TIOL-DDT 1642 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1642 </font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>01.07.2011<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value reduced 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 4323 to USD 4317. Tariff value of poppy seeds is decreased from 2520 USD to 2405. There is no change in the value of other items. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_042.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 42/2011-CUS (N.T.), Dated: June 30, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Authorising EIC for issuing Certificate of Origin under India-Malaysia Comprehensive Economic Cooperation Agreement </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has amended the Appendix 4D of Handbook of Procedures Vol-I, 2009-2014 to include India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EIC would also be the authorised agency to issue Certificate of Origin under India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA), with effect from 1st July 2011. </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=47&filename=notification/dgft/2010/dgft10pn058.htm" target="_blank">DGFT Public Notice No. 58/2009-2014 (RE-2010), Dated: June 30, 2011</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Export - pharmaceuticals – Bar-coding – Not from Today </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EXPORTERS</strong> of pharmaceutical products were required to adopt a trace and track system and incorporate its features for exported medicines using barcode technology as per GS 1 global standards as detailed below: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>a. Primary Level packaging requirement: </strong> Incorporation of 2D (GS1 Data matrix) barcodes on medicines at strip/vial/bottle, etc. encoding unique product identification code (GTIN) and Unique Serial Number of the Primary pack. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>b. Secondary Level packaging requirement: </strong> Incorporation of barcodes (1D or 2D) encoding unique product identification code (GTIN), Batch Number, Expiry Date and Unique Serial Number of the Secondary pack. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>c. Tertiary Level packaging requirement: </strong> Incorporation of barcodes (1D) encoding unique product identification code (GTIN), Batch Number, Expiry Date and Unique Serial Number of the Tertiary pack (shipper/carton). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was to come into effect from today – 01.07.2011. Now it is extended to 01.07.2012, 01.01.2012 and 01.10.2011, for (a), (b) and (c) respectively. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case the importing country has mandated a specific requirement, the exporter can adhere to the same and it would not be necessary to comply with the stipulations at serial number a, b & c above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the track and trace system, manufacturers would be required to maintain serialized record of exported pharmaceutical products for a minimum period of six months after the expiry date of the product. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn059.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 59/2009-2014 (RE-2010), Dated: June 30, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP
- Procedure relating to export of pharmaceuticals and drugs</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECTOR </strong>General of Foreign Trade has notified with immediate effect, procedures /guidelines to strengthen the enforcement mechanism available under the Drugs and Cosmetics Act, 1940 to ensure that counterfeit drugs do not get exported out of the country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Every exporter of Drugs & Pharmaceuticals at the time of shipment shall submit, along with other required documents: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A copy of Certificate of Analysis issued by the manufacturer for the subject product; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A copy of Certificate of Analysis issued by approved laboratory of the importing country / FDA; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A copy of Certificate of Analysis issued by a laboratory approved by Drugs Controller under Drugs & Cosmetics Act, 1940 and the rules made there under. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wherever required the officials of the Drug Control Department posted at the port offices may retain a sample of the consignment for the purpose of reference and tracking of the manufacturer / exporter of the subject product. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn060.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 60/2009-2014 (RE-2010), Dated: June 30, 2011</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Failure to Export Cotton – Defaulters – DGFT also Needs a Spell Checker</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRADE </strong>Notice No. 01 dated 10.1.2011 was issued allocating a quantity of 19 lakh bales of cotton for export among 928 applicants for registration of contracts. In terms of Note (i) of Registration Certificate, the exporters who have got Registration Certificates from the four Zonal offices of DGFT and DGFT (HQ) were required to submit the proof of shipments within 10 days of last shipment.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The firms whose name appear in the Annexure 1 to the Trade Notice are debarred from future allocation for export of cotton. The reasons for default have been indicated against each of the firms. It may be noted that the names of the firms who have exported upto 5% less/excess than the allocated quantity (quantity taken in MTs & converted into bales; 1 bale = 170 Kg) have not been included in the list. The list has been prepared based on export figures provided by <strong><em>concerned </em></strong> Regional Authority of DGFT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The exporters whose name appear in the Annexure-1 of the Trade Notice and have any objection with regard to (i) excess/ shortfall in exports or (ii) who have effected exports and submitted the documents within stipulated time, may approach the <strong><em>concerned </em></strong> RC issuing authority within 3 days along with all necessary documents for rectification of error, if any. The <strong><em> concerned </em></strong>RC issuing authority will verify those documents and rectification, if required, will be done. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case any representation is received, <strong><em>concerned </em></strong> RAs are advised to examine the same and send its report to the undersigned immediately, positively same day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Penal action as per section 11(2) of FT (D&R) Act is being taken separately. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this Annexure -1 is issued by the <strong>Depatment of Commerce</strong>, <strong>Directorate Genreal of Foreign Trade</strong>. Please note that the spellings of <strong>Department </strong> and <strong>General </strong>are wrong. Any word processor would have shown the mistake, but obviously, the <strong>concerned </strong>babu does not bother to check. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many officers get very angry when <strong>DDT </strong> points out such silly mistakes, but why should they make such silly mistakes? Can't they be a little more careful?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/trade_notice_011_11.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Trade Notice No. 11 , Dated: June 29, 2011</strong></font></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"> – Monday'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>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Activity of conducting stability test and validation analysis of samples of goods manufactured on job work basis by assessee – 'Technical Testing and Analysis service' – Pre-deposit of Rs. 4.55 lakhs ordered : CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant was engaged in manufacture of P or P medicaments on job work basis. As a part of the manufacturing activity, the appellant conducted stability analysis and validation tests on samples and recovered ‘stability analysis charges' and ‘validation charges' separately from the principal. The original authority demanded service tax with interest and imposed penalties under sections 76 & 78 alleging that the appellant failed to follow statutory formalities for paying service tax under the head ‘Technical Testing and Analysis service'. On appeal, Appellate Commissioner sustained the demand of service tax with interest but vacated penalty imposed under section 76 of the Act. Aggrieved by this order, the appellant filed an appeal before CESTAT seeking waiver of pre-deposit and staying recovery of the dues confirmed against them. </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>Sec 145 - Whether, if there is a mismatch of modvat credit and Central Excise duty payable on closing stock, rejection of books is justifiably warranted - NO, says ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE </strong>assessee company, engaged in the business of manufacturing of aluminum conductors and trading in shares and securities, filed its income tax return, which was picked for scrutiny. During the course of proceedings the AO observed about the MODVAT credit as mentioned in the audit report under section 44AB that out of total unutilized MODVAT of Rs. 71,45,581, an amount of Rs. 21,11,596, was included in the closing stock of finished goods which implied that the balance amount of Rs. 50,33,985, was unutilized MODVAT relating to the raw material stock. However, the value of closing stock of raw material was Rs. 1,43,44,522, and the excise duty relating that closing stock included in the MODVAT account was only Rs. 9,60,366. In view of this difference the AO formed a view that the books of the assessee were not correct and accordingly he rejected the books and framed the assessment after applying gross profit rate. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs – Settlement Commission</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Settlement Commission has the power to impose penalty wholly or in part: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Settlement Commission has the power to decide the terms of settlement on duty, penalty or interest, which has been done in this case. While passing an order in terms of section 32F of the Central Excise Act, 1944, the Settlement Commission has the power to grant immunity from prosecution. It has the power to impose penalty wholly or in part. The petitioner's plea of error in the order imposing duty, penalty and interest as bad on the ground that the specific provision has not been referred to is a misconceived plea and not tenable in law. The discretion is left to the Settlement Commission to impose appropriate duty, penalty and interest. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice weekend.</font></p>
<div 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></div>
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