TIOL-DDT 1227 · 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> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1227 </font><br> 30.10.2009 <br> Friday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exchange Rates for November 2009 - Notified </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC has notified the rate of exchange of conversion for Imported Goods and goods for Export for the month of November, 2009. Notification No. 146/2009-Customs (N.T.), dated the 25th September, 2009 is superseded. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_158.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 158/2009-Cus.,(N.T.), Dated: October 28, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise Chief Commissioners Conference Today</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioners of Central Excise are meeting today and tomorrow in Shillong to thrash out many issues. This could perhaps be the last meeting of the Chief Commissioners of Central Excise to sort out Central Excise issues, if GST is a fact next fiscal. It is a good idea not to carry the carcass of excise issues to the GST era. So the Chief Commissioners should try to settle all pending issues and persuade the Board to accept their views and get clarifications issued immediately. The Chief Commissioners and the Board should use this opportunity to solve issues rather than perpetuate litigation. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let the tax administration be perceived as one ready to help the tax payer pay his taxes in peace rather than one out to harass him at the slightest opportunity. This will also help in a smooth transition to the GST era. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Opening of Diamond Dollar Accounts (DDAs) - Modification</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In terms of Para 4A.19 of the Foreign Trade Policy 2004-2009, firms and companies dealing in purchase/ sale of rough or cut and polished diamonds/ precious metal jewellery plain, minakari and/ or studded with/ without diamond and/ or other stones, with a track record of at least 3 years in import/ export of diamonds/ coloured gemstones/ diamond and coloured gemstones studded jewellery/ plain gold jewellery and having an average annual turnover of Rs.5 crores or above during preceding three licensing years, were allowed to open Diamond Dollar Accounts (DDAs). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has since relaxed the eligibility criteria of the track record of at least 3 years to 2 years and the average annual turnover of Rs.5 crores or above to Rs. 3 crores or above during preceding three licensing years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI wants the Authorised Dealer Category–I banks to note the revised eligibility criteria notified by the Government while permitting eligible firms and companies to open and maintain DDAs with them. They are also advised to be guided by Foreign Trade Policy (FTP) in force from time to time, in future. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2009/rbi09cir013.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI CIRCULAR NO. 13/RBI., Dated: October 29, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Combating Financing of Terrorism - Unlawful Activities (Prevention) Act, 1967 - Obligation of Banks</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Unlawful Activities (Prevention) Act, 1967 (UAPA) has been amended by the Unlawful Activities (Prevention) Amendment Act, 2008. Government has since issued an Order dated August 27, 2009 detailing the procedure for implementation of Section 51A of the Unlawful Activities (Prevention) Act, 1967 relating to the purposes of prevention of, and for coping with terrorist activities. In terms of Section 51A, the Central Government is empowered to freeze, seize or attach funds and other financial assets or economic resources held by, on behalf of or at the direction of the individuals or entities Listed in the Schedule to the Order, or any other person engaged in or suspected to be engaged in terrorism and prohibit any individual or entity from making any funds, financial assets or economic resources or related services available for the benefit of the individuals or entities Listed in the Schedule to the Order or any other person engaged in or suspected to be engaged in terrorism. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has advised Banks to strictly follow the procedure laid down in the UAPA Order dated August 27, 2009 and ensure meticulous compliance to the Order issued by the Government<strong>. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Procedure for unfreezing of funds, financial assets or economic resources or related services of individuals/ entities inadvertently affected by the freezing mechanism upon verification that the person or entity is not a designated person: </strong>Any individual or entity, if it has evidence to prove that the freezing of funds, financial assets or economic resources or related services, owned/held by it has been inadvertently frozen, shall move an application giving the requisite evidence, in writing, to the concerned bank. The banks shall inform and forward a copy of the application together with full details of the asset frozen, given by any individual or entity informing of the funds, financial assets or economic resources or related services frozen inadvertently, to the nodal officer of IS-I Division of MHA as per the contact details given in paragraph 6(ii) above within two working days. The Joint Secretary (IS-I), MHA, being the nodal officer for (IS-I) Division of MHA, shall cause such verification as may be required on the basis of the evidence furnished by the individual/entity and if he is satisfied, he shall pass an order, within fifteen working days, unfreezing the funds, financial assets or economic resources or related services, owned/held by such applicant under intimation to the concerned bank. However, if it is not possible for any reason to pass an order unfreezing the assets within fifteen working days, the nodal officer of IS-I Division shall inform the applicant. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI/2009-10/198 RPCD.CO.RF.AML.BC. No. 34/ 07.40.00/ 2009-10: Dated: October 29, 2009</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No duty on Rice imports – India starts import of rice – taking coal to Newcastle?</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Importing rice into India is as good or bad as taking coal to Newcastle – but that is exactly what is happening. With the recent exemption from Customs duty on import of rice which was a high 70% (Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9808" target="_blank">DDT-1217-16.10.2009</a>) </strong>import of rice into India has started. About four lakh tonnes of rice has already been imported by traders and the figure is going to go up. Though the government is not importing rice, it has created an opportunity for private traders to do so. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Two Million Tax evaders in Pakistan </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The tax authorities have detected some 2 million individuals who have not filed their tax returns and the government would give them a last chance to file their income tax returns by December 15, Federal Minister for Finance and Revenues, Shaukat Tareen, said. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of these people have National Tax Number and are not filing their income tax return while half of them don't have NTN. The government would ask them to come forward voluntary and pay their due taxes. Tareen informed that if they were able to increase the revenue collection, then there would be no need for IMF loan package. He said that 8.8 percent tax-to-GDP ratio is totally unacceptable and the government is trying to increase this ratio to 10.6 percent this year with an increase of 1.8 percent in the GDP. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He said that GST is under performing area in the tax system as GST collection amounts to 3 percent of the GDP in Pakistan and it is way behind other countries whereas it stands at 7 percent in Sri Lanka and 9.5 percent in Turkey. The government is planning to introduce VAT regime in the country to bridge the growing gap in tax collection. </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"> – Tuesday'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" 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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>Notification 6/2006-CE - Software has to be developed from basic building blocks whereby a new software product should emerge as per specific requirement of client so as to qualify itself as custom designed software – demand upheld - CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant has imported Performance Analysis and Diagnostic Optimization System (PADO) software package and Boiler performance Optimization System software package (BPOS) vide four Bills of Entry for use in coal based power plants run by <em>M/s BHEL </em>. The appellant claimed exemption from Additional Customs duty and Education Cess (totaling Rs.1,04,58,534/-) in lieu of Central Excise duty, based on Notification no. 6/2006-CE dated 01.03.2006 classifying the same as <em>customized software </em>. The Departments view that the same is not custom designed software and hence ineligible for the exemption under the said notification was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals). </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>Advance Ruling - fruit based drink mixes/concentrates derived from fruit juice through various processes - business of processing, preservation and packaging of fruits or vegetables – eligible for deduction under sub-section (11A) of section 80IB - AAR </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The applicant is a non-resident Indian, generally residing in USA. The applicant is being assessed to income tax in India as NRI by the Income-tax authorities in Ahmedabad. The applicant proposes to set up and promote a unit near Ahmedabad in the name of “Pioneer Fruit International” to produce fruit based drink mixes/concentrates derived from fruit juice through the various processes. The process involves various steps such as peeling, extraction of fruit oil, fruit pulping, screening, emulsifying, homogenizing, spray drying, addition of preservatives, colour and sweetness and packaging. The authorized representative of the applicant stated at the time of hearing that three products will be produced in the proposed plant : (1) fruit juice – either obtained from one or more than variety of fruits (normally packed in pouches for ready consumption) (2) Concentrates of juice which in the ordinary parlance are known as ‘fruit syrups' consumed by mixing water, and (3) fruit powder obtained by spray-drying of homogenized juice. It is stated that the final product will be placed in packages compatible with the preservation and marketability of the products. The applicant has furnished a copy of the project report in respect of the proposed unit. </font></p> <p align="justify"><font color="#663399" 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>Applicability of doctrine of unjust enrichment to refund of duty paid whether at stage of provisional assessment or final assessment to be decided only based on facts and evidences of duty incidence being borne by assessee – Tribunal Order set aside and matter remanded to original authority – High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A duty payment by an importer initially in the form of a deposit and later as a provisional payment and much later on the finalisation of the assessment are all towards the discharge of duty liability under the provisions of Customs Act. And being a levy in the nature of a indirect tax it has to be presumed that any importer who is a trader or a businessman will necessarily pass on the duty liability to the customers or the consumers. </font></p> <p align="justify"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Monday is a Holiday</font></em></strong></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tuesday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tuesday with more <strong>DDT</strong> </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </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>