TIOL-DDT 1518 · 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 align="justify"><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL-DDT 1518 <br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>30.12.2010 <br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Thursday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty – Yet Another Belated Resurrection! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Anti Dumping Duty on imports of certain Rubber Chemicals, namely, MOR, PX13 and TDQ, falling under Chapter 29 and 38 of the First Schedule to the Customs Tariff Act, originating in, or exported from, European Union, People's Republic of China, Chinese Taipei and the United States of America, imposed vide Notification No. 94/2005-Customs, dated the 20th October, 2005 w.e.f 7 th July 2005. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Notification had expired on 6 th July 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has extended the validity of the notification till 11 th May, 2011 – more than six months after its death!. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There seems to be something terribly wrong in this resurrection. The provisional Anti Dumping Duty was imposed by Notification No. 63/2005 dated 7 th July 2005 and the definitive anti dumping duty was imposed by Notification No. 94/2005 with effect from 7 th July 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is extended to 11 th May 2011. This 11 th May 2011 does not relate to any of the dates. Further some parts of the notification seem to be missing. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway instead of giving life to dead notifications, Board should amend the Law to stipulate that the notifications will be valid till they are withdrawn by the Board. In practice that is what is happening anyway. </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_132.htm" target="_blank">Notification No. 132/2010-Cus., Dated: December 28, 2010</a> </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clean Energy Cess – Whether Education Cess is payable on imported Coal? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE</strong> Chapter VII of the Finance Act, 2010, Clean Energy Cess has been imposed on certain specified varieties of coal. This Cess is collected as excise duty and different set of rules have also been notified for this purpose. The rate of duty as per the 10 th Schedule to the Finance Act is Rs 100/- per MT and the effective rate is Rs 50/ per MT in terms of Notification No. 03 /2010-Clean Energy Cess dated 22.6.2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the clean energy cess is levied on the goods produced in India, by virtue of the provisions of Section 3 of the Customs Tariff Act, 1975, the same is collected as additional duty of customs on the imported varieties of Coal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It appears that in many customs houses, the field formations are taking a view that education cess and secondary education cess are also applicable on the clean energy cess and are collecting the same from the importers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vide Notifications 28/2010 CE and 29/2010 CE both dated 22.6.2010 provide exemption from payment of Primary and Secondary Education Cess for the goods specified under the 10 th Schedule to the Finance Act, 2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though some importers have brought these notifications to the notice of the Customs authorities, the benefit of exemption under these notifications for the imported coal is denied on the ground that the same are not applicable for the imported coal. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The effective rate of Rs 50/- Per MT was notified under Section 5A of the Central Excise Act, 1944 and so also the exemption notifications for the educations cesses ( 28/2010 CE and 29/2010 CE) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, if the benefit of exemption is extended under Notification 3/2010, there is no reason why the same should be denied for the exemption under Notifications 28 and 29/2010 CE. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board should issue a clarification on this immediately. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Harbhajan, Service Tax and the Great Indian News Service </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> cricketers, Harbhajan Singh and Yuvraj Singh happen to read the news in the Indian Media, they would rather stay back in South Africa rather than return to India. Yesterday NDTV reported that Harbhajan is likely to be prosecuted – maybe Service Tax officers will be waiting at the airport with handcuffs! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today the Economic Times, one of the most respected pink papers, reported, “India off-spinner Harbhajan Singh has been caught on a wrong foot for not paying service tax on his <strong><em>income </em></strong>”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Paper also reported that, “the central excise department (Chandigarh region) had also slapped a <strong><em>fine </em></strong> of Rs. 15 million (Rs.1.5 crore) on another Punjab cricketer, Yuvraj Singh.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately the reporters of the top newspapers and channels have absolutely no idea of tax and what they report is taken as the gospel truth by many. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These cricketers are playing for the Nation in far away South Africa and there was absolutely no need to tarnish their names with this alleged Service Tax evasion. If somebody has not paid Service Tax, there is a way to collect the tax and it is certainly not by leaking news to the media – especially to that section of the media which does not understand your laws and flaws! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Answering a question in Parliament, the then Finance Minister Chidambaram said, “I think, onemust be careful before branding somebody finally as a tax evader.There is a hierarchy of Tribunals and Courts and only when the last forum is exhausted, we come to a final conclusion, one can say that there is a final evasion of tax.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The names of our cricketers were apparently leaked to the Press by the Department, which should be more concerned with Revenue than publicity. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax – Rs. 42,000 Bribe for a Refund of Rs. 90,000 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bribe barometer has gone beyond the Mercury levels. A greedy Tax Assistant of the Income Tax Department demanded a bribe of Rs 42,000 to provide a refund of Rs 90,000 to a businessman. The amount of bribe was of course negotiable and finally settled at a <em>reasonable </em> figure of Rs. 20,000. A first installment of Rs. 6000 was negotiated – only the enterprising babu did not visualize the possibility of an inconvenient CBI. The CBI laid a trap and caught him red handed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What is paltry sum of Rs. 6000 compared to the 1.7 Lakh Crores in the telecom scam, is the view of many who sympathise with the poor tax assistant! </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"> – Friday's cases</font></strong></font></strong></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font>Central Excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Parallel challans maintained, plastic granules cleared in the guise of lay flattubings, non existent vehicles numbers shown in the documents, payments received in cash and details of buyers suppressed - Duty and penalty upheld; extended periodinvocable: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NEEDLESS</strong> to say the extended period would beinvocablein this case in view of the fact that parallelchallanswere maintained, plastic granules were cleared in the guise of lay flattubings, non existent vehicles numbers were shown in the documents, payments were received in cash and details of buyers were suppressed. Therefore the submission that extended period could not have been invoked is not acceptable. Therefore penalty under Section11ACequal to duty is imposable. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee makes payments to service providers for facilitating national roaming service to its mobile subscribers, TDS liability arises u/s 194I for use of equipment or u/s 194J for payment to be treated as fees for technical services - Assessee's appeal partly allowed: ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Tribunal is -Whether when assessee makes payments to service providers for facilitating national roaming service to its mobile subscribers, TDS liability arises u/s 194I for use of equipment or u/s 194J for payment to be treated as fees for technical services. And the Tribunal partly allows the assessee's appeal. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Security Agency Service – Defiant attitude of the appellant - Appeals dismissed for failure to make the pre-deposit of Rs. 3 Crores: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> stand taken by the appellants that they do not maintain any record regarding services rendered to their customers period-wise amount payable, amount received and dues, is strange for a company whose turnover runs into crores which does not even bother to quantify the services and quantify the amount individual-wise. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6666">Until Tomorrow with more DDT</font></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">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>