TIOL-DDT 1098 · 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 1098</font><br> 28.04.2009<br> Tuesday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Merger of Bongaigaon Refineries and Petrochemicals Limited with IOCL – Central Excise recognises</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BONGAIGAON</strong> Refinery & Petrochemicals Ltd. (BRPL) had merged with IOCL and is now known as Indian Oil Corporation Ltd. (Bongaigaon Refinery) with effect from 25.03.2009. Now this amalgamation is recognised by Central Excise.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 29/2002-Central Excise, dated the 13th May 2002, goods cleared from</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Numaligarh Refinery, or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Bongaigaon Refineries and Petrochemicals Limited, or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Indian Oil Corporation, Guwahati, or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Assam Oil Division, Indian Oil Corporation, Digboi,</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">are exempted from fifty percent of the excise duties.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now <em>since Bongaigaon Refineries and Petrochemicals Limited </em> is merged with IOCL, this notification is amended to make (b) read as</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian Oil Corporation Ltd., Bongaigaon Refinery, or</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now <em>Bongaigaon Refineries and Petrochemicals Limited </em> was merged and converted into <em>Indian Oil Corporation Ltd. (Bongaigaon Refinery) </em> with effect from 25.03.2009, but the Central Excise amending Notification is issued on 27.4.2009. What happens to the period from 25.03.2009 to 26.04.2009? Some sincere Central Excise officers are sure to realise this mistake and the issue will ultimately reach the Supreme Court.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notice issued by IOCL on 25.03.2009, says,</font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the aforesaid Order of Amalgamation, the name of Bongaigaon Refinery & Petrochemicals Ltd. will be deleted and/or replaced by Indian Oil Corporation Ltd. (Bongaigaon Refinery) at all places wherever applicable.</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=30&filename=notification/excise/2009/etariff09_05.htm" target="_blank">Notification No. 5/2009-Central Excise - Dated: April 27, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">The Rich leaving UK</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The richest of British have lost about a third of their wealth in the last year- about 155 billion pounds.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lakshmi Mittal, the steel tycoon lost nearly 17 Billion pounds. But that still saw him as the richest with over a ten billion pounds.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To add to the misery of the poor rich of UK, it seems many of the Super Rich including Hugh Osmond, whose business empire spans insurance and pub chains, are planning to leave UK for better tax havens, especially in view of the 50p rate of income tax announced recently.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Policy Guidelines for issuance and operation of Prepaid Payment Instruments in India – RBI instructions</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pre-paid payment instruments issued by banks and non-bank entities have been gaining popularity as a means of payment in India. In order to ensure an orderly development and operations of this product, Reserve Bank had placed the 'Approach Paper' on <strong>issuance and operation of ‘ </strong>prepaid payment instruments in India' on the RBI website for public comments on November 07, 2008. Based on the comments received from banks, existing issuers of pre-paid payment instruments, general public and a series of meetings with various stake holders, the draft guidelines was prepared by Reserve Bank and was also placed on the website for public comments. After taking into account further comments/suggestions received, Reserve Bank has finalised the ‘guidelines for prepaid payment instruments in India'.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reserve Bank of India, has notified, the <strong><font color="#FF6600">‘Guidelines for Prepaid Payment Instruments in India'</font> </strong> for the information of general public. All persons currently operating or proposing to operate such payment systems shall comply with the guidelines.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pre-paid Payment Instruments: </strong>Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holder, by cash, by debit to a bank account, or by credit card.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The pre-paid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instruments which can be used to access the pre-paid amount (collectively called Payment Instruments hereafter).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The pre-paid payment instruments that can be issued in the country are classified under the three categories viz.</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Closed system payment instruments</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Semi- Closed system payment instruments and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Open system payment instruments.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Closed System Payment Instruments</strong>: These are payment instruments issued by a person for facilitating the purchase of goods and services from him/it. These instruments do not permit cash withdrawal or redemption. As these systems do not facilitate payments and settlement for third party services, issue and operation of such instruments are not classified as payment systems.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Semi-Closed System Payment Instruments</strong><em>: </em>These are payment instruments which are redeemable at a group of clearly identified merchant locations/ establishments which contract specifically with the issuer to accept the payment instrument. These instruments do not permit cash withdrawal or redemption by the holder.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Open System Payment Instruments<em>: </em></strong>These are payment instruments which can be used for purchase of goods and services at any card accepting merchant locations (point of sale terminals) and also permit cash withdrawal at ATMs.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi.htm" target="_blank">RBI /2008-09/458 - DPSS.CO.PD.No . 1873 /02.14.06/ 2008-09 April 27, 2009</a></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">–</font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Tomorrow's cases</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 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 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 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></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><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">Movement of limestone and rejects in the mining area covered by the entry ‘mining of mineral, oil, gas' and cannot be taxed under ‘cargo handling service' prior to 1 June 2007: CESTAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> several decisions, the Tribunal has held that when an activity comes under the service tax net with effect from a certain date the same activity could not be subjected to tax under a pre-existing category unless the scope of the pre-existing categories of service is simultaneously modified.</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">Carry forward MAT credit available to assessee was to be adjusted first before charging interest under Ss 234B and 234C ; If there is conflict between Rule and substantial provision, Rule must pave way to provision; Revenue cannot rely on Form-I to say that MAT credit under Sec 115JAA should be given only after tax and interest - Form-I cannot go beyond provisions of Act: Madras High Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>If</strong> there is conflict between Rule and the substantial provision of the Act, the Rule must pave way to the provision of the Act; revenue cannot rely on the Form-I to say that the MAT credit under Section 115JAA should be given only after tax and interest Form-I cannot go beyond the provisions of the Act: “the intention of the legislature is to give tax credit to tax and not to the tax and interest. Once the intention is clear, the revenue cannot rely on the Form-I to say that the MAT credit under Section 115JAA should be given only after tax and interest. Further we have answered the first question of law in favour of the assessee i.e. the MAT credit under Section 115JAA should be given effect to before charging the interest under Section 234B and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisions of the Act. Form-I cannot lay down the order of priority of adjustment of TDS, advance Tax, MAT credit under Section 115JAA which is contrary to the provisions of the Act.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Customs</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6600">Detention - writ petition can be entertained at pre-detention stage only if it is passed under a wrong Act; against a wrong person; for a wrong purpose; vague, extraneous and irrelevant grounds or wrong Authority - even smaller Benches of the Supreme Court are bound by Judgments of larger Benches: Bombay High Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Courts have necessary powers in appropriate cases to interfere with the detention order but the scope of interference was limited to the following exceptions:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) That the impugned order is not passed under the Act under which it is purported to have been passed;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) That it is sought to be executed against a wrong person;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) That it is passed for a wrong purpose;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) That it is passed on vague, extraneous and irrelevant grounds; or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) That the authority which passed it had no authority to do so.</font></p> </blockquote> <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>