TIOL-DDT 1566 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1566</font><br>
11.03.2011<br>
Friday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Restriction on Export of Cotton Yarn - Bombay High Court Quashes DGFT Policy Circular </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> a notification dated 9.4.2010 issued under Section 5 of the FTP 2009-2014, the Central Government, imposed restriction on export of cotton yarn by directing that the contracts for export of cotton yarn shall be registered with the Textile Commissioner prior to shipment and clearance for export of cotton yarn consignments shall be given by customs authorities after verifying that the contracts have been registered.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification
dated 22.12.2010 was issued to permit export under licence with retrospective
effect from 1.12.2010 and the policy circular dated 22.12.2010 was issued
to implement the policy decision taken in the meeting of Group of Ministers
on 21.12.2010, imposing restriction on the export of cotton yarn during the
year 2010 - 11 (upto 31.03.2011) at 720 million kgs. The policy circular
further provides that henceforth export of cotton yarn will be restricted
and will be allowed to be exported under a licence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Bombay High Court has quashed the Policy Circular dated 22.12.2010 as contrary to law . The High Court rejected the Government's plea to stay the operation of the order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10704" target="_blank">DDT 1336</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11836" target="_blank">1513</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11981" target="_blank">1536</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12019" target="_blank">1541</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12068" target="_blank">1548</a>, <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12084" target="_blank">1550</a> and <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12122" target="_blank">1555</a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This order was delivered on 9th March and we bring it to you today. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12235" target="_blank">Breaking News</a></strong>.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government @ speed of Light - High Court Order Quashed! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a rare and almost impossible feat, the DGFT has undone the effect of the High Court judgement mentioned above – WITHIN A DAY. He has just amended the Notification! Even before the lawyers and clients could get together to celebrate the marvellous victory in the High Court and before the prospective exporters could rush to the DGFT for licence to export cotton yarn, the DGFT outsmarted them. The DGFT has corrected whatever lapse pointed out by the High Court whereby the Circular was quashed. He simply amended the notification and the High Court had held that the DGFT who issued notification on 22.12.2010 is authorized to issue notification for and on behalf of the Central Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now in the amended Notification No. 14(RE-2010)/2009-14 dated 22.12.2010, the “nature of restriction” is, “Export permitted under licence subject to a quantity limit of 720 million Kgs during the Fiscal Year 2010-11 (i.e. upto 31.03.2011) or as notified by DGFT from time to time.” What was stipulated in the Circular is now included in the notification. And everything is now legal and correct. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What if the High Court refuses to stay its order, we have our notifications factory! It is not really worthwhile to fight the Government in Courts – they always have the power to change the rules in the middle of the game or even after the game is over! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether the DGFT is right or wrong in undoing the order of the High Court, the fact that he could do it within a day, is a marvellous unparalleled achievement for bureaucracy. THEY COULD ISSUE A NOTIFICATION THE DAY AFTER THE HIGH COURT DELIVERED ITS JUDGEMENT!!!!!!!. If our babus can work with such speed to help the citizens instead of harming them, our country will be a GREAT DEMOCRACY. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 31(RE-2010)/2009-14; Dated March 10 2011 . </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise - Limitation under Section 11A, not applicable to compounded levy scheme - Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court, yesterday held that the importing of elements of one scheme of tax administration to a different scheme of tax administration would be wholly inappropriate as it would disturb the smooth functioning of that unique scheme. The time limit prescribed for one scheme could be completely unwarranted for another scheme and time limit prescribed under Section 11A of the Act is no exception. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed that the judgement of the Supreme Court in the case <em>Commissioner of C. EX & Customs v. Venus Castings (P) Ltd as reported in - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-113-SC-CX.htm" target="_blank"><font size="1">2002-TIOL-113-SC-CX</font></a></strong></em> had has clearly laid down the principle that the, compounded levy scheme is a separate scheme altogether and an assessee opting for the scheme is bound by the terms of that particular scheme. It is settled matter now that Section 11A of the Act has no application for recovery under different schemes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This would mean that there would be no time limit for demands under the compounded levy scheme. Will the Limitation Act work? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you today this landmark decision of the Supreme Court delivered yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12232" target="_blank">Breaking News</a></strong>. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">National Human Rights Commission Urges Government to Drop Idea of Service Tax on Healthcare</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOW</strong> it is almost certain – the new adventure of Service Tax on healthcare proposed in the 2011 Budget will go to the mortuary. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The National Human Rights Commission in a statement released yesterday said, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"It has come to the notice of the Commission through media reports that the Government of India proposes to introduce a five per cent service tax on healthcare services thereby bringing the diagnostic services and hospitals having twenty five beds or more with centralized air conditioner system in the tax net. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is also reported that the excise duty on the medicines is proposed to be increased from four to five per cent which may make the medicines costlier hurting the common man. In addition to this, for the first time, the traditional medicines are also proposed to be brought within the ambit of excise duty. <br>
<br>
There are also media reports quoting a recent WHO report on financial health systems that millions of people plunge into poverty every year due to illness and catastrophic medical bills.<br>
<br>
In this backdrop, the National Human Rights Commission hopes that the Government may not go ahead with any such proposals which shall affect the healthcare to the common man. The Commission is of the view that any tax, adversely affecting the human rights of the poor and the needy may not be imposed." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apart from the NHRC , Prime Minister Manmohan Singh's surgeon Dr Ramakant Panda and renowned cardiologist Devi Shetty have strongly opposed the proposal to impose service tax on healthcare services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is indeed difficult for the FM to ignore the suggestions from such hallowed sources. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty On Rubber Chemicals </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on Certain Rubber Chemicals ( MBTS ) originating in, or exported from People's Republic of China, imposed vide Notification No. 87/2005-Customs, dated the 27th September, 2005, is extended till 25 th July 2011. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_028.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 28/2011-Customs, Dated: March 4, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty On Polytetrafluoroethylene </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Anti Dumping Duty on imports of Polytetrafluoroethylene ( PTFE ) originating in, or exported from People's Republic of China, imposed vide Notification No. 42/2010-Customs, dated the 5th April, 2010, is extended till 25 th July 2011. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_029.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 29/2011-Customs, Dated: March 4, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty On Glass Fibre and articles </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> provisional Anti Dumping Duty on imports of Glass Fibre and articles originating in, or exported from People's Republic of China, was imposed vide Notification No. 75/2010-Customs, dated the 14th July, 2010. Now definitive anti dumping duty is imposed on it for a period of five years from the date of imposition of the provisional anti-dumping duty, that is, the 14th July, 2010. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_030.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 30/2011-Customs, Dated: March 4, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Revision of fee for issuance of Certificate of Origin </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended the HOP to stipulate that, “The fee for issuance of Certificate of Origin (Preferential) for India 's exports under India 's Free Trade Agreements ( FTAs ), Preferential Trade Agreements (PTAs) and for exports under GSP , Global System of Trade Preferences ( GSTP ) schemes shall be Rs. 350/- (Rupees Three Hundred and Fifty only). The enhanced fee would be applicable for the applications received w.e.f . April 1, 2011.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The existing fee is Rs. 150/- </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn040.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 40/2009-2014 (RE- 2010), Dated: March 09, 2011. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG Wants IRS Officers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a letter to the CBDT Chairman, the Dy. CAG states, <em>“With a view to have closer cooperation from your department and have the advantage of domain knowledge of Direct Taxes of your officers in planning and executing the audits of the Direct Taxes collections, we would like to have the services of one of the Direct Recruit officers of the Indian Revenue Service at the level of Director/Deputy Secretary (with 9-14 years of service, on deputation to our office” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has asked the Chief Commissioners to send the applications of eligible officers by 18.3.2011. May be the CAG must have sent a similar letter to CBEC Chairman also.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/cbdt_C&AG.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F No. A-35012/9/2011 – Ad VI Dated: March 09, 2011. </font></strong></a></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><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"><strong><font color="#663399">Service Tax </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recoveries made from credit card holders in respect of transactions done abroad prima facie covered by “credit card services” falling under clause (ii) of “Banking and other Financial Services” under section 65(12) of the Act - HDFC Bank Ltd. directed to pre-deposit Rs.74 lakhs - CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Service Tax demand of Rs.74 lakhs under the head “Banking and other Financial Services” (BOFS) was confirmed against HDFC Bank Ltd. by the CCE, Thane-II. This demand is on certain charges collected by the bank from their credit card-holders in respect of the service through credit cards availed by them abroad. Inasmuch as when the card holders used the cards for shopping abroad, they had to pay in foreign currency and HDFC recovered from them, in addition to the exact value of the goods in foreign currency, 3.5% towards what they called “margin of profit”. The taxable value for the demand is the aggregate of this margin collected by HDFC from their credit card holders, who used cards abroad. </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">Whether lending of shares is a common practice in market? - If yes, whether lending of shares can be construed as transfer within meaning of Sec 2(47) when assessee sells out same in subsequent year and offers capital gains to tax - ruled in favour of assessee: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether lending of shares is common practice in shares market and Whether when assessee sells out shares in subsequent year and offers capital gains to tax, the lending of shares can be construed as transfer within the meaning of section 2(47) of the Act. Verdict goes in favour of assessee. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Doctrine
of cause of action is ordinarily applicable to civil disputes - there is
no room for extending this doctrine to the field of claims for refund of
Central Excise duties as Section 11B of the CEA, 1944 provides a complete
machinery for claiming refund: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent,
a 100% EOU, cleared final products to the DTA on payment of duty of excise
in terms of the proviso to Section 3 (1) of the Central Excise Act read with
Notification No.23/2003-CE. In a letter dated 17/01/2006, the Superintendent
of Central Excise pointed out a mistake in the quantification of the duty
paid on the above DTA clearances [01/11/2005 to 26/04/2006] and advised the
respondent to pay appropriate duty on future DTA sales and also to pay the
differential amount of duty for the past period. The assessee worked out
the differential amount of duty and paid the same by way of debit in CENVAT
account on 24/07/2006. </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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