TIOL-DDT 1420 · 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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1420 </font><br> 10.08.2010 <br> Tuesday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Goods for Commonwealth Games, 2010 - CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per <em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_013.htm" target="_blank"><strong>Notification No.13/2010-Customs dated 19.2.2010</strong></a></em>, exemption was granted on Customs duty on specified goods imported into India for the purpose of organizing the Commonwealth Games to be held in October, 2010 in New Delhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Organising Committee as well as Departmental Officers had certain doubts which the Board clarifies. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a doubt whether suppliers/contractors/vendors are eligible for the benefit under the notification. Board clarifies that THEY ARE NOT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the <font color="#FF6633"><em><strong>concerned</strong></em></font> Commissioners to sensitize field formation under their charge to ensure speedy clearance of consignments subject to observance of due procedure. Further, in order to ensure smooth conduct of the Commonwealth Games, the clearances of import consignments connected with the Games shall be allowed on holidays also on payment of applicable MOT charges. Board desires that all <font color="#FF6633"><em><strong>concerned</strong></em></font> Commissioners of Customs should take suitable advance action in this regard and provide adequate manpower for this purpose. All <font color="#FF6633"><em><strong>concerned</strong></em></font> Commissioners of Customs are also advised to appoint a nodal officer to monitor clearance of consignment imported for the purpose of the Commonwealth Games. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Which Commissioner is <font color="#FF6633"><em><strong>concerned</strong></em></font>? </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_026.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 26/2010 Dated: August 9, 2010 </font></strong></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Dhamra Notified as Customs Port </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DHAMRA</strong> in Orissa has been notified as a port for unloading of imported goods, namely, Coking coal, Thermal coal and limestone and loading of Iron ore for export </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_069.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 69/2010-CUSTOMS (N.T.) , Dated: August 5, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Establishment of Branch Offices (BO) / Liaison Offices (LO) in India by Foreign Entities – RBI extends date </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Annual Activity Certificates (AACs) as at the end of March 31, are to be submitted by the Branch Office / Liaison Office (BO/ LO), on or before April 30 every year, to the designated AD Category-I bank and a copy to the Directorate General of Income Tax (International Taxation), New Delhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of the difficulties expressed by some Liaison Offices / Branch Offices in submitting the AACs within the prescribed period, RBI has decided to review the current calendar for the same. Accordingly, the AACs from the Auditors, as at end of March 31, along with the audited Balance Sheet may be submitted on or before September 30 of that year. In case the annual accounts of the LO/ BO are finalized with reference to a date other than March 31, the AAC along with the audited Balance Sheet may be submitted within six months from the due date of the Balance Sheet. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2010/rbi10cir006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A.P. (DIR Series) CIRCULAR NO. 06/RBI., Dated: August 09, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can Service Tax credit be utilised for payment of clean energy cess? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CLEAN</strong> Energy cess is collected on certain specified goods like coal at the effective rate of Rs 50/- per MT. Consequent to the enactment of the Finance Bill 2010, several notifications have been issued and the “Clean Energy Cess Rules 2010” have also been notified for collection of this Cess. The provisions of the Notifications have been further explained by the JS(TRU-I) vide his letter dated 24th June 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since this clean energy cess is collected as “duty of excise”, there is a possibility of utilising the CENVAT Credit for payment of this cess. So, the <em>CENVAT Credit</em> Rules 2004, have also been amended simultaneously vide Notification 26/ 2010-CX.,(N.T.), Dated: June 29, 2010 to insert a proviso in sub-rule(4) of rule 3 as under: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided also that the CENVAT credit of any duty specified in sub-rule (1) shall not be utilized for payment of the Clean Energy Cess leviable under section 83 of the Finance Act, 2010 (14 of 2010):” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The impact of the amendment is that <strong>any duty</strong> specified under sub-rule (1) shall not be utilised for payment of clean energy cess. But in addition to various “duties”, this sub-rule also allows a manufacturer/ service provider to take credit of the <strong>service tax</strong> leviable under section 66 of the Finance Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the question is whether the restriction under the proviso inserted for “any duty” is also applicable to “Service Tax”? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While one school of thought is of the view that, since the newly inserted proviso mentions ‘<font color="#FF6633">any duty specified in sub-rule (1) shall not be utilized for payment of the Clean Energy Cess</font>' , the restriction applies only to utilization of different types of ‘duties' specified in sub-rule (1) like ‘duty of excise', ‘additional duty of excise', etc but not to utilization of credit of service tax paid on input services. And this leeway can be taken advantage of by coal mining companies who can exhaust their service tax credits which they accumulate by availing mining services, for paying Clean Energy Cess. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the contrary, there is another school of thought which is of the view that the phrase ‘<font color="#FF6633">any duty specified in sub-rule (1) shall not be utilized for payment of the Clean Energy Cess</font>' , refers to not only different duties of excise mentioned in sub-rule (1) but also credit of service tax paid on input services. This argument of restricting service tax credits is also supported by the clarification issued by TRU in its letter dated June 24, 2010. In paragraph 2 of this clarification it is stated as follows: “<font color="#FF6633">As a result the aggregate rate of cess would be Rs.50 per tonne. This amount has to be paid in cash as suitable amendment in the CENVAT credit rules, 2004 is being made to <u>exclude payment of this cess using credit</u></font><u>.</u>” The word ‘credit' referred to in this TRU letter also includes credit of service tax paid on input services. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board should take note of this confusion and issue a suitable clarification to the stakeholders – before the matter reaches the Supreme Court. </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"> – Wednesda'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">Service Tax</font></strong> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Airport Service - Royalty charges for space, advertising, garbage disposal, income from entry charges, not liable to service tax - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AIR</strong> India has been given exclusive contract to perform ground handling services including passengers handling, ramp handling and cargo flight handling including loading of cargo etc. Air India has paid service tax- royalty charges collected by appellants from M/s Air India can be construed as an amount for lease or rental charges for functioning in the appellant's area. </font></p> <p><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">Sec 260A - Can assessee raise a new question of law, not framed earlier, at time of final hearing - YES, says HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the High Court is - Whether as per the provisions of section 260A which are pari materia to section 100 of the Civil Procedure Code it is permissible to raise a new question of law, not framed earlier, at the time of final hearing. And the answer is YES. </font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to clearance of 3500 MT of paper – Bifurcation of factory, no ground for denial of credit – Question of fact – no appeal – Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is manifest that both the authorities below have found as a fact that both the units had the requisite equipment for manufacture of paper starting from the stage of pulp to the final stage of the end product i.e. paper. The finding is a pure question of fact and is not put in issue by the revenue. That being so, the impugned order does not give rise any question of law. Resultantly, the appeal deserves to be dismissed. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p> <p><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> </body> </html>