory premises. He submitted that under Section 35B of Central Excise Act, 1944, in all type of loss cases, the Tribunal has no jurisdiction to hear the appeal arising out of the order of the Commissioner (Appeals).</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>Indo-USA tax treaty - air transport - taxability - income from transportation of cargo in international traffic by aircraft owned, chartered or leased by other airlines is not exempt from taxation in India under Article 8 unless it falls under pool system; Even inland transportation connected to such transportation not to be exempt: ITAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Indo-US tax treaty is one of the most litigated DTAAs in India. And, within the treaty, the two most litigated sections are relating to the fees for included services or royalty and income from shipping and air transport. In the latest decision the Tribunal has held that the transportation of cargo in the international traffic through the aircrafts owned, chartered or leased by other enterprises would be outside the scope of Article 8(2) of the DTAA and consequently would not be exempt from taxation under Article 8(1) unless such transportation falls under para 4 of this Article. Further, the inland transportation connected with such transportation would also not be exempt under Article 8. However, such profits would be considered as business profits under Article 7. Therefore, the matter has been remanded to the AO for fresh examination in the light of Article 7 of the Treaty.</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>Refund without challenging assessment - fact that no reasoned order was passed will not make assessment order invalid and assessee eligible for refund: Bombay High Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> fact that the assessing officer has failed to pass a speaking order would not invalidate the assessment order so as to file refund claim and seek refund of duty paid on the enhanced value as per the assessment order. In other words, pendency of the application seeking a speaking order would not entitle the appellant to seek refund of duty paid as per the assessment order. It is well settled by the decisions of the Apex Court in the case of <em>Flock (India) Pvt. Ltd</em>. and <em>Priya Blue Industries </em> Ltd that so long as the assessment order stands the question of granting refund does not arise at all. The argument of the appellant that unless an appealable speaking order is passed, the importer cannot file an appeal against the assessment order, is without any merit. Assessment order passed on the bill of entry is an appealable order and the same can be challenged even in the absence of a speaking order. In other words, in the absence of a speaking order, it cannot be said that the assessment order is not appealable. Where an assessment order is passed without giving reasons and in spite of repeated requests reasoned order is not passed, proceedings can be initiated for setting aside the assessment order passed on the bill of entry.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend.</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> </body> </html>