TIOL-DDT 1312 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1312 </font><br>
05.03.2010 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Leviability of cess on tractors under Tractor Cess Rules – CBEC Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> High Court of Himachal Pradesh in case of <em>Indo Farm Tractors & Motors Ltd. V/s UOI </em>- </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2007/2007-TIOL-724-HC-HP-CX.htm" target="_blank">2007-TIOL-724-HC-HP-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> had
held that Automobile Cess Rules are not applicable for imposition of cess
on tractors. The said judgement was upheld by the Hon'ble Supreme Court in
CWP No. 895/2005.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A reference was made to the Ministry of Heavy Industry & Public Enterprises, the administrative ministry responsible for Automobile cess, to take suitable action consequent to the Court judgement. The Ministry of Heavy Industry & Public Enterprises has informed that cess on tractors is leviable under the Tractor Cess Rules, 1992 and related notifications issued by the adminstrative ministry. However, existence of these rules were not brought to the notice of the Hon'ble Courts and the Hon'ble Court has passed the order without having any occasion to consider these rules. In view of the said situation, the opinion of the Law Ministry was sought. Law Ministry has clarified that since the decision of the Hon'ble High Court was not rendered in the context of Tractor Cess Rules, 1992, therefore, it is legally correct to collect the tractor cess as per the law. Further, the Hon'ble High Court has also held that the cess on tractors can be recovered if the rules are framed by the Government. As the rules are already in existence, there is no bar on collection of cess. In this connection, it is mentioned that Ministry of Heavy Industry & Public Enterprises has clarified that the Tractor Cess rules, 1992 were notified vide Notification No. S.O. 55(E) dated 19.01.1993 and these are still in existence. Further, cess at the rate of 1/8% ad valorem was levied vide Notification No. 662(E) dated 06.09.1985. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So Board clarifies that tractors are chargeable to tractor cess in terms of the Tractor Cess Rules, 1992 read with the IDRA Act, 1951. And Board wants necessary steps to be taken to collect the cess. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court order came in July 2007. Why did the Board wait for nearly three years to issue this clarification? And what happens to those who had not paid the cess all these years? Will they be charged with suppression, fraud and intent to evade tax? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular916.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 916/06/2010-CX dated: March 04, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export warehousing - Gautam Budh Nagar and Nagpur added </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WAREHOUSING</strong> provisions have been extended to all excisable goods specified in the First Schedule to the Central Excise Tariff Act, 1985 intended for storage in a warehouse registered at such places as may be specified by the Board and export therefrom. Board <em>Circular No. 581/18/2001-CX dated 29th June, 2001</em> specifies conditions, procedures, class of exporters and places under sub-rule (2) of rule 20 of Central Excise Rules, 2002 for warehousing of excisable goods for the purpose of export. In paragraph 2(2) of the said Circular, the Board has specified places where warehouses may be established. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The warehouses may be established and registered in Ahmedabad, Bangalore, Kolkata, Chennai, Delhi, Hyderabad, Jaipur, Kanpur, Ludhiana, Mumbai, the districts of Pune and Raigad in the state of Maharashtra, the district of East Midnapore in the state of West Bengal, the district of Kancheepuram in the state of Tamilnadu, the district of Indore in the state of Madhya Pradesh, the taluka Ankleshwar in the district of Bharuch in the state of Gujarat, Navi Mumbai in the district of Thane in the state of Maharashtra, Sholinghur in the district of Vellore in the state of Tamilnadu, Bidadi in the Bangalore Rural District, Karnataka and the district of Thiruvallur in the state of Tamilnadu. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the district of Gautam Budh Nagar in the state of Uttar Pradesh and the district of Nagpur in the state of Maharashtra are added. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular917.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 917/07/2010-CX dated: March 04, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cigarettes and Other Tobacco Products - Empowering Customs & Central Excise Officers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALL</strong> the tobacco products manufactured/ packaged/ imported for sale in India have to bear the specified health warnings as prescribed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has clarified that the officers at the level of Superintendents and above of the Customs & Central Excise department are empowered for entry, search and seizure only at the premises registered under the Central Excise & Customs. Therefore, officers are not empowered to enter, search etc. for premises which are not registered with the department for carrying out any act under the COTP Act, 2003. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular918.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 918/08/2010-CX dated: March 04, 2010 </font></strong></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"> – Monday'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">Service Tax</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commercial Training and Coaching Service – Demand for period prior to insertion of Explanation in Service Tax Rules, 1994 regarding value of taxable service received prior to providing taxable service – prima facie case in favour but for later period post October 2004 appellant ordered to make pre-deposit : CESTAT. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant, a provider of <em>“Commercial Training and Coaching Service”</em> subject to tax from 01.07.2003 seeks waiver of pre-deposit and stay of recovery in respect of service tax of Rs.40,87,384/- and equal amount of penalty. The above demand of service tax has been raised partly on fees collected by the assessee from their students prior to 01.07.2003 and partly on the fees collected from them during October, 2004 to March, 2006. </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">Indo - French DTAA - ONGC awards contract to non-resident - sub-contract to non-resident sister concern - AO holds assessee as agent of employees of subcontractor who render technical services - it is not economic link but a live payment nexus which must be established to hold assessee as agent u/s 163(1)(c): ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAN</strong> a non-resident contractor who subcontracts the services to a non-resident sister concern be treated as an agent of the employees of the subcontractor? Whether economic link is sufficient or a live link is necessary. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When tariff heading clearly provides characteristics of the products and its end use, it was duty of departmental officers to draw samples and get same tested - officers having failed to do this over a period of three years, demand hit by limitation </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants classified the excisable goods manufactured by them under CETH 2710.90 viz. <em>“Others”</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue authorities did not even bat an eyelid while proposing classification of the goods under CETH 2710.11 and 2710.13 on the ground that the products manufactured by the appellants fulfilled the requirement of the boiling point range prescribed for these headings in the tariff and the products either by themselves or in admixture with any other substance are suitable for use as fuel in spark ignition engine. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </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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