TIOL-DDT 1440 · 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 1440</font><br>
08.09.2010 <br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Duty on Electricity – Retrospective Shock – Now some Relief (only for one?)</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BUDGET</strong> 2010, imposed a 16% Customs Duty on 'electrical energy' cleared from a Special Economic Zone into Domestic Tariff Area or non processing areas of Special Economic Zone. This was retrospectively effective from June 26, 2009.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has announced some major relief to electricity sellers from SEZs. </font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new rates are:</font></p>
<table width="450" border="1" align="center" cellpadding="3" cellspacing="0">
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<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></p></td>
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">if removed from power projects of <SPAN STYLE="background: #ffff00">1000
MW and above,-</SPAN></FONT></FONT></P>
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">if removed from power projects of <SPAN STYLE="background: #ffff00">less
than 1000 MW,-</SPAN></FONT></FONT></P>
</tr>
<tr valign="top">
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) using <SPAN STYLE="background: #ffff00">imported
coal as fuel;</SPAN></FONT></FONT></P>
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 100 per 1000 kwh </font></p></td>
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 40 per 1000 kw </font></p></td>
</tr>
<tr valign="top">
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) using <SPAN STYLE="background: #ffff00">
domestic coal as fuel;</SPAN></FONT></FONT></P>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
</tr>
<tr valign="top">
<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) using <SPAN STYLE="background: #ffff00">domestic gas as fuel;</SPAN></FONT></FONT></P>
<td><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 110 per 1000 kwh </font></p></td>
<td><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rs. 60 per 1000 kwh </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assuming that a unit of power is sold for Rs. 5/- the duty payable would have been Rs. 800/- for 1000 kwh, whereas now it is a maximum of Rs. 110/- and nil if domestic coal is the fuel.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why was the duty imposed in 2010 Budget and why this massive concession given now? Who does it benefit? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Hindu Business Line reported today that <em>Adani Power</em> is to gain up to Rs 1 Crore per day. The report also says that <em>Adani Power</em> is perhaps the only company to commercially sell electricity from an SEZ and so it is also possibly the only beneficiary of this sop. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this notification also makes some cosmetic changes to the condition for import of zipper, velcro tape etc,.The Notification should not look as favouring just one party! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10526" target="_blank">TIOL-DDT 1310 - 03.03.2010 </a></strong></font>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_091.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 91/2010 - Cus.,Dated: September 6, 2010
</font>
</strong>
</a>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Courier Regulations for manual and electronic mode – Board Explains </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_036.htm" target="_blank">Notification No.36/2010-Cus (NT) dated 5th May, 2010</a></em></strong> Board had notified Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. These Regulations have been framed to enable electronic filing and processing of customs declarations with regard to import and export consignments carried by courier companies. Further, vide <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_075.htm" target="_blank">Notification No.75/2010-Cus (NT) dated 12th August, 2010</a></strong></em>, consequential changes have also been made in the Courier Imports and Exports (Clearance) Regulations, 1998, which regulate the procedure for clearance of courier consignments in the manual mode. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has explained the salient features of both the Regulations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For removal of doubts, it is clarified that similar to Bill of Entry Regulations for the manual and electronic mode, the two Courier Regulations-electronic as well as manual mode prescribe the procedure for filing and processing of declarations. While manual Regulations apply to courier clearances at specified places, the electronic Regulations would apply wherever the automation facilities are being setup. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The existing Authorised Couriers who are registered or transacting business in terms of Regulation 12 of the Courier Imports and Exports (Clearance) Regulations 1998 at locations where automated clearance facilities become operational shall be eligible to file declarations under the electronic mode without any requirement for fresh appointment or fresh intimation, subject to the fulfillment of other conditions or requirements imposed under courier Regulations for the electronic mode. In short, once a person is registered as an Authorized Courier, he can file declarations under both the modes subject to compliance of other requirements of the respective Regulations.
</font>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 33/2010 - Customs; Dated: September 07, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Paid on non-dutiable/non excisable goods – Board issues notification</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU</strong> pay excise duty on a product and take credit on the inputs used in its manufacture. Later, a Court declares that your product is not excisable or not dutiable. Now the Department has strange ways of dealing with the situation. It will ask you to reverse the <em>CENVAT Credit</em> taken on the inputs as the final products are not dutiable. But what about the duty paid? Department will say, it is not duty at all – how can you pay duty when duty was not payable at all? Will you get refund? Are you joking? You have collected the <strong>amount</strong> from your customer and so the amount is payable to the government. Will the buyer get credit? No, as what was paid was not duty!!!!! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2007, the Law was amended and under Section 5B of the Central Excise Act, the Government could by notification order for non-reversal.
</font>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The original litigation on the issue started with the zigzag case of Technoweld Industries - </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2003/2003-TIOL-37-SC-CX.htm" target="_blank">2003-TIOL-37-SC-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">,
wherein the Supreme Court finally held that <em>drawing wire from wire rods does not amount to manufacture</em>.
Harassed assessees had to persuade the government to undo the Supreme Court
decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board notifies that assessees who have paid duty on the drawn wire and who have taken <em>CENVAT Credit</em> need not reverse the Credit and this is applicable only if the Credit was taken prior to 8th July 2004! That means this notification is applicable only to disputes relating the period prior to July 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court Judgement in Technoweld case came in March 2003. Section 5B was inserted in May 2007 and Board gives the clarificatory Notification in 2010! Better late than never!!!!!! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And why can't this be made applicable in all cases and not for wire alone? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7263" target="_blank">DDT 859 - 06.05.2008</a></strong></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_28.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 28/2010-CX.,(N.T.), Dated: September 1, 2010 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP – DGFT Amends Appendices </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Sl. No. 3 under the ‘Note' to Appendix 25 C related to “BG Format” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Sl. No. 4 under the ‘Note' to Appendix 25 D related to “LUT Format” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Sl. No. 9 under the “Guidance in the matter of Executing BG / LUT” mentioned after Appendix 25 D </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of the Handbook of Procedures (Vol.1), 2009-14 </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn008.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 8/(RE: 2010)/2009-2014, Dated: September 6, 2010 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Sugar – Export Release Order – DGFT Direction</strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT directs that all the field formations take necessary action for compliance of the decision of the Government and not to allow export of sugar on “ton-to-ton” basis without release order from Directorate of Sugar against advance authorization(s) issued from 17.02.09 to 30.09.09 for import of raw sugar. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn008.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 1/(RE: 2010)/2009-2014, Dated: September 7, 2010
</font>
</strong>
</a>
<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 color="#663399" 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">Central Excise</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise – Demand – Limitation - there has to be a willful misstatement or suppression of facts or fraud or contravention: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> the Department to have benefit of extended period of limitation, the requirements of Section 11A of the CESA Act have to be satisfied inasmuch as there has to be a willful misstatement or suppression of facts or fraud or contravention of any of the provisions of CESA Act, 1944 or of the rules made thereunder. It would therefore have to be seen whether in the instant case the requirements for availing of the benefit of the extended period five years is available to the Respondents. In the instant case, on the basis of the material on record, it cannot be said that there was any misstatement of facts by the Petitioners as the Department was fully aware of the activities of the Petitioners. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax
</font>
</strong>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 36(1)(iv) - Assessee deposits employer's contribution to own PF - Can such contribution be disallowed merely because PF Trust fails to make investments as per rules - NO, says ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether Employer's contribution deposited during the year to its own provident fund trust is not allowable on the fact that the trust had not invested funds as per prescribed rules of ITR and hence not entitled to be considered as a recognized trust. </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">Service Tax – While ignorance of Law is no excuse, for penalty, presence of reasonable cause would be germane - High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THOUGH</strong> ignorance of law cannot be an excuse for payment of service tax, when it comes to the question of imposition of penalty the statute specifically stipulates the circumstances under which such penalty and interest thereon can be levied. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Until Tomorrow with more DDT</font></strong></font></p>
<p align="justify"><font color="#FF6666"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice Day ahead.</font></strong></font></p>
<p><font color="#FF6666"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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