TIOL-DDT 1658 · 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=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1658</font><br> 25.07.2011<br> Monday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Exemption - Goods for Mega Power Project - Certificate </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOODS</strong> required for setting up of any Mega Power Project and goods required for the expansion of any existing Mega Power project, so certified by an officer not below the rank of Joint Secretary to the Government of India in the Ministry of Power, are exempted from Customs Duty vide Sl. Nos 400 and 400A of the table of Notification No. 21/2002 – Cus dated 01.03.2002. There are certain conditions as prescribed by Condition No. 86.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has added another clause viz., clause (aa) to Condition No. 86 which is as follows:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case of imports for a project for which the certificate regarding Mega Power Project status issued by an officer not below the rank of Joint Secretary to the Government of India in the Ministry of Power is provisional, the importer furnishes a security in the form of a Fixed Deposit Receipt from any Scheduled Bank for a term of thirty six months or more in the name of the President of India for an amount equal to the duty of customs payable on such imports but for this exemption, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, at the time of importation and if the importer fails to furnish the final Mega Power status certificate within a period of thirty six months from the date of importation, the said security shall be appropriated towards duty of customs payable on such imports but for this exemption.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_065.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 65/2011-CUSTOMS, Dated : July 21 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise - Exemption - Mega Power Projects </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is an exemption under Central Excise, 6/2006–C.E DATED 01.03.2006 too for Mega Power Projects and Ultra Mega Power Projects and the existing conditions 26 and 28 under the said Notification are replaced by a new set of conditions. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2011/etariff11_35.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 35/2011-CX., Dated: July 21, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">GST will Lead to a Corruption-free Tax Administration </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> a National Conference organised by ASSOCHAM, CBEC Chairman Dutt Mazumder said, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Introducing GST will lead to a corruption-free tax administration and more tax revenues due to efficient collection and increased compliance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ April 2012 deadline for implementation of the long-awaited GST could be moved to June or July 2012 as the central and state governments continue trying to resolve their differences. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The GST will be an indirect tax imposed by all states and the central government and replace existing levies such as central sales tax, state sales tax, entertainment tax, lottery tax, electricity duty, stamp duty and value added tax. Exports and direct taxes such as income tax, corporate tax and capital gains tax will not be affected. ??</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The tax will be collected on goods and services at each stage of sale or purchase in the supply chain and there will be a tax credit mechanism set in place. The end consumer – as the last person in the supply chain – will bear the final tax. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Some state governments have been concerned about a loss in their revenue and worry that the tax reform will give too much power to the central government.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Tax rates under the GST regime are likely to be between 16 per cent and 20 per cent.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ A robust information technology infrastructure called GST Net is being put in place for implementation of the GST.</font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">TDS of Service Tax?</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is reported that the Government is contemplating TDS of Service Tax. Government feels that this step would boost up revenue and plug evasion. TDS has been very successful in Income Tax and maybe the Government is tempted to replicate this model in Service Tax, but this may not be all that easy in Service Tax as compared to Income Tax. With so many complications and classifications, Service Tax TDS may create more problems than it would solve. Who will decide whether the service is taxable at all and whether an exemption can be availed? There is a suggestion that Service Tax recipient should be made liable in all cases or at least in cases where the liability is more than a certain amount of tax or when the recipients are PSUs.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is not altogether a new concept.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nearly four years ago, the CBEC toyed with the idea of TDS of Central Excise. [Please see<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6619">DDT 777 – 08 01 2008</a></strong>]</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board had suggested:</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ To start with we may focus on big purchases (say Rs. 10 lakhs and above) by big Government purchasers like the Railways, the Defence, P&T Department and DGS&D. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ We may provide by rule to have clearance of excisable goods from the factory for such supplies without payment of duty against the indent issued by the purchasing department, under Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 (analogous to the erstwhile Chapter-X procedure for supply of OE to industrial consumers). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The purchasing department will work out the CE duty component from the purchase price and deduct the same at source in a way analogous to the system of deduction of Income Tax at Source. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ At the quarterly interval, they will forward CE duty so deducted at source to the Department. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Cenvat credit availed on the inputs used in the manufacture of such goods may be treated at par with manufactured goods under export, as provided under Rule 5 of Cenvat Credit Rules, 2004. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We really don't know what happened to this grand scheme. Board had asked the Chief Commissioners to give their opinions. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the file is ‘under active consideration' somewhere. </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"'The matter is under consideration' means we have lost the file. 'The matter is under active consideration' means we are trying to find the file."</font></em></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Expensive Photocopying? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENTRAL</strong> Excise officers had seized records from a factory and the poor assessee wanted photocopies of the seized documents for some statutory purpose. The Central Excise Authorities usually don't recognise the existence of other Government departments, which would also like to seize records. The assessee approached two Superintendents of Central Excise for the photocopies. The copies turned out to be extremely expensive for the assessee as well as the Superintendents. The Superintendents collected Rs. 15,000/- from the assessee – only to be caught red-handed by the CBI. The CBI also recovered Rs. 3 Lakhs from the car of one of the officers. <strong>(Please see our story</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=mbuzz/mbuzz2831.htm"><strong>Nagpur CBI arrests two Central Excise Superintendents in bribery case</strong></a><strong>)</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A bribe need not always be for a favour; it can even be for what is yours by right! </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><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><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">Central Excise</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">'Intended for use' - subject to different kinds of interpretation - Larger period of limitation not invokable: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is a question of interpretation of notifications and whether the term “intended for use” can cover the quantity of LSHS/LSWR consumed in the generation of electricity for internal use is subject to different kinds of interpretation. Therefore, it cannot be said that the appellants have willfully misdeclared the details relating to consumption of LSHS/LSWR. The very fact that NLC had also availed exemption would also support the case of TPCL. Therefore, following the decision of the Tribunal in the case of NLC held that the demand with regard to the extended period beyond the period of normal limitation cannot be sustained. </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 penalty can be imposed when annual rent mentioned in Lease Agreement is found to be suppressed - Yes, rules Delhi HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee entered into a Memorandum of Intent with the Bank to let out its property. Thereafter, the prescribed Form No.37-I was filed u/s 269UC, and the appropriate authority issued a certificate u/s 269UL(3) giving no objection. Thereafter, the appellant by a Lease Agreement had leased out its aforesaid property to the Bank at rental Rs.1,00,000 per annum. As per the aforesaid Lease Agreement, the property admeasuring 11,499 sq. yds together with five existing buildings or structure standing thereon was let out on rent to Bank. The assessee had leased out the said premises having aggregate constructed area of 1,23,490 sq. ft. for a term of 25. The assessee had received a sum of Rs.67,00,00,000/- as interest free deposit from the lessee i.e. Bank. For the A.Y 2006-07, the assessee filed a return of income, declaring loss of Rs.3,87,912/- along with computation of income and annual audited accounts. The assessee had shown rental income of Rs.1,00,000/- per annum based on the aforesaid Agreement dated 06.08.2001 entered into with Bank. The said return of income filed by the assessee company was accepted in intimation u/s 143(1). Thereafter, the case was selected for scrutiny. The AO by an order of assessment u/s 143(3) assessed the income of the assessee at Rs.52,94,352. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imposition of a penalty on partnership firm as well as on partners under Section 112 of Customs Act is permissible and justified: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR</strong> the purpose of imposing a penalty, the adjudicating authority under the Customs Act, 1962 may in an appropriate case impose a penalty both upon a partnership firm as well as on its partners. Whether the facts and circumstances of a case warrant the imposition of a penalty both on a firm and its partners should be decided upon the facts of each case. </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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>