TIOL-DDT 1301 · 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 1301 </font><br> 17.02.2010 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Beedi cess payable under provisions of Section 3 of Beedi Workmen Welfare Cess Act - CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has been informed that some Commissionerates are insisting on payment of cess on labelled beedis. Differing stands are being taken by different adjudicating authorities in this regard. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. S-23011/1/79-M.V. dated 19.12.1981[G.S.R. No.669(E)] as amended by [G.S.R. No. 281(E)] dated 30.03.82, issued by the Ministry of Labour, provides that when cess has been collected on unlabelled beedis, no further cess shall be collected when they are subsequently labelled. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On analysing the above notifications, which are still valid and live, the Board has concluded that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) If the biris are otherwise exempted from payment of Central Excise duty, they are also exempted from payment of biri cess. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) If cess has been collected on unlabelled beedis, no further cess is required to be collected, if they are subsequently labelled. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) For cases covered under (i) above, if the exempted beedis are subsequently labelled, cess shall be payable on labelled beedis. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the Trade & Industry as well as field formations to be suitably informed. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular914.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 914/04/2010-CX., Dated: February 16, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Plight of a Biri Manufacturing Woman - Will CBEC and FM listen? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> received this mail from a school teacher in Kerala. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">I am working as a High School Teacher in Kerala. I am submitting following lines for the kind consideration while preparing the Budget 2010. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">One of my friends, who is not a well educated woman, started the production of Hand Made Branded Biris (other than paper rolled biris), falling under Central Excise Tariff Heading 24031031. The Hand Made Branded Biris attracts Central Excise duty of Rs.14.42 per 1000 nos. (ie. BED-Rs.8.00 + NCCD- Rs.1.00 + Cess- Rs.5.00 + Education Cess @ 2% + Higher Education Cess @ 1%). </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Though clearance of 20 lakhs nos of handmade biris per month, without brand name, has been exempted from payment duty vide Sl.No.36 of Notification No.3/06, there is no exemption for clearance of branded biris. So she took central excise registration and paying duty, though her monthly turnover is around<strong> Rs. 2000</strong> (20,000 nos of biris). For payment of monthly duty of Rs.289/-, she has to travel 20 kms to nearest designated bank, and to file monthly ER-1 return she has to travel 30 kms to nearest Central Excise Range. Moreover, on implementation of ACES system, it has become too difficult for tiny biri units to follow the new procedures. Since majority of HMBB units are clearing less than 3 lakhs biris per annum (Total duty involvement is less than <strong>Rs.4326</strong> per annum ), providing an exemption for the clearance upto 3 lakhs nos. of biris in a financial year would be very much helpful and be a relief for these tiny units. Such an exemption would be supportive for woman empowerment, like in the case of my friend. Though the clearance of biris has an effect on public health, the exemption discussed herein would not result in a major impact as the market share of these tiny units is less than 5%. Hence it is requested to kindly present the case before concerned authorities to get an exemption to the tiny handmade branded biri manufactures. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She ended her mail with, “May Jesus Christ shower his abundant blessings upon you.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will Jesus Christ, Pranab Mukherjee or CBEC Chairman Sridhar help this woman? </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SC decision in Malayala Manorama - </font><font color="#006600" size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=37&filename=legal/sc/2008/2008-TIOL-77-SC-IT.htm" target="_blank">2008-TIOL-77-SC-IT</a></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> - referred to larger Bench </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> whole purpose of Section 115J was to take care of the phenomenon of prosperous `zero tax' Companies not paying taxes though they continued to earn profits and declare dividends. It does not make any distinction between public and private limited companies. It needs to be reiterated that, once a Company falls within the ambit of it being a MAT Company, Section 115J of the Act applies and, under that section, such an assessee-Company was required to prepare its profit and loss account only in terms of Parts II and III of Schedule VI to 1956 Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court yesterday referred the matter to a Larger Bench and we bring you the judgement today. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7178" target="_blank">Breaking News</a></strong>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Advance Authorisation - Amendment to FTP </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PARA</strong> 4.1.6 of the Foreign Trade Policy reads as, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Advance Authorisations necessitate exports with a minimum value addition of 15 %, except for items in Gems & Jewellery sector, for which value addition would be as per paragraph 4 A.2.1 of HBP v.1. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is amended to read as: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Advance Authorisation necessitates exports with a minimum value addition of 15%, except for items <font color="#663399"><strong>specified in Appendix 11B of HBP v1</strong></font> and for items in Gems & Jewellery Sector, for which value addition would be as per paragraph 4A.2.1 of HBP v1.” </font></em></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 31/2009-2014, Dated: February 16, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Performance of Ministers - No Monitoring by Bureaucrats </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Cabinet Secretariat has clarified that it is not correct to say that the Government had developed a Performance Monitoring System whereby performance of ministers would be reported by bureaucrats, as reported by a section of the media.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not factually correct to say that the serving officers will evaluate the performance of the ministers. The Prime Minister's order is clear that the entire process has to be driven by the ministers. According to the order: “At the beginning of each financial year, with the approval of the Minister concerned, each Department will prepare a Results-Framework Document (RFD) consisting of the priorities set out by the Ministry concerned, agenda as spelt out in the manifesto if any, President's Address, announcements/agenda as spelt out by the Government from time to time. The Minister in charge will decide the inter-se priority among the departmental objectives.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assertion that the system is run by a Committee on Government Performance is not true. According to PM's orders, the main function of this Committee is to ensure uniformity, consistency and coordinated action across various Departments. It does the secretarial work of preparing guidelines, ensuring timely submission of RFDs, and providing feedback to the ministries/departments concerned. It plays a supportive role to facilitate the smooth functioning of PMES. This Committee does not evaluate the performance of ministries or departments. It merely provides technical support to facilitate such evaluation by the ministers concerned. The objective is to ensure accountability of the department to the minister, who lays down the goals and targets for each period and reviews them. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MES Engineer arrested by CBI </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Bureau of Investigation has arrested an Assistant Garrison Engineer, MES, Ambala for demanding and accepting a bribe of Rs. one lakh from the complainant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The complainant, a private contractor has lodged a complaint in CBI alleging that the accused has demanded an illegal gratification of Rs. one lakh for signing his Measurement Books and also allowing him extension of time. The CBI registered a case and laid a trap. The accused was caught red handed while demanding and accepting a bribe of Rs. one lakh from the complainant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incriminating documents recovered during the search at premises of accused are being scrutinized for further investigation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Military Engineering Service – MES has the distinction of being one of the most corrupt Departments of the Government of India. In Defence Circles, the Department is known M oney E ating S ervice! </font></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"> – Thursday's cases</font></strong></font></strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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 color="#663399">Central Excise</font></strong> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty – Duty paid before issue of Show Cause Notice – 25% penalty is justified: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the present case, the issue is with regard to levy of penalty equivalent to 25% of the duty amount. Since the respondent assessee has already paid the duty amount prior to the issuance of show-cause notice, there is no question of exercise of any option by the respondent - assessee and the assessee is straightway entitled to the benefit of the Proviso 1 & 2 to Section 11AC of the Act. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">TDS - Sec 40(a)(ia) - Assessee claims deduction for accrued interest on debentures - AO treats it as contingent liability - Since assessee fails to deduct tax at source on interest expenditure, Revenue's decision to disallow entire expenditure is justified: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> intention of the legislature is clear that the nature of expenses mentioned in sub-clause (ia) cannot be allowed unless tax deducted has been paid thereon. If a liability is ascertained and it has been quantified and it has accrued, then, according to mercantile system of accounting, the same has to be allowed as an expenditure irrespective of the fact that whether any such expenditure has been debited to Profit & Loss Account as allowability of an expenditure will not depend upon accounting treatment given by the assessee to a particular expense. If the expenses have been incurred for the purpose of business and they are allowable otherwise, the entry in the books of account, whether it is made or not is not relevant for the purpose of considering the allowability thereof. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FERA </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Alleged Offences took place in 1958, first notice issued in 1973, personal hearing in 2003 – writ in 2003 - Department is not entitled to reopen old matters in this manner : High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> long saga of this case started sometime in 1958, 52 years ago. If the alleged offender was 50 years old then, he would be 102 now! No fault can be attributed to the petitioners for this delay and inaction on the part of the respondents. The respondents are not alleging any malice on the part of the petitioners. It is not the case of the respondents that the petitioners are responsible for delaying the proceedings. No justification is to be found in the explanation for causing delay in the adjudication process. The absence of relevant record due to lapse of more than 30-35 years is also a factual aspect which needs to be taken into account. The respondents cannot be allowed to reopen the proceedings. If allowed it would cause serious detriment and prejudice to the petitioners. The Department is not entitled to reopen old matters in this manner. </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>