TIOL-DDT 1336 · 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 1336 </font><br>
12.04.2010 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ITC (HS) Classification of Export and Import Items related to Groundnuts amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended the ITC (HS) Classification of Export and Import items relating to Groundnuts by substituting S. No. 48A earlier inserted vide <em>Notification No. 57(RE-2007)/2004-09 dated 21.11.2007</em> read with <em>Notification No. 110 (RE-2008)/2004-2009 dated 9.6.2009. </em></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 37/2009-2014., Dated: April 9, 2010 </font></strong></a></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Compulsory Registration of Cotton Yarn Export Contracts - DGFT makes amendments to ITC (HS) </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended Schedule 2, Table B of ITC HS Classifications of Export and Import Items by inserting S.No.161 B relating to cotton yarn with immediate effect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The amendment stipulates that the contracts for export of specified categories of cotton yarn shall be registered with the Textile Commissioner prior to shipment. Further, clearance of cotton yarn consignments shall be given by Customs only after verifying that the contracts have been registered. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2009/dgft09not038.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 38/2009-14, Dated: April 9, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amendment to Jurisdiction of Regional Authority </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended S.No. 16 of Appendix I of Handbook of Procedures (Vol.I) to notify the address of the new extension counter of the O/o Jt. DGFT located at Indore . This is in addition to the existing one at Nirman Sadan, Arera Hills, Bhopal . </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2009/dgft09pn055.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 55/2009-2014, Dated: April 9, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax Havens Notified for Purpose of Double Taxation Avoidance and Prevention of Fiscal Evasion </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has notified the following territories outside India as ‘specified territory' in terms of Explanation 2 to Section 90 of the IT Act, 1961. They are as follows: </font></p>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bermuda </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Overseas Territory </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">British Virgin Islands </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Overseas Territory </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cayman Islands </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Overseas Territory </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gibraltar </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Overseas Territory </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Guernsey </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Crown Dependency </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Isle of Man </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Crown Dependency </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Jersey </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a British Crown Dependency </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(viii) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Netherlands Antilles </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">an Autonomous Part of the Kingdom of Netherlands </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ix) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Macau </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a Special Administrative Region of The People's Republic of China </font></p></td>
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<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not022.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 22, Dated April 8, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rules for Determination of Fair Market Value of Certain Movable Property Notified </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBDT has amended the Income Tax Rules, 1962 to provide for Rules to determine fair market value of Jewellery, of archaeological collections, drawings, paintings, sculptures or any work of art, and valuation of shares and securities. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not023.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 23, Dated: April 8, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Deep Discount Bond of RECL Notified as Zero Coupon Bond </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Ten year deep discount bonds to be issued by the Rural Electrification Corporation Limited has been notified as Zero Coupon Bond for the purposes of clause (48) of section 2 of the Income Tax Act, 1961. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not024.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 24, Dated: April 8, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mumbai - IV Merged with Mumbai - I Commissionerate - But where are amendments to other Important Notifications? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC merged the jurisdiction of Mumbai – IV Commissionerate with Mumbai – I Commissionerate by issuing <em>Notification 13/2010-CE (NT) dated March 19, 2010. But blissfully ignored amending other important Notifications viz., No. 24/2005-CE (NT), No. 25/2005-CE (NT), No. 39/2005-Cus(NT), No. 6/2007-CE (NT) and No. 49/2005-Cus(NT).</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Board smuggle in these Notifications through the back door since considerable time has lapsed in amending these notifications? </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Assistant Commissioner asked to pay costs of Rs. 1 Lakh for disobedience of CESTAT and contempt of High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> overzealous Assistant Commissioner of Central Excise has no respect for the Tribunal or High Court; he ruled that CESTAT <strong>has erred </strong>and<strong> High Court has no jurisdiction</strong>, but the High Court was not impressed and imposed a cost of Rs. One Lakh to be paid to the assessee. The High Court chose this action instead of initiating contempt. The Assistant Commissioner refused to accept the Tribunal's power to extend stay and disputed the High Court's power to entertain the writ. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This normally comes out of a bureaucratic arrogance and sheer contempt for judiciary. Many of the IRS officers believe that they are far more superior to the not so wise men sitting on the benches. Such private opinion may be tolerable but of late they have become more valiant and express their contempt for judiciary openly. Recently we had reported about an Additional Commissioner who went hammers and tongs on the judiciary saying that the Delhi High Court misunderstood the Government's intention on service tax on renting of immovable property. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway Judiciary does not support such adventurist indiscipline by IRS officers. A High Court was not impressed by the gross disobedience of higher judicial offices by an overzealous Assistant Commissioner and imposed on him cost of Rs. One Lakh – instead of initiating contempt proceedings. Now the Assistant Commissioner should find one Lakh of rupees of white money! </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring this case tomorrow. </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"> – Tuesday'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">Income Tax </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income tax - Sec 195 - it is not mandatory for assessee to deduct tax at source if assessee has bona fide belief that payments made to non-resident are not chargeable to tax under Sec 4 in India: ITAT Special Bench </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> volcano of Sec 195 which used to erupt sporadically, has of late been spitting fire with rare regularity. First, it was the Karnataka High Court decision in the Samsung Electronics case <font size="1"><strong><em>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2009/2009-TIOL-629-HC-KAR-IT.htm" target="_blank">2009-TIOL-629-HC-KAR-IT</a>)</em></strong></font> which kept the cauldron steaming by adding a new dimension to the controversy. Then came the Delhi High Court decision in the case of Van Oord ACZ India (P) Ltd <font size="1"><strong><em>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2010/2010-TIOL-187-HC-DEL-IT.htm" target="_blank">2010-TIOL-187-HC-DEL-IT</a>)</em></strong></font> where the Bench completely differed from the Karnataka High Court. Now, here comes the latest decision from a Special Bench which was constituted to answer the query: Whether it is obligatory for the assessee to deduct tax at source on the entire payment if he has not applied to the Assessing Officer under Sec 195(2) of the I-T Act for deduction of tax at a lower or nil rate of tax. </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">CESTAT has power to grant stay beyond 180 days - Assistant Commissioner rules that CESTAT has erred and High Court has no jurisdiction - Cost of Rs. One Lakh imposed on officer: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> appears that since the appeal could not be decided within a period of 180 days, the petitioner moved a miscellaneous application for extension of the stay order. The Tribunal vide order dated 14.8.2008 extended the stay order, already granted, till the disposal of the appeal. The aforesaid order of the Tribunal has neither been challenged by the Revenue before higher Court nor has it been vacated. The aforesaid order of the Tribunal exists till date. Despite the aforesaid order of the Tribunal granting stay till the disposal of appeal, the respondent- Assistant Commissioner, Central Excise Division, Rae Bareli has issued the impugned notice of demand dated 11.1.2010 for recovery of Rupees 652.16 lacs. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Providing facilities of toilet and water are basic requirement to run factory and non-providing these facilities may affect production, hence Housekeeping service is essential and since related to manufacturing activity is an Input Service – Cenvat Credit available: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee was denied Cenvat credit by the lower authorities on the ground that the following services viz. Insurance on company vehicles, Tours & Travels, factory garden maintenance and plant housekeeping services were not Input services. So, the matter is carried to the CESTAT by the appellant. </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>
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