TIOL-DDT 1126 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099" size="3">TIOL-DDT 1126 </font><br>
05.06.2009 <br>
Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GST will be vigorously pursued - President </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> her address to the Joint Session of Parliament yesterday, the President, Pratibha Devisingh Patil said, </font></p>
<blockquote><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. My Government has been able to significantly increase realization of direct taxes as a result of improved and simplified tax administration and this process will continue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The roadmap for moving towards a Goods and Services Tax will be vigorously pursued. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
My Government is fully seized of the issue of illegal money of Indian citizens
outside the country in secret bank accounts. It will vigorously pursue
all necessary steps in coordination with the countries <strong><font color="#FF6600">concerned</font></strong>.<font color="#FF6633">(apparently
the President's speech writers have better command over English than the
Babus of North Block – If this was drafted by the Finance minions, it would
have read as “concerned countries”) </font></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What the President's speech writers did not realise on those three points are: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The TPL in CBDT has already complicated matters so much that you need a super computer and an army to credit the TDS to the Government. Because of this the TDS collections will fall drastically. Every effort to simplify the tax administration ends up in causing tragic misery to the tax payer. Just imagine how much time has to be spent in generating a Unique Transaction Number for every TDS deduction! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
<strong>GST:</strong> The Government hardly has ten months to meet the GST implementation
target and as of now they don't have the law, the infrastructure or even
the direction. For a successful GST you need a good IT infrastructure and
even in Central Excise the computerisation project is not taking off. The
ACES is still somewhere in the wiring stage. The other day I went to a
Central Excise Chief Commissioner's office and found the whole place weird.
They were trying to do the wiring for the ACES project! The State Commercial
taxes Departments are not even on talking terms. A sleek manager like P.
Chidambaram could perhaps have pushed it through – but apparently, some
strong forces don't want him in the Finance Ministry. God Save The Country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>Money
in Foreign Banks:</strong> This is what the BJP wanted to do. As long as politicians have their money stashed away in foreign banks, it is assured that nobody is going to bring them back. Maybe we should start a National Black Money Bank where any amount of money can be deposited without any questions being asked. We can charge a nominal deposit fee and request all the patriotic black money holders to deposit in this Bank instead of foreign Banks. </font></p>
</blockquote>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Applicability of NBFCs - ND -SI regulations – RBI Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All NBFCs with assets size of Rs 100 crore and above, and not accepting / holding public deposits were required to submit a Monthly Return on Important Financial Parameters to the Regional Office under whose jurisdiction the company is located. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘Systemically important non-deposit taking non-banking financial company'( NBFC - ND -SI) means a non banking financial company not accepting/holding public deposits and having total assets of Rs 100 crore and above as shown in the last audited balance sheet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A non-deposit taking NBFC with an asset size of less than Rs. 100 crore as on balance sheet date might subsequently add on assets before the next balance sheet date due to several reasons including business expansion plan. It is clarified that once an NBFC reaches an asset size of Rs. 100 crore or above, it shall come under the regulatory requirement for NBFCs - ND -SI despite not having such assets as on the date of last balance sheet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, it is advised that all such non-deposit taking NBFCs may comply with RBI regulations issued to NBFC - ND -SI from time to time, as and when they attain an asset size of Rs. 100 crore , irrespective of the date on which such size is attained. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DNBS (PD) CC.No . 141/03.10.001/2008-09 Dated: June 4, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation of properties - Empanelment of Valuers – RBI directions</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has suggested guidelines while formulating a policy on valuation of properties and appointment of valuers : </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(a) Policy for valuation of properties </strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) Banks should have a Board approved policy in place for valuation of properties including collaterals accepted for their exposures. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) The valuation should be done by professionally qualified independent valuers i.e. the valuer should not have a direct or indirect interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii) The banks should obtain minimum two Independent Valuation Reports for properties valued at Rs.50 crore or above. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(b) Revaluation of bank's own properties </strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) The extant guidelines on Capital Adequacy permit banks to include revaluation reserves at a discount of 55% as a part of Tier II Capital. In view of this, it is necessary that revaluation reserves represent true appreciation in the market value of the properties and banks have in place a comprehensive policy for revaluation of fixed assets owned by them. Such a policy should inter alia cover procedure for identification of assets for revaluation, maintenance of separate set of records for such assets, the frequency of revaluation, depreciation policy for such assets, policy for sale of such revalued assets etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) As the revaluation should reflect the change in the fair value of the fixed asset, the frequency of revaluation should be determined based on the observed volatility in the prices of the assets in the past. Further, any change in the method of depreciation should reflect the change in the expected pattern of consumption of the future economic benefits of the assets. The banks should adhere to these principles meticulously while changing the frequency of revaluation / method of depreciation. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(c) Policy for Empanelment of Independent valuers </strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i ) Banks should have a procedure for empanelment of professional valuers and maintain a register of 'approved list of valuers '. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) Banks may prescribe a minimum qualification for empanelment of valuers . Different qualifications may be prescribed for different classes of assets (e.g. land and building, plant and machinery, agricultural land, etc.). </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RPCD.CO.RF.BC.No . 112 /07.37.02/2008- 09Dated : June 4, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Chief Missing – Police Officers interrogated</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Mexico Customs Officer disappeared after a traffic collision. A video showed several police cars arriving at the scene of the accident. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Go back a few days – the Customs detained 58 police officers for suspected ties to drug traffickers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Police Corruption is a major problem for the President in cracking down drug cartels and crime groups. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Police is so corrupted that some of the policemen moonlight as gunmen for drug-smuggling groups. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All this happened in distant Mexico. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently DDT has come to know about some Air Customs officers seizing a few foreign liquor bottles from Immigration Police officers. You can't throw stones when you live in a glass house – it is only a matter of time before the Police catch the Customs! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs and the environment: protecting our natural heritage –World Environment Day </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today is World Environment Day. Kunio Mikuriya , WCO Secretary General <em> says, “ </em>The customs community can provide a good example of what can be done to help protect our natural heritage for future generations”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The growing illegal trade in environmentally sensitive goods has prompted the global community to adopt international and regional Multilateral Environmental Agreements ( MEAs ) with trade provisions to protect the environment. Starting from the CITES Convention on endangered species in 1975, the number of these trade-related MEAs have grown steadily over the years: the Montreal Protocol on ozone depleting substances in 1989; the Basel Convention on hazardous wastes in 1992; and the Chemical Weapons Convention in 1997, to name but a few. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Naturally customs plays an essential role to ensure that the cross-border movement of goods complies with these international agreements. Consequently, many customs administrations are faced with a huge challenge, namely a lack of awareness and basic information for frontline officers, which requires training for customs officers on how to recognize and respond to illegal shipments of environmentally sensitive goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Your planet needs YOU! </font></p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="2">tiol</font><font color="#006600" size="2"> – Monday's
cases</font></strong></font></strong></font></p>
<p align="justify"><font color="#660099" 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 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></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Condonation of delay - jurisdiction has to be conferred and cannot be assumed - Tribunal is a creature of the statute itself and there can be no inherent power beyond what is prescribed under Section 35C of the Central Excise Act - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Jurisdiction has to be conferred on any appellate authority by Parliament and it could not be assumed inasmuch as though Parliament prescribed a period of six months for the filing of an application for rectification of mistake in a final order passed by this Tribunal, they did not choose to confer jurisdiction on this Tribunal to condone any delay beyond this period. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Assessment after merger with another company - Company no longer in existence cannot be an assessee by any stretch of imagination - ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Scheme of Amalgamation was in effect from 1st April, 2004. The AO was duly informed by the assessee vide its letter dated 29/6/2004 addressed to the ACIT , Circle 12(2), Bangalore which has been duly acknowledged by the latter. This goes to prove beyond doubt that the AO was well aware of the fact that the assessee was in non-existence as on the dates on which the assessment proceedings have taken place and subsequent order passed. The company which was no longer in existence cannot be an assessee in any stretch of imagination. </font></p>
<p align="justify"><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of bought out spares and consumables subject to processes like inspection, testing, repacking, re-labeling by 100% EOU does not violate Notifications 52/2003- Cus and 22/2003-CE – ‘Manufacture' as defined in FTP applicable and not the definition under Central Excise Act – CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When Development Commissioner permits an activity in 100% EOU , in case of contradictory stand by Customs, matter to be referred demi officially to Board for clarifications – Exports permitted by Development Commissioner within the knowledge of Customs – No merits in impugned order, liable to be set aside </font></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></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>
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