TIOL-DDT 1447 · 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="3"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1447</font></strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <br> 17.09.2010 <br> Friday.</font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund of 4% Additional Duty of Customs (Special CVD) - NotificationNo.102/2007-Customs - Applicability to manufacturers in textile sector - Board Clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has received representation from trade and industry (especially the textile sector) through the Department of Commerce to allow the benefit of this exemption to manufacturer-importers, especially those who have opted out of the CENVAT Credit Scheme and do not pay excise duty on their final products. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Clarifies:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Special CVD is one of the duties specified under sub-rule (1) of rule 3 of the <em>CENVAT Credit</em> Rules, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Credit of this duty, when paid on inputs (imported) used in or in or in relation to the manufacture of excisable goods, is available. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ This credit can be used for payment of duty on the final product. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Hence a textile manufacturer who opts to pay excise duty on his final product can avail of <em>CENVAT credit</em> of 4% Special CVD paid on his inputs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ But this benefit obviously cannot be extended to a manufacturer who opts to avail of full exemption (and hence does not pay excise duty)) on his final product. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ If the imported inputs on which 4% Special CVD has been paid are used by such a manufacturer for the manufacture of final products, the benefit of exemption (by way of refund) under notification no 102/2007-Customs dated 14th September 2007would also not be available. This is because the condition regarding payment of State VAT on imported inputs cannot be fulfilled in this situation where inputs are consumed and not sold as such. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_034.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 34/2010-CX., Dated: September 15, 2010 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption to Imports From Nepal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2002/ctariff02_040.htm" target="_blank">Notification No. 40/2002 – Cus dated 12.04.2002</a></strong></em>, certain goods from Nepal are exempted from Customs Duty. This Notification is superseded and a new notification is issued – unprocessed minerals and Stone aggregate, boulder, sand and gravel – are added to the list. </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=23&filename=notification/custom/2010/ctariff10_094.htm" target="_blank">NOTIFICATION NO. 94/2010-CUSTOMS Dated: September 15, 2010</a> </font></strong></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption to Imports From Least Developed Countries </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_096.htm" target="_blank">NOTIFICATION</a></em></strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_096.htm"><strong><em>No. 96/2008 – Cus dated 13.08.2008</em></strong></a>, provides a complicated exemption to goods imported from the Least Developed Countries. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ For goods other than those specified in Appendix I and II, the effective rate is 60% of the applied rate. Applied Rate is the standard rate in the tariff read with any exemption notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Under Appendix-II, there are different exemption rates from the applied rates ranging from 4% to 40%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Appendix – II has no rates – it is only an exclusion list. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now for Sl. No. 1 above the effective rate is made 40% and for the items in Sl.No. 2 above, there is a fifty percent hike in the effective rates. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_095.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION NO. 95/2010-CUSTOMS Dated: September 15, 2010 </strong></font></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Chairmen of Revenue Boards - Should be a tenure Post</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC Chairman is retiring in November and the CBDT Chairman in December. The Revenue Administration should find successors before that. As per the Recruitment Rules, only a Member with more than one year residual service is eligible to be appointed as Chairman. In our last week's <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11414" target="_blank">CobWeb</a></strong>, we pointed out a strange situation - in December when the CBDT Chairman retires, there is no Member in the CBDT with more than one year service left. So now the Government has to appoint a Member with more than 16 months left and within a couple of months of his appointment as Member, he will supersede all the senior Members and become the Chairman. This new Chairman who was reporting to all these senior Members till yesterday would want them to report to him – in a hierarchy conscious service, his life will be miserable. When Mrs. Gandhi superseded the Judges of the Supreme Court and appointed AN Ray as the Chief Justice of India, all the superseded judges resigned. Justice Hidayatullah then remarked, "this was an attempt of not creating 'forward looking judges' but the 'judges looking forward'. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue Boards are the most important statutory Boards in the Country responsible for collecting the Revenue (maybe for squandering by the politicians) for the Nation and are certainly as important as say the Home Secretary or the Service Chiefs and should have a fixed tenure of at least two years, so that they have the time to do something. Why can't we simply appoint the senior-most Member as Chairman and let him continue in that post for two years?. After all only Members are appointed as Chairmen and if one is good enough to be a Member, he is obviously good enough to be Chairman. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM should ensure that we should have 'forward looking Members' and not 'looking forward' Members. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More on this in our <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11422" target="_blank">TIOL TOP</a></strong></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"> – Monday's cases </font></strong></font></strong></font></p> <p align="justify"><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">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Electric Bulbs and Rubber Strips fall within ambit of components, spares and accessories of goods falling under Ch. 85 of CETA, 1985 and are capital goods entitled for <em>CENVAT Credit</em>: High Court. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is the contention of the Department that <em>CENVAT credit</em> on electric bulbs and rubber strips is incorrect since these are neither eligible capital goods as per Rule 2(b)(i) of the <em>CENVAT Credit</em> Rules, 2001 nor are the spares/components/accessories of the capital goods as defined under Rule 2(b)(ii) of the Rules. </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">Does disallowance of losses claimed in exports transactions with non-resident parent company amount to enhancement of income - if yes, is it obligatory for AO to issue fresh notice - YES, 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 disallowance of losses claimed by the assessee company in its export transactions with the non-resident parent company amounts to enhancement of income. If yes, whether it is obligatory for the AO to issue fresh notice. 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">When there is no liability to pay tax, merely because the authorities took a contrary view in an appeal, if pre-deposit is insisted upon, it would not only cause undue hardship, but would also cause untold misery to appellant - : High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INASMUCH</strong> as since the Supreme Court decision is applicable to the facts of the case, there is no liability to pay tax and hence when there is no liability to pay tax, merely because the authorities took a contrary view in an appeal, if the pre-deposit is insisted upon, it would not only cause undue hardship, but would also cause untold misery to the appellant.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice <strong>Weekend</strong></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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p> </body> </html>