TIOL-DDT 1267 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT 1267 </font><br>
30.12.2009 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Implementation of Cigarettes and other Tobacco Products (Packaging and Labelling) Rules, 2008 - CBEC Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> provisions of the ‘Cigarettes and other Tobacco Products (Packaging and Labelling) Rules, 2008' require that every package of cigarette or any other tobacco product shall have the specified health warning in the manner specified in the Schedule to the Rules. Such health warning shall occupy at least 40% of the principal display area of the front panel of the pack and shall be positioned parallel to the top edge of the package and in the same direction as the information on the principal display area. Further, it has been clarified that the package shall mean any type of pack in which cigarette or other tobacco product is packed for consumer sale. The DGFT had also issued a notification on 5.6.2009 whereby a general note has been added to the import policy for complying with the said rules as follows: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“21. Import of cigarette or any other tobacco product shall be subject to the provisions contained in the “Cigarettes and other Tobacco Products (Packaging and Labelling) Amendment Rules, 2009”, as notified by the Ministry of Health & Family Welfare.” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the specific provisions whereby compliance with the Cigarettes Packaging and Labelling Rules have been made mandatory on imported cigarettes and tobacco products as a part of the Import Policy, the Customs field formations are required to enforce its compliance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hence, distribution or sale of cigarettes in duty free shops shall also be subject to compliance of the aforesaid Cigarettes Packaging and Labelling Rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the specified health warning, pictorial representation of ill effects of tobacco use and health message on imported cigarettes and other tobacco products are intended for public awareness and are components of specified health warning, Board wants the Customs field formations dealing with clearance of these products to be instructed accordingly for effective implementation of the aforesaid Rules. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/instruction09_012.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC F.No.450/160/2009-Cus.IV Dated: December 29, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs
- Application of Kimberley Process Certification Scheme (KPCS) to Semi-cut
diamonds – CBEC Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘<strong>KIMBERLEY</strong> Process Certification Scheme Secretariat, Namibia' has clarified vide a press release dated 30 November 2009, that “polishing a single or a few small facets will not transform rough diamonds into polished diamonds and make these fall off the KPCS radar and that semi-cut diamonds and their import or export remains subject to the requirements of the KPCS”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, semi-cut diamonds should be subjected to the requirement of production of certificate under the KPCS. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants wide publicity to be given to these instructions and difficulties, if any, to be brought to the notice of the Directorate General of Export Promotion. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_035.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 35/2009-Cus Dated: December 29, 2009 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Two Customs and an Income tax Officer to spend New Year in jail – Caught by CBI </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> have unconfirmed reports that the CBI has arrested two Customs Officers in Goa while accepting bribes from foreign ships. It is reported that these officers would take foreign goods from the ships which they would later sell to shops in Panaji. This is a usual practice in many small Customs stations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And in a remote place – Pithoragarh in Uttarakhand, an Income Tax officer was caught taking a bribe of Rs. 50,000/- from a trader. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the three officers will have a <strong><em><font color="#FF6633">happy</font> </em></strong> New Year in jail! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The officers should question, “Is it worth the risk, especially after the decent salary hike in the Sixth Pay Commission?” </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>How to avoid Income Tax Audit (scrutiny) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> US Tax payer has come up with a great revelation that his chances of being audited (= our scrutiny) by US IRS is just 1% if he follows one simple rule – show an income of less than 200,000 dollars. Then the chances of audit are just 1%. If you show an income of more than 200,000 dollars, the chances of Audit triple to 3%. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chances of Audit increases if:- </font></p>
<ul>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You have large amounts of itemized deductions on your tax return that exceed IRS targets.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You claim tax shelter investment losses on your tax return. </font>
</p>
</div>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You have complex investment or business expenses on your tax return.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You own or work in a business which receives cash and/or tips in the ordinary course of business. </font>
</p>
</div>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Your business expenses are large in relation to your income on your tax return.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You have rental expenses on your tax return. </font>
</p>
</div>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A prior IRS audit resulted in a tax deficiency.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You have complex tax transactions without explanations on your tax return. </font>
</p>
</div>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You are a shareholder or partner in an audited partnership or corporation.
</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ You claim large cash contributions to charities in relation to your income on your tax return. </font>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif">An informant has given information to the IRS. </font>
</p>
</ul>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wish we had some such tips on Indian Income Tax! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Jail for Tax Offences in Russia </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRESIDENT</strong> of Russia Dmitry Medvedev has signed a Bill banning jailing of tax offenders. They will be fined but not sent to jail. This is a result of the death of a tax lawyer in a Russian prison. </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"> – Thursday's
cases</font></strong></font></strong></font></p>
<p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Central Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Valuation – Section 4A of the CEA, 1944 - Toothpaste cleared in combination pack with a Toothbrush inserted in carton at premises of marketing agent – Toothpaste manufactured by assessee to be valued only on its MRP and not of combination pack –demand and penalty set aside - CESTAT. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TOOTHPASTE</strong> is admittedly an item notified under section 4A of Central Excise Act, 1944, whereas toothbrush was not so notified though, in respect of both these items, there was a requirement under the Standards of Weights and Measures Act, 1976 and the Rules made thereunder to declared on the package the retails sales price of the goods; Toothbrush was chargeable to ‘nil' rate of duty during the material period; </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>Carrying cash of Rs. 65 Lakhs is not an offence, but investigation agencies like Income tax cannot be faulted for their bona fide actions in trying to find out source and use; In such a situation, rights of passenger will have to yield to public interest - Income Tax Department apologises for causing inconvenience.– Premature leakage to media on pending investigation, not correct - Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> this interesting case, a US returned computer engineer has taken the Income Tax officers right up to the Supreme Court for harassing him and he argued his own case in the High Court and the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax Department apologises for causing inconvenience: The department's additional affidavit dated 23.11.2009 expressed regret for the inconvenience caused to the appellant and also assuages the apprehension felt by appellant that he would be harassed for having taken the department to court. The remedial action by the department and the expression of regret serves and achieves the purpose of appellant filing the writ petition. </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>From face of bills, it cannot be determined as to what purposes mobile phones are being used - No statement of any employee is on record with regard to use of phones - Assessee has given phones to employees for use of business purpose only, which was never controverted by lower authorities through any evidence – Credit of ST allowed- CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHETHER</strong> CENVAT credit is available on Mobile Phone Services is now become an agonizing issue. Coupled with the fact that the credits involved are paltry enough to be given the boot at the threshold stage itself, it is surprising that the see-saw of eligibility continues to haunt an assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, the lower authorities demanded CENVAT Credit of Rs.30,755/- from the appellant for the period January to July 2005 and they have also imposed on them equal amount of penalty. The demand is on telephone service, more particularly mobile phone service. After verification of the mobile phone bills produced by the assessee, the original authority came to the conclusion that the mobile phones were used not only for business purposes but also for personal purposes. </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>
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