TIOL-DDT 1465 · 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 1465 </font><br> </strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13.10.2010 <br> </font></strong><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wednesday </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notifies Additional Ports of Registration under Export Promotion Schemes</font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Para 4.19 of the HOP:-</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Advance Authorisation shall be issued for purpose of import and export through one of sea ports or airports or ICDs or LCS specified below. Authorisation holder shall register authorisation at the port specified in authorisation and thereafter all imports against said authorisation shall be made only through that port, unless the authorisation holder obtains permission from customs authority concerned to import through any other specified port. However, exports may be made through any of the specified ports.</em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sea Ports</strong>: Mumbai, Kolkata, Cochin, Kakinada, Kandla, Mangalore, Marmagoa, Chennai, Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Dahej, Nagapattinam, Okha, Mundhra, Surat (Magdalla), Jamnagar, Nhava Sheva, Haldia, Krishnapatnam, Bedi (including Rozi -Jamnagar), Dharamtar, Muldwarka,Porbander, Vadinar. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Air-ports</strong>: Ahmedabad, Bangalore, Bhubaneshwar, Mumbai, Kolkata, Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur , Srinagar, Trivandrum, Varanasi, Nagpur, Chennai, Indore, Dabolim (Goa), Lucknow ( Amausi ), Rajasansi (Amritsar). </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ICDs</strong>: Agra, Bangalore, Coimbatore, Delhi, Faridabad, Guwahati (Amingaon), Guntur, Hyderabad, Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Daulatabad, (Wanjarwadi and Maliwada), Waluj (Aurangabad), Anaparthy, Salem, Mallanpur, Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara, Pondicherry, Garhi Harsaru, Bhatinda, Dappar, Dera Bassi, Chheharata (Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri, Tuticorin, Babarpur, Bhadohi, Durgapur (Export Promotion Industrial Park), Kundli, Loni (District Ghaziabad), Mandideep (District Raisen), Raipur, Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur, District Dhar), Patli (Gurgaon). </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LCS:</strong> Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Hilly, Chengrabanda, Dawki, Atari, Ghojadanga, Agartala, Amritsar Rail Cargo, Nepalganj Road, Sutarkhandi. </font></em></p> <p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEZ</strong>: As notified by Central Government, any SEZ can be a specified port for import and export. </font></em></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the DGFT has added the following Ports and ICDs : </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Seaports :</strong>- Ennore (Tamil Nadu).</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ICDs :</strong>- Irugur Village (Tamil Nadu), Thudiyalur (Tamil Nadu), Chettipalayam (Tamil Nadu) and Veerapandi (Tamil Nadu).</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 11 /( RE2010 )/2009-14 Dated : October 11, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Amends DEPB Entry for Fish and Fish Products </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the DEPB entry Sl. No. 1 of the Product Group "Fish & Fish Products” (Product Code: 66). Purpose of the amendment is to describe the product better and make a distinction between "live or chilled form” (with no value cap) and "dried form” for which same value cap would continue. There is no change in the DEPB rate. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 12 /( RE2010 )/2009-14 Dated : October 11, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ITAT - Anguish over ITAT deciding case on a casual, offhanded and cavalier manner – Delhi High Court </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> the Delhi High Court found that the ITAT had passed an order on an issue which was not even raised in the grounds of appeal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court noted with anguish that even at the second appellate stage the matters are being dealt with in such a casual manner. The High Court stated that it did not expect the Tribunal, which the highest fact-finding authority in matters relating to taxation, to dispose of matters in such an offhanded and cavalier manner. The High Court found that the Tribunal has effectively put an end to reassessment proceedings under Section 147/148 of the Act on the ground of invalidity of notice when such a plea was not raised by the assessee at all. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2010/2010-TIOL-704-HC-DEL-IT.htm" target="_blank">2010-TIOL-704-HC-DEL-IT </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is job work under Rule 10A ? CESTAT sets aside demand on contract manufacturing under Rule 10A</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RULE</strong> 10A was inserted in the Central Excise Valuation (Determination of price of excisable goods) Rules 2000, with effect from 1.4.2007. With this amendment, everyone thought that the Supreme Court's historic decision in Ujagar Prints case, which ruled the field for nearly two decades on the valuation of goods manufactured by a job worker, has lost its relevance. During the Ujagar period, the value for goods manufactured on job work basis was the cost of the materials plus the job work charges paid by the principal manufacturer. Thus, irrespective of the price at which these goods were sold for the first time in the market by the principal manufacturer, the duty was payable only on the raw material cost plus the job charges. Thus, it became a wiser proposition to get the goods manufactured on job work, and pay less duty. After a long wait, perhaps the Government in its wisdom decided to put an end to this and brought Rule 10A . After this new rule, the value of the goods manufactured on job work would be the value at which the goods are sold by the principal manufacturer, but not merely the cost of the raw material plus the job charges. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent case that came up before the Bangalore Bench, the department wanted duty under Rule 10A and the assessee contested that the activity undertaken by them is only manufacture of goods under a sale agreement with the client on principal to principal basis which cannot be called as job work to attract the provisions of Rule 10A . In this case, the appellant assessee “purchased” the raw material from the vendors specified by the buyer, and “sold” the finished goods to the buyer by arriving at the price on the basis of the cost of the material plus marginal profit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was a thumping victory for the appellant at the Tribunal and the demand was set aside.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears we are back in Ujagar era. Only a little care has to be taken while drafting agreement. Instead of you supplying the inputs and goods to the job worker, ask him to buy from the specified vendor and settle the accounts later. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this CESTAT Order today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11531" target="_blank">Breaking News</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"> – Thursday'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">Repairing of transformers does not amount to manufacture - such transformers after repairs were cleared by reversing the <em>CENVAT credit </em>taken on inputs used in such activity - no cause for holding such payments as 'deposits' and proposing recovery u/s 11D of the CEA , 1944 - Revenue appeal dismissed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent repairs electrical motors manufactured by them within warranty period free of charge as well as those manufactured by other manufacturers on labour job basis. Whenever inputs, (on which <em>CENVAT Credit</em>) is taken, are used for repair work, they reverse the <em>CENVAT Credit.</em> All the clearances were made under challans and duty is paid only on the electrical motors manufactured by them. It was alleged against the respondent that they are doing job work and hence they are not liable to pay any duty, the credit taken on the inputs by them is liable to be reversed and the duty paid by them is to be treated as a deposit under Section 11D (1) of the Central Excise Act, 1944. </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 194H - Whether mere deduction of TDS and act of not depositing same in Govt account warrants disallowance even though assessee is not liable to TDS? - NO, says ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Tribunal are - Whether mere deduction of TDS and the act of not depositing the same in the Govt account warrants disallowance u/s 40(a )( ia ) even though the assessee is not liable to TDS; and Whether discount on sale of airlines tickets allowed by the assessee is not liable to TDS u/s 194-H as there is no contract of agency at any point of time between the assessee and the intermediaries. And the final decision has gone against the Revenue. </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 – ‘Piston rings in coil form' cleared on job work basis for chrome plating, received back in factory and service tax paid on job charges availed as input credit - Since section 93 does not make it mandatory for job workers to compulsorily avail Notification No. 8/2005-ST, Revenue's contention that availment of credit by principal of tax paid by job worker would be irregular, not sustainable - Prima facie case for full waiver of pre-deposit - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant cleared ‘piston rings in coil form' under challans for chrome plating and received them back in factory after completion of job work. Incidentally the job worker paid an amount of Rs. 2 crores as service tax on the job charges collected for the activity of chrome plating. This amount was availed as <em>CENVAT credit</em> by the appellant. The lower authorities sought to deny the credit on the ground that the job worker was not liable to pay any service tax and ought to have availed the benefit of exemption <em><strong><a href="http://www.taxindiaonline.com/RC2/pdfnoti/pdfsertax/pdf2005/st0805.pdf" target="_blank">Notification No. 8/2005-ST dated 01.03.2005</a></strong></em>. The demand was confirmed resulting in this appeal before CESTAT. </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> </body> </html>