TIOL-DDT 1590 · the untouched capture
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<p align="justify"><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL-DDT 1590<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>18.04.2011 <br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Values changed for Brass Scrap and Poppy Seeds </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has reduced the tariff values of Brass Scrap (all grades) from USD 4297 to USD 4278 and increased the value for Poppy seeds from USD 2688 to USD 2745 per MT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_031.htm" target="_blank">Notification No. 31/2011-CUS (N.T.), Dated : April 15, 2011 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs
- Labelling of goods in bond prior to Ex-bond clearance - CBEC Clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> Notification No.44 (RE-2000)/1997-2002 dated 24.11.2000 provides for labelling of the goods imported into India which are covered by the provisions of ‘Standards of Weights & Measures (Packaged Commodities) Rules, 1977'. This Notification mandates that compliance of labelling conditions have to be ensured before the import consignment of such commodities are cleared by Customs for home consumption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board received representations about difficulties being faced by importers in carrying out labelling of certain commodities which are small sized and sensitive to heat and dust in CFSs prior to clearance of the same under the provisions of DGFT Notification No.44 (RE-2000)/1997-2002 dated 24.11.2000. The problem is further compounded due to shortage of space in various CFSs. It has been represented that importers should be allowed to carry out the labelling activities as mandated under DGFT Notification No.44 (RE-2000)/1997-2002 dated 24.11.2000 in the warehouse before the clearance of the goods by the proper officer of Customs for home consumption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to redress the issue and to remove the difficulties faced by importers on account of space constraints at CFSs/ Port / ICDs and the nature of goods, etc., CBEC has decided to extend the facility of labelling on imported goods in Bonded warehouses subject to certain procedural conditions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has clarified that:- </font></p>
<div align="justify">
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The importers should first ascertain that for such marking / labelling facility, space, is available in warehouse prior to exercising this option. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In such cases, importers may file Warehousing Bill of Entry. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The assessing group will give suitable directions to Dock staff to allow bonding of the goods without labelling and with endorsement on the Warehousing Bill of Entry that verification of compliance of DGFT Notification No.44 (RE-2000)/1997-2002 is to be done prior to de-bonding by Bond Superintendent. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The goods will be labelled in the bonded premises and compliance of DGFT Notification No.44 (RE-2000)/1997-2002 will be ensured at the time of ex-bonding of the goods, by the Bond Officer, by examining the goods again and endorsing the Examination Report on the Ex-bond Bill of Entry. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. 100% examination at the time of Ex-bond clearance of goods should be done to ensure compliance of DGFT Notification No. 44 (RE-2000)/1997-2002. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The Examination Report can be endorsed on hard copy of Ex-bond Bill of Entry where EDI facility is not extended, and on hard copy as well as EDI system where EDI facility is extended to Bonded Warehouses. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. This facility is applicable only to goods that cannot be easily labelled in ports / CFS, having regard to their size and other factors such as sensitivity to temperature and dust. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. As the activity of labelling and re-labelling including declaration of Retail Sale Price (RSP) on goods amounts to manufacture in terms of section 2(f) of the Central Excise Act, 1944, if the same is carried out on goods warehoused, it would be considered as manufacturing operations having been undertaken in bond / warehouse and accordingly, the provisions of ‘Manufacture and Other Operations in Warehouse Regulations, 1966' would apply on those goods. Importers can, therefore, avail the facility of carrying out labelling in warehouse after following above procedure and the provisions of ‘Manufacture and Other Operations in Warehouse Regulations, 1966'. </font></p>
</blockquote>
</div>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_019.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 19/2011-Customs, Dated: 15 th April, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of New trim Cutting Waste for use in manufacture of Chindi rugs - CBEC Clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Board's Circular No.40/2007-customs dated 29.10.2007, trim cutting waste or fabric trims of continuous length with maximum width restriction of two inches (2”) falling under heading 6310, required for manufacture of Chindi rugs shall not be subjected to restrictions imposed by the present policy of ITC (HS) Code 6310 and shall be cleared without an import licence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board received representations from manufacturers of Chindi rugs that the requirement of trim cuttings waste or fabric trims of continuous length with a maximum width restriction of up to two Inches (2”) for manufacture of their final product should be relaxed and maximum width restriction of upto 10 Inches (10”) may be allowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter was referred to Director General of Foreign Trade (DGFT) for necessary clarification. DGFT has recommended the import of trim cuttings waste or fabric trims of continuous length with maximum width restriction up to ten inches (10”). It was also intimated by DGFT that CBEC may issue instruction to the field formations for exemption from the requirement of licence for such goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, Board has now clarified that import of trim cutting waste or fabric trims of continuous length with maximum width restriction of ten inches (10”) falling under heading 6310, required for manufacture of Chindi rugs shall not be subjected to restrictions imposed by the present policy of ITC (HS) Code 6310 and shall be cleared without an import licence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_020.htm" target="_blank">CBEC Circular No. 20/2011-Customs, Dated: 15 th April, 2011 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duty free export of samples as personal baggage of the exporter - CBEC Clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> has received references that export of samples in the passenger baggage are not being allowed while provisions of Foreign Trade Policy allow for the same. It was therefore represented that necessary clarification be issued. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies that, Para 2.31 of the Foreign Trade Policy which relates to export of passenger baggage does not specifically provide that samples could be part of the <em>bona fide </em> personal baggage. Whereas Para 2.20 provides that " “ <em>Bona fide </em>household goods and personal effects may be imported as part of passenger baggage as per limits, terms and conditions thereof in Baggage Rules. Samples of such items that are otherwise freely importable under FTP may also be imported as part of passenger baggage without an Authorization. Thus Para 2.31 of FTP relating to export of baggage does not provide for any expansion to include samples as <em>bona fide </em>baggage unlike FTP provisions in case of import of baggage. However the provisions contained in para 2.27 of Handbook of Procedure, Foreign Trade Policy makes it explicit that export of samples are allowed freely. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, in order to ameliorate the problem faced by the passengers, CBEC clarifies that <em>bona fide </em> trade samples should be part of export baggage in terms of para 2.31 of the Policy read with para 2.20 of the Policy and 2.27 of Handbook of procedures. While the matter of suitable amendment in para 2.31 of FTP has been taken up with DGFT, in the interim, Board wants that liberal view based upon status of exporter, nature and quantity of sample and certification if any from Export Promotion Council may be taken in the matter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/instruction11_008.htm" target="_blank">CBEC F No. 495/2/2011-Cus. VI , Dated: 5 th April, 2011 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clarification about requirement of “Declaration of Intent” for EOU shipping bills for claiming Chapter 3 scheme benefits - DGFT Clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>had clarified on 4.3.2010 that EOU shipments fall under the “free shipping bills” category. The trade and industry has, however, contended that the Department of Revenue does not treat EOU shipping bills as “free shipping bills”. On this issue, consultations have been held with Department of Revenue who have confirmed that EOU shipping bills are examined as per stipulated norms. Thus, the EOU shipping bills are not treated as “free shipping bills”. Hence, DGFT clarification dated 4.3.2010 is withdrawn. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has advised that shipments made by EOUs for the period 1.4.2008 till 31.12.2010 would not require “Declaration of Intent” for claiming Chapter 3 benefit. It is further advised that Policy Circular No. 40/2009-14 dated 16.7.2010 would continue to be in force for exports made on or after 1.1.2011 in terms of Para 3.11.8 of HBPv1 as amended by Public Notice No. 82/2009-14 dated 16.7.2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In effect, EOUs are eligible for Chapter 3 benefits without “Declaration of Intent” on shipping bills for the period 1.4.2008 till 31.12.2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir028.htm" target="_blank">DGFT Policy Circular No. 28 (RE-2010)/2009-14 : Dated 15th April, 2011 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NACEN organizes Budget Seminar - We have done a Good Job - Chairman </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NATIONAL</strong> Academy of Customs, Excise and Narcotics (NACEN) organized the National Budget Seminar on 15 th April 2011 at its campus in Faridabad. The Seminar was attended by more than 250 officers from all over the country, including the Chairman, CBEC and two Members of the CBEC, YG Parande and Lalitha John and the real Budget makers - the Joint Secretaries in TRU - Vivek Johri and VK Garg. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman explained the process of budget making - for the uninitiated and he said that somebody who works in TRU is looked up with respect, virtually inviting the large number of probationers present to consider TRU as a prize posting. The Chairman informed his officers that for the first time in this year's budget, the FM's Core Team included the Chairmen of the CBDT and CBEC. Earlier this team consisted of the Secretaries in the Finance Ministry. The Chairman explained the changes made in the CENVAT Credit Rules and the salient features of the Point of Taxation rules. The Chairman claimed that the Board had done a GOOD JOB and he requested the co-operation of the field officers. While concluding, the Chairman reminded the officers that “this is your Board”, and “if you do not like or do not agree with some of the decisions of the Board, you should bring it to the notice of the Board, instead of going public; there should be some discipline in this.” [ Sometime back a Chief Commissioner addressing a Trade Chamber was asked whether the chamber can send in a representation through the Chief Commissioner. The candid Chief Commissioner replied, “I am only a subordinate officer to the Board and they don't treat my letters seriously; it will be more fruitful if you can send your representation directly or through an MP!” ] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member, Budget, YG Parande made concluding remarks where he mentioned about Anna Hazare and Corruption. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Was the Seminar useful? While many of the probationers, ready to join the field in a few weeks were quite confused about the whole affair, there was near unanimous opinion that this was the first time that a Chairman actually interacted with the officers after a budget - many of the officers did not really expect the Chairman to know much about the Budget changes and they were pleasantly surprised to see a Chairman explaining minute details of the Budget - they would have been elated if he could spend a little more time with them. </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 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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UP Trade Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bottles used in manufacture of soft drink form part of Capital Investment, but crates do not: Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SO</strong> far as bottles are concerned, they are essential part of components and equipment necessary for the running of the factory and therefore such value of the investment would form part of the fixed capital investment and would be entitled to exemption as provided for. But so far crates are concerned they are used by the respondent only for the purpose of marketing. Use of crates is necessary for taking out the bottled beverages out of the factory and while doing the marketing of the sealed bottled beverages. The aforesaid view also receives support from the contents of the eligibility certificate given by the appellant and therefore crates have no use so far as running of the factory of the respondent. Therefore, the value of crates cannot be deemed to be investment for the purpose of including it within the meaning of expression "Fixed Capital Investment" as per sub-section (4) of Section 4-A of the Act. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether, if assessee does not claim Sec 80IB benefits in first year of production, it loses right to avail such benefits in subsequent year as well - NO, rules Delhi High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>two issues before the Bench are - Whether, if the assessee does not claim Sec 80IB benefits in the first year, it loses right to avail such benefits in subsequent years as well and whether it is necessary for the assessee to be registered under Industries Act as SSI to avail such benefits. And the verdict goes in favour of the assessee. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>C&F Agents - Whether reimbursement charges are includible in taxable value - Matter referred to Larger Bench : CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRIBUNAL</strong> found that different benches are taking different views on includibility or otherwise of the reimbursement charges received by a provider of taxable service in the calculation of gross amount for discharge of service tax. Since there are two views taken by the coordinate benches, Tribunal referred the matter to the President to constitute a larger bench and settle the issue of "includibility or otherwise of the reimbursement charges. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT </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">vijaywrite@taxindiaonline.com </a></font>
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