TIOL-DDT 1679 · 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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1679 </font><br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>25.08.2011 <br> </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Thursday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service tax on renting - Validity and Retrospective amendment upheld - Interim stay orders to continue till month end - High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Bombay High Court has upheld the levy of Service Tax on renting and the retrospective amendment of the Act. The High Court held that the legislative basis that has been adopted by Parliament in subjecting taxable services involved in the renting of property to the charge of service tax cannot be questioned. The assumption by a legislative body that an element of service is involved in the renting of immovable property is certainly not an assumption which can be regarded by the Court as being so manifestly absurd or perverse as to lead to an inference that Parliament had treated as a service, an item which in no rational sense could be regarded as involving service. But more significantly, even if the Court were to proceed on the basis, suggested by the Petitioners that no element of service is involved, that would not make the legislation beyond the legislative competence of Parliament. So long as the legislation does not trench upon a field, which has been reserved to the State legislatures, the only conclusion that can be drawn is that the law must be treated as valid and within the purview of the field set apart for Parliament. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court held that plenary power of Parliament to legislate can extend to enacting legislation both with prospective and with retrospective effect. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is certainly not the end of the story - the matter will go the Supreme Court. Immediately after the judgement was delivered, the Counsel requested the High Court to extend the interim stay granted earlier to enable the Petitioners to seek recourse to their remedies in appeal. The High Court directed that interim orders would remain operational for four weeks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But is it worth challenging a levy? Please see, “ <em>Challenging Imposition of Service Tax - Not a Wise Business Policy </em>? <strong>” </strong>in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12673" target="_blank">DDT 1635 - 22.06.2011</a>.</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you the Bombay High Court order today. Please see<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13034" target="_blank"> <strong>Breaking News</strong></a><strong>.</strong> </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CHA Licence Examination - Time to Clear Additional Papers </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BOARD</strong> had by Circular No.9/2010-Customs dated 8.4.2010, stipulated that persons qualified in written and oral examination held under Regulation 9 of the Customs House Agents Licensing Regulations (CHALR), 1984 but who were not granted Licence, are required to qualify in additional subjects to become eligible for grant of Licence under CHALR, 2004. Further, para 8.1 of the said Circular provides for <strong>one time </strong> opportunity to appear in examination for additional subjects to qualify them for grant of CHA Licence. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has re-examined the issue and observed that the intention of allowing these applicants to appear in the examination for additional subjects such as </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) The Patents Act, 1970 and Copyright Act; 1957 </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Central Excise Act, 1944 </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Export promotion schemes, </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Procedure on appeal and revision petition, </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) Prevention of Corruption Act, 1988, </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) Online filing of electronic Customs declarations, </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) Narcotic Drugs and Psychotropic Substances Act, 1985 and </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(h) Foreign Exchange Management Act, 1999 </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">was to ensure that they have working knowledge in these subjects as prescribed under CHALR, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, restriction on providing one time opportunity to qualify the examination for additional subjects for grant of CHA licence does not appear to be justified and needs re-consideration. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has decided that all such applicants who had already passed the examination held under regulation 9 of CHALR, 1984 but have not been granted licence and are seeking qualification in additional subjects shall be allowed to clear the examination by 31.12.2012 irrespective of number of chances to become eligible for grant of CHA licence in terms of Regulation 9 of CHALR, 2004. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also wants the DGICCE to conduct necessary examinations expeditiously, after giving due notice to these candidates. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board should consider making it mandatory for all its officers to clear an annual examination on all the above subjects and some more. The annual increment should be denied to officers who do not clear the examination and those who clear the examination should go up in the seniority list. That way we will have more officers that are knowledgeable at the top. </font></strong></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_038.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circular No. 38/2011-Customs, Dated : August 24, 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on Caustic Soda </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> had imposed anti dumping duty on Caustic Soda originating in, or exported from, Thailand, Chinese Taipei and Norway. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti-dumping duty imposed shall be levied for a period of five years (unless revoked, superseded or amended earlier) from the 23.08.2011 and shall be payable in Indian currency. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_079.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 79/2011-Cus , Dated: August 23 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Minimum Export Price of Onions Increased </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has increased the Minimum Export Price (MEP) of onions other than Bangalore Rose Onions and Krishnapuram onions to USD 300 per MT F.O.B. It was USD 275 per Metric Ton as notified on 12.08.2011. There is no change in Minimum Export Price (MEP) of Bangalore Rose Onions and Krishnapuram onions and it will continue to be USD 400 per Metric Ton F.O.B. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not068.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification No. 68 (RE-2010)/2009-2014, Dated: August 24 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Briefcases/Suitcases/Beautycases - SION Amended </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended SION No. H-3 of Plastic Product Group (Product Code H). There has been advancement in the technology in the field of manufacture of ‘Briefcases/Suitcases/Beautycases'. Due to advancement in the technology, Poly Carbonate (PC) is being used in place of ABS/other polymers, to provide higher impact strength. The amendment enables import of required raw materials for exports of ‘Briefcases/Suitcases/Beautycases' made up of Poly Carbonate. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn073.htm"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 73 (RE-2010)/2009-2014,Dated: August 23 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Allocation of quantity of Rough Marble Blocks </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>Trade Notice number 16 dated 17 th August 2011, allocation of 5 lakh MT of rough marble blocks has been made to 397 applicants for ITC HS codes 25151100 and 25151210 as indicated in Notification No. 64 of 4 th August 2011. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT wants RAs to scrutinize the ITC HS codes, IE codes etc in the allocation made on 17 th August 2011, for any typographical error/ or any error of clerical/ editorial nature, which may be appropriately corrected based upon actual scrutiny of documents submitted by allottees and documentary evidence so produced during such scrutiny. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT reiterates that any misdeclaration by an allottee shall invite action as mentioned in para 5 of Trade Notice number 16 of 17 th August 2011. The actions mentioned in that Trade notice were:- </font></p> <blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Forfeit the allocation </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Shall be debarred from allocation of marble in future and </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Shall be liable for penal action under the provisions of Foreign Trade (D&R) Act, 1992 </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=329&filename=notification/dgft/2010/dgft_trade_notice_18_2011.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Trade Notice No. 18/2011- Dated: August 24 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - Refund of Excess Amount of TDS Deducted and/or paid - CBDT Clarification </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>Circular No.2/2011 dated 25.4.2011, CBDT had clarified that; <em>no claim of refund can be made after two years from the end of financial year in which tax was deductible at source.</em> Now, the Board clarifies that ‘ <em>The refund claims pertaining to the period up to March 31, 2009 may be submitted to the Assessing Officer (TDS) up to 31.12.2012.</em>' </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2011/it11cir06.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Circular No. 6/2011- Dated: August 24 2011 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Director General of Income Tax (Intelligence and Criminal Investigation) - The New Super Sleuth? </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has notified the powers and jurisdiction of the DGIT and Directors, Intelligence and <strong><font color="#FF6633">Criminal Investigation</font>.</strong> Is it going to be another CBI for tax offence cases? The Directorates of (Intelligence and Criminal Investigation) are to be established at Delhi, Mumbai, Chennai, Kolkata, Chandigarh, Jaipur, Ahmedabad and Lucknow, with the DG in Delhi. Though the offices will be in these 8 locations, the officers will have All India jurisdiction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CI (Criminal Investigation) is said to be modelled on the US IRS Criminal Investigation (CI). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On July 1, 1919, the US IRS Commissioner created the Intelligence Unit to investigate widespread allegations of tax fraud. To establish the Intelligence Unit, six United States Post Office Inspectors were transferred to the Bureau of Internal Revenue to become the first special agents in charge of the organization that would one day become Criminal Investigation. They formed the nucleus that built the Intelligence Unit into an elite group of highly trained, dedicated professionals, who are recognized as the finest financial investigators in the world. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Intelligence Unit quickly became renowned for the financial investigative skill of its special agents. It attained national prominence in the thirties for the conviction of public enemy number one, Al Capone, for income tax evasion, and its role in solving the Lindbergh kidnapping. From these promising beginnings the Intelligence Unit expanded over the intervening decades, investigating tax evasion by ordinary citizens, prominent businesspersons, government officials, and notorious criminals. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In July 1978, the Intelligence Unit changed its name to Criminal Investigation (CI). Over the years CI's statutory jurisdiction expanded to include money laundering and currency violations in addition to its traditional role in investigating tax violations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since CI's inception in 1919 to the present, the conviction rate for Federal tax prosecutions has never fallen below 90 percent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In India, the Intelligence wing was created in the Income Tax Department in 1966 and now it is also the CI wing. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2011/it11not042.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Notification No. 42/2011- Dated: August 19 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"> - Friday's cases</font></strong></font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" 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">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Short receipt of molasses - loss is within the permissible limit of 1% as per Bombay Molasses Rules, 1955 - Assessee entitled to take full CENVAT credit on the quantity shown in the invoices - Revenue appeal dismissed: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>respondents are the manufacturer of various organic chemicals for which they required molasses as an input. The respondents are availing credit on molasses used in manufacturing of their final product. Molasses is procured from various sugar factories. It was found that the quantity of molasses received was less than the quantity mentioned in the invoices but the respondent had availed CENVAT credit on the full quantity shown in the invoices, therefore a show-cause notice was issued for reversal of CENVAT credit taken in excess against the short receipt of molasses. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clear assertion in SCN that raw materials are non-duty paid - Benefit of notification 202/88-CE not available: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> clear allegation to that effect was made in the Show Cause Notice with the virtual assertion that the said materials were cleared by manufacturer without payment of duty. The appellants have not made any efforts to bring on record the fact of payment of duty in respect of such materials by manufacturer. </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 conduct of valid search is pre-requisite for issue of notice for making assessment u/s 153A - YES, rules High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong>, a society, was created for charitable purpose to impart technical education and was registered u/s 12A. The Society had been conferred upon the status of “Deemed University” by the University Grants Commission. Pursuant to two search warrants issued in the name of ‘M', search and seizure operations were carried out in the residential premises of ‘M', the President of the Society. The questions before the High Court are - Whether when a Search is conducted u/s 132, the absence of warrant in the name of the assessee renders it invalid and whether conduct of a valid search is a pre-requisite for issue of notice for making assessment u/s 153A. 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>Toll charges collected from the users of the Highway towards 'management, maintenance or repair' service - Pre-deposit waived: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHERE</strong> the department itself maintained doubt on whether service tax could be levied on “management, maintenance or repair” of roads, highways etc. any bona fide belief on the part of the appellants that they might not be liable to pay service tax on such activities, cannot be suspect. If that be so, prima facie, the extended period of limitation was not rightly invoked in these cases. </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></p> </body> </html>