TIOL-DDT 1105 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 1105</font><br>
07.05.2009<br>
Thursday</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Implementation of Phytosanitary requirements in import or export of goods – CBEC Clarification</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> sanitary (relating to food safety) and phytosanitary (animal and plant health) measures are enforced in the course of international trade by various countries to prevent the spread and introduction of any pests of plants, plant products or insect, fungus and for protection of human, animal or plant life or health.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Circular No. 39/2004-Customs dated 3.6.2004 and Board's instructions dated 2.4.2009, Customs officers have been instructed to release the goods imported in wood packaging material, only in cases where the wood packaging material are appropriately treated as per international standards (ISPM -15) or is accompanied by a phytosanitary certification with the treatment endorsed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the international trade, every consignment accompanied with solid wood packaging materials (SWPM) needs to be treated and marked in accordance with the provisions of International Standards for Phytosanitary Measures (ISPM) No.15. In case of non-compliance of the ISPM -15, the importing countries issue notices to the National Plant Protection Organisation of the exporting country for non-compliance, and initiate necessary action against the exporter.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of late, the Government of India had received a number of non-compliance notifications from various countries particularly European Union countries regarding violation of ISPM -15 standards, in respect of goods exported from India. Most of these cases relate to non-treatment of wood packaging material or no treatment mark on wood packaging material used in packaging of goods exported from India . Exports to most countries including Canada, USA, Australia, Japan etc. require that all wood packaging materials used in packaging of export consignments are required to be rendered free from all pests either by heat treatment or by fumigation with Methyl Bromide by the treatment providers recognized by the Dir ectorate of Plant Protection, Quarantine & Storage (DPPQ&S) under the Department of Agriculture and Cooperation (DAC). The list of such accredited fumigation agencies for Methyl Bromide Fumigation and certified Heat Treatment Facilities for wood packaging material as per ISPM - 15, can be accessed at the DAC's website i.e. <strong><a href="http://agricoop.nic.in/">http://agricoop.nic.in/</a>. </strong>Detailed information on plant quarantine activities may also be accessed from the official website of DPPQ&S at <strong><a href="http://www.plantquarantineindia.org">www.plantquarantineindia.org</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board directs that all the Customs field formations should verify whether the export goods packed with raw or solid wood packaging material comply with the ISPM No. 15 or are accompanied by a phytosanitary certificate with the treatment endorsed issued by the agencies which are accredited/certified by DAC. In case of non-compliance, the matter may be referred to the Plant Quarantine authorities for proper treatment of export goods before their release.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, in respect of import consignments, Board reiterates that the provisions of sub-clause 20A prescribing compliance of ISPM -15 standards by wood packaging material may be enforced in terms of Plant Quarantine (Regulation of import into India) Order, 2003. Consignments that are found to be non-compliant or not carrying prescribed treatment mark on the wood packaging materials shall be referred to the Plant Quarantine Authorities for proper treatment or destruction or deportation to the country of export. <strong>The details of such non-compliance shall also be informed in the prescribed format for reporting of non-compliance to the DPPQ&S.</strong></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_014.htm" target="_blank">CBEC Circular No. 14/2009-Customs - Dated: May 06, 2009</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Ban of export non-basmati rice not applicable to export of rice to certain countries</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Ban on export of non-basmati rice shall not be applicable to export of rice to the following countries:-</font></p>
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td width="36" valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No.</font></strong></p></td>
<td width="98" valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Country</font></strong></p></td>
<td width="83" valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Quantity in MTs.</font></strong></p></td>
<td width="199" valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Name of PSU through which export to be made</font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Burkina Faso</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
<td rowspan="9"><div align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MMTC</font></div></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cameroon</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21,700</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cote D'Ivoire</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1,44,900</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Egypt</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">48,300</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Gambia</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">36,250</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mali</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Somalia</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tunisia </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5,550</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Zanzibar</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12,100</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Benin</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
<td rowspan="3"><p align="center">STC</p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ghana</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">68,800</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Guinea Bissau </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Liberia</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">96,600</font></p></td>
<td rowspan="4"><p align="center">STC</p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mozambique</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Togo</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 72,400</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Zambia</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24,200</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nigeria</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1,17,100</font></p></td>
<td rowspan="5"><p align="center">STC</p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 18.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Senegal</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1,41,300</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mauritius</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15,000</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sierra Leone</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">38,500</font></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21.</font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Djibouti</font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12,100</font></p></td>
</tr>
<tr>
<td valign="top"><font color="#000000"> </font></td>
<td valign="top"><p><strong><font color="#000000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Total</font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10,00,000</font></strong></p></td>
<td> </td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above export shall be subject to the following conditions:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The above quantity shall be exported by PSUs during KMS 2008-09;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Above PSUs shall procure rice from such rice mills which have surplus rice/paddy in their stock;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii) The rice to be exported shall be with a minimum of 25% of brokens;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv) The PSUs shall ensure that their entry into market for this export does not affect the overall price situation of rice; and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v) The PSUs shall source the rice to be exported from more than one State.”</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=45&filename=notification/dgft/2008/dgft08not104.htm" target="_blank"> DGFT Notification NO. 104 (RE-2009)/2004-2009 Dated: May 06, 2009</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Import of waste paper – DGFT's further Clarification</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Policy Circular No.82 (RE-08)/2004-2009 dated 28.4.2009, it has been clarified that the applications for import of waste paper submitted to MOEF are to be accompanied by the certificate of independent Pre-Shipment Inspection Agency.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT further clarifies that the pre-shipment inspection certificate shall state that imported material is only waste paper etc. and is free from any hazardous waste including municipal waste, bio-medical waste etc.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A list of Pre-Shipment Inspection Agencies have been notified by DGFT under Appendix-5 of Handbook of Procedures Vol.I. Though these agencies are enlisted for the specific purpose of conducting pre-shipment inspection of metal scrap, it is felt that many of such enlisted agencies may have capability to carry out pre-shipment inspection of waste paper also. Accordingly, trade and industry is advised to seek pre-shipment inspection from only those agencies who are enlisted in Appendix-5 of Handbook of Procedures Vol.I.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any new agency desiring to enlist under Appendix-5 for pre-shipment inspection of waste paper may apply to DGFT according to provisions cited there.</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/dgft08cir088.htm" target="_blank">DGFT Policy Circular No. 88(RE-08)/2004-2009 Dated: May 06, 2009</a></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Appellate Authorities should dispose of Stay Applications expeditiously; so long the stay application is not disposed of, the Assessing Officer must be slow or reluctant in initiating recovery process.- CBDT directed to issue Circular – No recovery during pendency of stay petition - High Court</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An issue is pending with the Commissioner (Appeals) which includes a stay petition. The Commissioner (Appeals) does not decide but the Department is not ready to wait.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A very familiar situation, though the CBEC had issued a circular that coercive steps should not be taken while the matter/stay is pending with Commissioner (Appeals), there seems to be no similar CBDT circular and there is a petition in the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed that the inaction on the part of the CIT(A) cannot be appreciated but has to be condemned in the strongest words.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the High Court directed the Commissioner (Appeals) to hear the stay application and dispose of the same within a period of 15 days from this date. <strong>However, it is expected that no coercive action will be taken against the petitioner meanwhile.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed,</font></p>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">we have experienced a flood of such writ petitions, where the petitioner having filed appeal along with the stay application before the authority concerned have waited for some time but the appellate authority has failed to pass any order whatsoever on the stay application and in the meantime the assessing authority had proceeded to make recovery which causes in filing of a number of writ petitions before this Court.</font></div>
</li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">This can be avoided by the authorities concerned showing more concern to their duties and by disposing of such stay applications expeditiously and in any case within a reasonable time.</font></li>
</ul>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">For inaction of the authorities, this Court is being flooded with avoidable litigation which is causing more harm to public at large who is waiting for dispensation of justice within a reasonable time from the highest Constitutional Court in the State.</font></div>
</li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">This Court is already burdened with lacs of cases awaiting their turn for disposal.</font></li>
</ul>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">The constraint in which this Court is functioning is being added by this inaction of the authorities and is causing delay in disposal of huge number of cases.</font></li>
</ul>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">We do not propose to make this order an occasion to illustrate the various reasons for delay but we will be failing in our duty if we refrain from showing our concern to such callousness on the part of the revenue authorities in sitting tight over the stay application compelling the assessee to run to the High Court by filing writ petition simply to get an order for expeditious disposal of the application for interim order.</font></div>
</li>
</ul>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">If they have some justification for not deciding the stay application for some time, it would be in the fitness of things that in such cases, the assessing authority, if it has received the information that the assessee has approached the appellate authority by filing appeal along with the stay application which is pending, must await the recovery till the decision is taken by the appellate authority on such stay application.</font></div>
</li>
</ul>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the High Court directed the Central Board of Direct Taxes, to look into this aspect of the matter and, if necessary, to issue a circular to all the appellate authorities directing them to dispose of stay applications expeditiously and so long the stay application is not disposed of the Assessing Officer must be slow or reluctant in initiating recovery process.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See </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/2009/2009-TIOL-228-HC-ALL-IT.htm" target="_blank">2009-TIOL-228-HC-DEL-IT</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 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></strong></font></strong></font></strong></font></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">Common input purchased in bulk to reduce cost and CENVAT credit taken – when assessee embarked on manufacturing exempted goods, they reversed corresponding amount of CENVAT credit – Tribunal's order allowing appeal upheld by High Court, so Revenue appeal does not survive: Tribunal</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN </strong> it comes to the provisions of Rule 6 of the Cenvat Credit Rules, it is an oft commented cliché – that the drafters of law do not take into account the predicament faced by the manufacturers in maintaining separate accounts of for receipt, consumption and inventory of inputs used for the manufacture of dutiable and exempted final products.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal had an occasion to comment on this scenario in the case of <em>Philips India Ltd. </em><strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-589-CESTAT-MUM.htm" target="_blank">2006-TIOL-589-CESTAT-Mum</a></font>] </strong> while dismissing the Revenue appeal and holding that it is grossly unjust to ask the respondents to pay a huge amount of Rs.1.09 crores under rule 57AD of CER, 1944 as against the inadmissible credit of Rs.87,569/-. The Bench noted – <em>that the wordings of the cited rule and the cited circulars <strong>do not deal with a situation when it is not possible to segregate the inputs</strong>, whereas such a situation has been dealt with by the Hon'ble Supreme Court's decision in the case of Chandrapur Magnet <strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-41-SC-CX.htm" target="_blank">2002-TIOL-41-SC- CX</a></font>].</strong></em></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">Exchange loss - fluctuation in dollar rates - Since assessee was paid advance by non-resident holding company without any obligation, it is not accrued liability - deduction cannot be allowed for notional loss: ITAT</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> exchange loss due to fluctuation in dollar rates has largely become a settled issue after the Apex Court giving the final verdict in the Woodward Governor Pvt Ltd case in favour of the assessee. But does it mean that all types of exchange loss are allowable deductions. NO is the latest ruling of the ITAT. A notional loss is not an allowable deduction. Unlike in the Woodward Governor case where the exchange loss was an accrued liability, the AO's finding in this case was that there was no accrued liability and the assessee fails to rebut this finding by any evidence. Thus, the claim of the assessee is disallowed.</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">CENVAT Credit - Rent-a-Cab Service to employees – whether can be treated as Input Service – Argument that transportation of anything other than goods stood impliedly excluded from “input services” not made before Bench in Cable Corporation case – Matter referred to Division Bench</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS </strong><em>appeal is headed for a long and tortuous journey. </em> For one, it is a Revenue appeal and concerns the CENVAT Credit taken of service tax paid on the Rent-a-Cab service to employees, consultant and other persons. Secondly, although the amount involved in the present appeal is less than Rs.50,000 /- the appeal was admitted by the Member(Technical) who constituted the Single Member Bench on the ground that the issue was of a recurring nature.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements</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>
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