TIOL-DDT 1147 · 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 1147</font><br> 06.07.2009<br> Monday</strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">DGIT </font></strong><font color="#006600"><strong> (Admn) - Nodal agency for co-ordination between the BIFR and the CBDT</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BIFR</strong> which stands for Board for Industrial and Financial Reconstruction is said to be the Board for Industrial Funeral Rites.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has nominated the Director General Income Tax (Administration) to be the Nodal agency for co-ordination between the BIFR and the CBDT and between the AAIFR and the CBDT.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It will be the responsibility of DGIT (Admn) to represent the CBDT before BIFR and AAIFR in every case in which Income Tax reliefs is sought under the Draft Rehabilitation Scheme or in the Sanctioned Scheme circulated by BIFR/AAIFR .</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases where the company and the assessing officer have quantified the Income tax reliefs the DGIT (Admn) will communicate the consent or denial of consent to BIFR at the time of hearing itself after obtaining the approval of CBDT.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is the responsibility of DGIT (Admn) to obtain the approval of CBDT in every case in which Income tax relief/concessions is sought and to communicate the approval of CBDT to BIFR and the concerned assessing officer.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The decision thus communicated by the DGIT (Admn) on behalf of the CBDT is binding on all assessing officers.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessing officer should give the Income Tax reliefs to sick companies only after obtaining the approval as mentioned above.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases where BIFR/AAIFR is taking a different view from that of the CBDT, it will be the responsibility of DGIT (Admn) to file appeal before the appellate authority (AAIFR) or before the Delhi High Court as the case may be.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In cases where the sick companies file appeals against the order of BIFR/AAIFR in any of the High Court other than Delhi High Court, it will be the responsibility of <strong>concerned </strong> Chief Commissioner of Income Tax (Administration) to defend the case in the respective High Court.</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=36&filename=notification/cbdt/2009/it09cir05.htm" target="_blank">CBDT Circular No. 5/2009, Dated: July 2, 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">SEZs </font></strong><font color="#006600"><strong> – Stamp Duty – DOC clarifications</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Stamp Act, 1899 as amended through Section 57 of the SEZ Act 2005 includes in proviso (3) to Section 3 that no duty shall be chargeable in respect of any instrument executed by or on behalf of or in favour of the Developer or Unit or in connection with the carrying out of purposes of the Special Economic Zone.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequent upon this amendment to the Indian Stamp Act 1899, clarifications have been sought by the States, regarding treatment of certain transactions related to SEZ for the purpose of application of Stamp duty.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department of Commerce has issued clarifications:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Whether exemption or refund of stamp duty can be given in respect of purchase of land by the Developer for the purpose of setting up of a SEZ, even if eventually no SEZ is set up?</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the SEZ is not actually commissioned within the time indicated by the MOCI in the approval, or if the SEZ notification is cancelled, the State Governments will be entitled to withdraw the concession of stamp duty and recover the same from the developer.</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Whether stamp duty will be payable in respect of purchase of land by the Developer for activities ancillary to the SEZ, e.g. housing, hotel, recreation, entertainment, golf, etc.?</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption would be available only with respect to the land which falls within the SEZ area. Any facility falling outside the SEZ area will not be eligible for exemption from stamp duty.</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Whether stamp duty would be payable in respect of sale or conveyance of the land developed by the Developer only to the units in the SEZ or to any other person or entity as well?</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the rules governing SEZ, sale of SEZ land to units or other persons or entities is not allowed.</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=260&filename=sez/sez_instructions/2006/sez09ins018.htm" target="_blank">Department of Commerce INSTRUCTION NO. 18 Dated: 2nd July 2009</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Netizens keep us on our toes with both accolades and brickbats – Thank You Sir</font></strong></font></p> <blockquote> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">While reporting the judgement delivered by the Mumbai Bench of CESTAT in <em>M/s Paros Corporation vs. CC (I), JNCH, Nhava Sheva <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2009/2009-TIOL-1007-CESTAT-MUM.htm" target="_blank"><font size="1">2009-TIOL-1007-CESTAT-MUM</font></a> </strong></em> in our analysis on this case, we reported as follows:</font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Incidentally, the above proviso and the Explanation thereto does not suggest the remedy to be adopted when the RSP declared on the imported article fails to reflect the true retail price or when the RSP declared on the package is altered, tampered or obliterated. It is pertinent to note that section 4A of the CEA, 1944 went through all these trials and tribulations before emerging rock solid by the amendments carried out in sub-section (4) on 14.05.2003 and by the framing of the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 vide notification no. 13/2008-CE(N.T), dated 01.03.2008.</em></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Having said that, it would appear quite ludicrous to assume that the provisions of section 2(f)(iii) of the CEA, 1944 come into play in the present case firstly because the provisions would apply to goods manufactured in India and secondly the singular activity of ‘alteration of the retail sale price' cannot possibly tantamount to manufacture for the simple reason that the goods were already marketable in the first place. Paragraph 6 of the Board Circular 1/2000- Cus III dated 05.01.2000 is also an indicator in this regard. Coupled with the Apex Court decision in Johnson & Johnson </em><strong><em>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2005/2005-TIOL-132-SC-CX.htm"><font size="1">2005-TIOL-132-SC-CX</font></a>] </em></strong><em>and BOC (I) Ltd. <strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2008/2008-TIOL-129-SC-CX.htm"><font size="1">2008-TIOL-129-SC-CX</font></a>]</strong>, the case would appear to be split wide open." </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We received an incisive comment, from one of our learned Netizens, posted in the Message Board:</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">“<em>With due respect to the TIOL team which has been doing a fantastic job giving great coverage on indirect tax, pristine analysis, excellent professionals at the helm of affairs, however, the use of the word 'ludicrous' in this article has in my humble view made an interesting argument sound otherwise and is clearly (<font color="#FF6600">not</font>) befitting the column. And may I condemn the use of this word (whether it makes any impact or otherwise) in the context of the article and the judgment.<br> <br> Commenting on tax positions and analysing the same, I strongly believe that such terms should not be used and if used, the site should moderate/edit the same. I am sure that most indirect tax experts would clearly believe that there is a sound ground of argument and by any sense of the English language would the same not peter towards 'ludicrous'.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">I do (<font color="#FF6600">not</font>) want to discuss the nitty gritty of the argument but suffice to say that I agree with Vyasji's comments.</font></em></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>A last word to TIOL team - All experts analysing tax positions should note that netizens who follow this site could get easily influenced by the contents herein, would take the inputs as a mother statement and hence more and absolute responsibility on the team to ensure against such clearly avoidable terms and words.” </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We fully agree with you Sir. We apologize for our erroneous analysis and our comment on the legal position adopted by the appellants before the CESTAT. In fact we realized the gravity of the mistake committed in our analysis and deleted that portion of the story immediately. Since, we carried the analysis and retracted a part of it later we owe an answer to the Netizens for this somersault and an apology to the counsel and also the alert netizen for condemning our mistake.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Once in a while mistakes do happen; after all to err is human. However, we assure the Netizens who religiously follow our case analysis that whenever there is a mistake we shall not hesitate in admitting it and retract glaring errors with an apology.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As Rudyard Kipling says,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF6600">If you can meet with Triumph and Disaster</font></em></font></p> <p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>And treat those two impostors just the same</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While we are humbled by the accolades we receive, we also thank the Netizens profusely for their brickbats. They will keep us on our toes.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Our Budget Special - Thirukkural form an IRS Officer</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember Chidambaram's Budget speeches used to contain quotes from Thirukkural. We found a Thirukkural scholar in C. Rajendiran, Commissioner of Central Excise, Coimbatore. Talking to him as an education as he reels out pearls of wisdom from Thirukkural on every subject. He has authored a scholarly book on Thirkkural and is a popular speaker on the subject. Natural Resources and good leadership make a Nation great and even without natural resources, a Nation with good leaders will become great.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we bring you his Thirukkural Budget.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9287" target="_blank">Guest Column</a></strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">PC's </font></strong><font color="#006600"><strong>Thirukkural Quotes</strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1996 Budget Speech: </strong> 2000 years ago, Saint Tiruvalluvar laid down the golden rule for the King's Ministers: <em>To be able to increase wealth, to lay it up and guard, And also well to distribute it, marks a royal lord.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1997 Budget Speech: </strong> What will we do without our critics? As Saint Tiruvalluvar said <em>Behold the King who reposeth not on those who can rebuke him/He will perish even when he hath no enemies.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2005 Budget Speech: </strong> Saint Tiruvalluvar said: <em>Health, wealth, produce, the happiness that is the result, and security - These five, the learned say, are the ornaments of a polity.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2006 Budget Speech: </strong>I also have severe fiscal constraints. When faced with a dilemma, I usually turn to my favourite poet-philosopher, Saint Tiruvalluva. Writing over 2,000 years ago, he said: <em>The world is his who does his job With compassion.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2007 Budget Speech: </strong>Saint Tiruvalluvar watches over us and warns:- <em>If ploughmen keep their hands folded, even sages claiming renunciation cannot find salvation.</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2008 Budget Speech: </strong>As always, I turned to my muse, Saint Tiruvalluvar, for guidance and reassurance. 2,000 years ago he set the benchmark for good governance in the following immortal words: <em>Generous grants, compassion, righteous rule and succour to the downtrodden are the hallmarks of good governance.</em></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">–Tuesday'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 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><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">Appeals – ‘person aggrieved': Buyer feels excise duty is not payable, but manufacturer does not file appeal in Tribunal – Buyer entitled to file appeal as it has no other remedy: Bombay HC</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> legislature has used the expression any person aggrieved and not the word “manufacturer”. If it was the intention of the legislature that the expression any person has to be read as only “manufacturer” then there was no reason for the legislature to use the expression “any person”. Once the legislature has used an expression which has received judicial interpretation then that interpretation will have to be followed to find the object and the reason for using the expression. The Appellant has demonstrated the prejudice that would be occasioned. It is in that context that the court rightly had directed the appellant to move an application to seek relief to prefer an appeal. The tribunal unfortunately misread the judgment of this court and proceeded to examine whether an appeal itself lies.</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">Dispute between State PSUs and Central Departments – Delhi Metro is hybrid PSU - COD clearance required: ITAT</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question is whether in case of disputes between the Income-tax Department and the hybrid PSU, the previous approval of the COD is required? Such permission is required in case of a PSU of the Central Government or the undertaking of the State Government. Therefore, there is no reason to come to a conclusion that such an approval is not required in case of a hybrid PSU.</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>