TIOL-DDT 1533 · 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 1533</font><br> 20.01.2011<br> Thursday </strong><br> </font> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bank Guarantee For Export Promotion Schemes - Relaxation on Penal Clause - CBEC Clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Circular No. 58/2004 - Cus dated 21.10.2004, exemption from Bank Guarantee will not be available in case the licence holder has been penalized under the provisions of Customs Act, 1962, the Central Excise Act, 1944, the Foreign Exchange Management Act (FEMA),1999 or the Foreign Trade (Development and Regulation) Act, 1992 during the previous three Financial years. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Requests are received from importers for exemption from Bank Guarantee on the ground that penalty imposed on them was on account of offences which were technical in nature. It has been suggested that exemption from Bank Guarantee may not be denied in cases of technical offences. [Please see <strong><a href="http://www.taxindiaonline.com/RC2/Red%20tape%20at%20port%20costlier%20than%20shipping%20between%20ports%20" target="_blank">DDT 1481 -04.11.2010</a></strong>] </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has now clarified that offences other than the following would result in denial of the benefit of exemption from bank guarantee. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Cases of duty evasion involving mis-declaration / mis-statement/collusion / willful suppression / fraudulent intent whether or not extended period for issue of Show Cause Notice (SCN) has been invoked. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ Cases of mis-declaration and/or clandestine/unauthorized removal of excisable / import / export goods warranting confiscation of said goods. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ Cases of mis-declaration / mis-statement / collusion / willful suppression / fraudulent intent aimed at availing<em> CENVAT credit</em>, rebate, refund, drawback, benefits under export promotion/reward schemes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ Cases wherein Customs/Excise duties and Service Tax has been collected but not deposited with the exchequer. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> ++ Cases of non-registration with the Department with intent to evade payment of duty / tax. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to verify whether the Authorization holder meets the above criteria, he may be asked to furnish an affidavit stating whether any case(s) involving misdeclaration, suppression etc. as mentioned above have been booked against him during the previous three Financial years under the provisions of the Custom Act, Central Excise Act, the Foreign Exchange Management Act (FEMA), the Foreign Trade (Development and Regulation) Act, and the Service Tax (Finance Act, 1994). In case the details reveal violation(s) of the type mentioned above under the provisions of the above mentioned Acts then the benefit of Circular No. 58/2004-Cus. will not be extended. The Commissioners to ensure that some of the affidavits furnished are cross checked randomly with the field formations for their veracity. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 6/2011 – Cus; Dated: January 18, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - What is Janata Personal Accident Policy? CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No. 3/1994 - ST dated 30.06.1994, Janata Personal Accident Policy, among other policies was exempted from Service Tax. After 17 years somebody got a doubt as to what could be the scope and meaning of Janata Personal Accident Policy. And the Board clarifies, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Generally, a standard JPAP is an individual oriented policy with a fixed ‘sum assured'. The sum assured in these JPAP policies is often as low as Rs. 25,000/- , so that even people without regular income can afford to purchase a risk cover for themselves. For the insurers, JPAP offers a vehicle to fulfill the ‘rural or social sector' obligation prescribed by the Insurance Regulatory Development Authority (IRDA). Since a description of JPAP Policy is not available in the relevant notification, it is clarified that customized group JPAP insurance schemes floated by various insurance companies as per the specifications of state governments <font color="#FF6633"><strong>concerned</strong></font>, to extend risk cover to target populations, and to fulfill the prescribed ‘rural or social sector' obligation, are covered by the subject service tax exemption.” </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For <strong>DDT</strong>, this is a red letter day – our crusade for the correct usage of ‘concerned' has at last succeeded. In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=2931" target="_blank">DDT 248 25.11.2005</a></strong>, we first raised the issue – “<strong>concerned officers vs officers concerned</strong>” and had been regularly highlighting the wrong place the word was being consistently used in. In 2007 we found the Administrative section of the Revenue Department using the word correctly – ‘the officer concerned' and now in 2011, we find it again being correctly used by TRU – ‘state governments <font color="#FF6633"><strong><em>concerned</em></strong></font>, not concerned state governments'. English still has a chance! </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir133.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 133/2/2011-ST, Dated : January 18, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Served From India Scheme (SFIS) - Review </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the Foreign Trade Policy to make certain changes in the Served From India Scheme (SFIS). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier the benefits under SFIS were available to Services listed in Appendix 10 of HBPv1. Henceforth the benefits under SFIS will be available to Services listed in Appendix 41 of HBPv1. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier the Eligibility for SFIS was based on Foreign Exchange earned in the current or previous year. Henceforth the Eligibility for SFIS will be based on Foreign Exchange earned in the current year only. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And consequently the Handbook of Procedures, Vol. 1 (HBPv1) is also modified with a new Appendix 41. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 17/(RE-2010)/2009-2014, Dated: January 18, 2011 </font></strong></a></p> <p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>And </strong></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn025.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 25/2009-2014 (RE- 2010), Dated: January 18, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bhopal IAS Couple worth Rs. 360 Crores </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is reported that the Income Tax Department has detected wealth valued at Rs. 360 Crores from an IAS Couple of Madhya Pradesh. The raid on them last year had got a cash of Rs. 3 Crores, but that was only a tip of the proverbial iceberg. The 1979 batch IAS Couple had served in important positions in Delhi and as their career progressed, so did their wealth and investments. The enterprising wife-husband team purchased 25 flats; 18 in Guwahati, six in Bhopal and 1 in Delhi. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe this made for each other couple can spend their last days together in jail, ruminating over the mammeries of Indian Administration of which they made liberal use. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">We Want to Sell You All Kinds of Stuff - President Obama to China </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WELCOMING</strong> the Chinese President, Obama said, yesterday, "We also think that China's rise offers enormous economic opportunity. We want to sell you all kinds of stuff. We want to sell you planes, we want to sell you cars, we want to sell you software and as President Hu and his government refocuses the economy on expanding domestic demand, that offers opportunity for U.S. businesses, which ultimately translates into U.S. jobs.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The US trade deficit with China is to the tune of 250 Billion Dollars! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the comments on President Obama's wish to sell cars and computers to China in the US Press: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But I can get them cheaper at home. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why did he leave out opium? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We want to sell you software</em> - Fine, we'll take one copy each. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“We want to sell you all kinds of stuff. We want to sell you planes. We want to sell you cars” We want to sell you our future..... </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Black Money in Foreign Banks - Mind Blogging Crime - Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court expressed its anguish at the Government's failure to even disclose information about black money in foreign banks, saying it was a theft of national wealth and plunder of the nation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is a pure and simple theft of the national money. We are talking about mind-boggling crime. We are not on the niceties of various treaties," said the Apex Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11960" target="_blank">CobWeb today</a></strong>. </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">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Club Membership is not an Input Service: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Input Service conundrum continues unabated and assessees and the department leave no stone unturned to test the definition of ‘Input Service' laid down in rule 2(l) of the <em>CENVAT Credit</em> Rules, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, an appeal has been filed by the assessee against denial of input service credit for the service of club membership. The amount involved in the dispute is a minuscule Rs.21,012/-. Noting that the issue involved lies in a narrow compass, the Bench admitted the application and after waiver of the condition of pre-deposit, the appeal was taken for disposal. </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 14 - Whether when assessee's own funds get mixed with interest-bearing funds, onus lies on AO to establish nexus between investments made in tax-free bonds and interest-bearing funds - Yes, says 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 when assessee's own funds get mixed with the interest-bearing funds, onus falls on AO to establish a nexus between the investment in tax free bonds and interest bearing funds and whether AO is right to invoke powers u/s 14 without establishing such a nexus. And the verdict goes against the Revenue. </font></p> <p align="justify"><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">Assembling of photocopiers amounts to manufacture - Demand of Duty and Penalty upheld: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE</strong> appellants imported various parts/modules/accessories of Digital Multi Functional Printers, Copiers and Photo Copiers-cum Printers depending upon the purchase orders received from customers. The same were imported either in one consignment or in split packings comprising of various parts/modules/accessories and also procured some indigenously manufactured components. The same were stored in the approved warehouse at Rampur, where kitting activities were undertaken and such activities included assembling of all the components with the use of not only the imported parts/modules but also the indigenous components and accessories including pin-top, software, RAM, Stabilizers etc, as per the requirement and configuration given by the customers. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"> <font color="#FF6666">Until Tomorrow with more <strong>DDT </strong></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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>