TIOL-DDT 1535 · 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> <div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1535</font><br> 24.01.2011<br> Monday</strong></font></div> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Boundaries Receding With Globalisation - Customs Station in Phulbari</font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">INAUGURATING</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> the Land Customs Station at Phulbari in West Bengal on Saturday, the Finance Minister Pranab Mukherjee said that with more and more globalization, geographical boundaries are not important. The FM said that with the opening of the new land customs station, trade which had been carried on between Nepal and Bhutan with Bangladesh, will now be extended to India. This would also lead to development of Siliguri, the largest business centre of the North-east.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM Inaugurates New Building of Chennai Air Customs</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister, Pranab Mukherjee, yesterday inaugurated the new office building of the Commissioner of Customs, Chennai Airport and Air Cargo, adjacent to the airport.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM said that though the country had come out of the global financial recession as the fastest growing economy, next only to China, there was no room for complacency as “the challenges are enormous for a growing economy. He said that the Government’s policies were focused on keeping the trade gap within manageable limits as a sharp export-import imbalance could cause concern in the long term as it manifested in the current account scenario.</font></p> <p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/chennai_cus.png" alt="Legal Corner Icon" width="378" height="471" hspace="5" border="0" align="center"></strong></font></p> <p align="center"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/customs.jpg" alt="Legal Corner Icon" width="250" height="187" hspace="5" border="0" align="centert"></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He pointed out that the revenue collected from Chennai air cargo complex from international trade has shown an increase of 278% during the period 1997-98 to 2009-10. He also pointed out that the value of imports during the same period has gone up from 4666 crores of rupees to 52003 crore rupees in 2009-10. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Targets Increased - Hard Times Ahead for Taxpayers</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> a review meeting of the officers of CBEC and CBDT in Chennai yesterday, the Finance Minister said that the Revenue Targets for this financial year will be increased by 4 percent for Direct Taxes and by 6 percent for Indirect Taxes. This means starting tomorrow, taxmen are going to hound you and somehow persuade you (<font color="#FF6633"><strong>read threaten you</strong></font>) to pay more taxes in the next two months.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM also wanted the officials to focus on increasing service tax collection. He pointed out that while the services sector has grown enormously, the rise in service tax collection was not commensurate. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Arrest in Service Tax?</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERVICE</strong> Tax officers all over the country have a feeling that there is lot of evasion because the officers do not have the power to arrest alleged evaders and prosecute them. It is heard that the officers have suggested to the Board to make Service Tax offences liable for imprisonment like in Central Excise and Customs. They say 17 years is a long honeymoon and it is time to get tough. The FM is too sagacious to fall for such arguments, especially at a time when he wants GST, and more importantly when his government is not in the best of health, but unfortunately, if he buys the theory, there will not be any increase in revenue to the government. Corruption will go up with every assessee threatened with arrest. The Department should first try to bring in clarity in the Law relating to Service Tax and they should understand the laws and also the field officers should be taught to obey Board’s instructions, before they want to have powers to arrest.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC - Presidential Awards - Why CESTAT DRs Ignored?</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has announced its Presidential Appreciation Certificate Awards for 2011 for a record number of 35 officers for outstanding record of service. It is surprising that not even a single Departmental Representative in the CESTAT figures in the list of 35 awardees. The DRs in the CESTAT do so much of thankless work for the Department – always unheard and unsung. It is unfortunate that their work goes unrecognized. While officers routinely posted to NACEN get a 30 percent allowance, even if they cannot take a single class, the DRs in CESTAT who have to face brilliant lawyers and more brilliant judges with the badly drafted notices and pathetically written orders, are not given any incentive. Hard work, sincerity, passion, loyalty and erudition – all are discerningly visible when you see a DR arguing a case – often a bad one. Officers from the investigating agencies like DRI and CEI often corner many of the awards – but their cases are cases only when effectively defended by the DRs in the Tribunal Benches. Almost all the DRs richly deserve the Presidential award, but hardly anyone ever gets it. A DR once told me that she prays before appearing for a major case and one day she asked her daughter also to pray for her. “Mummy, what will you get if you win the case?”, asked the daughter. “Nothing, but satisfaction”, was the answer.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CDR should prevail upon the Board to grant a few awards to the DRs every year. Even the DRI and CEI chiefs should recommend some DRs for the award. This is the least you can do to your most dedicated officers slogging it out in the Tribunal.</font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax On Fumigation - Board Issues Corrigendum</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> Circular No. 132/1//2011-ST., Dated: January 12, 2011, (Please See <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11930" target="_blank">DDT 1528 – 13.01.2011</a></strong>) the CBEC explained that, “<em>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</em>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And cautioned that, “<em>the wordings of this <font color="#FF6633"><strong>circular</strong></font> cannot be used to interpret the scope of service defined under Section 65 (105) (zzzd) of the Finance Act, 1994</em>”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Board clarifies that what they meant was, “<em>the wordings of this <font color="#FF6633"><strong>Notification</strong></font>” and not “the wordings of this <font color="#FF6633"><strong>circular</strong></font></em>”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This seems to be an unwanted and hasty corrigendum. What was there in the original Circular was good enough. The notification did not clarify anything – it simply exempted a service for export. In any case this notification had been superseded as pointed out by DDT. Avoidable Confusion?</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/st_corrigendum_132_11.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Corrigendum in F.No. 354/69/2010-TRU., Dated: January 20, 2011</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Food Inflation - Trade is part of answer, not part of problem - Lamy</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WTO</strong> Director-General Pascal Lamy said that “trade plays or can play a better role in addressing the rise in food prices and tackling food insecurity. Trade is part of the solution, and not part of the problem”.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DG Lamy further elucidated:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Barely out of the 2008 food price crisis, the world appears to have entered yet another phase of higher prices. Rising food prices are now stoking global inflation, not to mention political unrest of proportions that we could have seldom imagined.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I worry that whereas various reasons for food crises have been repeatedly rehearsed in the press, and many figures circulated - a serious analytical exercise of why and how the world appears to be experiencing repeated crises has yet to start.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Trade becomes the transmission belt through which supply adjusts to demand. It allows food to travel from the land of the plenty to the land of the few. When that transmission belt is disrupted through trade barriers, unexpected turbulence arises on the market.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export restrictions play a major role in food crises. There are other trade barriers too, which harm agricultural production, such as tariffs and subsidies, and which prevent food from being produced where this can be most efficiently done.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clearly we need greater investment in agriculture, a sector in which we have under-invested for a while. In particular, to prepare our agricultural system for the impending climate change that we are likely to witness. This will be vital to “prettying” the supply-side picture.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some say that part of the solution to price volatility may lie in market instruments; financials instruments, such as futures. Others say that these instruments, while perhaps intended to stabilize markets, can in reality increase harmful speculation. The definition of speculation, in my view, remains open. It is an issue which farmers and food producers have had to contend with since the beginning of time!<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"> – Tuesday's cases</font></strong></font></strong> </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Customs</strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">No standard formula for Redemption Fine, but nothing wrong for a Tribunal to follow precedent - Supreme Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> standard formula cannot be laid down for imposition of redemption fine and penalty and each case has to be examined on its own facts but when a final fact finding body returns a finding that the facts obtaining in each of the cases before it are similar, and such finding is not questioned, levy of redemption fine or penalty uniformly in all such cases cannot be construed as laying down an absolute formula, which is the case here.</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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sec 54 - Is exemption u/s 54 available even on payments made for reservation of a flat, not booking of a flat? - NO, rules 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 exemption u/s 54 is available even on payments made for reservation of a flat and not booking a flat. NO, says the Tribunal.</font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Transactions between Associated Enterprises - Due date for payment of service tax – Amendments to Section 67 of Finance Act, 1994 and Rule 6 of Service Tax Rules have no retrospective application - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE</strong> Legislative intention behind the amendments was explained by the Board as for plugging avoidance of tax on the ground of non-realization of money from associated enterprises and the intention of the Legislature in bringing the amendments is to introduce a new provision and not to remove any doubts in the existing provision - It is not, nor can it be, anybody's case, that Explanation shall always take effect retrospectively - The appellants are entitled for refund of excess interest paid for the service tax pertaining to the period prior to the amendment.</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>