TIOL-DDT 1130 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1130</font><br> 11.06.2009<br> Thursday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Export of Basmati Rice to Russia – DGFT amends conditions</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exports to Russian Federation permitted subject to pre-shipment quality certification issued by</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) Insecticide Residue Testing Laboratory.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Geo- Chem Laboratories Pvt. Ltd.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Reliable Analytical Laboratory. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) Arbro Pharmaceuticals Ltd.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Shri Ram Institute for Industrial Research, Delhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(6) Shri Ram Institute for Industrial Research, Branch Office Bangalore.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(7) Delhi Test House; and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(8) Vimta Labs.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">or any other agency as may be notified from time to time.</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=45&filename=notification/dgft/2008/dgft08not109.htm" target="_blank">DGFT Notification NO. 109 (RE-2008)/2004-2009, Dated: June 9, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Export of Groundnuts to Russia – Similar conditions</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exports to Russian Federation permitted subject to pre-shipment quality certification issued by</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (1) Insecticide Residue Testing Laboratory.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (2) Geo- Chem Laboratories Pvt. Ltd. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Reliable Analytical Laboratory.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (4) Arbro Pharmaceuticals Ltd.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Shri Ram Institute for Industrial Research, Delhi (6) Shri Ram Institute for Industrial Research, Branch Office Bangalore (7) Delhi Test House; and (8) Vimta Labs. or any other agency as may be notified from time to time.</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/dgft08not110.htm" target="_blank">DGFT Notification NO. 110 (RE-2008)/2004-2009, Dated: June 9, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">CENVAT Credit and Traffic Islands</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are you flummoxed after reading this caption?</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> We too were until we read the contents of the mail sent by a netizen who is following TIOL stories closely. Here is what he has to say –</font></p> <p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Sir, I am a registered manufacturer based in Nasik and availing CENVAT. Being a growing concern, I wanted to make my presence felt in this industrial town. Hence I opted for beautification of the traffic islands in the vicinity. The municipal authorities were helpful and allowed me to perform this gesture. In return, I was allowed to advertise my company's name on the iron grills enveloping the traffic island and also carry a plaque with my company name. The experiment proved a success and I am asked by the municipality to replicate the efforts at other places in the city. No doubt, maintaining the traffic island with greenery required me to hire the expertise of a company with a green thumb. They incidentally are registered with the Central Excise department and pay Service Tax under the category ‘Garden maintenance Services' and I have entered into an agreement with them.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>On the invoices issued by the service provider, my company took CENVAT Credit and this has been objected to by the department citing the recent case of Kirloskar Oil Engines <strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2009/2009-TIOL-790-CESTAT-MUM.htm" target="_blank"><font size="1">2009-TIOL-790-CESTAT-Mum</font></a>] </strong>reported by Taxindia.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>I feel that the department should not blindly follow this ratio for the simple reason that whereas in the case of Kirloskar Oil Engines, the garden maintenance services were used to beautify the gardens in the factory premises, in my case these services are indirectly used for advertising and sales promotion of my company's final products and hence satisfy the definition of input service given in rule 2(l) of the CENVAT Credit Rules, 2004. </em>I request DDT seeks the views of Netizens and also give its valuable opinion. <strong>DDT replies – </strong>We can only say that you have got a good case on hand, especially as there is a contr judgement. In the <em>Millipore India Ltd </em>case - <strong><em>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2009/2009-TIOL-490-CESTAT-BANG.htm" target="_blank">2009-TIOL-490-CESTAT-BANG</a></font>]</em></strong><em>,</em> the Tribunal observed, “one can include even landscaping the surroundings of the factory as ‘input service'. In these days, much importance is given to keeping the environment of a factory in a proper manner”</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">–Friday'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><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">C&F </font></strong><font color="#FF6600"><strong>Agent – selling of tea for the principal – No return filed due to a <em>bona fide </em>belief – Demand barred by limitation – issue not decided on merits: CESTAT</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is contended by the Revenue that the appellants failed to submit the Return and to observe the procedure. Tribunal held that procedural failure on the part of the appellants was a result of <em>bona fide </em>belief. As such, demand of tax is barred by limitation and the impugned order is liable to be set aside. The impugned order set aside on limitation without going into the merits of the case.</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">DTAA </font></strong><font color="#FF6600"><strong>–Income tax payable on rendering of services in India and utilisation of services in India; TDS to be deducted and if not deducted, payer liable to pay the TDS to Government - no tax on services purely off-shore and outside India; – High Court</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> twin criterion of rendering of services in India and utilisation of services in India becomes evidently noticeable in respect of "start, up services and overall responsibility." However, in respect of "technical services" the rendering of services being purely off-shore and outside India, the remuneration whatever paid towards technical services does not attract tax liability. However, the split up remuneration paid towards "start up services and overall responsibility", appellant had duty in law to effect TDS. The failure to do so makes it vicariously liable to pay the tax on the amounts paid to REOL towards, "start up services and overall responsibility." However, it would not incur any liability to pay tax towards the amount paid in respect of "technical services."</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">Challenge to safeguard Duty on Soda Ash - Writ Petitions ought to be entertained, when there is either a complete lack of jurisdiction or a palpable error so grave which requires imminent interference by a writ court – Petition dismissed – High Court</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> levy is in public interest, which is made to give effect to a provision in the statute that domestic industry is to be protected from onslaught of increased quantities of export which cause or threaten to cause market disruption; power is conferred on a senior functionary i.e., the Director General, who is required to exercise the same after due analysis of material and evidence collected by him after taking into account the presence of critical circumstances.</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>