TIOL-DDT 1278 · the untouched capture
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<p align="justify"><font size="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1278 </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong></strong></font></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
14.01.2010 <br>
Thursday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on PTFE – Yet another resurrection! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI</strong> Dumping Duty was imposed on imports of Polytetrafluroethylene (PTFE) originating in, or exported from Russia by Notification No. 110/2004-CUSTOMS, dated the 18th November, 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification emphatically stated, <strong><font color="#FF6633">“This notification shall be effective for a period of five years (unless revoked, superseded or amended earlier)”</font> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the notification has ceased to be effective from 17 th November 2009. There is no alarm bell in the Board for sun-set notifications and when the notification expired all the un <strong><font color="#FF6633">concerned</font> </strong>officers were sleeping and they could not extend it before its expiry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Notification is amended to stipulate that, <strong><font color="#FF6633">“ This notification shall remain in force up to and inclusive of the 17th November, 2010, unless the notification is revoked earlier ”. </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even if they forget on 17th November, 2010, there is absolutely no problem – they can extend it with retrospective effect whenever they want! With utter contempt for the hapless taxpayer! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 2/2010-Cus., Dated: January 11, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cotton bathmats/rugs for grant of duty credit scrip under VKGUY/FPS – DGFT clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HAND-MADE</strong> carpets and other textile floor coverings, covered under Chapter 57 of ITC (HS) Classification Book, are eligible for duty credit scrip under Focus Product Scheme at the rate of 5% for exports made with effect from 23-2-2009. Before 23-2-2009, these were eligible for duty credit scrip under VKGUY/FPS at different rates. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Trade and Industry have represented that cotton bathmats/rugs are covered under ITC (HS) Codes 5703 and 5705, but exports of cotton bathmats/rugs which are described in the shipping document as only cotton bathmats/rugs or machine-made or machine-tufted cotton bathmats/rugs, are being denied the benefit under Chapter 3 of the Foreign Trade Policy by the RAs on the ground that the policy allows the benefit only to ‘hand-made' category. In this regard, the Trade and Industry have represented that though for tufting, a motor operated tufting machine (similar to table-top type sewing machine) is being used, yet the entire process of making such tufted bathmats/rugs requires elaborate manual handling. In this regard, the Trade and Industry have elaborated that marking of the outlines on the base fabric as per the design and colour combination is done manually, the base fabric/canvas is cut manually to give it the desired shape;; filling of different colours with the needle of the sewing machine is done by moving the base fabric/canvas by hands; after finishing the tufting, uneven threads are cut by hands with the help of a scissor and sheering and embossing is also done by hand with the help a scissor to produce a finished product. Thus, the entire process requires elaborate manual handling by a worker and this motor operated tufting machine is not the kind which can produce the tufted bath mats/rugs automatically without any manual handling. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now DGFT clarifies that the exports should be considered for the benefit of duty credit scrip at the rate of 5% under the Focus Product Scheme for exports made from 23.2.2009 onwards, and earlier under VKGUY/FPS, at the applicable rates, after obtaining a self declaration from the exporter. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2009/dgft09cir021.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Policy Circular No. 21/2009-14 , Dated: January 12, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax – Deduction for Donation to Sports Bodies – more games added</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Explanation 4 to Section 80G, Sports Associations for encouraging certain games or sports notified by the Government shall be deemed to be a charitable institution. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following games are already covered: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Cricket ; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Hockey; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Football; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Tennis; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Golf </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Rifle Shoot ing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Table Tennis </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Polo </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. Badminton </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Swimming </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. Athletics </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. Volley-ball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. Badminton </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. Wrest ling </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15. Basket -ball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16. Kabaddi </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17. Weight - lifting </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18. Gymnastics </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19. Boxing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20. Squash </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21. Chess </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22. Bridge </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">23. Billiards </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24. Cycling </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25. Yachting </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26. Flying </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">27. Judo </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">28. Kho-kho </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29. Horse- riding </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30. Motor racing including motor cycle racing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">31. Mountaineering </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">32. Body building </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">33. Soft ball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">34. Carrom </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">35. Rowing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">36. Archery </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">37. An equestrian sports not being horse- racing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has added the following games with effect from 2010-11 and subsequent assessment years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">38. Baseball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">39. Fencing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">40. Handball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">41. Ice Hockey </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">42. Karate </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">43. Kayaking and Canoeing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">44. Netball </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">45. Sepak Takraw </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">46. Snooker </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">47. Soft Tennis </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">48. Taekwondo </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">49. Triathlon </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">50. Winter Games (Skiing and Ice Skating), and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">51. Wushu </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Notification No. 3/2010, Dated: January 12, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Taxation of Perks – CBDT makes minor correction in Notification No. 94/2009 </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No. 94/2009 dated 18.12.2009, the CBDT had amended the Income Tax Rules regarding taxation of perks under ‘salaries'.<strong> (<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10113" target="_blank">DDT 1262 – 21.12.2009</a>) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CBDT has made some minor corrections in the notification like “credit card” for “credit care” </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT NOTIFICATION NO. 2/2010, Dated: January 12, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Purchase of Immovable Property in India by Persons of Indian Origin – Grandmother added! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PERSONS</strong> of Indian Origin can buy property in India subject to certain conditions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Person of Indian Origin is defined as: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) at any time, held an Indian Passport or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(ii) who or either of <strong><font color="#FF6633">whose father or whose grandfather</font> </strong> was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is amended to read as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) who or either of whose father <strong><font color="#FF6633">or mother</font> </strong> or whose grandfather <strong><font color="#FF6633">or grandmother</font> </strong> was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As is said, “paternity is an opinion while maternity is a fact” – now the fact seems to be recognised. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2009/rbi09cir025.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI Circular No. 25/RBI., Dated: January 13, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Small scale Units in SEZs</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> SEZ Division of the Department of Commerce clarifies that:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Keeping in view the necessity to encourage small scale units it has been decided that in Central Government SEZs, preference may be given to “small scale units” as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the Development Commissioners of the Central Government SEZs may ensure that preference is given to the SSI units while allotting space in the SEZ. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DCs of the IT/ITES SEZs may please ensure that the IT/ITES SEZs are advised to set up incubators of size of minimum 200 seats and the minimum 10% of the space in the SEZ may be reserved for SSI IT/ITES units. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All other SEZs will allocate 10% space to SSI units. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez09ins046.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEZ Instructions NO. 46, Dated: January 12, 2010 </strong></font></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font></strong> <font color="#FF6633" size="5"><strong>tiol </strong></font></font><font color="#006600">– <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> Friday's cases </strong></font></font></p>
<p align="justify"><font 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"></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>Recorded audio / video Compacts discs imported in bulk and packed in jewel boxes with inlay cards - activity of packing does not amount to manufacture – High Court. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sony Entertainment (India) Pvt. Ltd. was inter alia engaged in the manufacture of pre-recorded audio cassettes. It commenced in April, 1997 the activity of marketing recording compact discs. The appellant imported recorded audio and video discs packed in boxes of 50. After receipt of the material in its factory, it packed each individual disc in transparent plastic cases known as jewel boxes, an inlay card containing the details of the content of the compact disc was also placed in the jewel box. The whole was then shrink wrapped. The appellant thereupon sold such packed compact discs in wholesale. </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"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2" color="#FF6633">Income
tax - non-resident company having PE in India seeks advance ruling - files
return based on ruling - AO hikes percentage of profit on estimate basis
- assessee accepts it - penalty - non-filing of appeal itself is no justification
for levying penalty u/s 271(1)(c): ITAT</font></strong></p>
<p align="justify"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">THE </font></strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2" color="#000000">provisions
relating to penalty under the Income Tax Act are a hugely used or may call
it, 'abused' section, notwithstanding the landmark judicial decisions on
this issue. This is one Section which is uniformly applied by the Revenue
to both - domestic companies as well as MNCs. <strong>Although there are
multiple sections like <em>271AA, 271BA and 271G</em> which were inserted
specifically to penalise MNCs concealing income or filing false information
but it is Sec 271(1)(c) which often steals the thunder even in the cases
of MNCs operating through PEs in India.</strong></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>ROM - Reasonability of opportunity granted by the Commissioner was assessed and accordingly the matter was remanded for granting one more opportunity of being heard – No mistake rectifiable under Customs Act - CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The rule of natural justice requires that a “reasonable opportunity” of being heard should be given to an aggrieved party. In our final order, the reasonability of the opportunity granted by the Commissioner was assessed and accordingly he was directed to grant one more opportunity of being heard to the party. We do not think that, in such a view, there is any mistake rectifiable under section 129B(2) of the Act. The application is dismissed. </font></p>
<p align="justify"><font color="#FF0000" size="5" face="Verdana, Arial, Helvetica, sans-serif"><strong>Happy <em>Sankranti</em></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p align="justify"><font color="#FF6633" 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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