TIOL-DDT 1367 · the untouched capture
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<p><font size="2"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1367 </font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
26.05.2010 <br>
Wednesday </strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No
Service Tax on laying of cables under or alongside roads - Board Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong>has come to the notice of the Board that disputes have arisen in some parts of the country regarding applicability of service tax on certain activities such as:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) shifting of overhead cables to underground on account of renovation/widening of roads; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) laying of electrical cables under or alongside roads/railway tracks; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) between grids/sub-stations/ transformers the distribution points of residential or commercial complexes; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) electrification of railways, installation of street-lights, traffic lights, flood-lights. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The taxability of these different activities were examined after taking into account the scope of all taxable services that are taxable such as site formation/excavation/ earth moving service, commercial or industrial construction services, erection, commissioning or installation services, works-contract service and also those which are covered under the Finance Act, 2010 and clarified as follows: </font></p>
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
<tr valign="top">
<td width="62"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></strong></p></td>
<td width="207"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Activity </font></strong></p></td>
<td width="213"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Status </font></strong></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Shifting of overhead cables/wires for any reasons such as widening/renovation of roads </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laying of cables under or alongside roads </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laying of electric cables between grids/sub-stations/transformer stations en route </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Installation of transformer/ sub-stations undertaken independently </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable service, namely Erection, commissioning or installation services [section 65 (105] ( zzd ]. </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laying of electric cables up to distribution point of residential or commercial localities/complexes </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laying of electric cables beyond the distribution point of residential or commercial localities/complexes. </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable service, namely commercial or industrial construction' or ‘construction of complex' service [section 65(105) ( zzq ) /( zzzh )], as the case may be. </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Installation of street lights, traffic lights flood lights, or other electrical and electronic appliances/devices or providing electric connections to them </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable service, namely Erection, commissioning or installation services [section 65 (105] ( zzd ]. </font></p></td>
</tr>
<tr valign="top">
<td width="62"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. </font></p></td>
<td width="207"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Railway electrification, electrification along the railway track </font></p></td>
<td width="213"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a taxable service under any clause of sub-section (105) of section 65 of the Finance Act, 1994 </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board states that the conclusions drawn above are essentially general in nature and would have to be applied in an individual case depending on its facts and circumstances. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One of our commentators remarked, laying of electric cables alongside a road is not taxable, but fixing a bulb to it is taxable?! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2010/sercir123.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CIRCULAR NO. 123/05/2010-ST., Dated: May 24, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Employees of IT/ ITES units of SEZ allowed to work from Home </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Instruction No. 55 dated 5th May, 2010, employees of IT/ ITES units in SEZs were allowed to work from home, subject to conditions that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) the person should be an employee of the SEZ unit </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) the person will carry out the work related to a project of the SEZ unit </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) the resultant exports must take place only from the premises of the unit in the SEZ </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Commerce Department has clarified that </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Off-site employees of SEZ may be permitted to work from home or from place outside the SEZ subject to the same conditions as prescribed in the instruction. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) IT units in DTA can carry out their job-work in a SEZ unit by following the procedure as laid down in Rule 43, of SEZ Rules 2006. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=260&filename=sez/sez_instructions/2006/sez09ins058.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INSTRUCTION NO 58 Dated: May 21, 2010. </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Adherence to time limits for investigation of complaints – CVC Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHIEF</strong> Vigilance Officers of Organisations/Departments are required to furnish investigation reports on complaints referred by the Commission for investigation and report within three months of the date of receipt of such references. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commission observes that Organisations/ Departments do not adhere to the time limits prescribed and thee is undue delay in submission of investigation reports. While emphasising the need for strict adherence to the prescribed time limits for furnishing reports, in case, if it is not possible for completing investigations within the specified periods, the Chief Vigilance Officer of the Organisations/Departments concerned should personally look into the matter and send an interim reply/report to the Commission seeking extension of time limit, indicating the progress of investigation and reasons for delay without fail in each complaint case. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/office_order_20_2010.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CVC OFFICE ORDER NO. 20/05/10, Dated: May 19, 2010 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Roads of Corruption - Highway Robbery – CBI nabs top NHAI officials </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HIGHWAY</strong> Robbery is perhaps as old as highways, but these days these actions take place in Delhi's corridors of power, not in the middle of some highways. It seems the CBI has arrested some top officers of the National Highways Authority of India. The Modus operandi of NHAI officials was to eliminate all potential contenders on one pretext or the other and favour the accused company ensuring huge financial gains to it. CBI recovered Rs . 46 Lakhs from a top officer of NHAI and Rs . 48 Lakhs from another officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where does this road lead to? Maybe straight into the pockets of some of our not so roadworthy babus . </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Air India - Should we carry this white elephant </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt26may.jpg" alt="Legal Corner Icon" width="102" height="139" hspace="5" border="0" align="left"></font>WHAT </strong>do employees of Air India do two days after one of their aircrafts refused to respect the runway and ran away with 160 lives? They simply went on strike disrupting the entire flight schedule and leaving hapless passengers stranded in all major airports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> This is worse than highway robbery. As such the employees are known for their callous, indecent and incompetent nature. And the organisation is deep in debts and facing the recent tragedy. Why don't they realise that they are surviving only on government money and largesse? That means they are eating the taxpayer's money and that tax payer includes the poorest of the poor ion the country who can never dream of reaching anywhere near an airport. The fact that they can go on strike within three days of the ghastly accident, shows that they have absolutely no concern for the organisation or its future. Should we waste the people's money on such a white elephant? Why can't we simply close it down or sell it off? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And because of the government's directive that its employees should travel only by Air India, there is a tremendous pressure on administration with babus taking more time on their tours and spending more time in airports than in the air or their offices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other day I was stranded in Bangalore airport for five hours because there was no clue as to when my Air India flight would take off. After four hours at least ten people had cancelled their tickets and took refund. At that time I offered to buy another ticket for a friend who was ready to join me. The Air India officer told me that booking is closed and he cannot sell another ticket. Now I know why they can never make profits! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ATM stolen </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> you can't steal from an ATM, what do you do? ‘steal the ATM'! If somebody can walk away with a part of a road, why can't thieves run away with an ATM. This is exactly what some thieves did in Karnataka yesterday. The automated teller machine (ATM) of HDFC Bank at Anekal weighing about 400 kgs was uprooted and loaded into a vehicle and carried away by the clever thieves. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And what was the watchman doing? He was sleeping in an adjacent bank! </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"> – Friday's cases </font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" 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">Income Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Can provisions of Sec 43B be invoked on a statutory liability which by flux of time changed its character - NO, says ITAT </strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> assessee was awarded sales-tax deferral benefit under the State Incentive Scheme for setting up Industries. Under this scheme, the Industrial Unit of the assessee was permitted to retain the sales tax collected from its customers for a period of 14 years. This scheme of the State Government was revised and as per the provision thereof the deferred amount of sales tax stands converted into interest free loan in the records of the State Government thereby losing its character of current liability. Against these facts, since the deferred amount has lost its character of current liability, the provisions of section 43B are not applicable to sales tax deferral scheme. </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"><b style='mso-bidi-font-weight:normal'><span style="mso-ansi-language:EN-IN"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central
Excise – <span class="SpellE"><span
class="GramE">Commr</span></span><span class="GramE">(</span>A) confirms invoking
Section <span class="SpellE">11AC</span>, but reduces penalty – Revenue
challenges reduction of penalty; assessee does not appeal. Tribunal should
not have confirmed reduction when the assessee had not appealed – High
Court</font></span><span style="font-size:10.0pt;font-family:"Verdana","sans-serif";
color:red;mso-ansi-language:EN-IN">
<o:p></o:p>
</span></b></p>
<p align="justify"><span style="text-align:justify"><font size="2"><span style='mso-ansi-language:EN-IN' lang="EN-IN" xml:lang="EN-IN"><font face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> show cause notice issued against the Respondent-Assessee was confirmed
by an order-in-original dated 13.03.2003. </font></span><font face="Verdana, Arial, Helvetica, sans-serif"><span style='mso-fareast-font-family:"Times New Roman"; mso-ansi-language:EN-IN' lang="EN-IN" xml:lang="EN-IN">The
Commissioner (Appeals) vide its order dated 30.06.2003 applied the provisions
of Section 11(AC) of the Central Excise Act, 1944 considering the facts
and circumstances of the case and went on to reduce penalty under Section
11(AC). The said order was subject matter of challenge, not at the instance
of the Respondent-Assessee but at the instance of the Appellant/Revenue,
before the Tribunal.</span></font></font></span></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commissioner(Appeals)
cannot condone delay in filing an appeal beyond condonable period of 30
days on ground that ‘law point' was involved – Revenue appeal
allowed: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 154
of the Customs Act, 1962 does not authorize correction of mistakes made while
presenting Bill of Entry. If it was the assessee's case that they made erroneous
entries in the Bill of Entry, it was up to them to seek amendment of the
Bill of Entry before assessing authority on the basis of documentary evidence
which was in existence at the time of clearance of the goods.</font></p>
<p align="justify"><font color="#FF0000" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tomorrow is a holiday</strong></font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Friday for the judgements</font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Friday with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice time.</font></p>
<p align="justify"><font color="#FF6666"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font></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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