TIOL-DDT 1193 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1193 </font><br>
09.09.2009 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Board
wakes up to reality- amends CENVAT Credit Rules relating to availment of
Credit on clearances from 100% EOU</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9431" target="_blank">TIOL-DDT 1162 27 07 2009</a> </strong>we raised an issue that the CENVAT Credit formula as provided in Rule 3(7)(a) of CENVAT Credit Rules, 2004 is unsuited for clearances from 100% EOU / EHTP / STP to DTA when the goods are exempt from levy of VAT / Sales Tax and requested the CBEC to bring in suitable amendments in the CENVAT Credit Rules, 2004 (‘CCR 2004') to ensure that the CENVAT chain is not hindered. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A large number of EOUs have represented to the MoC regarding the need for amendment of CENVAT Credit Rules, 2004 to make provision for allowing credit of additional duty of customs payable under Section 3(5) of the Customs Tariff Act, 1975. The EOUs are liable to pay this duty when the goods cleared in DTA are not subject to VAT/Sales Tax. Similar representations have also been made in respect of allowing credit of Education Cess paid by the EOUs. But, why to MoC? It is because often the MoC understands the problems faced with regard to Central Excise Law better than the MoF. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We were in fact tempted to report this proposed amendment while reporting the Highlights of the Foreign Trade Policy announced recently, but were waiting for the Notification by the MoF. Para 40 of the Highlights of the Policy reads: </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">40. EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education Cess on DTA sale </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Actually, EOUs will not be allowed any credit on DTA sale. The above para should have been <strong>“CENVAT Credit facility for the component of SAD and Education Cess will now be allowed on DTA sale”</strong>. Anyway, we can understand the intention of the MoC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, a second proviso has been added in Rule 3(7)(a) vide Notification 22/2009 CE(N.T.) dated 07.09.2009 as intended by the MoC in Highlights of the Policy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before this amendment, the Credit was allowed based on a formula. To give an illustration the duty payable on DTA clearances under Notification 23/2003 is as follows: </font></p>
<table width="400" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Value of the goods Rs</font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">100 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">50% of the Customs duty, say 5% if the tariff rate is 10% </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Value for CVD </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">105 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CVD @ 8% </font></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8.4 </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ed Cess on CVD </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">0.168 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SHE Cess on CVD </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">0.084 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total Customs duty </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13.652 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ed cess on total duty </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">0.273 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SHE Cess on total duty </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">0.136 </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total duty </font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14.061 </font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the Formula, the credit allowed is calculated as under: </font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Credit allowed = 100 multiplied by 1+ <u>BCD </u>multiplied by <u>CVD </u><br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">200 100 </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">= 100 X ( 1+ 10/200) X ( 8/100) <br>
= 100X ( 1.05)(0.08) <br>
= <strong>8.4</strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, effectively, what was allowed till now was only Rs 8.4/-, i.e. CVD payable at 8% in the above table. No credit was allowed on the education cess of 0.168 and SHE Cess of Rs 0.084/-. Similarly, no provision existed for allowing credit of additional duty of customs payable under Sec 3(5) of the Customs Tariff Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With effect from 7th September 2009, the credit is allowed not by any formula, but by the new proviso, which is as under: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided further that the CENVAT credit in respect of inputs and capital goods cleared on or after the 7 th September, 2009 from an export-oriented undertaking or by a unit in Electronic Hardware Technology Park or in a Software Technology Park, as the case may be, on which such undertaking or unit has paid – </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) excise duty leviable under section 3 of the Excise Act read with serial number 2 of the notification no. 23/2003-Central Excise, dated 31st March, 2003 [G.S.R. 266(E), dated the 31st March, 2003]; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) the Education Cess leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 and the Secondary and Higher Education Cess leviable under section 136 read with section 138 of the Finance Act, 2007, <u>on the excise duty referred to in (A), </u></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">shall be the aggregate of – </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(I) that portion of excise duty referred to in (A), as is equivalent to - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, which is equal to the duty of excise under clause (a) of sub-section (1) of section 3 of the Excise Act; <strong>(Rs 8.4 in the above table) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act; and </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(II) the Education Cess and the Secondary and Higher Education Cess referred to in (B)”. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, as far as Education Cess is concerned, it appears the amendment has created more confusion. Instead of allowing Education Cess payable on CVD part (0.168 and 0.084 in the above table), the amendment at (B) reads <u>“Education Cess on excise duty referred to in (A)”</u>. Does this mean the EOUs should pay again Education Cess on the total duty of 14.061/-? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though this is the popular belief of the field formations (that cess has to be charged again on total duty), the same has been dispelled by the Bombay High Court in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2008/2008-TIOL-516-HC-MUM-CX.htm" target="_blank">2008-TIOL-516-HC-MUM-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> which,
the Board appears to be not aware of. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It requires half a dozen consultants to understand what they mean. The issue is simple. We have to pick up the CVD and the related Cess from the total duties and accordingly draft a proviso to allow the same, in which they are failing every time. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And why have they retained the formulae? Apparently to take care of the situation prior to 7 th September 2009. And what is the sanctity of 7 th September – why deny this rightful benefit for the period prior to 7 th September? Litigation will continue merrily. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2009/exnt09_22.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 22/2009- CX.,(N.T.), Dated: September 7, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Expenditure Management – Tightening the Belt – Babus have less to spend </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Expenditure Department has imposed a mandatory 10% cut in non-plan expenditure in Domestic and Foreign Travel expenses; Publications; Professional Services; Advertising and Publicity; Office expenses; POL (except for security related requirement); Other administrative expenses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other steps are: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. 10% cut on Seminars and Conferences; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. No meetings in five star hotels. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. No travel on Government account by air will take place by first class. Only Economy Class Travel. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. No purchase of vehicles. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These instructions would also apply to Autonomous Bodies funded by the Central Government. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/expenditure_management.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MOF Department of Expenditure Office Memorandum No. 7(1) E.Coord/2009 Dated: 7th September, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs – Exemption to Imports from Antarctica </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has exempted all goods imported from Antarctica into India from the whole of the Customs Duty provided that a certificate from an officer not below the rank of a Deputy Secretary in the Department of Ocean Development in the Ministry of Earth Sciences is produced in each case by the importer to the jurisdictional Assistant Commissioner or Deputy Commissioner of Customs at the time of importation, to the effect that such goods have been used for or are related to the Indian Antarctic Expedition or the Indian Polar Science Programme. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_090.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 90/2009-Cus., Dated: September 7, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import, re-melt, re-make and export of imported finished jewellery – Whether an authorized activity in SEZ</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department of Commerce has clarified that import of jewellery and its remaking is an authorised manufacturing activity by an SEZ unit holding letter of approval for manufacturing of jewellery. Further import would include re -import of exported jewellery. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez09ins037.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOC F.No.C/6/2009-SEZ: Dated the 7th September, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong>Tax payers need to be treated with dignity and dealt with in a fair and transparent manner – FM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addressing the Chief Commissioners and DGs of the CBEC, the Finance Minister, Pranab Babu said, “The officers at all levels need to be sensitized to the fact that they are facilitators and not just regulators. The tax payers need to be treated with dignity and dealt with in a fair and transparent manner. To this end, I look forward to meaningful implementation of the key components of ‘Sevottam', namely the Citizen's Charter and the Public Grievance Redressal Mechanism. It is also important to ensure that the ongoing programmes concerning use of Information Technology and acquisition of modern equipments are completed as per schedule. It is also my expectation that the Department will play its rightful role in enhancing border security to curb the menace of smuggling, particularly of Fake Indian Currency Notes. With better availability of data, I also hope that the senior officers of the Department will be able to monitor the performance of the field formations more effectively and also provide more qualitative inputs with regard to administrative and policy initiatives.” </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the <strong>concerned </strong> officers take their minister seriously? </font></p>
<p align="center"> </p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM at the Chief Commissioners' Conference. MOS Palanimanickam and CBEC Chief Sridhar are also seen. Where is the Revenue Secretary? </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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"> – Thursday's cases</font></strong></font></strong></font></p>
<p><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="#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></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></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Classification – Carpets containing jute, cotton and polypropylene- to be classified on basis of that textile material which predominates by weight over any other single textile material; Revenue cannot in Court argue a case not made out in its show-cause notice. – Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is well settled that unless the foundation of the case is made out in the show- cause notice, Revenue cannot in Court argue a case not made out in its show-cause notice. </font></p>
<p align="justify"><font color="#663399" 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>Penalty - if assessee makes a claim of deduction under a particular Section where such deduction is clearly not admissible, such claim to be treated as false and bogus and to attract penal provisions: Delhi High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> can penalty u/s 271(1)(c) be imposed? The settled law is either in case of concealment of income or in case the assessee furnishes false particulars of income. In other words, in case of latter, if one submits fake documents to claim deductions, penalty will be attracted. But in this instant case the Delhi HC has widened the ambit of submission of false information by holding that if a claim of deduction is made under a particular Section where such deduction is clearly and undoubtedly not admissible, it is to be treated as 'false claim', and the same will attract the penal provisions u/s 271(1)(c). In other words, the HC has observed that in a case where no views are possible on the interpretation of admissibility of deduction under a particular Section, it is to be treated as bogus claim. And it will attract penalty provisions of the I-T Act. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service tax on services received from outside India can be discharged from CENVAT Credit account – No exclusion provided in scope of 'output service' defined in Rule 2(p) of CCRs, other than GTA prior to 01.03.2008 – Pre-deposit of Rs. 3.3 crores waived and stay granted: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants, M/s Toyota Kirloskar Motors Pvt. Ltd, received certain taxable services like intellectual property service, Commissioning & Installation Service, Maintenance & Repair Service from outside India. In addition to these services they were also recipients of GTA service. As a recipient, the appellants were liable to pay service tax on the services received from outside India in terms of Section 66A and for GTA in terms of Section 68(2) of the Finance Act, 1994. The total amount of service tax liable to be paid by the appellants during the period from April 2006 to August 2006 was Rs. 3.3 crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The entire amount of tax liability was discharged through their CENVAT Credit A/c. Revenue proceeded against the appellants on the ground that the services received from outside India cannot be regarded as ‘output service' and hence they cannot utilize their CENVAT Credit A/c for discharge of their tax liabilities. </font></p>
<p align="justify"><strong><font color="#663399" 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>
</body>
</html>