TIOL-DDT 1528 · 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> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1528</font><br> 13.01.2011<br> Thursday </strong></font> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Fumigation of Export Cargo - CBEC Clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> was asked a clarification whether the activity of fumigation of export cargo including agricultural/horticultural produce, whether loaded into containers or otherwise, is a taxable service falling under ‘cleaning services' or not. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has examined the issue and observes that, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fumigation, per se, is a cleaning activity. However, the definition under section 65(24b) of the Finance Act, 1994, as amended, taxes cleaning of ‘objects or premises' of (i) commercial or industrial buildings and premises thereof; or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial building and premises thereof. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And clarifies that, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fumigation of export cargo including agricultural/horticultural produce, whether loaded into containers or otherwise, does not satisfy the statutory definition of ‘cleaning activity' under Section 65(24b) of the Finance Act, 1994. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And explains that,</font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a matter of abundant precaution, Government had also issued Notification No. 41/2007-ST dated 6.10.2007, as amended by Notification No. 42/ 2007-ST dated 29.11.2007 to exempt specialised cleaning services of containers used for export goods. This was in line with the international practice of making the export consignments free from taxation in the country of its origin. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And cautions that, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the wordings of this circular cannot be used to interpret the scope of service defined under Section 65 (105) (zzzd) of the Finance Act, 1994. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But isn't the Board aware that Notification No. 41/2007 as amended by Notification No. 42/2007 had been superseded by Notification No. 17/2009 dated 7.7.2009? Any way this Notification No. 17/2009 also continues with the exemption for fumigating of containers. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir132.htm"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 132/1//2011-ST., Dated: January 12, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Renting - Supreme Court Stays Home Solutions Stay </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Service Tax on ‘Renting of Immovable Property' and the Home Solutions case, subject of many a scholarly analysis in our portal, is again in the news. The Supreme Court has stayed the operation of the Delhi High Court judgement dated 18/5/2010 in WP(C) No. 3398/2010 – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2010/2010-TIOL-341-HC-DEL-ST.htm" target="_blank"><font size="1">2010-TIOL-341-HC-DEL-ST</font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi High Court had in its earlier order reported in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2009/2009-TIOL-196-HC-DEL-ST.htm" target="_blank"><font size="1">2009-TIOL-196-HC-DEL-ST</font></a></strong>, had categorically concluded that renting of immovable property by itself cannot be regarded as a service. A determined Government sought to undo the Delhi High Court judgement in the last budget, which was again promptly challenged. The High Court was not impressed and granted stay to the petitioners in respect of renting of immovable property. Revenue naturally took the matter to the Supreme Court and the Supreme Court has stayed the operation of the Delhi High Court judgement, till the next date. The next hearing is on 20.01.2011. So the Revenue Department has a whole week to collect the Revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interesting days ahead. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Yoga - Sri Sri Ravishankar </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ART</strong> of Living Guru Sri Sri Ravishankar said yesterday, "We have to own up our heritage and traditions. While every country is making yoga their own as they have found its meaning, we are doing nothing to safeguard this valuable tradition of ours. Instead our government has brought yoga centres under the service tax net." </font></p> <p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/ravi_shankar.jpg" alt="Legal Corner Icon" width="450" height="167" hspace="5" border="0" align="middle"></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ever smiling Guru wanted the government to concentrate more on 'gross domestic happiness' rather than 'gross domestic product'. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SIBAL v CAG </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> public battle between the revered Comptroller and Auditor General of India and the Hon'ble Minister of Telecom is continuing unabated providing the much needed political entertainment, badly needed at a time when less entertaining stories like onions and inflation have no answers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAG sharply reacted to Kapil Sibal's answers to the CAG's presumptive estimate in the 2G scam. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the CAG, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ Making public comments on the matter which is being considered by a Parliamentary Committee is highly improper and may even amount to contempt of the House. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ When any matter is under consideration of a Parliamentary Committee and the Committee is holding its sittings for that purpose, no persons, including a Member of Parliament should make or publish a statement or comment about that matter. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the way the CAG prepares his reports. Now he is not sure whether Sibal's comments amount to contempt of the Parliament. He says they <strong>MAY</strong> amount to contempt. The CAG says that when something is before a Parliamentary Committee, nobody should talk about it. Why Sir? And in what era are we living? What prevents the citizens from expressing their views on an issue before a Parliamentary Committee? And what is wrong with it? Are we interested in knowing the truth or hiding it? This is the typical Audit mindset – you can criticize everybody, but at the slightest remark against you, you get offended. After all, this is supposed to be a democracy and democracy triumphs on debate, not on suppression of views. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After all Kapil Sibal was one of our top lawyers living with, ‘my lords', ‘learned brothers' and ‘humble submissions' and accepting every order with ‘much obliged' submission. He must be knowing his law. If CAG can go public, so should the minister. The game should be fair. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to CAG, the loss is 1,76,000,00,00,000; according to the minister, it is zero as he has just removed the 176. The actual figure could be somewhere in between. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CAG's job is over after he has submitted his report to Parliament – why should he comment even if the minister was irresponsible? <br> </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"><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">Appeal to Commissioner (Appeals) - Limitation - Appeal filed on 91st day barred even if end of 60 days was a holiday - High Court: </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> the period of the last day of filing of an appeal comes in the midst of a vacation or a holiday, the said period would not get excluded but is extended by applicability of Section 4 of the Limitation Act or Section 10 of the General Clauses Act which enables the affected party to prefer the appeal on the date when the Court or the office reopens. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Car which was black in colour and of a seating capacity of five while in UK was modified as a Limousine of silver gray colour and substantially improved facilities and cosmetics in United States from where it was imported. Confiscation upheld - CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAR</strong> imported by the appellant is a secondhand/used vehicle. It is settled law that valuation of secondhand goods cannot be made on a comparison with other secondhand goods. Each secondhand goods is uniquely placed and factors affecting its value cannot necessarily be true for other secondhand goods - As the charge of misdeclaration of value by the appellant was unsustainable there was no reason to hold the goods to be liable to confiscation in terms of Section 111 (m) of the Customs Act. </font></p> <p align="justify"><strong><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399" size="5" face="Times New Roman, Times, serif">H</font></em></font><font color="#663399" size="4" face="Times New Roman, Times, serif"><em>appy <font size="5">S</font>ankranti </em></font></strong></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><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>