TIOL-DDT 1236 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"> TIOL-DDT
1236</font> <br>
13.11.2009 <br>
Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I am not very popular with Departmental Officers – Revenue Secretary Bhide </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING </strong>a joint meeting organised by FAPCCI and CII at Hyderabad yesterday, Mr. PV Bhide, Revenue Secretary said that he was not very popular with the departmental Officers. <font color="#663399"><strong>(good that he knows it)</strong></font> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr Bhide and his team were there to explain the Direct Taxes Code. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He said apprehensions, mostly in the media, about winding up the Board and making officers powerless were not correct. He said the code tried to reduce discretionary powers of the officers and aimed at a better dispute settlement mechanism. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He strongly defended retrospective legislation and said that it was not easy to get laws amended retrospectively. First of all you have to convince your minister, then the cabinet and then Parliament and even the industry can represent to parliamentarians. When somebody remarked that the Finance Bill is passed in a few minutes, he said that the provisions are discussed at length in cabinet and committee meetings and perhaps due to political compulsions, other issues find more interest in parliament. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(Though Mr. Bhide finds it very difficult to get through the process of retrospective legislation, the fact is that retrospective legislation is smuggled through parliament only through the Finance Bills, maybe with the confidence that nobody will recognise them. Sometimes the government has the audacity to tell Parliament that the retrospective legislation is to nullify a Supreme Court order!. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have come across a situation recently – A Secretary to the Government of India wanted to know how to retrospectively amend an Act. We told him – simply draft the amendment and take the Bill to Parliament – the Finance Ministry does it every time – you can take help from the Revenue Secretary. “But he has a Finance Bill every year, while it was forty years ago that my ministry went to parliament with a Bill. If I introduce something now, there will be sensation!”, said the frustrated Secretary who was scared to even discuss it with his minister. Just see how easy the Revenue Secretary's job is – in getting retrospective legislation through parliament. - <strong>DDT </strong>) </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue Secretary said that the Code offers the best possible tax rates anywhere in the world. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Minimum Alternate Tax (MAT) - asset based tax:</font> </strong>The RS said that if 50% of the companies don't show profits – there is something wrong. You don't invest your money to get losses. If you are not able to show return on the assets, wind up or merge. Of course he said that they would consider issues like long gestation periods. A FAPCCI Member had earlier mentioned about the case where an assessee had to borrow money to pay Income tax and the Supreme Court held that interest on money borrowed to pay income tax is not deductible. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Code is Revenue neutral and he would be happy to get what he has been getting. But wherever he has lost, that had to be compensated and MAT is one such measure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On charitable trusts, he said, if after doing all the charity, if there is some profit left, they should pay some tax on that. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He added that Foreign investment comes because it is profitable to do business in India in spite of the taxes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are not throwing away all the DTAA – Government of India has a great reputation of keeping its promises. We are only recognising the supremacy of parliament. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Income Tax department not to do Agency Functions:</font> </strong>The Revenue Secretary said that he wants the department to be just a tax collecting department and not to be deciding what a charitable trust is and what incentives are to be given. If incentives are to be given, that has to be done by the Ministries concerned from their budgetary allocations. Immediately he added that the Code does not propose to withdraw any concessions to the SEZs, which is a policy of the Commerce Ministry. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mr. Bhide tried hard to convince his audience that he and the Code were right, but he was not prepared to concede anything. </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>And now Road Show on GST </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DTC Road Show had been on for quite some time – now it is the GST show. Yesterday the CBEC Members Dutt Mazumder and YG Parande were at the PHD Chamber of Commerce explaining the GST. Today they will join Revenue Secretary Bhide in Hyderabad to tell the world what the GST is all about. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of DTC, they have a detailed draft code ready, but for GST all that they have is the Discussion paper of the Empowered Committee – which the Union Finance Minister only promised to consider. There is yet no paper from the Central Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> asked a Deputy Commissioner of Central Excise what the meeting of the Revenue Secretary was all about. “Absolutely no clue!” he replied. You are absolutely right Sir, nobody has a clue. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping duty on Fully Drawn or Fully Oriented Yarn –Yet another Resurrection </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This column is not tired of telling the Government to keep track of the sunset clause in their notifications and wake up before the notifications die. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisional Anti dumping duty was imposed on All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester (non-textured and non-POY) falling under sub-heading 5402 47 00 of the First Schedule to the Customs Tariff Act, originating in, or exported from, the People's Republic of China, Thailand and Vietnam, by<em> Notification No. 29/2009-Cus., dated 26-3-2009</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Notification specifically stated that, “The anti-dumping duty imposed under this notification shall be effective <strong>up to and inclusive of the 25th September, 2009 </strong>” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As usual they forgot to extend it. And now on 11th November they have imposed definitive anti dumping duty effective from the original date of provisional anti dumping, that is 26-3-2009. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_124.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO. 124/2009-Cus., Dated: November 11, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>"Scrabble" is a board game. It is not a puzzle; it falls under <br>
Heading 95.04 and not under sub-heading 9503.00 of the CETA. - Supreme Court <br>
Yesterday's case today in TIOL </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we bring you with analysis a judgement of the Supreme Court delivered yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">How scrabble evolved:</font> </strong> When the Great Depression left architect Alfred Mosher Butts out-of-work, he decided to invent a board game. He did his market research and produced a document entitled "Study of Games". He concluded that there are three kinds of parlour games: "number games", such as dice and bingo; "move games", such as chess and checkers; and "word games", such as anagrams. He stated that "it is curious that while two of the three kinds of table games have yielded such interesting developments, the third has produced nothing better than anagrams". Thus Butts wanted to create a game that combined the vocabulary skills of crossword puzzles and anagrams, with the additional element of chance. The game was originally named Lexico, but Butts eventually decided to call the game "Criss-Cross Words". "Scrabble" which means "to grope frantically", was trademarked in 1948. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See the Supreme Court Judgement in <strong>Breaking News. </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Duty Free Refined or white Sugar - extended </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The nil duty concession was to expire on 30th November, 2009 and it is now extended till 1st March, 2010. Similarly for import of duty free raw sugar, the exemption was to expire on 1st April 2000. Now this is extended till 1st January 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You may also see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9470" target="_blank">DDT 1168 - 04.08.2009</a> </strong>for more details on this. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_125.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO. 125/2009-Cus., Dated: November 11, 2009 </strong></font></a></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"> – Monday's cases</font></strong></font></strong></font></p>
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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>CESTAT cannot grant equitable reliefs; assessee, under Section 11BB, can claim interest from date immediately following three months from date of appellate Commissioner's order to date of refund of duty- CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The best relief which can be given to the appellant is one based on the principles embodied in Section 11BB of the Central Excise Act. What is contained in Section 11BB is a provision for payment of interest on an amount of duty refunded under Section 11B of the Act. Where an Appellate Commissioner sanctions a refund claim in favour of an assessee but the department delays the refund, the assessee, under Section 11BB, can claim interest from the date immediately following three months from the date of the appellate Commissioner's order to the date of refund of duty </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>Claiming Depreciation on basis of fabricated documents and with no machine to install – Penalty of Rs. 6 Crores upheld – ITAT by majority. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On enquiry, the Department found that this transaction of sale was not genuine and the assessee had claimed depreciation on non-existent assets. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessing Officer disallowed the depreciation claim and also initiated penalty proceedings under sec.271(1)(c) of the IT. 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>Construction Service – Introduction of works contract service in 2007 does not make construction service not taxable earlier; If goods are sold along with service benefit of exemption under notification No. 12/2003 has to be allowed; If main contractor pays service tax, sub contractor need not pay (prior to 23.8.2007) - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The old circulars cited by the counsel, although relating to other taxable services, disclose the fact that the department did not want to levy service tax from a sub-contractor of taxable service where service tax on such service was levied from the main contractor. Therefore, there is merit in the contention that the assessee should not be asked to pay service tax if they can prove that the main contractor paid service tax on the same service for the same period. For this purpose, the assessee should be given an opportunity. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday 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>
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