TIOL-DDT 1548 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663366" size="3">TIOL-DDT 1548</font><br>
11.02.2011<br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cricket – World Cup 2011 - Customs Exemption to BCCI, but Board Forgets Circular</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Cricket World Cup 2011 is slated to start on 19 February and the Grand Finale will be at Mumbai on 02 April 2011. This would perhaps be the last world cup match for the greatest cricketer – our own little master. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government is not a spoilsport and has granted Customs Duty exemption to Sport equipments; Medical instruments; Photographic and audio-visual equipment and supplies; Broadcast equipment and supplies; Computer and other office equipment; imported by the Board of Control for Cricket in India (BCCI) or by any importer authorized in writing by BCCI in relation to World Cup, 2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And as usual bureaucracy cannot give anything without impossible conditions: There are two here. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Importer, at the time of clearance of the goods shall furnish a bond for the value of the imported goods supported by a bank guarantee to the extent of twenty five percent of the said value, to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs, undertaking that all such goods shall be re-exported within three months from the date of official closure of the World Cup and shall pay an amount equal to the duty leviable on the imported goods but for the exemption under this notification in the event of failure to do so; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Such goods shall be imported and re-exported from the sea ports at Mumbai or Chennai, Inland Container Depot at Tuglakabad or airports at Mumbai, Chennai or Delhi. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most probably nobody will get the benefit of this exemption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When will they get the authorization from BCCI, where will they get the Bond and who will give them bank guarantees. Two more World Cups will be over before they get over the Customs tangle in India. As a part of its public service, Board should have kept this notification as a top secret so that no unsuspecting innocent sports lover would try to avail it and get entangled for life. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Beware: Anyone availing this notification is bound to be lost in the maze of Indian Litigation for the next twenty years.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board in <strong>Circular No. 5/2011 – Cus Dated January 17, 2011</strong> had informed that, “henceforth BCCI would not be eligible to avail itself of duty exemption under Notification No.21 /2002- Cus. dated 1.3.2002 <em><strong>or any other Customs notification</strong></em>. Thus, goods imported by BCCI or certified by BCCI for import are not entitled to any exemption benefit which is available to sports goods / equipment / consumables imported or certified by a National Sports Federation (NSF) or Apex body in terms of any Customs duty exemption notification issued by the Central Government. ” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on this Circular, most probably, the Customs officers will not allow the exemption for the BCCI World Cup 2011 imports. If they really don't allow the exemption, the importers should be very happy, but God forbid, if they do. Your Bank Guarantee would be encashed and there will be Show Cause Notices which will have to be finally decided in the Supreme Court. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It happens only in India! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_007.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO. 7/2011- Cus .,Dated: February 09, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Higher Limits For Appeals, Quicker Refunds and TIEA </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> order to further reduce litigation, the Central Board of Direct Taxes (CBDT) has enhanced the limits for filing appeals against taxpayers in the Income Tax Appellate Tribunal, High Courts and Supreme Court. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top" width="106" bgcolor="#9bbb59"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appeal to </font></strong></p></td>
<td valign="top" width="148" bgcolor="#9bbb59"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Present Monetary Limit – Tax Effect (Rs) </font></strong></p></td>
<td valign="top" width="132" bgcolor="#9bbb59"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Enhanced Monetary Limit – Tax Effect (Rs) </font></strong></p></td>
</tr>
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<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ITAT </font></p></td>
<td valign="top" width="148" bgcolor="#e6eed5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 Lakhs </font></p></td>
<td valign="top" width="132"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 Lakhs </font></p></td>
</tr>
<tr>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court </font></p></td>
<td valign="top" width="148"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4 lakhs </font></p></td>
<td valign="top" width="132"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10 lakhs </font></p></td>
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<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court </font></p></td>
<td valign="top" width="148" bgcolor="#e6eed5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10 lakhs </font></p></td>
<td valign="top" width="132"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 Lakhs </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Refunds</font></strong>: In order to speed up refunds, TDS claims in all tax returns (ITR-1 to ITR-6) will be accepted without verification if the difference between the amount claimed in the return and the amount reflected in the TDS return (AS-26 statement) does not exceed one lakh rupees. This will enable the Income Tax department clear nearly 95 percent refunds without verifying each TDS claim. Cases with zero-matching, invalid TAN and difference exceeding Rs. 1 lakh will, however, be cleared only after due verification. This precaution is necessary to avoid refund frauds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman CBDT had directed all Chief Commissioners to upload necessary data so that the refunds can be issued expeditiously. It will be for the first time that most income tax refunds of the current assessment year will be dispatched to the taxpayers within the current financial year itself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">TIEA:</font></strong> India has entered into its third Tax Information Exchange Agreement (TIEA) with the British Virgin Islands. The Agreement was signed on 9th February 2011 by the High Commissioner of India to United Kingdom on behalf of India and the Deputy Premier on behalf of British Virgin Islands. The agreement provides for sharing information, including exchange of banking and ownership information, and also of past information in criminal tax matters. Earlier, India had signed similar TIEAs with Isle of Man and Bermuda. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cbdt_press_release_2011.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Press Release in No. 402/92/2006-MC (03 of 2011); Dated: February 10, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Allocation of Cotton Yarn Export - Not made Yesterday </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per DGFT's Policy Circular No.15 (RE-2010)/2009-14 dated 1st February, 2011, the allocation was to be made yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications were invited for allocation of cotton yarn export. Approximately 2500 applications were received. The balance amount was calculated by deducting amount already exported upto 15.1.2011 (from most recent DGCI&S data) from the existing ceiling of 720 Million Kgs. This balance quantity is very small. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a very small residual amount is to be allocated amongst such a large number of applicants, the actual quantity that comes to the share of many applicants becomes commercially unviable because of its un-economic size. Therefore, an administrative decision has been taken to consider only such applicants who have recent experience on such export. Hence, only those applicants with export performance in 2009-10 will be considered for allocation in this round.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the last date of export is 31st March, 2011, the allocation would be completed as expeditiously as possible, on receipt of the confirmatory e-mails (last date of receiving such e-mails is 14.2.2011). In view of the above, the allocation of cotton yarn for export as stipulated in Policy Circular No. 15 dated 1.2.2011 was not made yesterday as stipulated.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 17 (RE-2010)/2009-14 Dated: February 10, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Show Cause Notice issued within five years from date of knowledge of Department is valid - Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> an important ruling yesterday, the Supreme Court held that in a case where there was intent to evade duty, a Show Cause Notice issued within five years from the date of knowledge by the Department is not hit by limitation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The repercussions of this judgement will be the hot topic for the next few years and both the assessees and the Department will rely on this judgement. If the converse is true – then, if the intent to evade, suppression etc , are absent, the limitation would be one year from the date of knowledge of the Department. Is it so? Interesting days ahead. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this judgement today. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12065" target="_blank">Breaking News</a></strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shillong Customs Destroys Ganja Worth Over Three Crores Rupees </font></strong></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> officers of Customs (Preventive) Commissionerate, North Eastern Region on 10 th February, 2011, destroyed illicit Cannabis (Ganja) cultivation grown in vast areas of Nirala Char under Baghbor P.S and Karai khaiti Char under Alopatichar P.S in Barpeta district of Assam. The officers also destroyed semi-dry ganja plant weighing approximately 6000 kgs . These plants had been recently harvested by the cultivators and kept in the fields for drying. The value of the semi-dry ganja is estimated at ` 3 crores . Local Police officers of Alopatichar P.S under the direction of the Superintendent of Police, Barpeta also assisted in the operation. A team of departmental officers consisting of more than 40 personnel participated in the day long operation of cutting and uprooting the fully grown Cannabis (Ganja) plants and burning them along with the recovered semi-dry ganja at the site of cultivation. Some of the already harvested semi-dry ganja plants, wrapped in plastic bags, were found concealed among wheat cultivation, buried in pits in the back yard of some of the houses and even on tree tops. Similar destruction operations were carried out in neighbouring areas in the previous year and it was seen that this year cultivation did not take place in those areas. However, everywhere cultivators moved further into more remote areas not connected by motorable roads to escape the notice of Government agencies. The team had to walk several kilometers and even cross a rivulet by boat to reach the cultivated areas. Cultivation and dealing with Cannabis (Ganja) in any form is prohibited under provision of the Narcotics Drugs and Psychotropic Act, 1985. Further investigation regarding identity of the growers and marketing of the final produce is on, informs Mr. Ray Baruah Commissioner of Customs Preventive Shillong. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<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"> – Monday'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"><font color="#663399"><strong>Customs</strong></font></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">It is well settled principle that where any statutory provision prescribes a particular manner for doing a particular act, then that thing or act must be done in accordance with the manner prescribed therefore – Pre-deposit waived of penalty: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> exporter filed a Shipping Bill for export of Indian Basmati rice. The goods were examined by the SIIB and samples were sent to Deputy Chief Chemist. A penalty of Rs.2,54,048 /- was consequently imposed u/s 114(i) of the Customs Act, 1962 by the Commissioner of Customs (Export), Nhava Sheva. The exporter is before the CESTAT with an application for waiver of pre-deposit penalty. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<div align="justify">
<p><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income
tax - Whether where assessee maintains separate D-mat account for investment
and also for trading, and shares are duly recorded in books, AO is wrong
in treating short-term capital gains as business income - It is short-term
capital gains, rules ITAT</font></strong></p>
</div>
<p align="justify"><font size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif">THE </font></strong><font face="Verdana, Arial, Helvetica, sans-serif">issue
before the Tribunal is - Whether
where assessee maintains separate D-mat account for investment and for
trading and the shares are duly recorded in the books of account under
the head investments and stock in trade, AO is wrong in treating short
term capital gains as business income - Whether SEBI registration charges
paid as per the directions of the orders of the High Court for the prior
period, are to be considered as prior period expenses though the liability
was settled in the current year. </font></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">Appellant not entitled to claim refund as the amount of interest paid by them was inextricably linked with amount of service tax paid and was already availed and utilized as CENVAT credit in their business : CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant had received ‘business auxiliary services' from foreign commission agents during the period from 10.9.2004 to November 2006. In terms of Rule 2 (i) (d) (iv) of the Service Tax Rules, 1994, inserted with effect from 16.08.2002, they paid the service tax on the commission paid to the foreign commission agent amounting to Rs. 24,28,022/-. Interest amounting to Rs. 2,30,018/- on this amount of service tax was paid on 17.12.2007. <em>CENVAT Credit</em> of the above service tax was taken and utilized by the appellant for payment of duty on their final products. However, on 2.1.2008, they sought refund of the above amount of interest which had been paid.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the Judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more<strong> DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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>
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