TIOL-DDT 1089 · 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 1089</font><br> 15.04.2009<br> Wednesday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Measures to Prevent Export of Counterfeit Drugs- DGFT PN</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has issued a Public Notice prescribing the procedures/guidelines to strengthen the enforcement mechanism available under the Drugs and Cosmetics Act, 1940, to ensure that counterfeit drugs do not get exported out of the country.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Every exporter of Drugs & Pharmaceuticals at the time of shipment shall submit, along with other required documents, the following:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) A copy of Certificate of Analysis issued by the manufacturer for the subject product; Or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) A copy of Certificate of Analysis issued by approved laboratory of the importing country/FDA; Or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) A copy of Certificate of Analysis issued by a laboratory approved by Drugs Controller under Drugs & Cosmetics Act 1940 and the rules made thereunder.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wherever required, the officials of the Drug Control Department posted at the port offices shall retain a sample of the subject consignment for the purpose of reference and tracking of the manufacturer/exporter of the subject product.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This comes into force with immediate effect.</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/dgft08pn173.htm" target="_blank">DGFT Public Notice No. 173 (RE-2008) /2004-2009, Dated: April 13, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">The Fiscal Crisis – How did we get there? Obama answers</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">President Obama yesterday explained,</font></p> <blockquote> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">This is when the crisis spread from Wall Street to Main Street. After all, the ability to get a loan is how you finance the purchase of everything from a home to a car to – as you all know very well - a college education. It's how stores stock their shelves, farms buy equipment, and businesses make payroll. So when banks stopped lending money, businesses started laying off workers. When laid off workers had less money to spend, businesses were forced to lay off even more workers. When people couldn't get car loans, a bad situation at the auto companies became even worse. When people couldn't get home loans, the crisis in the housing market only deepened. Because the infected securities were being traded worldwide and other nations also had weak regulations, this recession soon became global. And when other nations can't afford to buy our goods, it slows our economy even further.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">So this is the situation, the downward spiral, we confronted on the day we took office. And so our most urgent task has been to clear away the wreckage, repair the immediate damage to the economy, and do everything we can to prevent a larger collapse. And since the problems we face are all working off each other to feed a vicious economic downturn, we've had no choice but to attack all fronts of our economic crisis simultaneously.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Back to future: </strong> the President further explained,</font></p> <blockquote> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is simply not sustainable to have a 21st century financial system that is governed by 20th century rules and regulations that allowed the recklessness of a few to threaten the entire economy. It is not sustainable to have an economy where in one year, 40% of our corporate profits came from a financial sector that was based on inflated home prices, maxed out credit cards, overleveraged banks and overvalued assets; it's not sustainable to have an economy where or an economy where the incomes of the top 1% have skyrocketed while the typical working household has seen their income decline by nearly USD 2,000. That's just not a sustainable model for long-term prosperity.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">For even as too many were chasing ever-bigger bonuses and short-term profits over the last decade, we continued to neglect the long-term threats to our prosperity: the crushing burden that the rising cost of health care is placing on families and businesses; the failure of our education system to prepare our workers for a new age; the progress that other nations are making on clean energy industries and technologies while we remain addicted to foreign oil; the growing debt that we're passing on to our children. Even after we emerge from the current recession, these challenges will still represent major obstacles that stand in the way of our success in the 21st century.Now we've got a lot of work to do. There is a parable at the end of the Sermon on the Mount that tells the story of two men. The first built his house on a pile of sand, and it was soon destroyed when the storm hit. But the second is known as the wise man, for when "…the rain descended, and the floods came, and the winds blew, and beat upon that house…it fell not: for it was founded upon a rock." It was founded upon a rock.We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It's a foundation built upon five pillars that will grow our economy and make this new century another American century: number one, new rules for Wall Street that will reward drive and innovation; number two, new investments in education that will make our workforce more skilled and competitive; number three, new investments in renewable energy and technology that will create new jobs and industries; number four, new investments in health care that will cut costs for families and businesses; and number five new savings in our federal budget that will bring down the debt for future generations. That is the new foundation we must build. That's our house built on a rock. That must be our future – and my Administration's policies are designed to achieve that future.</font></p> </blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> The challenges are too great. The stakes are too high. – WHERE ARE WE?</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Too Many Holidays – DDT at the receiving end</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When we carried Central Excise Superintendent Dev Kumar's frustration about too many holidays for government, we least expected <strong>DDT </strong> to be the target of attack.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A <font color="#FF6600">Netizen remarked in the Message Board, It is sad to see government offices having a few working days thrown in between holidays! Isn't it equally sad to see <strong>DDT </strong> also having a few working days between holidays? Preachings must also be practised. Isn't it so?</font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A <font color="#FF6600">Distinguished colleague from the Bar, Anil Kumar remarked, “ <em>It's an irony to see your <strong>DDT </strong> write about Holidays and you finish your column with "Tomorrow is a Holiday. See our columns Wednesday for the judgments." Why blame the Central Government alone for not accepting the pay commission recommendations...Are we also not doing the same thing”</em></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">My Editorial Colleague responded, <font color="#FF6600">“The activities of the Govt are the primary source of commentary for any media organisation, more predominantly for us as we are more govt-centric. If the Govt does not work; our policy making or revenue administration goes into hibernation, what is there for us to comment on. If we are lamenting holidays it does not mean that holidays are primarily bad or we do not need holidays but not so many in a series which affect the normal working of the economy”</font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since its inception in December 2004, <strong>DDT </strong> has been following the Central Government Holidays in <strong>Delhi </strong> and that is the source of all our doses. On our Birthday last year in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7209" target="_blank">DDT-851-24.04.2008</a>, </strong>we had asked our esteemed Netizens if they would like to have DDT on Saturdays too and the majority opinion was that the present system of five day week in tune with the Central Government was perfectly right. While many Netizens felt that DDT deserved a two day break, the main plea was that many government officers browse TIOL in the offices, DDT on a holiday will be missed.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So we are following the Government holidays as per the suggestions of our Netizens. We are grateful to the large number of Netizens who understood and appreciated the agony and plight of writing a daily column on such a mundane topic as taxes and advised us to maintain the <em>status quo</em>, we are more grateful to the critics, for they keep us on our toes where we deserve and ought to be. Thank you.</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></strong></font><font color="#663399">Central Excise</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Supplementary invoice – Interest not payable - Reliance placed on quashed High Court order – Revenue loses in High Court</font></strong></font></p> <p align="justify"><br> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now where do we stand?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Two High Courts have held that no interest is payable while a Larger Bench of the Tribunal has referred the issue to a still Larger (Five Member) Bench in the <em>Lucas TVS </em> case - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-1843-CESTAT-MAD-LB.htm" target="_blank"><font size="1">2008-TIOL-1843-CESTAT-MAD-LB</font></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what should Commissioners and Tribunal Benches do? Follow the High Court or wait for the Five member Bench?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The Twist in the tale: </strong> But the original High Court decision was set aside by the Supreme Court. We had mentioned this while reporting the <em>Goodyear India </em> case in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2009/2009-TIOL-55-HC-P-H-CX.htm" target="_blank"><font size="1">2009-TIOL-55-HC- P&H - CX</font></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Section 10A (1) deduction of profits and gains to be given from total income: ITAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DEDUCTION</strong> of such profit and gains as derived by an undertaking from the export of articles is to be allowed from the total income of the assessee. Such deduction is subjected to the provisions of section 10A . Total income is defined in section 2(45) of the IT Act and it means the total amount of income referred in section 5 computed in the manner laid down in this Act. Section 5 of the IT Act defines the scope of total income. Scope of total income includes income received or deemed to be received, accrued or arise or deemed to accrue or arise.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service Tax</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Is ignorance of law an excuse for law enforcing authorities? Tribunal sets aside demand of service tax raised under Section 11 of the Central Excise Act and Confirmed under Section 66 (1) of the Service Tax Act</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IGNORANCE</strong> at its worst. Nothing else can summarize this case more appropriately. A show cause notice for demand of service tax was issued under Section 11 of the Central Excise Act, 1944. Not even Section 11A, which is invoked for demand of Central Excise duty. Worse, the demand was confirmed under Section 66(1) of the Finance Act, 1944. Worst, the Finance Act was wrongly mentioned as Service Tax Act. Further there is no sub-section (1) in Section 66 of the Finance Act. It is only Section 66. What will happen to the demand with so many errors? The result is obvious.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A cursory search through the decided case laws resulted in 54 instances where <strong>Service Tax Act </strong> was used instead of <strong>Finance Act.</strong></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 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>