TIOL-DDT 1468 · 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 1468 </font><br> 18.10.2010 <br> Monday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap increased</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>GOVERNMENT</strong> has increased the Tariff Value of Brass Scrap from US Dollars 4026 to 4132 per MT. There is no change in the tariff value of other items. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2010/cnt10_090.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO.90 /2010-CUSTOMS ( N.T. ) Dated: October 16, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Drawback on supplies made by DTA units to SEZ – Who Gives? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2007/cuscir07_43.htm" target="_blank">Circular No.43 /2007-Cus dated 5th December, 2007</a></strong> clarified that the Specified Officer posted in an SEZ is the appropriate authority for granting drawback in respect of goods supplied from DTA units to Developers and units in SEZ except where the unit or Developer issues a disclaimer to the DTA supplier in which case the Commissionerate of Central Excise /Customs & Central Excise having jurisdiction over the DTA unit would sanction drawback. With regard to issue of cheque books for disbursal of drawback claims, the circular provided that the jurisdictional Commissioner of Customs in consultation with the Pay & Accounts Officer shall make arrangements for issue of authorization and drawback cheque books (wherever EDI facilities are not available for directly crediting the said amount to the Bank Accounts of the exporters). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been reported by Central Excise formations that this arrangement of obtaining authorization and cheque books from the jurisdictional Custom Houses causes delays and some of the divisions are facing difficulties in getting the cheque books issued from the PAOs of the custom houses. It has been suggested that since drawback is required to be disbursed in a time bound manner and has interest clause, the procedure may be modified so as to allow the Commissioner of Central Excise and Customs/ Central Excise to sanction and disburse drawback claims without having to approach the jurisdictional Commissioner of Customs for issue of authorization and cheque books. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now the Board clarifies that:- </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioners of Central Excise or Customs and Central Excise, as the case may be, may issue authorization to Dy ./ Asstt . Commissioners of Central Excise posted in Divisions under them for the purpose of disbursing drawback to DTA units against disclaimers issued by SEZ units/developers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The cheque book issued by the Pay & Accounts Officer of the jurisdictional Central Excise or the Customs and Central Excise Commissionerate, as the case may be, to the Central Excise Division for making refunds may be used for disbursement of drawback and the accounting procedure as laid down in the Principal, CCA's office letter No. Coord /2(8)/98/ 434 dated 13.06.2005 may be followed in this regard. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants suitable Public Notice, standing order to be issued by the Commissioners. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_039.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 39/2010-CUSTOMS, Dated : October 15, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">National Anti - Corruption Strategy - CVC releases Draft for Comments </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> National Anti-Corruption Strategy represents a blueprint for commitment and action by the various stakeholders to the governance process. It aims at systematic and conscious reshaping of the country's national integrity system. The strategy recommends a set of action to be taken by the government and a set of action by the political entities, judiciary, media, citizens, private sector and civil society organisations. To ensure that the strategy does not remain a mere document, it is envisaged to ensure its effective implementation by developing suitable parameters for evaluating and monitoring the progress of its implementation. The CVC would review the progress on an annual basis and submit a report to the Parliament. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CVC had appointed a consultant to assist the commission in drafting the strategy. And the Report is ready – it is just another wish list hoping for Utopia! </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Some important points in the strategy : </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strategy to deal with petty corruption </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Government should computerise all activities involving delivery of public services on a mission mode. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Simplification of rules and procedures should be undertaken so as to make them citizen friendly and avoid the need for the citizens to approach public officials for intervention. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Citizens should be empowered to resist the demand for bribes by instituting mechanisms like “Anti Bribery Hot Lines” or Whistle Blower provisions so that citizens can report solicitation of bribes which should then be followed by prompt action. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Promoting the involvement of citizens and Civil Society Organisations in keeping vigil through means like social audit. </font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strategy to tackle grand corruption. </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Political parties should demonstrate political will to fight corruption by adopting and enforcing a code of ethics among members, avoiding conflict of interest in appointment to public offices and adopt integrity in governance and prevention of corruption as a key election manifesto. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Until the modalities for state electoral funding are decided, disclosure of source of funding and the annual financial statements of the political parties should be made mandatory. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Concealment of ill gotten wealth should be made difficult. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Promotion of transparency, objectivity and merit in selection and appointment to important public offices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Transparent and participative policy making with regard to policies governing the issue of licences, auction of public assets. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Strengthening the independence and integrity of regulatory bodies. </font></p> </blockquote> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strategy to Address Political Corruption </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Establishment of institutions like the Lokpal and the adoption of a National Anti-Corruption Strategy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Political parties should adopt a code of ethics and vigorously enforce it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Political parties should avoid conflict of interest while nominating members to public offices like ministers, chairmen or member of parliamentary committees. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Commitment to maintaining integrity in governance and combating corruption should be made a key election manifesto by all parties. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Modalities for state funding for elections need to be worked out at the earliest. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Norms for disclosure of source and amount of funding received by parties should be strengthened. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Political executive should move towards transparent and participative policy making. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">God knows how much money the CVC has spent in getting this document made and how much of it has gone in corruption. But what did they come up with? Who doesn't know all these lofty goals? But who is interested in curbing corruption? You want political parties to follow a code of ethics but what do you do when ministers walk around with thousands of Crores, ably assisted by the ‘steel frame'? What kind of strategy the Commission can present to the country when the CVC himself is an accused? </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/nationalanticorruptionstrategydraft.pdf" target="_blank">CVC's Draft National Anti-Corruption Strategy </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">'</font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Made in the World'</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WTO</strong> Director-General Pascal Lamy, in his speech to the French Senate in Paris on 15 October said:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>What we call 'Made in China' is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries that preceded its assembly in China in the global value chain, from its design to the manufacture of the different components and the organization of the logistical support to the chain as a whole. In other words, the production of goods and services can no longer be considered “mono-located”, but rather, “multi-located”. As a result, the notion of “relocation”, which made sense in the past when referring to the production of a product or service at a single location, loses much of its meaning. If I relocate a segment of the production chain for reasons of economies of scale, and others relocate to my area for the same reasons, the impact on my total value added, i.e. roughly speaking, my employment may be neutral, negative or positive; and nowadays, it is this balance that we have to look at very closely. If we continue, in this context, to base our economic policy decisions on incomplete statistics, our analyses could be flawed and lead us to the wrong solutions. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For instance, every time an iPod is imported to the United States, the totality of its declared customs value (150 dollars) is ascribed as if it were an import from China, contributing a bit more to the trade imbalance between the two countries. But if we look at the national origin of the added value incorporated in the final product, we note that a significant share corresponds to re-importation by the US, and the rest to the bilateral balance with Japan or Korea which should be allocated according to their contribution to that added value. In fact, according to American researchers, less than 10 of the 150 dollars actually come from China, and all the rest is just re-exportation. In the circumstances, are evaluation of the yuan - a topic which is very much in vogue these days - would only have a modest impact on the sales price of the final product and would probably not restore the co mpetitiveness of </font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">competing products manufactured elsewhere. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone Not Giving Up - Fresh Writ in Bombay High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Vodafone battle continues. The Company filed another writ petition in the Bombay High Court on Friday challenging the Income Department's notice to them as agent of Hutchison from whom Vodafone purchased the 67 per cent stake to enter the Indian markets. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone said the Income Tax department cannot treat them as agent in default as the basic issue of jurisdiction is contested by them and the matter is currently under appeal in the Supreme Court and any action of this sort at this point of time will be premature on the part of the department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course this seems to be a parallel issue – there are two cases. The latest writ is related to the case in which the Income Tax Department had asked Vodafone why it should not be treated as a representative assessee of Hutchison while the case pending in the Supreme Court is about Vodafone not having deducted TDS when it paid Hutchison. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the parties are not leaving any stone unturned in this internationally significant tax case. </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><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">Unjust enrichment - Merely because MRP of goods remains same when duty is paid and when goods are cleared at Nil rate of duty, it cannot be presumed that burden of duty has not been passed on to customers - Matter remanded: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REVENUE</strong> filed this appeal against the impugned order passed by the Commissioner (Appeals), whereby the Commissioner( Appeals) has allowed the refund claim filed by the respondent. The Commissioner (Appeals) in the impugned order held that as the MRP (Maximum Retail Price) during the period in dispute the goods remains the same, therefore, it is presumed that the burden of duty has not been passed on. </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">Penalty u/s 271(1)(c) - Declaring positive income as losses in return and not rectifying same even after being pointed out amount to furnishing of wrong particulars - Penalty sustainable: 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 declaring positive income as losses in the return, and not rectifying the same even after being pointed out, amount to furnishing of inaccurate particulars and whether it calls for invocation of penalty. And the Tribunal's answer is YES. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Export - Filing of declaration only procedural – substantial benefit cannot be denied – Tribunal's order in </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2009/2009-TIOL-888-CESTAT-DEL.htm" target="_blank"><em>2009-TIOL-888-CESTAT-DEL</em></a></font><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> upheld – Revenue Appeal Dismissed: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANY</strong> service cannot be disqualified on the basis that the same has only peripheral connection with the output service as long as it is proven the same has been used in providing export services. Once it is established that the said services have been used for providing the output service, rebate claim becomes admissible subject to verification of the payment of service tax on the said services </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><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> </body> </html>