TIOL-DDT 1452 · 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 1452 </font><br> 24.09.2010 <br> Friday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Conversion of free shipping bills to export promotion scheme shipping bills and conversion of shipping bills from one scheme to another – CBEC clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Board's <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2004/cuscir04_004.htm" target="_blank">Circular No.4/2004-Cus dated 16.01.2004</a></strong></em>, conversion of shipping bills from one export promotion scheme to another only where the benefit of an export promotion scheme claimed by the exporter has been denied by the DGFT/MoC&I or Customs due to any dispute. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has noticed that the Tribunal in a series of judgments have held that amendment to shipping bill after export of goods is governed by the proviso to section 149 of the Customs Act, 1962 and if the requirements of the said proviso are satisfied, conversion of shipping bill should be allowed. The conversion of the shipping bill from one scheme to another cannot be linked with denial of benefit of one scheme by DGFT/MoC&I or Customs due to some dispute as no such condition for amendment of shipping bill has been provided in section 149 of Customs Act, 1962. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After considering representations, board has been very kind and decided that:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, from Advance Authorization/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example from Drawback scheme to DEPB scheme or vice versa) irrespective of whether the benefit of an export promotion scheme claimed by the exporter was denied to him by DGFT/ DOC or Customs due to any dispute or not. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The conversion may be permitted in accordance with the provisions of section 149 of the Customs Act, 1962 on a case to case basis on merits provided the Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the goods were exported, that the goods were eligible for the export promotion scheme to which conversion has been requested. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course the Board wants the field to take due care while allowing conversion to ensure that the exporter does not take benefit of both the schemes i.e. the scheme to which conversion is sought and the scheme from which conversion is sought. Whenever conversion of a shipping bill is allowed, the same should be informed to DGFT so that they may also ensure that the exporter does not take benefit of both the schemes. </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=25&filename=notification/custom/2004/cuscir04_004.htm" target="_blank">Circular No.4/2004-Cus dated 16.01.2004</a> is superseded.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has, for a change, shown respect for Tribunal orders and trade requests. This is how the Revenue Board should function. Even now the conditions are cumbersome – Board should consider making the procedure more simple. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_036.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC CIRCULAR NO. 36/2010-Cus, Dated : September 23, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Air Tickets Illegal - IATA Chief </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/giovannibisignani.jpg" alt="Legal Corner Icon" width="96" height="126" hspace="5" border="0" align="left"><strong>THE</strong> International Air Transport Association (IATA) Director General and CEO, Giovanni Bisignani paid a lot of left handed compliments to the Indian Aviation Industry and the Government, yesterday in New Delhi. He was very unhappy with the service tax on air tickets and said, “the Ministry of Finance has added $236 million to the cost of operating in India with an extension of India's 10.3% service tax from international premium tickets to economy and domestic travel as well, in contravention of the International Civil Aviation Organization (ICAO) rules. It is an embarrassing situation for such a relevant country as India-which is a member of the ICAO Council-to be ignoring rules that it has helped to develop” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bisignani also said, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> Developments in Delhi are impressive. For the first time India has a hub that could rival Singapore or Dubai, with plans to accommodate 100 million passengers by 2030. But I have concerns over Mumbai. By 2016, stop-gap measures may take capacity up to 40 million. But where is Mumbai's 100 million passenger plan? We must find a solution that is environmentally responsible. The clock is ticking and a conclusion is urgently needed. Mumbai is a great city. However history tells us that no city can remain great without effective transport links. It is time for all parties to work together to agree on a site and get on with it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India allows 100% FDI in transit systems, ports, harbors, hotels, ocean transport and road systems. But airline FDI is restricted to 49%. Moreover, no foreign airline can invest in an Indian airline. The inconsistency is difficult to understand. Does it make sense that a non-Indian airline can own 100% of a green field airport project, but cannot invest a single Rupee in an Indian airline? The success of India's airlines should not be compromised by an archaic investment policy that isolates them from global trends. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Services will play key role in economic recovery - WTO Chief Pascal Lamy </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> WTO Chief comments:-</font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Opening new trade opportunities in services makes sense for growth and it makes sense for job creation. </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">In the US, the service sector accounts for more than 75 per cent of the economy. According to the US Bureau of Labour Statistics, in 2009, 90 million people were employed in service sector industry, compared to 19 million in the goods sector. </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">In terms of the recovery, trade in services will continue to play a key role. </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“Trade in services” is not “trade” in the conventional sense of a product being transacted across a border. It represents the whole range of international economic transactions, including those involving the movement of companies and people, both as suppliers and consumers of services.</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When you look at the latest personal computer, laptop or mobile phone, you are looking at a wealth of services. Services underpin every part of the production process, from research and development, design, engineering, financing, transportation, distribution and marketing. Without services, there would be little value-added and innovation.</font></strong></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><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">Mere fact that order of appellate authority is not “acceptable” to department is in itself an objectionable phrase for not following it unless its operation has been suspended by a competent Court - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>THE</strong> order of the Appellate Collector is binding on the Assistant Collector working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and Appellate Collectors, who function under the jurisdiction of the Tribunal the principles of judicial discipline require that the orders of the higher appellant authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department, in itself an objectionable phrase and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assessee and chaos in administration of tax laws”. </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">Sec 38 - Assessee claims deduction for full expenditure incurred on repair of roof of large building having many tenants - Deduction should be commensurate with area occupied for purpose of business - Assessee's appeal dismissed: Bombay High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether an order under-section 201(1A) is a consequential order of section 201(1) and hence the stay granted by the ITAT in pursuance to a stay application against the demand of Sec 201(1) is equally applicable to section 201(1A) also.</font></p> <p><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">Incidence of levy is on occurrence of event i.e provision of service and event has already occurred before commencement of commercial production on 1.3.1996 – Service Tax demand set aside with consequential relief: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant's grievance in this case is that the entire technology was provided before the commencement of the commercial production i.e 1.3.1996 and hence it could not be converted into ‘Consulting Engineering Services'. It is also submitted that the appellant did not provide any service of the nature described as ‘Consulting Engineering Services' after 7.7.1997 or before that, and hence there shall be no Service tax liability on the appellant.</font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements</font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend</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>