TIOL-DDT 1503 · 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 1503 </font><br> 08.12.2010 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Electricity Meter installed in consumers' premises and hire charges collected – Exempted - Clarifies Board </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is a general practice among electricity transmission (TRANSCO)/distribution companies (DISCOM) to install electricity meters at the premises of the consumers, to measure the amount of electricity consumed by them and ‘hire charges' are collected periodically. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC clarifies that “Supply of electricity meters for hire to the consumers being an essential activity having direct and close nexus with transmission and distribution of electricity, the same is covered by the exemption for transmission and distribution of electricity, extended under the relevant notifications <strong>(<em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_011.htm" target="_blank">Notification No. 11/2010-ST dated 27.02.2010</a> </em></strong><em>and/ or</em><strong><em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2010/stnot10_032.htm" target="_blank">32/2010-ST dated 22.06.2010</a>.</em>)</strong></font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2010/sercir131.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 131/13/2010 – ST., Dated: December 07, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Duty Free Import of Samples - DGFT Aligns with Customs</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NORMALLY</strong> it is the Customs, which takes its sweet time to implement the Foreign Trade Policy announced by the Commerce Ministry. Now the role is reversed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sub-para of Para 2.27 of HBP Vol.I 2009-14 , states, “Duty free import of samples upto Rs. 100,000 for all exporters (Rs. 3,00,000 for gems and jewellery sector) shall be allowed as per terms and conditions of Customs Notification.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But Customs Notification No. 154/94 – Dated July 13, 1994 as amended by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2010/ctariff10_016.htm" target="_blank">Notification No. 16/2010 - Cus dated February 27, 2010</a></strong></em>, already provides for exemption up to a value of Rs. 300,000 for all. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now in tune with the Customs Notification, DGFT has amended Para 2.27 of Handbook of Procedures, Vol. I, 2009-2014(RE 2010) , to provide for, “ Duty free import of samples upto Rs. 3,00,000 for all exporters shall be allowed as per terms and conditions of Customs Notification. ” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does it mean by any chance that the Customs Notification was ineffective all these days? </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn017.htm" target="_blank">DGFT Public Notice No. 17/2009-2014 (RE- 2010), Dated: December 06, 2010</a> </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Air Cargo Security Threats - Role of Customs </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The international trade supply chain is a complex system of interconnected parties, places and exchanges of information that is of critical importance to global prosperity and well-being but is vulnerable to disruption. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Recently, an attempt was made to use air cargo as a delivery mechanism for explosive devices. The plot was prevented by the coordinated actions of several agencies, including Customs, responding to specific intelligence information. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The successful response to the threat shows the need for the contribution of, and close co-operation between, all public and private sector stakeholders. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ WCO and Customs administrations have an important role to play in air cargo security. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Based on the WCO's extensive experience in maritime security, many of the lessons learned are relevant to all other modes of transport (air, rail and road). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Customs possesses information on supply chains as well as powers to inspect, in principle, every cross-border movement of goods, passengers and conveyances. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ This range of knowledge and authority places Customs in a unique position to specify data requirements, analyse transaction data, monitor cargo movements, identify high-risk cargo, and apply various control techniques including knowledge of traders, risk analysis, scanning and physical examination. </font></p> </blockquote> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WCO Instruments and Tools that Contribute to Air Cargo Security: </font></strong></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The WCO has a series of instruments and tools that contribute to the protection of the air cargo system. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In 2005 the WCO adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade, to strengthen end-to-end supply chain security through enhanced Customs-to-Customs networking and formal partnerships with trade. The SAFE Framework places emphasis on risk analysis and export control, preferably based on advance cargo data. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The SAFE Framework also encourages use of non-intrusive technology (NIT) as a component of a risk-based processing system. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The SAFE Framework contains the Customs/Business innovation of Authorized Economic Operator (AEO) programmes, which provides benefits to administrations and security partners in the private sector. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ WCO Members use the Harmonized System (HS) Code as the global standard to identify goods in international trade. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The WCO promotes usage of the WCO Data Model as the global standard that links goods, related parties, and means of transport together for risk assessment and compliance verification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The WCO advocates use of its Customs Enforcement Network (CEN), its communication tool CENcomm and the national application nCEN. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All of these WCO instruments and tools can be used to track goods and to share information with other government agencies in order to deter future air cargo security incidents. </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All Customs administrations must have the capacity and skills across every dimension of the operating model to perform efficiently and effectively. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Policy Commission of the WCO is meeting in Shanghai 6 th through 8th December 2010 and an important subject on the agenda was <font color="#FF6633"><strong>threats to air cargo security</strong></font>. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bush-era Tax Cuts to Continue - Rich Americans will continue to get Tax benefits </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bush Tax Cuts for the richest Americans were to expire in 2010, now President Obama is all set to extend it by another couple of years. The President helplessly declared, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Make no mistake: Allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family. And that could cost our economy well over a million jobs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the same time, I'm not about to add $700 billion to our deficit by allowing a permanent extension of the tax cuts for the wealthiest Americans. And I won't allow any extension of these tax cuts for the wealthy, even a temporary one, without also extending unemployment insurance for Americans who've lost their jobs or additional tax cuts for working families and small businesses; As a result, we have arrived at a framework for a bipartisan agreement. For the next two years, every American family will keep their tax cuts -- not just the Bush tax cuts, but those that have been put in place over the last couple of years that are helping parents and students and other folks manage their bills. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I have no doubt that everyone will find something in this compromise that they don't like. In fact, there are things in here that I don't like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years. And I'm confident that as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we're going to have to make to secure our future and our children's future and our grandchildren's future, it will become apparent that we cannot afford to extend those tax cuts any longer.” </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">Income Tax</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 269UC – Lease for nine years renewable for a further period of nine years – deemed to be a lease for more than twelve years – Prosecution to be continued: Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> a plain reading of the explanation it is evident that a lease which provides for the extension of the term thereof by a further term it shall be deemed to be a lease for a term of not less than twelve years, if the aggregate of the period for which the lease is granted and period of extension counted together makes it more than twelve years; magistrate directed to conclude the trial within six months. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise/Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Inputs removed as such - No need to reverse credit of input services - P&H High Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INPUTS</strong> removed as such - No requirement to reverse the Credit on input services under Rule 3(5) of the <em>CENVAT Credit</em> Rules when inputs are removed as such -Rule 3(5) only talks about the <em>CENVAT credit</em> taken on inputs or capital goods. It does not refer to the CENVAT on input service - No substantial question of law arises. </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">Non-maintenance of separate accounts under rule 6 of <em> CENVAT Credit</em> Rules, 2004 – appellant reversing credit on pro-rata basis whereas department holding appellant liable to pay 10% of price of exempted goods- matter requires reconsideration by adjudicating authority – remanded: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants are availing credit in respect of the common inputs used in the manufacture of goods cleared on payment of duty as well as exempted goods. The appellants are reversing the credit on pro-rata basis or in some cases have not availed the credit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is the case of the Revenue that since the appellants are not maintaining separate accounts in respect of inputs used in the manufacture of exempted goods, as per the provisions of Rule 6(3)(b) of the <em>CENVAT Credit</em> Rules, the appellants are liable to pay 10% of the price of the exempted goods.</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> </body> </html>