TIOL-DDT 1464 · 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 1464 </font><br>
12.10.2010 <br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure to re-credit 4% Special Additional Duty (SAD) of Customs in DEPB, VKGUY, FPS, FMS, MLFPS scrips - DGFT clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFER</strong> <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_102.htm" target="_blank">Customs Notification No. 102/2007-Customs dated 14th September, 2007</a></strong></em> (as amended), <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2008/cuscir08_06.htm" target="_blank">Customs Circular No.6 /2008-Customs dated 28th April, 2008</a> </em></strong><em>and</em><strong><em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2009/cuscir09_006.htm" target="_blank">6 /2009- Cus dated 9th February, 2009</a></em></strong> on the provision to re-credit the 4% SAD to applicants who qualify for the re-credit subject to compliance of the conditions stated therein. This re-credit facility is available in case of debit of the 4% SAD from the duty credit scrips such as DEPB , VKGUY , FPS and FMS Scrips subject to fulfilment of the conditions.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Various importers, exporters, trade and industry associations have sought clarification regarding the procedure for re-credit of 4% Additional Duty of Customs (SAD) leviable under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 in pursuance of <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_102.htm" target="_blank">Notification No.102 /2007-Customs dated 14.9.2007</a></strong></em> and the Customs circulars stated above. Department of Revenue have also referred the matter for a corresponding procedure for re-credit for uniform action by the field formations of DGFT and the Customs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly <em>DGFT had issued Policy Circular No. 22 dated 3.2.2010</em> wherein the detailed procedure for re-credit of 4% Special Additional Duty (SAD) in the Duty credit scrip was laid down. It was stated therein that “ in case the validity of the scrip is less than 6 months on the date of submission of request to the RA, the scrip may be revalidated for 6 months from the date of endorsement for utilization of the re-credit amount so allowed by the RA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had also recently issued a <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_027.htm" target="_blank">Circular No. 27/2010- Customs dated - 13.08.2010</a></strong></em> (see <em><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11274" target="_blank">DDT 1424 - 16.08.2010</a></strong></em>) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems representations have been received from Trade and Industry that re-credit and revalidation of the scrips is not being allowed in cases where validity of the scrips submitted for such re-credit may have expired on or before the date of submission of the request to the Regional Authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> now clarifies, </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Intention of the aforesaid provision for revalidation is to allow the utilization of the re-credited amount. Hence, it is clarified that the validity of the re-credited scrips shall be six months from the date of endorsement by Regional Authorities or the original validity of the duty credit scrip, whichever is later. This revalidation shall be irrespective of the fact as to whether the scrip has expired on or before the date of submission of the scrip to the Regional Authority. All the Regional Authorities shall take appropriate action accordingly . </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When will we be able to make things simpler? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 02/2009-2014, Dated : October 8, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Fish Body Oil Import made Free </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u>THE</u></font><u><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"> Government has made the import of Fish Body Oil (Refined) with certain parameters ‘Free' as per the FTP – earlier only Fish Lipid Oil was freely importable and Fish Body Oil was prohibited. However, through this latest amendment, the entry related to Fish Body Oil is now sub-classified into two – Fish Body Oil (Refined) and Fish Body Oil (Crude). While import of Fish Body Oil (Refined) is now made ‘Free', Fish Body Oil (Crude) which was earlier prohibited is now made restricted. </font></u></strong></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not008.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 08 /( RE-2010)/2009-2014, Dated: October 8, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Is Politics a Profession or Occupation? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> was the question before the Supreme Court in a case decided in 1975 <strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2002/2002-TIOL-811-SC-MISC.htm" target="_blank">2002-TIOL-811-SC-MISC</a></font>]</strong> in an expenditure tax matter. The respondent was PVG Raju a rich Maharajah practicing the politics of socialism, spending lavishly for furthering his party's popularity and the prospects of his fellow candidates at the elections to the Andhra Pradesh Legislative Assembly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court had to examine whether politics of the socialist brand or otherwise is a profession or occupation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">There can hardly be any doubt that it is either, or both. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Harold Laski treated politics as a science and wrote his well-known book on the Grammar of Politics, but the art of politics at a practical level has also been the subject of comment and has been praised and denounced on the basis that it is a profession. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To Gandhiji it is sacred as religion.</font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Lincoln it rises to noble heights of statesman- ship. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lenin, Nehru and a galaxy of other great visionaries and makers and moulders of the modern world have dedicated themselves to politics as a profession. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course in its vulgar and vicious manifestations, this occupation has been regarded by literary giants like Dr. Johnson as the last refuge of a scoundrel'. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Robert Louis Stevenson has used barbed words: 'Politics is perhaps the only profession for which no preparation is thought necessary (Familiar studies of Men and Books, 'Yoshida- Torajiro '). </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">George Bernard Shaw uses stinging language in Major Barbara: 'He knows nothing; and he thinks he knows everything. That points clearly to a political career'. </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is thus clear, without reference to the wealth of case-law relied on by the High Court, that politics has been a profession and, indeed, under modern conditions in India, perhaps the most popular and uninhibited occupation-with its perils, of course. </font></strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently Revenue relied on this case before the ITAT while trying to tax the donations/gifts received by Madam Mayawati, Hon'ble Chief Minister of Uttar Pradesh, as her professional income.<strong> [<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=39&filename=legal/itat/2010/2010-TIOL-550-ITAT-DEL.htm" target="_blank">2010-TIOL-550-ITAT-DEL</a></font></strong>] - not with much success of course. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">One Year jail for obstructing Central Excise Raid </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIMES</strong> of India reported that a Consumer Activist who interfered in a raid conducted by the Central Excise Department 18 years ago was recently sentenced to a year`s rigorous imprisonment. Preventing a public servant from performing his duty can have serious repercussions. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> Rs
84 Crores Advance Income Tax by young Congress MP </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> young Congress MP is reported to have paid Rs. 84 Crores as advance of income tax for the current financial year. His expected income for the year should be around Rs. 500 Crores. Politics is certainly a profession and a very lucrative one at that. And this rich MP did not have much time to earn all those Crores as he was busy throughout the year mourning the death of his equally poor father or expanding his political base, but he could ensure that he earned about Rs. 2 Crores per day. Fifty years ago, a rich socialist Maharajah got into trouble for spending his own money for getting his socialist colleagues elected as legislators! Times have changed! </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"> – Wednesday'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">Valuation - Job work - Rule 10 A of Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 - Merely indicating vendors of raw materials or by giving advance money for procurement of such materials or installing equipments given by buyer would not render appellant as a job worker - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MAY</strong> be this dispute is the first of its kind after inserting Rule 10 A in the Central Excise (Determination of price of excisable goods) Rules 2000 with effect from 1.4.2007. The demand of differential duty was raised by treating the appellants as job worker by invoking the provisions of Rule 10 A. According to this rule, in case of goods manufactured on job work, if the goods are sold by the principal manufacturer, the value for payment of duty will be the transaction value of the principal manufacturer. </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 37(1) - Can assessee treat professional charges paid for a failed land deal entered into for expansion of business as revenue expenditure? - 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 AO is right in disallowing professional charges paid by the assessee for a failed land deal entered into for expansion of business. Whether treatment of professional charges under I-T Act is to be the same for a failed deal and a consummated land deal. And the Tribunal has ruled in favour of the assessee.</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">Denial of CENVAT Credit – principles of natural justice; copies of relied documents to be provided; procedural irregularity to be ignored; Original invoices available – but not verified – matter remanded - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> rules of principles of natural justice require that before any document is relied upon to ascertain the liability of the assessee, the copy thereof should be made available to the assessee except in case where there are statutory prohibition for providing such copies or some other justifiable reason. </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 color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p align="justify"><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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