TIOL-DDT 1491 · 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 1491 </font><br>
22.11.2010 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Tyres, Tubes and Flaps - Revised </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> Anti Dumping Duty was imposed on import of bias tyres, tubes and flaps originating in, or exported from, People's Republic of China (China PR) and Thailand, by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_106.htm" target="_blank">Notification No. 106/2006-Customs, dated the 9th October, 2006</a></strong></em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Definitive Anti Dumping Duty on these goods have been imposed by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_088.htm" target="_blank">Notification No. 88/2007-Customs dated the 24th July, 2007</a></strong></em>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Designated Authority in its mid-term review findings, <u><em>has recommended continuation of anti-dumping duty at new rates</em></u> on imports of new/unused pneumatic non radial bias tyres, tubes and flaps with or without tubes and/or flap of rubber, having nominal rim dia code above 16” used in buses and lorries or trucks originating in or exported from China PR and Thailand. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Government has in supersession of <strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_088.htm" target="_blank">Notification No. 88/2007-Customs</a></em></strong>, imposed new Anti Dumping Duty on these products from 18.11.2010, which will be valid till 8th October 2011, that is till the expiry of the original <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_106.htm" target="_blank">Notification No. 106/2006-Customs, dated the 9th October, 2006</a></strong></em></font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_117.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 117/2010-Cus: Dated November 18, 2010. </font></strong></a></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption for Project for Generation of Power Using Non-Conventional Materials – Relaxation for State Electricity Boards </font></strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS per <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2005/ctariff05_081.htm" target="_blank">Notification No. 81/2005 - Cus, dated 08.09.2005</a>, </font></strong></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipment, and auxiliary equipment (including those required for testing and quality control) and components, required for initial setting up of a project for generation of power using non-conventional materials, namely, agricultural, forestry, agro-industrial, industrial, municipal and urban waste, bio waste or poultry litter, falling under any Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, are exempted from so much of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of 5% ad valorem, subject to the following conditions,- </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ xxxxxxxx </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the importer proves to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, that there is a valid power purchase agreement between the importer and the purchaser, for the sale and purchase of electricity generated from the non-conventional materials, for a period of not less than ten years from the date of commissioning of the project; and </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ xxxxx </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has amended the above Notification to stipulate that the condition (ii) above will not be applicable to the power generation projects promoted by State electricity boards or corporations which are notified by the respective State Governments as the State Transmission Utility and Licensee, by inserting a proviso under the condition (ii). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A similar amendment is made to Central Excise <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2005/etariff05_033.htm" target="_blank">Notification No. 33/2005-Central Excise, dated the 8th September, 2005</a></strong></em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_118.htm" target="_blank">Notification No. 118/2010-Cus: Dated November 18, 2010</a> </strong>and <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/etariff10_34.htm" target="_blank">Notification No. 34/2010-CE: Dated November 18, 2010 </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">A Peculiar Manufacturing Process and Expected Audit Objection</font></strong></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HERE</strong> is a peculiar case of a manufacturer of explosives; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The raw materials are not explosives by themselves but they cannot be mixed together in the plant in which they are stored. All the ingredients / raw materials falling in different chapter headings are taken to mining area in a specially designed vehicle called BMD (Bulk Mixing Delivery) vehicle to make the final product i.e. “Explosives” falling under Ch.36 of CETA, 1985. Though the actual manufacturing is taking place at the mining area it appears that the registration to the place where raw materials are stored was granted basing on the Section Notes 3 of Section VI of CETA, 1985. The section notes decided the classification of the final product i.e. “Explosives” in view of the peculiar manufacturing process involved. Hence the unit is granted Central Excise registration as there is manufacturing activity though not in the plant but at the mining area. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG has objected to taking credit on the inputs used for manufacturing the explosives as they are not used in the factory. CAG has also taken a contradictory objection that the assessee is clearing raw materials to the mining area and bringing back the leftover raw materials to the plant and discharging the duty on the quantity that is delivered without any permission. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee submits that this is the procedure followed by several assessees in different Commissionerates. Show Cause Notices and appeals will follow. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Delhi Municipal Corporation to Collect Service Tax? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is learnt that the Municipal Corporation of Delhi – MCD is all set to collect Service Tax from Power Distribution Companies. This would bring in Rs. 10 Crores annually. The MCD is one of the biggest Municipalities of the world and is larger than many nations, but can they collect Service Tax? How will this affect GST? </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Half Jobs Vacant in CBEC and CBDT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Revenue Secretary said in Kolkata that nearly 70,000 posts are lying vacant in the income tax and customs departments. “Some employees moved Court and got the promotion list frozen thereby stopping the promotion process. We have to first get this promotion list cleared,” he said. With half the staff, they could collect nearly 8 Lakh Crores of Tax Revenue in the current fiscal. The fact is Revenue comes in not because of the staff, but in spite of the so many spokes they put into the wheels of Revenue Collection. The officers need promotion and Mr. Revenue Secretary, to keep up their morale, you need to give them promotions – but you need Revenue and your officers are really an impediment for Revenue. So do give them the promotions, but do ask them to stay at home and not hamper Revenue Collections. Simply ask half your officers to stay at home and collect their salaries – you will find your revenue going up. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether it is worker in Bangalore, in Ohio or in Guangdong, real issue is jobs – WTO Chief Pascal Lamy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WTO</strong> Chief Pascal Lamy was in India last weekend. Addressing a FICCI meeting on 19 November 2010 in New Delhi, Pascal Lamy said, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What lies behind concerns about macro-economic imbalances is in reality a concern about unsustainable and socially unacceptable unemployment levels. Whether it is the worker in Bangalore, in Ohio or in Guangdong, the real issue is jobs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I would like to take this opportunity to publicly acknowledge the engagement and support of PM Dr. Singh and Minister Sharma, whose initiative to convene trade ministers last year helped re-invigorate the Doha Round. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Economic crises are a reality of the world we live in. They have occurred in the past and will in the future as well. At present, the global economy finds itself recovering from one of the worst in history. Economic crises, naturally, create problems at home. It is in these times that proponents of unilateralist, populist policies which discriminate against foreign workers and goods become more vocal. Instead, during tough economic times, those of us who believe in multilateralism must let our voices be heard. Some may call us naïve, or even idealists. But the lessons of history are there: they show us that it is coordinated action through international cooperation that maximizes benefits for citizens of the world. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI to Sign MOU with NASSOCOM </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Bureau of Investigation will sign a Memorandum of Understanding (MoU) with National Association of Software & Services Companies (NASSCOM) for sharing better awareness on the emerging Cyber Technologies relating to cyber crime investigation, training and Computer Forensics. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The MOU will be signed today at 1230 hrs in the presence of Ashwani Kumar, Director, CBI and Som Mittal, President of NASSCOM </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">Mandatory Penalty - No discretion to reduce penalty if conditions of S.11AC are fulfilled: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> was clarified by the Supreme Court that the pre-conditions stipulated under Section 11AC of the Act, namely, non-payment or short payment of duty was the result of fraud, collusion or any willful mis-statement, suppression of the facts, or contravention of any provisions of this Act or the Rules made there under with the intent to evade payment of duty, had also to be satisfied. The court thus held that once these conditions are satisfied, the penalty as prescribed under Section 11AC of the Act had to be imposed and in that event there was no discretion with the authority to impose lesser penalty than what is prescribed in the aforesaid provision.</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 32(1)(ii) - Whether expenditure incurred for acquisition of technical knowhow for improvement of products is revenue or capital expenditure? - Revenue expenditure, rules Delhi High Court.</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the High Court is - Whether expenditure incurred by the assessee for acquisition of technical know-how for improvement of products was revenue expenditure or capital expenditure, eligible for depreciation u/s 32. High Court says it is revenue expenditure.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax</font></strong></p>
<p align="left"><font size="2"><strong><font color="#ff0000"><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax – Penalty <b> under
Section 78 equivalent to the amount of service tax was the minimum:
High Court </b></font></font></strong> </font></p>
<p align="justify" style="margin-bottom: 0cm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
appeal before the High Court was to consider following question of law:- </font> </p>
<blockquote style="text-align: justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“Whether
the penalty imposed equivalent to Service Tax short paid by the party
under Section 78 of the Finance Act, 1994 is the maximum statutory limit
or the minimum mandatory limit?”</em></font></blockquote>
<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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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