TIOL-DDT 1174 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#660099" size="3">TIOL-DDT 1174 </font><br>
12.08.2009 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Advance Authorization – Export of SCOMET items – DGFT Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> case of applications for Advance Authorisation where export item is a SCOMET item, and where the applicant so requests, Advance Authorisation may be issued prior to issue of SCOMET licence, subject to the condition :- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“In case SCOMET licence is not granted within four (4) months of the issue of the Advance Authorisation, then the exporter would pay customs duty and applicable interest on the imported goods and thereafter close the Advance Authorisation. This condition would be incorporated in the Advance Authorisation. The applicant would also give an LUT in this regard.” </font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For your ready reference SCOMET means - <strong><font color="#FF6633">SPECIAL CHEMICALS, ORGANISMS, MATERIALS, EQUIPMENTS AND TECHNOLOGIES </font></strong></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2008/dgft08cir099.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Policy Circular No. 99 (RE-08)/2004-2009 Dated: August 11, 2009</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Fake Notes Circulation in India – lowest in World? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whenever you get a Rs. 500 or Rs 1000 note, chances are bright that the security thread is not bright and the note may be fake – there are so many fake notes in circulation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The high level group set up by the Reserve Bank of India on currency distribution headed by Ms. Usha Thorat , Deputy Governor, Reserve Bank of India has recommended </font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. ensure that ATMs and other outlets for currency distribution dispense clean and good notes. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. the security features have to be constantly upgraded, </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. public have to be educated on how to detect a fake note, </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. technology needs to be used in greater measure to improve the integrity and efficiency of the currency operations, </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. information on detection has to be shared promptly with enforcement agencies, </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. security systems for cash storage and handling at banks strengthened further and </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. note sorting machines installed at all bank branches and other locations. </font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Group noted that the number of fake notes in India is estimated at 3 to 6 pieces per million, and this is one of the lowest in the world. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=1&filename=wnew/rbirelease.htm" target="_blank">RBI Press Release dated August 11, 2009 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>List of Terrorist Individuals/Organisations - under UNSCR 1267 – RBI instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has forwarded to all the banks the updated list of Individuals and entities under UNSCR 1267. RBI wants the banks to report those accounts to Reserve Bank of India & Financial Intelligence Unit-India which bear resemblance with the individuals/ entities listed therein. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the UNSCR 1267, all States are required to take the following measures in connection with any individual or entity associated with Al-Qaida, Usama bin Laden and/or the Taliban as designated by the Committee: </font></p>
<div align="justify">
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ freeze without delay the funds and other financial assets or economic resources of designated individuals and entities [<strong>assets freeze</strong>],
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ prevent the entry into or transit through their territories by designated individuals <br>
[<strong>travel ban</strong>], and
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ prevent the direct or indirect supply, sale and transfer from their territories or by their nationals outside their territories, or using their flag vessels or aircraft, of arms and related materiel of all types, spare parts, and technical advice, assistance, or training related to military activities, to designated individuals and entities [<strong>arms embargo</strong>].</font></p>
</blockquote>
</div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New Income Tax Code to be unveiled today </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Minister Pranab Da is to unveil the new Income tax Code today. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The First Income tax Act was introduced in India in 1860, mainly to meet the huge expenditure on the 1857 mutiny. The father of Income Tax in India is James Wilson who became India's First Finance Member. The Finance Member James Wilson while introducing the Income-tax Act in 1860 quoted from the authority of Manu for levying income tax in this country. The Act received the assent of the Governor General on 24th July, 1860. It came into effect immediately and was modelled on the English Statute. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are references both in Manu Smriti and Arthasastra to a variety of tax measures. Manu, the ancient sage and law-giver stated that the king could levy taxes, according to Sastras . The wise sage advised that taxes should be related to the income and expenditure of the subject. He, however, cautioned the king against excessive taxation and stated that both extremes should be avoided namely either complete absence of taxes or exorbitant taxation. According to him, the king should arrange the collection of taxes in such a manner that the subjects did not feel the pinch of paying taxes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most of the taxes of Ancient India were highly productive. The admixture of direct taxes with indirect Taxes secured elasticity in the tax system, although more emphasis was laid on direct tax. The tax-structure was a broad based one and covered most people within its fold. The taxes were varied and the large variety of taxes reflected the life of a large and composite population. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kautilya's Arthasastra was the first authoritative text on public finance, administration and the fiscal laws in this country. His concept of tax revenue and the on-tax revenue was a unique contribution in the field of tax administration. It was he, who gave the tax revenues its due importance in the running of the State and its far-reaching contribution to the prosperity and stability of the Empire. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Act, 1922 gave a shape to the present structure of the Income Tax in India. The 1922 Act was replaced by the present Income Tax Act 1961 which is now nearly fifty years old and is one of the most complicated Acts in the world, which needs to be simplified. Rajiv Gandhi wanted an income tax return that can be prepared and furnished by the ordinary taxpayer without professional assistance. That is still a far cry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the new Income Tax Code is not another attempt to complicate matters further. </font></p>
<blockquote>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">"It was only for the good of his subjects that he collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold" - -- Kalidas in Raghuvansh eulogizing KING DALIP . </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">"From the treasury, comes the power of the government and the Earth whose ornament is the treasury, is acquired by means of the Treasury and Army". – Kautilya </font></p>
</blockquote>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MAYTAS allowed to exit from SEZ </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MAYTAS is SATYAM reversed – Satyameva Jayathe – reversed SATYAM cannot succeed. Now the Board of Approvals for SEZs has allowed MAYTAS to withdraw its bio-tech SEZ . The Company is required to refund Rs. 31 Lakhs of Service Tax exemption it had availed. </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="4">tiol</font><font color="#006600" size="2"> – Wednesday's
cases</font></strong></font></strong></font></p>
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</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Department cannot approbate and reprobate – when the applicant has taken Cenvat credit and paid duty, which as per the Department is not payable, yet having accepted the same, Revenue cannot refuse CENVAT on inputs – recovery of nearly two Crores stayed - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicants have been manufacturing various <strong><em>press parts </em></strong>required in automobile industry and engineering industry. They have been availing CENVAT credit. For manufacture of press parts, the applicants have been procuring jumbo coils of Hot Rolled (HR) Steel and have been engaging themselves in the activities of de-coiling, cutting, and slitting of HR steel coils and pickling and oiling the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department is of the view that since the processes do not amount to manufacture as clarified in the Board's Circular 811/08/2005- CX dated 02.03.2005, there is no question of the assessee availing Cenvat credit and paying Excise duty. </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>Settlement Commission has not considered huge undisclosed income – imposes a token penalty – No true and full disclosure – matter remanded to Settlement Commission – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the facts and the legal position even though the respondents had not made full and true disclosure of their income while making applications under Section 245C , it would not be proper to set aside the proceeding. However, at the same time, the Commission appears to have misdirected itself on several important aspects while passing the final order. Taking into consideration the multiple disclosures and the fact that the respondents had failed to make true and full disclosure initially as well as at the time of second disclosure, no justifiable reasons to reduce or waive the amount of penalty so drastically. Impugned orders dated 29.1.1999 passed by the Settlement Commission are set aside and all the proceedings are remanded. </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>Refund of excess duty paid – Nothing on record to suggest that the duty is paid under protest to attract the provisions of proviso to Section 27(1)(b) of Customs Act – No reason to interfere with order of Single Judge – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellants, M/s Tamilnadu Steel Tubes Ltd had paid excess Customs duties of Rs. 20.67 lakhs over and above what was required to be paid by them. After failing in their attempts to secure refund from the lower authorities, the appellants approached the High Court by filing Writ Petitions. The petitions were however dismissed by a Single Judge but appellants were granted liberty to approach the authorities with a written representation to re-consider the matter. </font></p>
<p align="justify"><strong><font color="#660099" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p align="justify"><font color="#FF6666" 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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