TIOL-DDT 1350 · 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 1350</font> <br>
03.05.2010 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amendments to Finance Bill 2009, Notifications Finally Out in Open </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> reported
the amendments to the Finance Bill, 2009 moved by the Finance Minister on
the floor of Lok Sabha on Thursday. Though the corresponding notifications
were finally issued by Board, the secret world of CBEC was hesitant is releasing
these notifications to the outside world immediately. Probably they wanted
to make them public only through their website. A symptom of bureaucratic
pride in concealing the obvious. Are we crawling back to the days of the
Raj? Anyway, when we got hold of the notifications we were in for some surprises. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ST Exemption extended to more Vocational Courses </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has extended service tax exemption benefit to taxable services provided in relation to modular employable skill courses approved by National Council of Vocational Training, by a vocational training provider registered under the Skill Development Initiative Scheme with the Directorate General of Employment and Training, Ministry of Labour and Employment, Government of India. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_023.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 23/2010-ST, Dated: April 29, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government Withdraws Drawback benefits for Export of Cotton Yarn </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended Rules 3(1)(v), 6(4), 7(5) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 to exclude various types of Cotton Yarn falling under Chapters 5205, 5206, 5207 of the First Schedule to the Customs Tariff Act, 1975, from claiming drawback benefits when such goods are exported. The Drawback Schedule appended to <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_103.htm" target="_blank">Notification No. 103/2008-Cus(N.T.) dated 29-08-2008</a></em></strong> is also amended for this purpose. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_033.htm" target="_blank">Notification Nos. 33/2010–Cus(N.T.)</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_034.htm" target="_blank">34/2010-Cus(N.T.), Both dated: April 29, 2010</a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value of Brass Scrap and Poppy Seeds decreased </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has decreased the tariff value of brass scrap from US Dollars 4018 to 3920 per MT. The tariff value for poppy seeds is also decreased from US Dollars 3897 to 3468. The tariff values of all other items remain unchanged. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_035.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 35/2010–Cus(N.T.), Dated: April 30, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Concessional Rates of Customs duties for import of Ostomy appliances and Duty Exemption to tunnel boring machines, parts of optical disc drives etc </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has extended concessional duty benefits for import of ostomy appliances and accessories thereof, and also to parts/components required for manufacture of ostomy appliances, if the manufacturer follows IGCRDMEG Rules, 1996. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also full exemption from customs duty is extended to certain goods required for manufacture of optical disc drives, if the manufacturer follows IGCRDMEG Rules, 1996. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government also extended exemption to tunnel boring machines and parts thereof if importers provides certificate to the Customs authorities from the specified competent authority for the purpose. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs duty rate on stainless steel scrap for the purpose of melting is reduced to 2.5% from the current effective rate of 5% and all goods falling under Chapter 5301 (flax, flax tow and waste) are exempted from basic customs duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also, concessional rate of 5% customs duty extended to few more drugs including cancer and AIDS' related drugs by expanding List 3 of Notification No. 21/2002-Cus. In the Finance Minister's speech, a mention was made that these drugs were also provided with exemption from CVD by way of an excise duty exemption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be noted that the excise exemption is already provided to the drugs listed in List 3 or List 4 of<strong><em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2002/ctariff02_021.htm" target="_blank">Notification No. 21/2002-Cus</a></em></strong> by virtue of S. No. 47 of <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_004.htm" target="_blank">Notification No. 4/2006-CE dated 01-03-2006</a></em></strong> as amended. So a separate notification was not issued as it is already covered by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_004.htm" target="_blank">Notification No. 4/2006-CE</a></strong></em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For effecting the above mentioned changes in customs duty rates, Notification No. 21/2002-Cus dated March 1, 2002 was amended at appropriate places. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_054.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 54/2010-Cus, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption from Additional Customs Duty in lieu of Sales Tax/VAT for Acetate Tow </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ACETATE</strong> Rayon Tow falling under Chapter 5502 00 10 of Customs Tariff Act, 1975, required for manufacture of cigarette filter rods is exempted from additional customs duty leviable under Section 3(5) of Customs Tariff Act, 1975, if the importer follows the procedure prescribed under IGCRDMEG, Rules, 1996. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the excise duties were increased on cigarettes during the Budget, smokers felt pinched with the increase in price of cigarettes. Since it was only a pinch, smokers continued to smoke despite the pinch. Now will the cut in duty rates on acetate rayon tow reduce the price of filter cigarettes? Let's wait and see. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_055.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 55/2010-Cus, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Effective Rate of Export Duty on Iron Ore Concentrates etc increased </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has increased the effective rate of export duty on iron ores and concentrates, all sorts, to 15% with immediate effect. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_056.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 56/2010-Cus, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excise Duty Reduced on Waste Paper and Paper Scrap, Concessional Rate for Cartons, Boxes and Cases extended to more Manufacturers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has reduced the effective rate of excise duty for waste paper and paper scrap falling under Chapter 4707 to 4%. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, Condition No. 12 of the <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_004.htm" target="_blank">Notification No. 4/2006-CE dated 01-03-2006</a></strong></em> (applicable to goods of S. No. 96E of this notification) is amended as follows : </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">“The exemption shall be applicable to units manufacturing cartons, boxes or cases, as the case may be, starting from the stage of Kraft paper, corrugated paper, corrugated sheet, corrugated board or any one or more of these stages and not having the facility to manufacture Kraft paper in the same factory.” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hitherto, Condition No. 12 read as follows: </font></p>
<blockquote>
<p align="justify"><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“The exemption shall be applicable to units manufacturing cartons, boxes or cases, as the case may be, starting from the stage of bought out Kraft paper and not having the facility to manufacture Kraft paper in the same factory.” </font></em></p>
</blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The concessional duty benefits are extended to manufacturers of ‘cartons, boxes and cases, of corrugated paper or paperboard' whose manufacturing process starts from any one or more stages as mentioned in the new condition and not just from the ‘stage of kraft paper'. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_20.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 20/2010-CE, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to Supari and Concessional rate to hand-rolled cheroots </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has provided excise duty exemption to all goods falling under Chapter 2106 90 30 (‘ Betel nut product known as "Supari" ) of the Central Excise Tariff Act, 1985. S. No. 27 of <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_003.htm" target="_blank">Notification No. 3/2006-CE</a></em></strong> is amended for this purpose. S. No. 27A of the said notification is omitted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, hand-rolled cheroots falling under Chapter 2402 10 10 of Central Excise Tariff Act, 1985, with per cheroot retail sale price equivalent not exceeding Rs. 3 shall have an effective rate of excise duty of 10% . In this connection, S. No. 32B is inserted in <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_003.htm" target="_blank">Notification No. 3/2006-CE</a></strong></em> after S. No. 32A thereof. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For this purpose, hand-rolled cheroots means “a tobacco product manufactured by manually rolling tobacco leaves wrapped in an outer covering of tobacco leaf without the aid of power or machine, with both ends cut flat.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Retail Sale Price shall be defined as per ‘Explanation No. 1 to S. No. 18A' of the said notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per this definition, “Retail sale price” means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is sole consideration for such sale. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what if the hand-rolled cheroots are loosely tied up with a thread or a rope in bundles of ten or 25 or whatever instead of clearing them in packaged form without any affixation of RSP. This is a cottage industry dominated by semi literates or illiterates whose only job is to roll tobacco leaves and sell them for a price to traders and wholesales/retailers. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">How will the government go about with its job of collecting excise duty from such people? Or if the hand-rolled cheroots do not have an RSP at the time of clearance from the factory premises but are still sold with some RSP how is that going to be tackled? Or will they apply tariff rate of 16% if no RSP is affixed? These are some of the questions that the field formations will come across in the near future. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_21.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 21/2010-CE, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Concessional Rate of Excise Duty on Cigars, Cheroots and Cigarillos Withdrawn </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has omitted S. No. 11 of <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_02.htm" target="_blank">Notification No. 2/2008-CE dated March 1, 2008</a></strong></em> which refers to goods of Chapter Nos. 2402 10 10, 2402 10 20, 2402 90 20 and 2402 90 90 of the Central Excise Tariff Act, 1985 (‘cigars, cheroots and cigarillos, of tobacco and cigarillos of tobacco substitutes'). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With this omission, ‘cigars, cheroots and cigarillos, of tobacco and cigarillos of tobacco substitutes' shall have an effective rate of excise duty of 16% (which is the tariff rate) except hand-rolled cheroots of ‘retail sale price' not exceeding Rs. 3 which attracts an effective rate of 10% as per <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_003.htm" target="_blank"><strong>Notification No. 3/2006-CE</strong></a></em> as amended by <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_21.htm" target="_blank"><strong>Notification No. 21/2010-CE, Dated: April 29, 2010</strong></a></em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_21.htm">. </a></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not clear if this is a deliberate exercise of enhancing the duty rate for ‘cigars, cheroots and cigarillos of tobacco, and cigarillos of tobacco substitutes' because, there is no mention of this increase in the Finance Minister's speech while carrying out the amendments to the Finance Bill, 2010. Or is it a case of oversight and confusion resulting from Government's eagerness to provide concessional rate of excise duty and additional excise duty to hand-rolled cheroots. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_22.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 22/2010-Cx, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional Excise duty on Hand-rolled cheroots with RSP less than Rs. 3/- </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed <u>additional excise duty of 1.6%</u> on hand-rolled cheroots with per cheroot retail sale price equivalent not exceeding Rs. 3. In this regard, S. No. 4A is inserted in <em><strong><a href="http://www.taxindiaonline.com/RC2/pdfnoti/pdfexcise/pdf2005/cex0605.pdf" target="_blank">Notification No. 6/2005-CE</a></strong></em> after S. No. 4. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. 4 thereof pertains to ‘cigars and cheroots of tobacco' and S. No. 5 thereof pertains to ‘cigarillos of tobacco' which currently attracts an additional excise duty of 1.6% or Rs. 246 per thousand whichever is higher. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For this purpose, hand-rolled cheroots means “a tobacco product manufactured by manually rolling tobacco leaves wrapped in an outer covering of tobacco leaf without the aid of power or machine, with both ends cut flat.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the ‘Retail Sale Price' shall be defined as per ‘Explanation No. 1 to S. No. 18A'. In fact our frantic search to find out S. No. 18A in the Original <em><strong><a href="http://www.taxindiaonline.com/RC2/pdfnoti/pdfexcise/pdf2005/cex0605.pdf" target="_blank">Notification 6/2005-CE</a></strong></em> as amended did not yield fruitful results. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears the Board has copy-pasted this sentence from Column No. 3 of S. No. 32B of <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_21.htm" target="_blank">Notification No. 21/2010-CE Dated: April 29, 2010</a></em></strong> which amended the Original Notification No. 3/2006-CE which actually contains S. No. 18A with Explanations numbered as 1 and 2, where Explanation No. 1 defines ‘retail sale price' and Explanation No. 2 gives an illustration of computing per-kg RSP. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per this definition, “Retail sale price” means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is sole consideration for such sale. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now to incorporate the definition of ‘retail sale price' for the purpose of hand-rolled cheroots, the Board has to amend Notification 6/2005-CE as amended by this <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_23.htm" target="_blank">Notification 23/2010-CE Dated: April 29, 2010</a></strong></em>, to provide for a proper definition of ‘retail sale price' for hand-rolled cheroots. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">In the absence of a specific definition in the relevant notification itself, there are chances of field formations going berserk by coming up their own definitions since the definition of ‘retail sale price' provided elsewhere in the Central Excise Act, 1944 or notifications issued there under are restrictively applicable to only those situations. For e.g. definition of Retail Sale Price in Section 4A is applicable only for the purpose of that Section. </font></strong></font></p>
<p><font color="#663399"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We request the Board to amend the notification immediately. </font></strong></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_23.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 23/2010-CE, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SSI Exemption extended to manufacturers of all branded packing materials </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Government has amended <em>Notification No. 8/2003-CE</em> by substituting clause (e) of paragraph 4 of the said notification. The new clause (e) reads as follows : </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">“(e) where the specified goods are in the nature of packing materials and are meant for use as packing material by or on behalf of the person whose brand name they bear.” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hitherto, prior to this amendment, clause (e) of paragraph 4 read as follows: </font></p>
<blockquote>
<p align="justify"><em><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“(e) Where the specified goods are in the nature of packing materials, namely, printed cartons of paper or paper board, metal containers, HDPE woven sacks, adhesive tapes, stickers, PP caps, crown corks, metal labels, plastic bags, printed laminated rolls, plastic containers and plastic bottles. </font></em></p>
<p align="justify"><em><font color="#663366" size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that in respect of plastic containers and plastic bottles, the exemption under this notification shall apply only where such plastic containers or plastic bottles are meant for use as packing materials by the person whose brand name such goods bear.” </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With this amendment SSI benefit is extended to manufacturers of all kinds of packing materials so long as they are meant for use as ‘packing material by or on behalf of the person whose brand name they bear'. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_24.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 24/2010-CE, Dated: April 29, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - payment of advance-tax and self-assessment tax is not an expenditure incurred for purpose of business. This is an item of appropriation of income – penalty on Microsoft sustained: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee had taken loan of about Rs. 13.13 crore from Microsoft Corporation, U.S.A. . Due to fluctuation in rate of the foreign exchange, a loss of Rs. 39.90 lakh was incurred in this year on account of the restatement of the liability on the closing day of the previous year. This amount was claimed as a revenue loss. The AO considered the facts and the submissions. It was mentioned that it is the assessee who claimed revenue loss occurring on account of change in rate of foreign exchange. Therefore, the onus of proving that the loss was a revenue loss is on the assessee. This onus has not been discharged. Therefore, the loss was disallowed. Penalty was also imposed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee also utilized a portion of the loan for payment of advance-tax. The general proposition canvassed before the Tribunal about the issue being debatable is not applicable at all in respect of this payment because payment of advance-tax and self-assessment tax is not an expenditure incurred for the purpose of business. This is an item of appropriation of income. Therefore, there could be no dispute in regard to the loss pertaining to the payment of advance-tax. </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 style="text-align:justify;mso-element:frame;mso-element-frame-hspace:9.0pt;
mso-element-wrap:around;mso-element-anchor-vertical:page;mso-element-anchor-horizontal:
margin;mso-element-left:18.0pt;mso-element-top:38.75pt;mso-height-rule:exactly"><font color="#FF6633"><b><span style="font-size:10.0pt; font-family:Verdana">Income
Tax - payment of advance-tax and self-assessment tax is not an expenditure
incurred for the purpose of business. This is an item of appropriation
of income – penalty on Microsoft sustained – ITAT</span><span style="font-size:10.0pt; font-family:Verdana">
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<p style="text-align:justify;mso-element:frame;mso-element-frame-hspace:9.0pt;
mso-element-wrap:around;mso-element-anchor-vertical:page;mso-element-anchor-horizontal:
margin;mso-element-left:18.0pt;mso-element-top:38.75pt;mso-height-rule:exactly"><span style="font-size:10.0pt;font-family:Verdana">The
assessee had taken loan of about Rs. 13.13 crore from Microsoft Corporation,
U.S.A.<span class="msoDel1"><del datetime="2010-05-03T00:15" cite="mailto:x">.</del></span> Due
to fluctuation in rate of the foreign exchange, a loss of Rs. 39.90 lakh
was incurred in this year on account of the restatement of the liability
on the closing day of the previous year. This amount was claimed as a revenue
loss. The AO considered the facts and the submissions. It was mentioned that
it is the assessee who claimed revenue loss occurring on account of change
in rate of foreign exchange. Therefore, the onus of proving that the loss
was a revenue loss is on the assessee. This onus has not been discharged.
Therefore, the loss was disallowed. Penalty was also imposed.
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<span style="mso-spacerun:yes"> </span>
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<p style="text-align:justify;mso-element:frame;mso-element-frame-hspace:9.0pt;
mso-element-wrap:around;mso-element-anchor-vertical:page;mso-element-anchor-horizontal:
margin;mso-element-left:18.0pt;mso-element-top:38.75pt;mso-height-rule:exactly"><font color="#663399"><b><span style="font-size:10.0pt;font-family:Verdana">Central
Excise</span></b></font></p>
<P align="justify"><strong><FONT COLOR="#663399"><FONT FACE="Verdana, sans-serif"><FONT color="#FF6633" SIZE="2">An assessee
can claim CENVAT Credit only on the basis of invoices of duty paid goods
which had actually reached the premises of the assessee and not otherwise – P&H
HC holds the order of Tribunal allowing the credit as perverse and speculative.</FONT></FONT></FONT></strong></P>
<P ALIGN="JUSTIFY"><FONT FACE="Verdana, sans-serif"><FONT SIZE="2"><strong>THE </strong>revenue
is in appeal against the CESTAT order allowing the appeals of the assessees
who were denied credit on the invoices issued by a registered dealer by
the lower authorities. The credit was denied based on some investigations
conducted at the dealer’s end. Based on the statements recorded from
various persons it was held by the lower authorities, that the goods received
were not co-relatable to the invoices issued and the trucks in which the
inputs were shown to have been received were actually used for transporting
some other goods on the same day.</FONT></FONT></P>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CHA - Written Examination conducted before 2004 and oral examination conducted after 2004. Department directed to grant relief: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the present case, the Madras High Court dealt with a different issue. The petitioners had cleared the written examination under CHALR 1984, apparently before new regulations, namely, CHALR 2004 came into force. The department conducted oral examination for these petitioners after February 23, 2004 and the petitioners passed the oral examination after 2004. </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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