TIOL-DDT 1624 · 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 1624</font><br>
07.06.2011<br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise - Registration Exemption for Smart Cards </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> per Rule 9(1) of the Central Excise Rules, 2002, “every person, who produces, manufactures, carries on trade, holds private store-room or warehouse or otherwise uses excisable goods, shall get registered”: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 9(2), “<em>The Board may by notification and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons who may not require such registration</em>”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board has exempted from the rule, <em>every manufacturing unit engaged in the manufacture of recorded smart cards falling under sub-heading 8523 where manufacturer of such goods has a centralized billing or accounting system in respect of such goods manufactured by different manufacturing units and opts for registering only the premises or office from where such centralized billing or accounting is done</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board exemption reads as, “<font color="#FF6633"><strong><em>In exercise of the powers conferred by sub-rule (2) of rule 9 of the Central Excise Rules, 2002, the Central Board of Excise and Customs hereby exempts from the operation of said rule ……..</em></strong></font> ” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The use of the article “the” is rather peculiar to English and its usage is rather difficult for non-English speaking people. In the Russian language for example, they don't have the article ‘the'. A Russian who was in England asked a person on the street, “What is time?” The Englishman replied, “that, my friend, is a question, the answer to which we have not been able to get for the last five thousand years!” There is a world of difference between, “what is time?” and “what is <strong>THE</strong> time?” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, Board should have used, “<strong><font color="#FF6633">operation of THE said rule</font></strong>”, instead of “<strong><font color="#FF6633">operation of said rule</font></strong>” or why couldn't they simply say ‘exempted from registration'? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had suggested to the Board on several occasions to appoint a good English teacher to go through their notifications! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2011/exnt11_14.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 14/ 2011 -CX.,(N.T.), Dated: June 3, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is a Smart Card? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHAPTER</strong> Note 4(b) to Chapter 85 of the Schedule to the Central Excise Tariff Act stipulates, “<em>For the purposes of heading 8523, the term “smart cards” means cards which have embedded in them one or more electronic integrated circuits (a microprocessor, random access memory (RAM) or read-only memory (ROM)) in the form of chips. These cards may contain contacts, a magnetic stripe or an embedded antenna but do not contain any other active or passive circuit elements.</em>” </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax - India in IATA's Wall of Shame - killing goose laying golden eggs!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> International Air Transport Association (IATA), has yesterday placed India on its “Wall of Shame”, for its excessive Service Tax. IATA's Director-General and CEO, Giovannio Bisignani in his address to the 67th Annual General Meeting in Singapore yesterday, said, “<em>Taxing aviation does not pay. The Dutch repealed a USD 412 million departure tax because it cost the economy USD 1.6 billion. And the Irish plan to cancel their USD 165 million Travel Tax because it cost USD 594 million and 3,000 jobs. The lesson for governments is simple: <strong>don't kill the goose that lays golden eggs</strong>.</em>” </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Aviation
fuels global trade that is stimulating economies and restoring government
budgets. Tax the bankers. They created the mess. Their billions in bonuses
should help to clean it up,”</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> he
added </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DG usually embarrasses governments with facts and figures and has perfected the ‘art of shouting politely', though he calls the ‘WALL' a hit parade of ‘<em><font color="#FF6633"><strong>government tax bandits</strong></font></em>'. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Origin of Goods - WTO Chief Explains </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WTO</strong> DG, Pascal Lamy explained, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The concept of country of origin for manufactured goods has gradually become more challenging as the various operations, from the design of the product to the manufacture of the components, assembly and marketing have spread across the world. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The question of “who produces what for whom”, and “where the value added is accruing” are perhaps as important as the traditional concept of country of origin, which guides not only custom statistics, but the application of the core WTO principle of Most Favoured Nation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In international trade theory, trade in goods is seen as a substitute for the movement of factors of production. Thus, a country's imports of goods from its trade partner are seen as additional suppliers of the partner country's labour and capital, which competes with the importing country's own workers and entrepreneurs. But with the fragmentation of production, the share of value added by factors of production of the origin country in traded products is considerably lower than in the past. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">'Made in World' - WTO Initiative </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">LAUNCHING</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> a book, “<em>Trade Patterns and Global Value Chains in East Asia ” on 6 June 2011 at the WTO, DG, Pascal Lamy said, “an iPod assembled in China by Apple and most of the export value recorded in Chinese trade is attributable to Japan and other Asian countries.</em>” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He added, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When products include many parts made in many other countries, the effect of an isolated exchange rate appreciation or depreciation to the selling price in export markets will be reduced to the domestic content of these exports, to its “value added content”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Industrial production in Asia is driven by demand from the USA, and Asian producers have organized themselves to satisfy this demand, specializing on their comparative advantages. It shows a story of mutually beneficial interdependence. Global manufacturing brought a new dimension to the relationship between trade, investment, industrial production and development. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Besides China, which is today dubbed the “World Manufacturer”, we have a series of industrial success stories in Malaysia, Indonesia or Thailand. And this is not limited to manufacturing. Trade in commercial services has been spreading, as global manufacturing demands state-of-the-art logistical, communication and business services to thrive. In the process, Hong Kong and Singapore have become giant trade hubs, while India and the Philippines have developed successful activities of business-services exports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Contrary to what many people believe, the Asian success story began because a booming US demand for mass volumes and large varieties met suppliers who were able to satisfy this demand. Autarky and isolationism were not options, and it was by opening their economies to trade and foreign investment that “developing Asia” became “emerging Asia”. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA - Settlement of prosecutions cases </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MINISTRY</strong> of Corporate Affairs (MCA) has decided to review pending prosecution cases by holding Lok Adalats.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lok Adalats are to be organised on 9th, 16th, 23rd & 30th June in the offices of <em><strong>concerned</strong></em> ROCs between 10.00 AM to 1.00 PM by giving an advance advertisement in the local Newspapers. The chapters of ICSI, ICWAI, ICAI and Bar Council are to be used for wide publicity and efforts are to be made to dispose of compoundable offences there itself. In next month, two Lok Adalats will be held by each RD per month. These would be held on Saturdays. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The object of organizing Lok Adalats should be to ascertain the legal cases where the companies and their officers in default are inclined to get the offences compounded so that necessary applications may be moved by the companies for this purpose and on payment of compoundable fees, the prosecutions may be withdrawn. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_settlement_prosecutions_cases.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA CIRCULAR [F.NO.3/57/2011-CL.II], Dated: June 3, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Forests at Your Service - World Environment Day - Customs initiative </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> connection with the World Environment Day 2011 with the theme “Forests at your Service”, the Secretary General of the World Customs Organization, Kunio Mikuriya, calls upon Customs and timber trade regulating agencies to intensify their efforts to improve controls over the trade in international timber. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The world's forests are under severe pressure from indiscriminate logging and the illegal trade in timber products. These questionable practices cause widespread environmental damage, cost governments billions of US dollars in lost revenue, enable corruption to flourish, and undermine the rule of law and good governance”, he said. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs are on the frontline at international borders and play an invaluable role in ensuring that timber shipments moving in the global trading system comply with national laws and international environmental undertakings such as the Convention on Trade in Endangered Species of Wild Fauna and Flora (CITES). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Violations of Customs law can include export and import of banned tree species, timber traded in contravention of national bans, cross-border movements without a licence or other necessary documents, use of fraudulent documents, underestimation of volumes and tonnage, and misclassification of wood products and species. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The WCO strongly urges its 177 Members to report all illegal seizures to the Customs Enforcement network (CEN) and make greater use of the WCO ENVIRONET system for the rapid exchange and dissemination of information relating to the illegal trade in timber. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian Revenue Service can help in saving forests</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YOU</strong> go to any Customs, Excise, or Service Tax office – the place is full of mountains of paper. Before a Show Cause Notice is issued thousands of papers are seized and copious copies are made. Some lawyers prepare big bundles of books in reply to Show Cause Notices, more to impress the client than the adjudicator. The Audit parties visiting the assessees collect copies of several unwanted documents, often in triplicate. The other day an assistant to an adjudicating authority asked me for copies of hundreds of invoices. I told her that her children and grand children would curse her for her role in destroying forests. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the time the case reaches the Tribunal, the Appeal Book is a big bundle of hundreds of pages of unwanted material. And six copies are made of this bulky bundle. Irrelevant case laws are referred and copies of them are religiously enclosed – Nobody ever reads them! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Hard copies of all Notifications, Circulars and instructions issued by the Board are sent to the Chief Commissioners after a month or so and they are again printed and sent to all the field formations. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't they use all those Computers? </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"> – Wednesday'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">Appellant paid duty on imports made by their clients - Clients also issued notice - Amount paid by appellant should be refunded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> can be seen from the show cause notices issued to the two customers of the appellant, revenue authorities have considered M/s. Reliance Communications Ltd. and M/s. Raymond Ltd. as importers and have secured the interest of the revenue by directing those two customers to deposit the differential duty of amount on allegation of mis-declaration of value by them. The said show cause notice also admits that the appellant has deposited an amount of Rs.5,21,98,021/-.</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 loans received as brokerage against sale of property by assessee, a real estate agent, from companies in which assessee held shares, are liable to be held as deemed dividend - YES, rules Delhi HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench is - Whether loans and advances received as brokerage commission against sale of property by the assessee, in the business of real estate, from companies in which he held shares, is liable to be treated as deemed dividend or Whether payments towards share application money made by companies in which assessee held shares of companies in which he had a substantial interest is liable to be treated as deemed dividend. YES is the High Court's answer. </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">‘Panel for Air-conditioners' supplied to Research Institutions registered with Department of Scientific and Industrial Research are entitled for exemption under notification no. 10/97-CE – Revenue appeal rejected: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>short question involved in this case is, whether the respondent are entitled for exemption under Notification no. 10/97-CE dated 01.03.1997 in respect of ‘panel for air conditioners' supplied by them to their buyer which is registered with the Department of Scientific and Industrial Research or not? </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 color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></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>
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