TIOL-DDT 1585 · 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=utf-8"> </head> <body bgcolor="#FFFFFF"> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#663399" size="3">TIOL-DDT 1585 </font><br/>07.04.2011 <br/>Thursday </strong></font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"> Service Tax - Commercial Coaching Or Training - Supreme Court Remands Cases to Tribunal</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>IN</strong> <em>Great Lakes Institute of Management Ltd vs CST, Chennai </em>– <strong><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2008/2008-TIOL-134-CESTAT-MAD.htm" target="_blank"><font size="1"><em>2008-TIOL-134-CESTAT-MAD</em></font></a></strong>, the CESTAT held, <em>“we find that education in the instant case is not a business. The primary object of GLIM is to impart education. Profit making is not its main motive. The refrain of the several judicial authorities cited is that profit motive characterizes a commercial concern as against general public utility in the case of a charitable organization. Therefore GLIM is not a commercial concern and the training or coaching provided by GLIM is not a commercial activity”</em>. </font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">And the demand for Service Tax was set aside. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Finance Act 2010 had inserted an explanation in Section 65(105)(zzc) retrospectively with effect from 1st July, 2003, which reads as under: </font></p> <blockquote><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">“Explanation. - For the removal of doubts, it is hereby declared that the expression “commercial training or coaching centre” occurring in this sub-clause and in clauses (26), (27) and (90a) shall include any centre or institute, by whatever name called, where training or coaching is imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and the expression “commercial training or coaching” shall be construed accordingly.” </font></em></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">So predictably, the Revenue took the Great Lakes Institute to the Supreme Court and the Apex Court in <strong><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2010/2010-TIOL-117-SC-ST-LB.htm" target="_blank"><em><font size="1">2010-TIOL-117-SC-ST-LB</font></em></a></strong> had remanded the case to the Tribunal to examine the case in the light of the Explanation inserted in the Act. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The<em> Great Lakes Institute of Management Ltd vs CST, Chennai </em>– <strong><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2008/2008-TIOL-134-CESTAT-MAD.htm" target="_blank"><font size="1"><em>2008-TIOL-134-CESTAT-MAD</em></font></a></strong> was followed in <em>Institute of Insurance & Risk Management </em>- </font><font face="Verdana, Arial, Helvetica, sans-serif" size="1"><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2009/2009-TIOL-2563-CESTAT-BANG.htm"><em><strong>2009-TIOL-2563-CESTAT-BANG</strong></em></a></font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"> and in this case also the Revenue appealed to the Supreme Court and the Supreme Court has remanded this case also to the Tribunal. - <em><strong><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2011/2011-TIOL-37-SC-ST.htm" target="_blank"><font size="1">2011-TIOL-37-SC-ST </font></a></strong></em></font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Apparently the Government is serious about taxing education! </font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">Service Tax – Update on Renting </font></strong></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>MANY</strong> Netizens are mailing us, wanting to know what happened to the renting case in the Delhi High Court. </font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">We are informed that: </font></p> <blockquote><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">“Mr. AS Chandiok, ASG continued his arguments till the rising of the Court on 31st March. These appear to have almost come to an end. The rejoinder arguments by the petitioners will be heard on the next date - 26th April, 2011, as the Court will be on a fortnight's vacation after the 1st week of April. This time there will be a greater discussion on the limited aspect of retrospective validation provision. Probably, we can hope to expect the final order sometime in the 2nd half of May ”. </font></em></p></blockquote> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">CBEC Notifies Hazira ICD </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>CBEC</strong> has notified Hazira (Surat) as an ICD for Unloading of imported goods and the loading of export goods. Notification No. 12/97-Customs (N.T.), dated the 2 nd April, 1997, is amended. </font></p> <p><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_028.htm" target="_blank"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Notification No. 28/2011 - Cus., (NT.), Dated: April 6, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">CBDT issues Explanatory Notes to provisions of Finance Act, 2010 </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> CBDT has issued explanatory notes to the provisions of the Finance Act, 2010 – just a few days before the Finance Act 2011 is effective. </font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">AMENDMENTS AT A GLANCE</font></strong></p> <table align="center" border="1" cellpadding="3" cellspacing="0" width="90%"><tbody><tr><td valign="top"><p align="center"><em><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Section/Schedule </font></strong></em></p></td><td valign="top"><p align="center"><em><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Particulars/Paragraph number </font></strong></em></p></td></tr><tr><td valign="top"> </td><td valign="top"><p><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Finance Act </font></strong></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">First Schedule </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Rate Structure, <strong>3.1-3.3-6 </strong></font></p></td></tr><tr><td valign="top"> </td><td valign="top"><p><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Income-tax Act </font></strong></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">2(15) </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Change in the Definition of “charitable purpose”, <strong>4.1-4.4 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">9 </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Income deemed to accrue or arise in India to a non-resident, <strong>5.1-5.4 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">10AA </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Computation of exempted profits in the case of units in Special Economic Zones (SEZs), <strong>6.1-6.2</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">12A </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Cancellation of registration obtained under section 12A, <strong>7.1-7.4 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">35, 10(21) </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Weighted deduction for scientific research and development, <strong>8.1-8.8</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">35AD </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Investment linked deduction for specified businesses, <strong>9.1.1-9.3.2</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">40(a)(ia), 201, 271B </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Disallowance of expenditure on account of non-compliance with TDS provisions, <strong>10.1.1-10.2.3</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">44AB, 44AD </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Limit of turnover or gross receipts for the purpose of audit of accounts and for presumptive taxation, <strong>11.1-11.5 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">32, 47, 35DDA, 43, 47A, 49, 72A, 115JAA </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Conversion of a private company or an unlisted public company into a limited liability partnership (LLP), <strong>12.1-12.9 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">56 </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Taxation of certain transactions without consideration or for inadequate consideration, <strong>13.1-13.7</strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">80C </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Deduction in respect of long-term infrastructure bonds, <strong>14.1-14.2</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">80D </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Deduction in respect of contribution to the Central Government Health Scheme (CGHS), <strong>15.1-15.4</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">80-IB(10) </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Deduction for developing and building housing projects, <strong>16.1-16.5 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">80-ID </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Deduction of profits of a hotel or a convention centre in the National Capital Territory (NCT), <strong>17.1-17.3 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">115JB </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Minimum Alternate Tax under Section 115JB, <strong>18.1-18.3 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">143 </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Centralised Processing of Returns, <strong>19.1-19.4</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">194B, 194BB, 194C, 194D, 194H, 194-I, 194J </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Rationalisation of provisions relating to Tax Deduction at Source (TDS), <strong>20.1-20.3 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">203, 206C </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Certificate of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), <strong>21.1-21.3</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">245A, 245C, 245D </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Settlement Commission, <strong>22.1-22.5</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">256, 260A </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Power of the High Court to condone delay in filing of appeals, <strong>23.1-23.7</strong> </font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">282B </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Document Identification Number, <strong>24.1-24.2 </strong></font></p></td></tr><tr><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">First Schedule </font></p></td><td valign="top"><p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Taxation of income of non-life insurance business,<strong> 25.1-25.5</strong> </font></p></td></tr></tbody></table> <p><a href="https://taxindiaonline.com/RC2/pdfdocs/wnew/it10cir01.pdf" target="_blank"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">CBDT Circular No. 1/2011 [F.No. 142/1/2011-SO(TPL)] Dated: April 6, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">AP High Court Comes down heavily on Corruption </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>AS</strong> Corruption has become a hot topic of late, we bring you a very recent High Court judgement which had some sharp comments on corruption. And the issue was selling of blank shipping bills at Rs. 150/ each. The High Court approved the revocation of the CHA licence and held that the act of corruption is relevant and not the quantum. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Extracts from the rather strong judgement: </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ While issuance of signed blank shipping bills would, by itself, amount to negligence on the part of the CHA, their doing so for a consideration of Rs.150/- per shipping bill is an act of corruption. It is in this context that the proportionality of punishment imposed on the respondent, and the scope and amplitude of this doctrine, is required to be examined. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ It should be borne in mind that, in disciplinary matters, the Commissioner is responsible for the happenings in the Customs area, and for the discipline to be maintained thereat. If he takes a decision necessary for that purpose, the CESTAT would, ordinarily, not interfere on the basis of its own notions of the difficulties likely to be faced by the CHA or their employees. The decision is best left to the disciplinary authority save in exceptional cases where the punishment imposed is shockingly disproportionate or is mala fide . </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ In cases involving corruption there cannot be any punishment lesser than the maximum i.e., revocation of the license. No other lesser punishment can be contemplated in such cases. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ it must be borne in mind that a single act of corruption is sufficient to award the maximum penalty which, under the CHALR, is of revocation of the license. </font></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ In an appeal, preferred against an order imposing punishment under the CHALR, the CESTAT should not be swayed by considerations of misplaced sympathy. </font></p><p align="justify"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ No indulgence can be shown to persons indulging in acts of corruption. </font></strong></p><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">++ The punishment imposed on the respondent, by the Commissioner of Customs, of revocation of their license, when viewed in the light of the grave and serious acts of misconduct held established, is justified. </font></p></blockquote> <p><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">We will bring you this judgement tomorrow. </font></strong></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><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 face="Verdana, Arial, Helvetica, sans-serif" size="2"><img align="left" alt="Legal Corner Icon" border="0" height="84" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" width="100"/><strong><font color="#663399">Central Excise</font></strong></font></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Inputs exported as such by reversing Credit - Eligible for Rebate: HC </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> assessee had purchased various inputs/capital goods from domestic suppliers and manufacturers and subsequently exported the same on payment of duty by reversing the credit of duty availed on those inputs/capital goods under Rule 3(4) of the Cenvat Credit Rules 2002. Inputs/capital goods when exported on payment of duty under Rule 3(4) of 2002 Rules, rebate of that duty would be allowable as it would amount to clearing the inputs/capital goods directly from the factory of the deemed manufacturer. </font></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">Income Tax</font></strong></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Sec 271FA - Whether penalty is warranted if assessee-bank fails to respond to notice for failure of filing Annual Information Return admittedly on ground of ignorance of change in law - YES, rules High Court</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> issue before the Bench is - Whether penalty is warranted if assessee-bank fails to respond to the notice for failure of filing annual information return admittedly on ground of ignorance of the change in the law. YES is the High Court's answer. </font></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">Customs </font></strong></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">CHA Licence – CHA sells signed blank shipping bills for Rs. 150/- each – revocation of licence justified - In cases involving corruption there cannot be any punishment lesser than maximum. Any sympathy shown in such cases is totally uncalled for and opposed to public interest: HC</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>BLANK</strong> shipping bills were issued by the partner and authorized representative of the respondent-CHA for a consideration of Rs.150/- per shipping bill. In cases involving corruption there cannot be any punishment lesser than the maximum i.e., revocation of the license. No other lesser punishment can be contemplated in such cases. Any sympathy shown in such cases is totally uncalled for and opposed to public interest. The consideration received for the act of misconduct may be small or large. It is the act of corruption that is relevant, and not the quantum involved in such acts. </font></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">See our columns Tomorrow for the judgements</font></strong></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until Tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Have a Nice Time. </font></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Mail your comments to</font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p> </body> </html>