TIOL-DDT 1698 · 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 1698</font><br> 22.09.2011<br> Thursday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Telephone Services Provided through Village Panchayat Telephones - CBEC Clarifies</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BSNL</strong>, which was earlier (that is, prior to 1.11.2000) known as Department of Telecommunications, had been rendering telephone services through Village Panchayat Telephone (VPT) for local call facility.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.3/94-ST dated 30.6.1994 exempts specified taxable services and includes ‘<em>Departmentally run Public Telephones for local calls'</em> (Sl.No.12 of the table under the Notification). Thus, up to 31.10.2000, the Department of Telecommunications was correctly availing exemption under the above provisions for rendering the said services. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, after 1.11.2000, Department of Telecommunications was corporatized into BSNL, a public sector undertaking. <strong>Therefore, a doubt has arisen as to whether BSNL would be eligible for the said exemption under Sl.No.12 of the table appended to notification No. 3/94, since it is not a government department anymore. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There have been conflicting views on the subject and a clarification has therefore been requested.</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Explains:</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl.No.13 of the table appended to the Notification No. 3/94(S.T.) dated 30.6.94, there is exemption for ‘ Guaranteed Public Telephone operating only for local calls ' and therefore, BSNL is eligible for exemption under this provision. In this context, the PSU Division of Department of Communications, Ministry of Communications and IT, has also clarified that Village Public Telephones (VPTs) with facility of local calls (without 95 dialing facility or STD facility) would fall under the category of ‘<em>Guaranteed Public Telephone operating only for local calls</em>.</font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And Clarifies:</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, even after 1.11.2000,<font color="#FF6633"><strong> BSNL continues to be covered under the ambit of the said notification (by virtue of Sl.No. 13 of table appended to the notification) and, therefore, are clearly eligible for exemption. </strong></font></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/sercir146.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 146/15/2011-ST., Dated: September 20, 2011</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The terms such as ‘local calls', ‘local area', ‘Exchange' etc are highly technical</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHY</strong> all this fuss now over local calls on BSNL phones. Has anyone seen them lately? What with a villager earning Rs. 26 a day being categorized as not poor, certainly they can afford a cell phone! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any way this was a matter of interesting litigation a few years ago. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In<em> BSNL v CCE, Pune II - </em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2008/2008-TIOL-1339-CESTAT-MUM.htm" target="_blank"><font size="1">2008-TIOL-1339-CESTAT-MUM</font></a></strong>, the Tribunal remarked, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The law has to keep pace with the rapid technological advances made/being made in the field of communication. Further, Notification no. 3/94-ST was issued in 1994, when mobile phones was not heard of. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <strong><font color="#FF6633">The terms involved such as ‘local calls', ‘local area', ‘Exchange' etc are highly technical</font></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ We feel that the Department of Telecommunications is the appropriate authority to resolve the conflict. The meaning of the expression ‘local calls' and ‘guaranteed public telephone' occurring at Sl. No. 13 of the Table annexed to the Notification 3/94-ST dated 30.6.1994 needs to be clarified by the Department of Telecommunications. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Amendment to Notification 3/94-ST may also be thought of by the Department of Revenue, Ministry of Finance, keeping in view the technological advances made in the field of communication so as to clearly bring out the intention of the Government. </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After three years, comes the Board clarification. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Morpholine </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed provisional anti dumping duty on Morpholine falling under sub heading 2933 3917 of the Customs Tariff, originating in, or exported from, China PR, European Union and the United States of America. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification clearly states the anti dumping duty imposed shall be effective for a period not exceeding six months. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope they remember this when they extend it retrospectively. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_091.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 91/2011-Cus.,, Dated: September 20, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Rubber Chemical PX-13 (6PPD) Continues with Modified Rates </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI</strong> Dumping Duty on Rubber Chemical PX-13 (6PPD) falling under Chapters 29 and 38 of the Customs Tariff, was imposed by Notification No. 133/2008 dated 12th December 2008. It was provisionally imposed by Notification No. 61/2008 dated 5th May 2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the duty is re imposed for the goods originating in, or exported from, Korea RP and will be effective till 4th May 2013.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently, the entries relating to Korea in the Notification No. 133/2008 are deleted. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_092.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 92/2011-Cus., Dated: September 20, 2011 </strong></font></a></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_093.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 93/2011-Cus., Dated: September 20, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Electronic Fund Transfer - Dishonour - Same Liabilities as NI Act</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> RBI has reiterated that section 25 of the <em>Payment and Settlement Systems Act, 2007</em> accords the same rights and remedies to the payee (beneficiary) against dishonour of electronic funds transfer instructions for insufficiency of funds in the account of the payer (remitter), as are available to the payee under section 138 of the Negotiable Instruments Act, 1881. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The sub-section (5) of the section 25 of the Payment and Settlement Systems Act, 2007 provides for punishment of two years and twice the amount of electronic funds transfer instruction, or both for dishonour of such electronic funds transfer on par with the penalties stipulated for dishounour of cheques under the Negotiable Instruments Act, 1881. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has asked banks to popularise the electronic fund transfer modes among customers by allaying any apprehensions on the rights and remedies available to the payees against dishonour of electronic funds transfer instructions. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank">RBI DOC/2011-12/191, Dated: September 21, 2011 </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Poor in India - an Endangered Species? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> whole of yesterday, I spent in finding a genuine poor Indian. The Planning Commission, headed by an eminent Economist who also doubles as the Prime Minister of the Country and consisting of all eminent high brow economists, tells us through the Supreme Court of India that anybody who makes about a thousand rupees a month in Urban India, is not poor. My domestic help makes about Rs. 4000 and her husband as a watchman makes about Rs. 7000 and the wise economists of the country tell me that they are pretty rich! I was having a lot of compassion for the couple assuming they were poor. A driver tells me that he makes about Rs. 5000 – quite rich. A cobbler told me that his family income is about Rs. 8,000. Even a beggar I met admitted to earning about Rs. 200 per day. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I met an Inspector of Central Excise who makes about Rs. 35,000 per month – pays Rs. 12000 as house rent, saves Rs. 8000 in GPF, Rs. 4000 rupees on his children's' education; Rs. 10,000 on household expenditure, Rs. 3000 on transport – already he is in deficit. Planning Commission says he is super rich! An about to retire Secretary to the Government is worried where he is going to stay after retirement. His honest career is going to give him a total of Rs.30 Lakhs on retirement. A small flat in Delhi costs two Crores. He calls himself a poor Government Servant. Planning Commission thinks different. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I am really worried that soon we may not have any poor people left in the country and when there is no poverty, maybe there is no need for so much of governance and 75 percent of the Government machinery can be closed down. Maybe, we can bring down the poverty level to one rupee a day and Lo and behold, we can simply abolish poverty in India and declare India as a rich country – all that we need is a report from the Planning Commission. Prosperity anywhere seems to be a threat to poverty everywhere. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But do we really need a Planning Commission? </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><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">Central Excise </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tribunal committed a breach of judicial discipline in distinguishing Supreme Court judgments; Tribunal directed to hear appeal without pre-deposit. Counsel asked to explain how Tribunal did not follow judicial precedents: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRIMA</strong> facie, the Tribunal committed breach of the judicial discipline in distinguishing the Supreme Court judgments, applicable to the facts of the case by giving its own reasons. It has not only differed on reasons given on same facts, but has also ventured to distinguish the reasons given on the question of law.: the counsel appearing for the department called upon to explain as to how the Custom, Excise & Service Tax Appellate Tribunal could have taken a different view both on the facts and the question of law, which are prima facie covered by the judgments delivered in similar cases which were decided in favour of companies manufacturing the jute carpets.</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 a liability, otherwise deductible, is not to be allowed because of overriding effect of provisions of SICA - NO, rules HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> <strong>questions before the Bench are</strong> - Whether a liability otherwise accrued and deductible under the Income Tax Act becomes a contingent liability only because a consent of the Board or the Appellate Authority is required for its recovery under the provisions of Section 22 and Section 22-A of the Sick Industrial Companies (Special Provisions) Act, 1985 – Whether in such circumstances, the liabilities otherwise allowable as deduction under the provisions of Income Tax Act would not be allowable because of the overriding effect of Section 22 of SICA. And the verdict goes in favour of the assessee. </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">Manufacturer of excisable goods has to file appeal under provisions of Central Excise Act, 1944 if dispute relates to <em>CENVAT Credit</em> on service tax paid on input services: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is manufacturer of excisable goods and the dispute is regarding availment of CENVAT Credit on input service. The appellant had filed appeal under the provisions of Finance Act, 1994 before the Commissioner (Appeals) which was dismissed as time barred by holding that the appeal should have been filed under the provisions of Central Excise Act, 1944. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What if manufacturer who is also providing output service takes credit on some common input service like telephone? Appeal should be under CE Act or under the Finance Act? Why can't the confusion be eliminated by having common time periods for central excise as well as service tax matters? </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> <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> </body> </html>