TIOL-DDT 1712 · 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 1712 </font><br>
13.10.2011<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessee being dealer and not manufacturer not liable to pay excise duty under section 11D - Apex Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> short legal question before the Tribunal was whether the assessee, being only a "dealer" and not a "manufacturer" was liable to pay excise duty under section 11D of the Act? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal accepted assesse's plea that the amendment of sub-section (1) of section 11D of the Act, with retrospective effect from September 20, 1991, by section 103 of Finance Act, 2000, had no application to the period in question i.e. July 1997 to August 2000. The Tribunal held as follows:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"There is no dispute before us that demand sustained by the Commissioner was in respect of the goods which were not manufactured by the appellant. Before the Andhra Pradesh High Court the constitutional validity of Section 11-D, before its amendment was under challenge along with other provisions. In order to uphold the constitutionality of the provisions the High Court read down the expression `every person' in sub-section (1) of Section 11-D as the manufacturer/producer as also the expression `every person' appearing in Section 28-B of the Customs Act as the importer. It was the above view that has been expressed by this statutory amendment under Section 103 of the Finance Act 2002 with retrospective effect from 20.09.91. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, we are concerned with the demand for a period from July 1997 to August 2000. Under these circumstances, the appellant's contentions are only to be accepted. No demand can be raised against the appellant under Section 11-D as it is not the manufacturer of the concerned goods. In the result, we set aside the impugned order and allow the appeal." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue took the matter to the Apex Court by filing an appeal under section 35L(b) of the Central Excise Act, 1944.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After hearing both sides, the Apex Court decided the issue in favour of assessee </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2011/2011-TIOL-99-SC-CX.htm" target="_blank">(2011-TIOL-99-SC-CX)</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> by
holding that in view of the period involved in the present appeal, viz. July
1997 to August 2000, there is no infirmity in the impugned order passed by
the Tribunal on merits. It was further held that the present appeal was not
maintainable under section 35L(b) of the Act as it does not involve determination
of any question having relation to rate of duty of excise or to value of
goods for the purpose of assessment. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chairman Speaks to his Officers </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBEC Chairman Dutt Mazumder addressed officers of the rank of JC and above in New Delhi yesterday. He explained to them his efforts in revamping the department and various steps taken like self-assessment in Customs and changes in Service Tax. He impressed upon the officers on the great responsibilities and challenges before them. He is also reported to have explained to them his efforts in getting the cadre review cleared. The Chairman had earlier addressed the officers in Mumbai and Kolkata regions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the Armed Forces, there is a tradition of the retiring chief visiting different Commands, just before their retirement and addressing the officers. It is almost clear now that the Chairman is retiring this month end and not staying on. He has just a couple of weeks before handing over the baton. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Memorandum of Instructions governing money changing activities - RBI Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> has decided to amend certain instructions contained in A. P. (DIR Series) Circular No. 57 [A.P. (FL/RL Series) Circular No. 04] dated March 9, 2009 by amending Parts A and E of the Annexure I thereof as follows: </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Note to Part A: Urban Cooperative Banks (UCBs), fulfilling the eligibility norms, would be considered for authorization as Authorised Dealer Category-I / Authorised Dealer Category -II only. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Part 6: Sales against Reconversion of Indian Currency: ADs Category – I, ADs Category – II and FFMCs may provide facility for reconversion of Indian Rupees to the extent of Rs. 50,000/- to foreign tourists (not NRIs) against ATM Receipts based on the following documents: </font></em></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ Valid Passport and VISA </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Ticket confirmed for departure within 7 days. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Original ATM slip (to be verified with the original debit/ credit card). </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the other instructions contained in the Circular No.57 dated March 9, 2009 remain unchanged. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A P (DIR Series) Circular No. 33/RBI., Dated: October 12, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">EU tax policy in support of EU 2020 Growth Strategy - EU Tax & Customs Commissioner </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EU's</strong> Commissioner for Taxation and Customs Union, Audit and Anti-Fraud, Algirdas Semeta, unveiled his taxation policy as a part of EU 2020 Growth strategy. He said that the proposed EU Tax policy is in the context of stronger economic policy coordination in the backdrop of the current economic situation and challenges faced by the EU Member States. Some highlights of his tax policy are: </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Common Consolidated Corporate Tax Base – CCCTB </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Improving business environment is at the heart of the initiative to harmonise the corporate tax base, better known as the 'CCCTB'. The CCCTB is expected to eliminate tax obstacles on cross-border activities within the Single Market and to encourage foreign investments into the EU. The main benefits of CCCTB are: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ It would ensure that companies opting into the system follow the same rules for calculating their tax bases in every Member State. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Cross-border loss relief would be allowed for companies and permanent establishments operating in the EU as a group. This would eliminate the current over-taxation that arises from the inability to set off cross-border losses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Companies within the same group would no longer have to comply with transfer pricing requirements, and cross-border restructuring operations would be made simpler. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Double taxation and non taxation </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unrelieved double taxation in cross-border situations increases the overall tax burden of enterprises operating in the Single Market and can, therefore, have a negative impact on capital investment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of this, it is proposed to address double taxation in the direct tax area as follows: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Enhance existing EU instruments to combat double taxation. This includes the Directive on withholding taxes on interest and royalties between associated companies and the Arbitration Convention on transfer pricing. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Develop new instruments such as a binding resolution mechanism to eliminate double taxation in the case of a dispute between Member States. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxation to serve wider policy goals </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxation, beyond its primary role in raising fair and legitimate revenues to finance public goods, is an appropriate market based instrument to contribute to achieving specific policy objectives. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Use of environmental taxation can support environmentally sustainable growth as well as promote employment. Expanding environmental taxation can indeed make a contribution towards more growth-oriented tax systems. The introduction of a CO2-tax element would help meeting the EU's goals in the climate change and energy policies. It will also be an opportunity to consider environmental taxation in the shift of the tax burden away from labour taxation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commission recently proposed to introduce a financial transaction tax in the EU as a first step to cover the widest possible range of financial instruments (shares, bonds, structured products, derivatives agreements etc). This initiative will ensure that financial institutions make a fair and substantial contribution to public revenues. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax is back on the EU agenda. The Commission is convinced that this policy can greatly contribute to the consolidation and growth objectives of the Union. </font></strong></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">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income tax - Whether activity of imparting training to merchant navy cadets can be construed as charitable activity, and hence assessee cannot be denied Sec 11 benefits - NO, rules ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a registered Trust. It was claimed by the assessee that it imparted training to merchant navy cadets at subsidized rates with an object to make no material surplus (service). The assessee claimed that as the assessees activities were charitable in nature and hence, its income was exempt u/s 11 of the Act. The assessee filed an application for registration as a Charitable Trust/ institution on 17.12.2008 u/s 12AA of the Act before the DI (Exempt.), the assessee stated that it was conducting short-programmes for passenger-ship familiarization. The assessee also submitted the details of the courses and its company structure. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 11(3) of CCR, 2004 inserted in statute book w.e.f 01.03.2007 and hence cannot be applied retrospectively - Appellant opting for exemption Notification 30/2004-CE – Refund of unutilized CENVAT credit available u/r 5 of CCR, 2004 - Matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant, a manufacturer of yarn and textiles, opted for exemption from payment of duty in terms of Notification No. 30/2004-CE dated 09.07.2004. Prior to July, 2004 the appellant was paying excise duty on the final product manufactured and removed by them. They were also availing CENVAT credit. On the date of opting for exemption there was an unutilized accumulated credit balance of Rs.31,20,523/- lying in the appellant's CENVAT credit account. They filed the refund claim as per Rule 5 of the CCR, 2004 but the same was denied by both the lower authorities. </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">Viscose Filament Yarn imported from People's Republic of China - imposition of anti-dumping duty as provided under serial no. 5 of Notification 45/2006-Cus, which is in respect of any goods imported from any other country except the People's Republic of China, is not sustainable - Appeal allowed: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> importer is before the CESTAT with an application for waiver of pre-deposit of anti-dumping duty of Rs.10,74,963/- and penalty of Rs.5,00,000/- imposed under section 112(a) of the Customs Act by the Commissioner of Customs (Imports), JNCH, Nhava Sheva. The adjudicating authority held that the goods are liable for anti-dumping duty as provided under serial no. 5 under Notification no. 45/2006-Cus dated 24.05.2006. </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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