TIOL-DDT 1331 · 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 align="justify"><font color="#663399" size="2"><strong><font size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1331 </font></strong></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><br> 05.04.2010 <br> Monday </strong></font></font></p> <p align="justify"> </p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Seminar on Budget 2010 at Vizag </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TODAY,</strong> TIOL in association with Tax Law Research Group, Visakhapatnam is hosting a one day seminar on the changes brought in Customs, Excise and Service Tax in Budget 2010 at Visakhapatnam . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Seminar should be a curtain raiser for GST. CBEC Member Dutt Majumder is the Chief Guest and is sure to enlighten the audience with his deep knowledge. Senior officers of the Department, leading consultants and captains of industry and trade are attending. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you updates of the developments in the seminar. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Alumina Balls/Ceramic Pebbles used in Ceramic Tiles Industry are Capital Goods – CBEC Clarifies </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC received representations from field formations and the industry seeking clarification as to whether items like alumina balls/ceramic pebbles, which are grinding media used in ball mills in the Ceramic Tile Industry should be treated as capital goods or inputs under the provisions of CENVAT Credit Rules. Similarly doubts were expressed as to whether other items like bolting cloth/ screens/ silicon cylinders which carry designs and which are fitted on the machines used for printing of design over the surface of the tiles, should be considered as capital goods or inputs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board felt that the classification of these items as capital goods or inputs is relevant because a concessional rate of excise duty is available to a tile manufacturer subject to the condition that no CENVAT credit is taken on inputs used in the manufacture of ceramic tiles. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After examining the issue, CBEC clarified as follows: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been reported that alumina balls/ceramic pebbles are essential to run the ball mill in the ceramic tile factory and the ball mill cannot function without the grinding media. Therefore, alumina balls/ ceramic pebbles which are grinding media should be considered as component/ part of the machines to be classified as capital goods for CENVAT credit purposes. Similarly, bolting cloth/screens/silicon cylinders which carry designs and which are fitted on the machines used for printing of designs are also essential for operating of the machines. Therefore, these items would also be considered as capital goods for the purpose of CENVAT Credit Rules, being part/component of the machines. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2010/excircular920.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No. 920/10/2010-CX, Dated : April 1, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Duty Exemption Extended to Import Raw Sugar & Pulses </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Government has extended customs duty exemption benefit to pulses falling under Chapter 0713 mentioned at S. No. 11A of Notification 21/2002-Cus by one more year (till March 31, 2011) by amending clause (f) of the proviso to preamble of the said Notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, the Government has decided to extend customs duty exemption benefit for raw sugar if imported by a ‘bulk consumer' till December 31, 2010 subject to certification by a Chartered Accountant as specified in the newly inserted Condition 5C therein. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With this the Government has replaced the erstwhile stringent conditions of Condition 5A, which expired on March 31, 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In terms of Condition 5A (which expired on March 31, 2010), a person other than a sugar factory or a sugar refinery, was required to produce a valid contract with a sugar factory or sugar refinery and also furnish a bond to the Assistant/Deputy Commissioner of Customs that the raw sugar shall be used for the said purpose. This bond was to be discharged on production of a certificate from the Central Excise authorities having jurisdiction over such sugar factory/refinery within a period of three months from the date of import of raw sugar that the entire quantity of imported raw sugar has been refined. Failure to comply with these conditions resulted in foregoing the duty exemption benefit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, under the new Condition 5C, the importer at the time of import shall produce a certificate from a Chartered Accountant to the effect that he is a bulk consumer and the said certificate shall be issued by the Chartered Accountant after taking into account the monthly use or consumption of sugar by such person, establishment or unit in the last twelve months. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">‘Bulk Consumer' is defined as “a person, establishment or industrial unit using or consuming more than ten quintals of sugar per month as a raw material for production or consumption or use in any manner other than sale.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that the Government in its eagerness to bring sugar prices under control is throwing caution to the wind by replacing stringent conditions for persons importing raw sugar in bulk. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_040.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 40/2010-Cus, Dated : March 31, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap increased and poppy seeds decreased </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has increased the Tariff Value of Brass Scrap from US Dollars 3801 <strong>to 3898 </strong>per MT. The tariff value for poppy seeds is decreased from US Dollars <strong>4256 to 4070 </strong>. All other items remain unchanged. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 27/2010-Cus(N.T.), Dated: March 31, 2010 </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Government approves one more research institute as ‘Other Institution' </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of s. 35(1)(i) of Income Tax Act, 1961 read with rules 5C and 5E of Income Tax Rules, 1962, the Central Government has approved <strong><em>B.M. Birla Science & Technology Centre, Jaipur </em></strong> as one of the institutions eligible to claim deductions for expenditure on research activities from AY 2009-10 onwards subject to fulfilling the conditions prescribed in the Notification. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not019.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 19/2010-INCOME TAX, Dated: March 31, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurisdiction of IT Commissioners of Kochi , Kozhikode re-notified </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of sub-sections (1) and (2) of Section 120 of Income Tax Act, 1961, CBDT has amended Notification dated July 31, 2001 for re-notifying the jurisdiction of CIT-I, Kochi , CIT-II, Kochi and CIT, Kozhikode . </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not020.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 20/2010-INCOME TAX, Dated: April 1, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notifies New Policy for Issue of Import licences for Rough Marble Blocks </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER</strong> considering representations from various Associations of Marble Manufacturers/Processors for reviewing the regime governing import of marbles, the Central Government has amended Import Licensing Note No. (2) inserted at the end of Chapter 25 of the Schedule-I (Imports) to the ‘ITC (HS) Classifications of Export and Import Items' to notify the amended Policy provisions which will henceforth be applicable for import of Rough Marble Blocks for the FY 2010-11. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EXIM Code Nos. 25151100 and 25151210 indicated in Schedule-1 (Imports) of ITC (HS) Classifications of Export and Import Items relates to import of Marble and Travertine - Crude or Roughly trimmed and merely cut, by sawing or otherwise, into blocks of a rectangular (including square) shape. Import of these items is restricted and subject to import licensing procedures. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Marble import policy undergoes frequent changes and in a recent case, the HC of Delhi after going through the policy provisions, remarked “ The frequency of policy changes, the number of circulars and notifications over a short span bear testimony to hectic behind-the scene lobbying by the two broad categories of marble traders, i.e. importers and domestic manufacturers, and even their sub-groups.”<strong><em> <font size="1"><br> ( <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2010/2010-TIOL-174-HC-DEL-CUS.htm" target="_blank">2010-TIOL-174-HC-DEL-CUS</a>) </font></em></strong></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not036.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 36/2009-2014, Dated: March 31, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>One more Testing Centre Notified for Testing of Basmati Rice samples </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> continuation of Policy Circular No. 33 dated 30th September, 2010 ( <strong>it is actually 2008 </strong>) DGFT has decided to designate Basmati Export Development Foundation (BEDF), Modipuram as an authorized centre for testing of samples of basmati rice for variety identification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hereafter, the Customs authorities may draw samples for variety identification and send these samples for analysis to Basmati Export Development Foundation (BEDF), Modipuram, in addition to AGMARK testing centres. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2009/dgft09cir028.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Policy Circular No. 28/2009-14, Dated : March 31, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Invitation of Applications for Import licences for Rough Marble Blocks </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has issued Notification No. 36/2009-2014 dated 31st March, 2010 notifying the policy conditions for issue of import licenses for import of rough marble blocks for FY 2010-11 and set a ceiling of 3 lakh MT for the FY 2010-11. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this regard, DGFT calls for applications from eligible applicants for issue of import licences for FY 2010-11 in the relevant Aayaat Niryaat Form along with the prescribed documents. The requirements to be fulfilled are also notified for prospective applicants. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The applications may be submitted to the <strong><em>concerned </em></strong> Regional Authority (RA) of DGFT on or before April 9, 2010 . </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2009/dgft09cir029.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Policy Circular No. 29/2009-14, Dated : March 31, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import Authorization for Import of Rough Marble to be Registered at Specified Port – DGFT Amends HBP Vol.1 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended Paragraph 2.37 A of the Handbook of Procedures (Vol.1) for 2009-2014 as follows:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Import authorizations for a restricted item, if so directed by the competent authority, shall be issued for import through one of the sea ports or air ports or ICDs or LCS, as per the option indicated, in writing, by the applicant. However, for import of rough marble, port of registration is mandatory and the applicant must indicate the same in the application itself. Authorization holder shall register the import authorisation at the port specified in the Authorization and thereafter all imports against said authorization shall be made only through that port, unless the authorization holder obtains permission from customs authority concerned to import through any other specified port .” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further a new entry 7C is added in ANF 2B (related to Application form for import of restricted items) after the entry 7B as follows: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">" 7C Port of Registration (As per para 2.37A of HBP Vol. 1)” </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn051.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Public Notice No. 51/2009-2014, Dated: March 30, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>More Products Notified under Focus Product Scheme </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Table 6 of Appendix 37D of HBPv1, to insert new products eligible for export benefits under the Focus Product Scheme. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The products which are newly notified for FPS benefits are certain electrical and electronic goods, desktops and notebooks, agrochemicals and pesticides, various petro products, apparels (i.e. ready made garments) and their corresponding linked markets (see the PNs for detailed list of the new products notified). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FPS benefits for export of the newly listed products (other than apparels i.e. ready made garments) are available for exports on or after 1.1.2010. For apparels i.e. ready made garments, the benefits under FPS are available for exports made from April 1, 2010 to September 30, 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn052.htm" target="_blank">Public Notice Nos. 52/2009-2014</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn053.htm" target="_blank">53/2009-2014, Both Dated: March 31, 2010 </a></strong></font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">Jurispruden</font><font color="#FF6633" size="3">tiol</font><font color="#006600" size="2"> – Tuesday's cases</font></strong></font></strong></font></p> <p align="justify"><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"></font><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>Income tax - Deduction under Sec 10A to be allowed only after setting off brought forward losses; Perpetuating a mistake is not heroism, says Tribunal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION 10A </strong>is indeed one of the most disputed Sections in the I-T Act. When the Chennai Special Bench had given its decision in favour of the assessee in the case of Scientific Atlanta, it was thought that the issue has been settled. But that is not correct. In an interesting and bold decision, the Bangalore Bench of the Tribunal has differed with the Special Bench by observing that the perpetuating a mistake is not heroism and has finally gone by the decision of the Jurisdictional High Court which has ruled in favour of the Revenue. </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>Penalty under Rule 25 not applicable to purchaser of excisable goods: High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee is a 100% EOU engaged in manufacture of ready made garments. The DRI, in the course of investigation, found that the assessee had issued CT-3 certificates for procurement of 100% polyester hand print fabrics measuring 3.75 lakh mts from another EOU, but were alleged to have been diverted to the local market in collusion with the supplier by fabricating AR3A documents. A SCN was issued to the assessee which was adjudicated by the Commissioner whereby a penalty of Rs. 10 lakhs each was imposed both on the assessee and its director. An appeal to the CESTAT resulted in quashing of penalties. </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>Adjudicating authority could not have by a visual examination arrived at a conclusion that the ‘Hard Disc Drive” imported is a ‘removable/exchangeable' – Commissioner(A) relying on expert opinion to uphold classification as claimed by importer appears proper – No cause for granting any stay – Revenue appeal rejected: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong> respondent imported goods declared as “Hard Disc Drives” and classified the same under CTH 8471 70 20. The department alleged that what was imported is “Removable or exchangeable disc drives” and the same is correctly classifiable under CTH 8471 70 30. The original adjudicating authority was of the view that such issues could be decided by a simple visual examination. He placed the “alleged hard disc drive” on the adjudication table and observed in his order that the hard disc imported by the appellant are enclosed in metal cartridges by fitting and these were interchangeable. So, he upheld the department's stand. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tuesday for the judgements </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tuesday with more DDT </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> </body> </html>