TIOL-DDT 1271 · 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 1271 </font><br> 05.01.2010 <br> Tuesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty reduced on imports from SAFTA countries </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has reduced the duty on a large number of goods imported under the Agreement on South Asian Free Trade Area (SAFTA), 2006. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_067.htm" target="_blank"><strong><em>Notification No. 67/2006 – Cus dated 30.06.2006</em></strong></a>, is amended. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_148.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 148/2009-Cus., Dated: December 31, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty reduced on textile imports from SAFTA countries </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has reduced the duty from 9% to 8% for import of textile items from Pakistan and Sri Lanka. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_068.htm" target="_blank"><strong><em>Notification No. 68/2006 – Cus dated 30.06.2006</em></strong></a>, is amended. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_149.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 149/2009-Cus., Dated: December 31, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty reduced on imports from Singapore </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has reduced the duty on as many as 532 items imported from Singapore. </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_010.htm" target="_blank"><strong>Notification No. 10/2008 – Cus dated 15.01.2008</strong></a>, is amended.</font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the table in the previous notification had a list of 537 items and the present list has only 532 items. Why? Has the Board missed some items? <strong><font color="#FF6633">DDT</font> </strong> did a quick research and found some interesting facts. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The previous list actually contained 538 items with 537 numbers listed. There was a Serial number 250A – so that made it a list of 538 items. But Serial Numbers 131 to 137 (7 items) referred to the same tariff heading 38085000, that is the seven serial numbers were the same – there should have been only one. So there were six extra numbers. There should have been 538–6=532 serial numbers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AND THIS HAS BEEN CORRECTED NOW. <strong><font color="#FF6633">DDT</font> </strong> heartily congratulates the Board for detecting such a mistake and correcting it, though it does not have many consequential effects. But managing such long lists is really difficult. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_150.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 150/2009-Cus., Dated: December 31, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty Free Imports from Korea </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has exempted a large number of goods imported from Korea from the whole of Customs Duty in accordance with the provisions of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_187.htm" target="_blank">No. 187/2009-Customs (N.T.), dated the 31st December, 2009</a></em></strong>.[please see yesterday's <strong><font color="#FF6633">DDT</font></strong>] </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_151.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 151/2009-Cus., Dated: December 31, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Concessional Duty on Imports from Korea </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified concessional rates of duty on nearly a thousand items in accordance with the provisions of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_187.htm" target="_blank">No. 187/2009-Customs (N.T.), dated the 31st December, 2009</a></em></strong>.[please see yesterday's <strong><font color="#FF6633">DDT</font></strong>] </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_152.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 152/2009-Cus., Dated: December 31, 2009 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Concessional rates of duty for imports from ASEAN Countries </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified concessional customs duty on imports from Malaysia, Singapore and Thailand in accordance with provisions of the Customs Tariff [Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2009/cnt09_189.htm" target="_blank"><strong>No. 189/2009-Customs (N.T.), dated the 31st December 2009</strong></a></em>. [please see yesterday's <strong><font color="#FF6633">DDT</font></strong>] </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_153.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 153/2009-Cus., Dated: December 31, 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"> – Wednesday'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>Bullet proofing activity on vehicles was done by a job worker after clearance of bare vehicle from factory on payment of duty – Cost of bullet proofing cannot be added into assessable value at manufacturer's end – CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue involved in the appeal is valuation of bullet proof vehicles supplied to <em>Jammu & Kashmir </em>Police by the respondent <em>M/s M&M Ltd </em>. Two purchase orders were placed on the respondent. Two orders were placed on <em>Mahindra Defence Systems </em>, a division of <em>Mahindra & Mahindra Ltd </em>(MML). Base vehicles were cleared from manufacturing unit in <em>Nasik </em>on payment of duty on the basis of value indicated in the purchase order. The bullet proofing was done by a job worker/sub-contractor and thereafter vehicles were supplied to J & K Police. Revenue took a stand that respondent (manufacturing unit in <em>Nasik </em>) should have discharged duty on the total price of bullet proof vehicles and consequently proceedings were initiated by issuance of two show-cause notices proposing recovery of more than Rs. 1.21 crores. The Assistant Commissioner gleefully confirmed the duty demand with interest and he also imposed penalty of Rs. 10 lakhs. On appeal filed by the respondent the Commissioner(Appeals) set aside the demand. </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>A firm and its partners are consequently separate entities under Income tax Act - ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THOUGH</strong> in general law, a firm and its partners are not distinct, this is subject to statutory exceptions. Under the scheme of assessment of firms applicable from AY. 1993-94 a firm is treated as an independent entity and the expenditure by way of remuneration, interest, commission etc. paid to partners is allowable to it as a deduction subject to ceilings and such interest, salary etc is taxable in the hands of the partners. A firm and its partners are consequently separate entities under the Act; Accordingly, the fact that the profits are charged to tax in the hands of the firm does not mean that the share of such profits is non – exempt in the hands of the partner. The profits being exempt in the hands of the partner, s. 14-A does apply in computing his total income. </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 of flats and transferring them to land owners who are co-developers in exchange for land received from them cannot be held to be any service – Restriction of utilization of CENVAT Credit to 20% under Rule 6(3)(c) not sustainable – Complete waiver of pre-deposit of service tax and penalty ordered – CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> appellants are engaged in construction of residential complexes and are registered with service tax authorities under the taxable service categories of ‘commercial or industrial construction service' and ‘construction of complex service'. They are also registered with VAT authorities and assessed for levy of VAT under the head ‘works contract' for transfer of goods involved in construction of complexes. </font></p> <p align="justify"><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>Default in Monthly Payment of duty – bar on utilising Cenvat credit – Attachment of goods without notice not correct – Proper course is to issue notice for recovery of wrong credit – High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is a case where the respondents alleged that by operation of sub-rule (3A) of Rule 8, which was amended with effect from 01.06.2006, the petitioner was not entitled to avail Cenvat credit during the period of default. Thus, in substance, the dispute relates to the petitioner's eligibility to avail Cenvat credit during the period of default, namely, between 01.06.2006 and 14.06.2006. This dispute is thus clearly comprehended by Rule 14 of the CENVAT Credit Rules, 2004. </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>