TIOL-DDT 1675 · 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 1675 </font><br>
18.08.2011 <br>
THURSDAY </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Valuation - Imported Music CDs - Royalty to be included in Assessable Value – SC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court in a judgement delivered yesterday held that if a pre-recorded music cassette or a popular film or musical score is imported into India, duty will necessarily have to be charged on the value of the final product. As per Rule 9, in determining the transaction value there has to be added to the price actually paid or payable for the imported goods, royalties and the license fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of sale of goods. Therefore, when pre-recorded music cassette is imported as against the blank cassette, definitely, its value goes up in the market which is in addition to its value and therefore duty shall have to be charged on the value of the final product. Therefore, there can be no dispute with regard to the fact that value of the royalty paid is to be included in the transaction value. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We bring you this judgement today. Please <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12985" target="_blank">Breaking News</a>. </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value Increased for Brass Scrap and Decreased for Poppy seeds </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has increased the tariff values of Brass Scrap (all grades) from USD 4261 to USD 4399. Tariff value of poppy seeds is decreased from 2276 USD to 2242. There is no change in the value of other items. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_057.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 57/2011-CUS (N.T.), Dated : August 12, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Welcome Changes in CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no President for CESTAT now. The Senior Vice-President is holding charge. Keeping in view of the difficulties pointed out by the various Members of CESTAT Bar Association, and in order to clear heavy pendency, changes in Cause Lists are proposed from 5 th September 2011. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ All short matters will be listed for hearing on all days in CESTAT, Delhi and Mumbai Benches followed by regular appeals. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Two Single Member Benches will sit alternatively on every Friday in CESTAT, Delhi Bench and CESTAT, Mumbai Bench. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In Ahmedabad, one DB will sit every day (including Friday) and one single Member Bench will sit every day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In CESTAT, Chennai, Kolkata and Bangalore Benches, DB will function from Monday to Thursday and Single Member cases will be listed before both the Members on every Friday. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not clear whether short matters will be listed every day in Ahmedabad, Bangalore, Chennai and Kolkata? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is strange that Courts in India hear short matters involving stay, waiver, adjournment, etc., first thing in the morning when everybody is fresh. By the time the more important regular final matters are heard, everybody is tired, hungry and sleepy. Why can't the more important main appeals be heard in the mornings and the short matters be heard later in the day? But with unreasonable and huge demands being confirmed by Revenue biased adjudicators, stay matters are vitally important in the Tribunal. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cestat_circular_01_2011.htm" target="_blank">CESTAT Circular Dated : August 17, 2011 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Allocation of quantity of Rough Marble Blocks for import for Financial Year 2011-12</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of Notification No.64 (RE-2010)/2009-2014 dated 4.8.2011, the allocation of 5 lakh MT of Rough Marble Blocks for import as notified vide Notification No.64 dated 4.8.2011, has been released by DGFT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following categories of e-mails have not been considered: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) e-mails received before 1200 hrs on 6.8.2011 and after 1700 hrs of 10.8.2011; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) e-mails showing cumulative turn-over of less than Rs. 5.00 crores during the period 2005-06 to 2009-10. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) cases where IEC number have not been given(& indicated as “applied for”). </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case, more than one e-mail was received from same IEC holder/firm, only the most recent e-mail has been considered. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=329&filename=notification/dgft/2010/dgft_trade_notice_16_2011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Trade Notice No. 16/2011- Dated: August 17 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI cancels FIR - Retired Income Tax Assistant Commissioner to be paid retirement benefits: CAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant before the CAT was an Assistant Commissioner of Income Tax, who retired on 30.6.2008. The Central Bureau of Investigation (CBI) registered an FIR dated 2.2.2005 under Section 13(2) read with Section 13(1)(c) of the Prevention of Corruption Act, 1988, for the applicant acquiring assets disproportionate to his known sources of income. CBI, after investigation has sent report for cancellation of the FIR in the year 2007, and even though a period of four years has gone by, decision by the Magistrate dealing with the case to accept the cancellation report or not, is still pending. The short and simple case of the applicant is that when no judicial proceedings are pending against him, withholding his retirement benefits would be illegal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Administrative Tribunal observed that the CBI, has already recommended cancellation of the FIR. The matter is pending before the Magistrate for consideration of the cancellation report. It is only after the Magistrate may not accept the cancellation report and may order further investigation in the matter, and on such investigation the CBI collects sufficient evidence which may sustain conviction and the Magistrate may take cognizance, that judicial proceedings can be said to be pending against the applicant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the CAT ordered that the full pension of the applicant shall be restored forthwith and arrears on that count shall be made over to him as expeditiously as possible and definitely within a period of six weeks. The applicant had also asked for interest, which the Tribunal did not grant. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=78&filename=pitara/sercaselaw/caselaw/2011/2011-TIOL-01-CAT.htm" target="_blank">Click here for the CAT order dated 16.08.2011 </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can an application for condonation be filed for delay in passing of Review order by Commissioner? </font></strong></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> received this mail –</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Working in the Technical section of a Central Excise Commissionerate is a great learning experience. Recently, I came across an interesting situation. The order passed by the Deputy Commissioner was reviewed by the jurisdictional Commissioner of Central Excise. Nothing wrong with this, except that the <strong>review order was after three months</strong> from the date of communication of the order passed by the original authority. The Commissioner while directing the Deputy Commissioner to file an appeal before the Commissioner (Appeals) has also directed that an application for Condonation of Delay be filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I went through the review and appeal provisions, sections 35E and 35 of the CEA, 1944, in question and which read - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>“35E. Powers of Committee of Chief Commissioners of Central Excise or Commissioner of Central Excise to pass certain orders.- </strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(1) x x x </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any Central Excise Officer subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Every order under sub-section (1) or <strong>sub-section (2)</strong>, as the case may be, <strong>shall be made within a period of three months from the date of communication</strong> of the decision or order of the adjudicating authority. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) Where in pursuance of an order under sub-section (1) or subsection (2), the adjudicating authority or the <strong>authorised officer makes an application to the</strong> Appellate Tribunal or the <strong>Commissioner (Appeals) within a period of one month from the date of communication of the order under</strong> sub-section (1) or <strong>sub-section (2)</strong> to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply to such application. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>35. Appeals to Commissioner (Appeals).-</strong> (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) hereafter in this Chapter referred to as the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order: </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.” </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A careful reading of the above indicates that – </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the review order has to be necessarily passed within the period of three months specified in section 35E(3) of the CEA, 1944 and there is no relaxation or extension available in the law; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the condonation of delay envisaged in proviso to section 35(1) of the CEA, 1944 is with regard to delay in filing the appeal before the Commissioner (Appeals) after the review order has been received by the adjudicating authority as mandated in section 35E(4) of the CEA, 1944 and it cannot mean to bring under its umbrella the period of three months mentioned in section 35E(3) of the CEA, 1944. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clearly, the direction of the Commissioner to file an application for condonation of delay along with the appeal is erroneous and cannot stand scrutiny of law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Refusing to abide by his diktat is also fraught with serious consequences and hence as an obedient officer, the appeal was filed before the Commissioner (Appeals) seeking condonation of the delay –<strong> delay on the part of the Commissioner to pass a review order within the mandatory period of three months! </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It's fun…real fun… </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">DDT adds </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue as they say is no more <em>res integra,</em> as they say. The Tribunal in <em>Commissioner of Central Excise, Raipur vs Monnet Ispat & Energy Ltd</em> </font></strong></font><strong><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-1133-CESTAT-DEL-LB.htm" target="_blank">2010-TIOL-1133-CESTAT-DEL-LB</a></font></strong><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">, had held, </font></strong></font></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<font color="#663399">The Tribunal has ample power to condone the delay in filing the appeal including the one filed under Section 35E(4) of the said Act</font>. The period which can be condoned in relation to filing of the appeal under Section 35E(4) of the said Act <font color="#663399">would include the period availed by the review committee in terms of Section 35E(1) or 35E(2) of the said Act.</font> As regards the appeals by the Department in terms of Section 35E(4), the same should be filed within one month from the date of communication of the order under sub-section (1) or sub-section (2) of the said section but not beyond four months from the date of communication of order of the adjudicating authority to the review committee. In case there is any delay in this regard, the same can be condoned in exercise of powers under Section 35B(5), on being satisfied about sufficient cause for such delay and power to condone the delay would <font color="#663399">include the period availed under Section 35E(1) or (2) by the reviewing committee to decide about filing of the appeal. </font>” </font></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Nation at war </font></strong></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AMERICA</strong> is at war! It has been invaded from inside by corrupt, unethical, and self-serving groups, gangs, mobs and institutions. This enemy has gained power and is destroying the foundation of America, the essential freedoms of the individual, along with the structures built on that foundation . – a reader's comment in Human Events. </font></em></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We can substitute America with India. </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"> – Friday'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">Refund of cost recovery charges is an administrative function – No appeal to CESTAT or Commissioner (Appeals): CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> refund of cost recovery charges is an administrative function and the respondent herein should have approached the jurisdictional Commissioner or the administrative machinery of the department for refund of the amount instead of filing an appeal under section 35 of the Central Excise Act, 1944. Thus, the appeal itself was not maintainable before the Commissioner (Appeals). </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
supply of food and beverage in sealed containers to international airlines
leaving India amounts to exports within meaning of Sec 80HHC - YES, rules
HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of hotelier and runs and maintains several hotels of international standard in India and also in the business of export of foods etc. to international airlines at Mumbai and New Delhi. The assessee had separate units at Mumbai and New Delhi which supplied food and beverages in sealed containers to international flights leaving India. Such foods and beverages in sealed containers were cleared for transmission to the aircrafts and were also escorted by the Customs Authorities at International Airports. After due clearance from the Customs Authorities, such food and beverages were put on board of the aircrafts going out of India. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Services used for wind mills away from factory are Input Services for manufacturer: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is located in Nagothane, Raigad District and they are engaged in manufacturing of excisable goods falling under chapter 73 of CETA, 1985. They availed CENVAT credit on various services rendered for their wind mill farm situated in Satara District. Viewing that same were not Input Services, a show cause notice was issued and the same were confirmed by both the lower authorities. </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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day. </font></p>
<p><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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