TIOL-DDT 1401 · 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 1401</font><br>
14.07.2010 <br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Export Duty on Clearances to SEZ - Supreme Court Confirms </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> reporting the Gujarat High Court judgement in the<em> Essar Steel</em> case – </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2009/2009-TIOL-674-HC-AHM-CUS.htm" target="_blank"><em>2009-TIOL-674-HC-AHM-CUS</em></a></strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2009/2009-TIOL-674-HC-AHM-CUS.htm" target="_blank">, </a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> had
observed, <font color="#FF6633"><strong>In a landmark judgement the Gujarat High Court has with high erudition and lucidity explained the concepts and demolished every theory advanced by Revenue. Wonder why the highly intelligent Revenue officers can't think like this? </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The moot question for consideration before the High Court was whether the levy of export duty on goods supplied from the Domestic Tariff Area to the Special Economic Zone is justified under law . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> also predicted, <font color="#FF6633"><strong>This, by no means, is the end of the story – the Government will take the matter to the Supreme Court.</strong></font> (it doesn't need great abilities of prediction). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Government filed delayed SLPs in the Supreme Court. The Apex Court condoned the delay but dismissed the SLPs, on 12.07.2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At least now the Government should quickly <strong><em>accept</em></strong> the order of the highest Court in the Country and communicate the fact to the field formations so that tons of litigation can be closed. Writ petitions on this issue are pending in almost every High Court in the country. It is time we end some of these useless litigation. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SC Order <font size="1">- (</font></strong></font><strong><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2010/2010-TIOL-50-SC-SEZ.htm" target="_blank">2010-TIOL-50-SC-SEZ</a>) </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibition of Indian 1000/500 Rupee Notes in Nepal – Customs to Educate</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> latest CBEC Circular states, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian currency notes in the denomination of Rs.1000 and Rs.500 are not permissible for exchange for banking transaction in Nepal in terms of guidelines issued by Ministry of Finance, Government of Nepal and Nepal Rashtra Bank. In fact, the current legal provisions in Nepal provide that notes of these denominations are liable for seizure and the persons carrying them are to be fined or imprisoned for up to three years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instances have come to the notice of the Board that many Indian nationals travelling to Nepal by Air or by land routes and carrying Indian currency notes of Rs.500 and Rs.1000 denomination primarily due to ignorance of the law, are not only violating the RBI regulations issued in this regard but also get entangled in legal proceedings for possession of these notes in Nepal, like criminal prosecution along with confiscation of such currency notes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board hereby desires that at prominent places at the Airports and Land Customs Stations in India from where the passengers depart, to put up a display / notice board mentioning that <em>“Import / export of Indian currency notes of the denomination of above Rs.100 from / to Nepal is prohibited and would attract penal provisions. The use of such currency notes of the denomination of Rs.1000 and Rs.500 is also prohibited in Nepal. Therefore, these notes are liable to be seized and the persons carrying them are liable to be fined or imprisoned for up to three years in Nepal.” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You may remember, recently the Home Minister of Nagaland was held in Nepal's Tribhuvan International Airport with Indian Currency Notes of Rs. 500 and Rs. 1000 valued at about Rs Nine lakhs. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_019.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No.19 / 2010-Customs Dated : July 13, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">But it's not our fault, says Nepal's RB Governor</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Federation of Nepalese Chambers of Commerce and Industries recently petitioned NRB, asking it to lift the ban on the Indian notes. The Nepal Rashtra Bank explained, “it is not in our hands; Unless India amends its own Act, the ban will be on in Nepal and other countries as well." In fact very recently, Yubaraj Khatiwada, Governor of Nepal Rastra Bank (NRB) requested Indian RBI Governor Dr. Subba Rao to lift the ban on Rs 1,000 and Rs 500 Indian rupee notes in Nepal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Actually Nepal is stuck with nearly 40 Crores of seized Indian Currency. RBI refuses to accept thees notes as they are ILLEGAL. And those people who must have carried these genuine notes into Nepal have lost their valuable cash. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bribe-proof garments - Pocketless trousers to prevent Corruption </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TALKING</strong> of Nepal, the C ommission for the Investigation of Abuse of Authority (CIAA) of Nepal has come up with a novel idea to stop corruption in Kathmandu's Tribhuvan International Airport. Now all airport officials will be given bribe-proof garment - trousers with no pockets. But pockets are not the only places where corruption can be hidden. It was held that a Keralite keeping gold in his underwear was not actually concealing gold, because as his lungi had no pockets, that was the only place where he could keep the gold safely.</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"> – Thursday's cases</font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commissioner
ignored a significant provision contained in the proviso to notification
67/95-CE while confirming demand of over Rs 3 crores – issue not
addressed seriously – Stay ordered: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> case goes thus - A part of the naphtha manufactured within the refinery was
captively consumed in the generation of electricity which in turn was captively
consumed in the manufacture of two other petroleum products [viz. LPG (Domestic)
and SKO (PDS)] which were cleared without payment of duty. A duty demand
of more than three crores was raised on the said quantity of naphtha by denying
the benefit of Notification no. 67/95-CE dated 16.03.1995 to the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can assessee claim deduction of provision made for fluctuation in foreign exchange earmarked for paying technical knowhow even though no TDS was deducted - YES, says High Court. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> allowability of fluctuation in foreign exchange rates has always been a major bone of contention between the Revenue and the assessee. In this interesting case, the issue is - Whether the assessee is entitled to claim deduction of provision made on account of foreign exchange fluctuation in relation to technical Know-how even though no TDS was deducted by the assessee, And the answer is YES.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Tribunal is expected to bear in mind that judgments of Tribunal are subject
to scrutiny by High Courts – Bombay HC quashes a cryptic order by CESTAT
(WZB) </font></strong></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> first paragraph of the order is nothing but a preamble to the order, whereas the second para of the order refers to the findings given by the adjudicating Commissioner, whereas third para takes notice of the definition of word “goods” and finally in fourth para conclusive finding without there being any threadbare discussion is recorded. Such order can hardly be said to be a reasoned order with application of mind.</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are the observations of the HC of Bombay in an appeal by the revenue against the Tribunal's order in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2005/2005-TIOL-708-CESTAT-MUM.htm" target="_blank">2005-TIOL-708-CESTAT-MUM</a></strong></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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