TIOL-DDT 1453 · 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
1453</font><br>
27.09.2010<br>
MONDAY</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT Credit - Service Tax - Spares of Motor Vehicles and Dumpers included in Capital Goods</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MOTOR</strong> Vehicles and dumpers or tippers used for providing certain output services are defined to be Capital Goods on which <em>CENVAT Credit</em> can be availed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, components, spares and accessories of motor vehicles, dumpers or tippers, are also included. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_29.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/ 2010-Central Excise (N. T.), Dated : September 24, 2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Illegal use of Satellite Phones in India - CBEC Wakes Up - A Little too late? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC's latest Circular reiterates that use of any kind of satellite phone in India is permissible only after obtaining a licence from the DOT. Presently, use of specific types of INMARSAT terminal only is permitted by the DOT, while use of ‘Thuraya' satellite phone in India without specific permission of DOT is illegal. Thus, unauthorized use of a satellite phone in India attracts penal provisions under section 20 and 21 of the Telegraph Act, 1885 for violation of provisions of section 4 of the said Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has come to the notice of the Board that satellite phones are being brought into India via baggage and being used by anti-national elements which poses a serious security threat. Accordingly, the Board has taken a serious note of unauthorized use of satellite phone in India after import through passenger baggage. It is, therefore, decided that arriving passengers importing satellite telephone as baggage shall be required to declare the same to the Customs on arrival. Furthermore, it is necessary to alert all arriving passengers to their responsibility to make such declaration. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any such satellite phone declared to Customs shall be allowed clearance subject to production of permission for use from DOT, Government of India. Satellite phones imported for use in India without a valid permission of DOT may be detained and appropriate action in accordance with the law may be initiated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board desires that Deputy / Assistant Commissioner on duty at the Airport should remain vigilant to check against any attempt to import Satellite phones without declaration to Customs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants these instructions to be strictly complied with. Otherwise? It will be viewed seriously! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">These phones are mostly used by terrorist organisations and have been imported into India regularly and are said to be in use by several terrorists. Why was the Board silent about this all these days? And the Board Circular also seems to be inaccurate. The Circular says that use of ‘Thuraya' satellite phone in India without specific permission of DOT is illegal. But other Government organisations say that THURAYA phones are not permitted in India. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Several Indian Embassies abroad have warned visitors to India not carry these phones as they will be confiscated, but the Indian Customs is silent all these years. It seems in MARCH 2010, the Home Ministry had asked Customs and DRI to seize unlicenced satellite phones. In 2005, the Delhi Police had seized Satellite Phones. Just six months ago Karnataka Police had seized 11 Thuraya Satellite phones. It seems even the Customs had seized some of these phones five six years ago. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And there had been a tragic case: An Italian environmentalist was on a world tour in his Mercedes that ran on biofuel to spread awareness about climate change. In January 2010, he was arrested by the Rajasthan Police for carrying a satellite phone – he never knew that it was illegal in India. He spent a few days in jail and a few months fighting the case before he was allowed to leave the country. It cost him about Rs. Five lakhs to stay in India and fight the case. His trip up to India had cost him about 2.5 lakhs. He could not complete his trip. When people ask him about the worst part of his journey, he has no hesitation in saying, “India”. He says, “even prison was a really positive experience for me, one I hope never to have to repeat”. The lesson he learnt was, “people in power can be really stupid, and even more so when they are acting out of fear. Secondly, there is nothing you can do about it if you are in the wrong place at the wrong time” </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IF YOU HAVE ANYBODY COMING TO INDIA, WARN THEM NOT TO BRING A SATELLITE PHONE. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And there had been a classic case. A Company imported 'Thuraya Satellite phone' and claimed exemption under Customs Notification No. 21/2002, which was denied by the Adjudicating Authority and Commissioner (A), but the Tribunal held that satellite phone is also a cell phone and so eligible for the exemption. Please see</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2007/2007-TIOL-1909-CESTAT-BANG.htm" target="_blank"><font size="1">2007-TIOL-1909-CESTAT-BANG</font></a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC CIRCULAR NO. 37/2010-CUS, Dated : September 24, 2010 </font></strong></a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT to get new Technical Members</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> understand that Government has cleared five Commissioners - PR Chandrasekharan, Mathew John, P. Babu, Sahab Singh and AK Prasad for appointment as Technical Members of the CESTAT. They all have over eight years experience as Commissioner and two of them are Law Graduates. It is a great news for CESTAT that vacancies are being filled up. At least three Benches have no Technical Members and they are being imported from other Benches, which would certainly cause inconvenience and delay in all the benches. The Mumbai Bench is still hearing 2003 cases. Maybe the Government should consider creating new Benches at Cochin, Hyderabad, Bhubaneswar, Bhopal, Guwahati, Mumbai and Delhi. The ITAT has over 50 Benches and 100 Members. CESTAT should have at least 28 Benches and 60 Members, covering all major States having High Courts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems one of the selected Members has filed a case in CAT regarding seniority and if he joins CESTAT, the case would become infructious and that is good news for those waiting to become Chief Commissioners. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Only People Who Make Money During Recession - Lawyers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> newly enrolled members of the Bar, Jayanti Natarajan, MP said, “apart from the nobility of the profession, law is also a profession where there could never be a recession or downturn as the only people who make money during recession are lawyers. Also, in any case legal disputes are bound to exist as long as human society endures ” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She added, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There were four stages in a lawyer's life. Stage one: where there was no work and no money. Stage two: where there was some work and no money. Stage three: where there was some work and some money. And stage four, for a very lucky few, who had no work but lots of money. </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"> – Tuesday'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">Central Excise</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods Cleared to DTA from EOU without permission – Duty payable under Section 3(1) of Act and not under proviso - Shrimp seeds chargeable to nil duty of excise - No duty payable on DTA clearances - Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHALLENGE</strong> in this batch of appeals filed by the revenue is to the orders passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zone, inter alia, holding that the duty of Central Excise on shrimps and shrimp seeds produced and removed by the respondent ("the assessee"), a 100% Export Oriented Unit ("EOU"), in the Domestic Tariff Area ("DTA") without the approval of the Development Commissioner, would be payable under Section 3(1) of the Act and not under the proviso appended thereto. </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 68 - Does inability to prove complete identity of creditors and source of funds constitute failure on part of assessee to discharge onus to prove genuineness of the transaction under section 68 - YES: Delhi High Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> company filed its return declaring a loss. It had raised loans from five different parties. Scrutinizing the loan details, the AO required assessee to prove the genuineness of the cash credits. Assessee explained that the loans were raised by cheques and bank drafts, and the depositors had also subscribed towards shares of the assessee company. Assessee also filed letters from each of the five creditors. Not satisfied, the AO sought the personal presence of the creditors. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation - RSP - pet jars/ poly bags containing individual pieces of Eclairs weighing less than 5.5. gms each - Assessment to be under Section 4A – CESTAT LB (By majority)</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> view of the finding of fact by the referral Bench in this case that the impugned poly packs and pet jars are multi-piece retail packages and the total weight of the pieces in such packages exceed 20 gms, the exemption under Rule 34(b) is not applicable and consequently, the assessment is required to be done applying provisions of Section 4A. </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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p>
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