TIOL-DDT 1279 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> <font color="#663399" size="3">TIOL-DDT 1279</font><span style=''><br>
15.01.2010<br>
Friday</span></b><b style='mso-bidi-font-weight:normal'><span
style=''><o:p></o:p></span></b></font></p>
<p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='mso-bidi-font-family:Verdana;color:#006600'>Availment of CENVAT Credit when certain activities do not amount to Manufacture – CBEC clarifies<o:p></o:p></span></b></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'><strong>IN</strong> almost every CAG report, we find a repeated objection on CENVAT credit. The audit discovered that in many cases the process undertaken did not amount to manufacture, but the assessees had availed CENVAT Credit on the inputs and paid duty on the final products. In such cases, the amount paid to the Government is not duty and it is only “deposit” and this resulted in irregular passing of CENVAT Credit to the “downstream manufacturers”. Way back in 2004, the Supreme Court held in case of <i
style='mso-bidi-font-style:normal'>N<span style='mso-bidi-font-weight:bold'>armada Chematur Pharmaceuticals Ltd </span></i></span></font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em><strong><u><span
style='color:#006600'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2004/2004-TIOL-113-SC-CX-LB.htm" target="_blank">2004-TIOL-113-SC-CX-LB</a></span></u></strong></em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <span
style='mso-bidi-font-family:Verdana'>such payment of duty is revenue neutral. However, the CAG as well as the revenue can afford to not to accept the judgements of the Supreme Court, they continue to raise this kind of objections resulting in show cause notices.<o:p></o:p>
</span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>In the Budget of </span><st1:metricconverter
ProductID="2007, a"><span style='mso-bidi-font-family:Verdana'>2007, a</span></st1:metricconverter><span
style='mso-bidi-font-family:Verdana'> new Section 5B has been inserted in the Central Excise Act, 1944, empowering the Government to regularize the credit taken in cases where the process is held as not amounting to manufacture by a court. Though under this Section, CENVAT credit has been regularized for metalisation of plastic films, ( Notn 22/2008 CE(NT) dated 2.5.2008)<span style='mso-spacerun:yes'> </span>there are many other cases where the process was held as not amounting to manufacture and it is a fertile area for many audit objections and show cause notices. <o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>Board has received references from the field formations that though certain activities including connectorising, testing, repacking and relabeling of feeder cables, cutting of HR/CR coils into sheets or slitting into strips do not amount to manufacture, such processors are taking CENVAT credit and justifying their CENVAT availment on the ground that they are paying duty on final products.<o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>And it has been clarified that:<o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>In view of the provisions of Section 5B of the Central Excise Act, 1944, if an assessee, who has paid excise duty on a product under the belief that the same is excisable, but subsequently the process of making the said product, is held by the Court as not amounting to manufacture, in such cases, the Central Government may issue an order for non-reversal of such credit in past cases. <o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>In view of the above, after examining the matter, the following instructions are issued by the CBEC:<o:p></o:p></span></font></p>
<blockquote>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'><em>(i) In cases where the process undertaken by an assessee indisputably does not amount to manufacture, the department should inform the assessee about the correct legal position and advise him not to pay duty and not to avail credit on inputs. <o:p></o:p></em></span></font></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>(ii) If the assessee has already paid duty, and in a situation where there is no manufacture as held by the Courts subsequently, and facts of the case are covered by the provisions of Section 5B of the Central Excise Act, 1944, the assessee is at liberty to approach the Central Government for issue of appropriate notification for regularization of the CENVAT credit availed.</span></font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'><o:p></o:p></span></font></p>
</blockquote>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>So, in the coming days we many see many notifications issued under Section 5B and the <span class=GramE>“ irregular</span> passing of CENVAT Credit to the downstream manufacturers” will go down in the history.<o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>But the important question is what will happen if the assessee takes credit even after the court order holding the process as not amounting to manufacture? How the credit will be recovered? In many cases, the duty paid on the final product will be more than the credit availed. When we are fast approaching the GST regime, shouldn't we accept if someone pays duty on value addition instead of fighting over the “irregularity of passing the Credit to downstream manufacturers”?<o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b style='mso-bidi-font-weight:normal'><span
style='mso-bidi-font-family:Verdana; color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular911.htm" target="_blank">CBEC
<span style='mso-bidi-font-weight:bold'>Circular No. 911/2010, Dated: </span></a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2009/excircular911.htm"><st1:date Year="2010" Day="14" Month="1"><b><span
style='mso-bidi-font-family:Verdana; color:#0000CC'>January 14, 2010</span></b></st1:date><b><span
style='mso-bidi-font-family:Verdana; color:#0000CC'><o:p></o:p></span><span style='color:#006600'><o:p></o:p></span></b></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'><o:p> </o:p></span></b></font></p>
<p class=MsoNormal align=center style='text-align:center;mso-layout-grid-align:
none;text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'>Exemption to Goods required for setting up of Nuclear Power Project – Some more units added to the list.<o:p></o:p></span></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'><o:p> </o:p></span></b></font></p>
<p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style='mso-bidi-font-weight:bold'><strong>LIST</strong> 43 of the exemption Notification 21/2002 Cus dated 01.03.2002 contains the list of Nuclear power projects allowed for exemption as mentioned at serial No 401 of the Notification. The following units are added to the existing list of units eligible for exemption.</span><span style=''><o:p></o:p></span></font></p>
<blockquote>
<p style="margin:0in;margin-bottom:.0001pt;text-align:justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style=''><br>
”Rajasthan Atomic Power Project- Units -7 and 8 (Rawatbhata) of 1400MWe”<o:p></o:p></span></font></p>
<p style="margin:0in;margin-bottom:.0001pt;text-align:justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><o:p> </o:p></font></p>
<p style="margin:0in;margin-bottom:.0001pt;text-align:justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style=''>“Kakrapar Atomic Power Project-Units 3 and 4 (Kakrapar) of 1400 MWe."</span></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><o:p> </o:p></span></font></p>
</blockquote>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_003.htm" target="_blank">Notification
No.</a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_003.htm"><span style='color:#0000CC;mso-bidi-font-weight:bold'>
<b>03/2010-Cus., Dated: </b></span><st1:date Year="2010" Day="13" Month="1"><b><span
style='color:#0000CC'>January 13, 2010</span></b></st1:date></a><st1:date Year="2010" Day="13" Month="1"></st1:date><span
style='color:#0000CC;mso-bidi-font-weight: bold'><o:p></o:p></span></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><o:p> </o:p></span></font></p>
<p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='mso-bidi-font-family:Verdana;color:#006600'>Deemed exports under FTP – ICB is not mandatory for Mega Power Projects<o:p></o:p></span></b></font></p>
<p class=msolistparagraphcxsplastcxspmiddle style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style='mso-bidi-font-family:Verdana; mso-bidi-font-weight:bold'><strong>PARA</strong> 8.2 of the <span
style='color:windowtext;text-decoration:none;text-underline:none'>FTP 2009-2014</span> has been amended to do away the requirement of International Competitive Bidding for Mega power Projects subject to certain conditions. The following sentence has been added to para 8.2:</span><span
style='mso-bidi-font-family:Verdana'> <o:p></o:p></span></font></p>
<p class=msolistparagraphcxsplastcxspmiddle style='margin-left:.5in;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>“However, in regard to mega power projects, the requirement of ICB would not be mandatory, if the requisite quantum of power has been tied up through tariff based competitive bidding or if the project has been awarded through tariff based competitive bidding.”<o:p></o:p></span></font></p>
<p class=msolistparagraphcxsplastcxspmiddle style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style='mso-bidi-font-family:Verdana'>And also the following sentence has been added at the end of paragraph 8.4.4(iv):<o:p></o:p></span></font></p>
<p class=msolistparagraphcxsplastcxspmiddle style='margin-left:.5in;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family:Verdana'>“Further, supply of goods required for the expansion of existing mega power project as specified in Sl. no 400A of DoR Notification 21/2002- Customs dated 1.3.2002, as amended shall also be eligible for deemed export benefits as mentioned in paragraph 8.3 ( a), (b) and (c) of FTP, whichever is applicable.”<o:p></o:p></span></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not024.htm" target="_blank">DGFT
Notification No. 24/(RE 2010/2009—2014), Dated: </a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not024.htm"><st1:date
Year="2010" Day="14" Month="1"><b><span style='color:#0000CC'>January 14, 2010</span></b></st1:date><b><span
style='color:#0000CC'><o:p></o:p></span><span style='color:#006600'><o:p> </o:p><o:p> </o:p></span></b></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'><o:p></o:p></span></b></font></p>
<p class=MsoNormal align=center style='text-align:center;mso-layout-grid-align:
none;text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'>Composition of Unit Approval Committee for EOUs Notified<o:p></o:p></span></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'><o:p> </o:p></span></b></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><strong>WHEN</strong> the Commerce Ministry notified the Handbook of Procedures Vol.I (2009-2014) on </span><st1:date Year="2009" Day="27"
Month="8"><span style='mso-bidi-font-weight: bold'>August 27, 2009</span></st1:date><span style='mso-bidi-font-weight:bold'> they notified the powers and functions of the Unit Approval Committee but forgot to notify the composition of the Unit Approval Committees. Now, the HBP Vol.I is amended to incorporate </span><st1:place><span style='mso-bidi-font-weight:bold'>Para</span></st1:place><span style='mso-bidi-font-weight:bold'> 6.31 notifying the composition of Unit Approval Committee for EOUs. <o:p></o:p></span></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><o:p> </o:p></span></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-family: Verdana'><span style='mso-spacerun:yes'> </span>6.31 Composition of Unit Approval Committee </span><span style=''>shall be as under: </span><o:p></o:p></font></p>
<table border=1 align="center" cellpadding=0 cellspacing=0 class=MsoNormalTable
style='mso-cellspacing:0in;margin-left:35.6pt;mso-table-layout-alt:fixed;
mso-padding-alt:2.25pt 2.25pt 2.25pt 2.25pt'>
<tr style='mso-yfti-irow:0;mso-yfti-firstrow:yes'>
<td width=361 style='width:271.1pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Development Commissioner </span></font></p></td>
<td width=89 style='width:66.4pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Chairperson </span></font></p></td>
</tr>
<tr style='mso-yfti-irow:1'>
<td width=361 style='width:271.1pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Jurisdictional Commissioner of Central Excise & Customs </span></font></p></td>
<td width=89 style='width:66.4pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Member </span></font></p></td>
</tr>
<tr style='mso-yfti-irow:2'>
<td width=361 style='width:271.1pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Joint DGFT </span></font></p></td>
<td width=89 style='width:66.4pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Member </span></font></p></td>
</tr>
<tr style='mso-yfti-irow:3;mso-yfti-lastrow:yes'>
<td width=361 style='width:271.1pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Joint/Deputy Development Commissioner of the Zone </span></font></p></td>
<td width=89 style='width:66.4pt;padding:2.25pt 2.25pt 2.25pt 2.25pt'>
<p class=MsoNormal><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''>Member </span></font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''><span
style='mso-spacerun:yes'> </span>Any other nominee of any Department/Agency as special invitee </span></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn032.htm" target="_blank">DGFT
Public Notice No.</a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn032.htm"><span style='color:#0000CC;mso-bidi-font-weight:bold'>
<b>32/2009-14 , Dated: </b></span><st1:date Year="2010" Day="13" Month="1"><b><span
style='color:#0000CC'>January 13, 2010</span></b></st1:date><span
style='color:#0000CC;mso-bidi-font-weight: bold'><o:p></o:p></span></a><span
style='color:#0000CC;mso-bidi-font-weight: bold'><o:p></o:p></span></font></p>
<p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='mso-bidi-font-family:Verdana;color:#006600'>Amendments to Focus Products, Focus Market, VKGUY schemes<o:p></o:p></span></b></font></p>
<p class=msolistparagraphCxSpLast style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;margin-left:0in;mso-add-space:auto;text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span
style='mso-bidi-font-family:Verdana'><strong>DGFT</strong> has amended Appendices 37A, </span><st1:metricconverter ProductID="37C"><span
style='mso-bidi-font-family:Verdana'>37C</span></st1:metricconverter><span
style='mso-bidi-font-family:Verdana'>, 37D of HBP Vol.I incorporating new products/markets for export benefits under VKGUY, Focus Products and Focus Markets schemes. <o:p></o:p></span></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn030.htm" target="_blank">DGFT
Public Notice No.</a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn030.htm"><span style='color:#0000CC;mso-bidi-font-weight:bold'>
<b>30/2009-14 & 31/2009-14, both dated: January 12, 2010 and</b></span></a><span style='color:#0000CC;mso-bidi-font-weight:bold'><b>
<o:p></o:p></b></span></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><o:p></o:p></span></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn033.htm" target="_blank">DGFT
Public Notice No. 33/2009-14, Dated: </a></span></b><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn033.htm"><st1:date
Year="2010" Day="13" Month="1"><b><span style='color:#0000CC'>January 13, 2010</span></b></st1:date><b><span
style='color:#0000CC'>.<o:p></o:p></span></b></a><b><span
style='color:#0000CC'><o:p></o:p></span></b></font></p>
<p class=MsoNormal style='text-align:justify;mso-layout-grid-align:none;
text-autospace:none'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#0000CC'><o:p> </o:p></span></b></font></p>
<p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:
auto;text-align:center'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:green'>Notification of Adjudicating Officer for DRI SCN</span></b></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''><strong>IN</strong> terms of Notification No. 37/2003-Customs (N.T.) dated </span><st1:date
Year="2003" Day="3" Month="6"><span style=''>3rd June, 2003</span></st1:date><span style=''>, Board has assigned the SCN F. No. DRI/SRU/INV-09/2008/NIDHI dated 07.12.2009 issued in case of M/s. Nidhi Textiles, Surat & others by ADG, DRI, Ahmedabad to Commissioner of Customs (Adjudication), Mumbai, for adjudication. </span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
text-align:justify'><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/order_437_10.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><span style=''>F.No.437/01/2010-Cus.IV, Dated: </span></strong><st1:date Year="2010" Day="14" Month="1"><b><span
style=''>January 14 , 2010</span></b></st1:date> <span style='mso-bidi-font-weight:bold'><o:p></o:p></span></font></a></p>
<p align=center style='text-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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style='color:#006600'>Monday's cases<o:p></o:p></span></b></font></p>
<p style='text-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"><b><span style=''>Central Excise </span></b></font></p>
<p style='text-align:justify'><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>Central Excise – In a chemical process, quantity of different products emerging not within the control of human beings – If legislative intent is to restrict use of naphtha only for manufacture of fertilizers then the phraseology in notifications viz., ‘intended for use' would not have been used – Duty demand set aside – CESTAT </span></b></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''><strong>REVENUE</strong> proceeded to demand customs and excise duty along with interest from the appellants on the ground that exemption is available only to the extent of naphtha used in the manufacture of fertilizers and the quantity of naphtha used for production of carbon dioxide, which was further used in the manufacture of ammonium bicarbonate would not be entitled to any exemption. The duty demands were confirmed and penalties were imposed on the appellants.</span></font></p>
<p style='text-align:justify'><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>Gift Tax</span></b></font></p>
<p style='text-align:justify'><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>Gift Tax – Inadequate consideration – If the consideration itself is incapable of being determined, there is no question of ascertaining whether it is adequate or inadequate – ITAT by majority </span></b></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style=''><strong>AS</strong> rightly pointed out on behalf of the assessee, when capital gains has been charged on the footing that the re-valued figure of Rs.80,54,997/-represents the full value of consideration as per section 45(3) of the IT Act, the gift tax authorities cannot possibly say that the assessee has transferred his assets for inadequate consideration. </span></font></p>
<p style='text-align:justify'><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>Service Tax</span></b></font></p>
<p style='text-align:justify'><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>Service Tax – Construction of godowns at Railway yard for Central Warehousing Corporation which in turn lets out the same for commercial purpose is taxable under </span></b><st1:place><st1:PlaceName><b><span
style=''>Commercial & Industrial</span></b></st1:PlaceName> <st1:PlaceType><b><span
style=''>Building</span></b></st1:PlaceType></st1:place><b><span
style=''> Construction services – CESTAT </span></b></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><span style=''>THE</span></b><span style=''> appellants, a Private Limited company, constructed godowns with ancillaries, roads, electrical installation at the Railway yard for Central Warehousing Corporation. A Service Tax audit was conducted by the departmental officers and it was pointed out to the company that construction of warehouse at Railway yard falls under the category of Commercial and Industrial construction services as defined under Section 65(25b) of the Finance Act, 1994. </span></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><font color="#663399"><strong>See our columns Monday for the judgements<o:p></o:p></strong></font><strong><o:p></o:p></strong><o:p></o:p></span></font></p>
<p style='text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'><font color="#FF6666">Until Monday with more <b>DDT</b> <o:p></o:p></font></span></font></p>
<p style='text-align:justify'><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'>Have a nice weekend.</span><b
style='mso-bidi-font-weight:normal'><span style=''><o:p></o:p></span></b></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-bidi-font-weight:bold'>Mail your comments to
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