TIOL-DDT 1713 · 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 1713 </font><br>
14.10.2011 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Foreign Trade Supplement - Low Key Disappointing Fare - Has Commerce Ministry become irrelevant? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> release of the annual supplement to the Foreign Trade Policy is usually a mega event, closely watched and extensively covered by the pink press and experts of the idiot box. But somehow yesterday's event was a very low-key affair and even the Press Information Bureau did not cover it. The invitation from the PIB stated, “<em>Shri Anand Sharma, Union Minister of Commerce, Industry & Textiles, will address a Press Conference on Thursday, 13th October, 2011 at 12.00 noon at The Ashok, Convention Hall, Chanakyapuri, New Delhi to make announcement on Foreign Trade Policy 2009-14</em>”. The Publishers in the Print Media, who usually bring out their annual supplements, have now nothing to print. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT - First digital signature enabled Government Department</strong>: DGFT has become India's first digital signature enabled Department in Government of India, which has introduced a higher level of Encrypted 2048 bit Digital Signature. Digital certificate provides a high level of security for online communication such that only intended recipient can read it. It provides authentication, Privacy, non-repudiation and Integrity in the virtual world. <font color="#FF6633"><strong><em>What are the Revenue Departments waiting for? </em></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">'<strong>Niryat Bandhu' - A scheme for International Business Mentoring:</strong> Under the scheme, officers of DGFT will be investing Time and Knowledge primarily to mentor the interested individuals who want to conduct the business in a legal way. Over time, it would be expected to develop a class of businessmen who carry out the international business in an ethical manner. <font color="#FF6633"><em><strong>But what is DGFT officers' experience in conducting business?</strong></em></font></font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Changes in the FTP:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Additional Duty Credit Scrips @ 1 percent:</strong> Export of products to notified countries (in Table 3 of Appendix 37C of HBPv1) will be entitled for additional duty credit scrip @ 1% of FOB value of exports (in free foreign exchange) made with effect from 01.04.2011.; Focus Products notified under Table 8 of Appendix 37D shall be granted additional duty credit scrip @ 1% of FOB value of exports (in free foreign exchange) for exports made with effect from 01.10.2011 till 31.03.2012. – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not079.htm" target="_blank">Notification No. 79(RE-2010)/2009-2014 , Dated : October 13, 2011 </a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clubbing of Advance Autorisations:</strong> Regional Authorities (RAs) would now allow clubbing of Advance Authorisations. Facility of clubbing shall be available only for redemption / regularisation of cases and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years. However, in case of Authorisations issued on or after 1.4.2004, Advance Authorisations with different customs notification can be clubbed. Advance authorisation for annual requirement can also be clubbed with the advance authorisation. This is a decentralising measure. The exporters will not be required to approach DGFT Headquarters. – <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn079.htm" target="_blank">DGFT Public Notice No. 79(RE-2010)/2009-2014, Dated: October 13, 2011</a></strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New Towns of Excellence:</strong> Firozabad, Bhubaneswar and Agarthala are added as the new towns of Export Excellence; New products are added to the list of items for Focus Product Scheme - <strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn080.htm" target="_blank">DGFT Public Notice No. 80(RE-2010)/2009-2014, Dated: October 13, 2011</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Online Exchange of DFIA between DGFT and Customs: </strong> Duty Free Import Authorizations (DFIA) issued on or after 13.10.2011 will be transmitted by DGFT ‘on-line' to Customs. This will not involve any change on the part of exporters/ importers. Accordingly, the existing system of ‘on-line' filing of application for issue of Duty Free Import Authorization (DFIA) would continue without any procedural change. The physical copy of DFIA will continue to be issued, for some more time, so as not to inconvenience any one till a smooth transition is completed. - <strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir041.htm" target="_blank">DGFT Policy Circular No. 41(RE-2010)/2009-2014, Dated: October 13, 2011</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Metal
Scrap and waste generated while repairing worn out machinery – not
manufacture - not excisable: SC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> every factory, old machines are worn out and when they are removed or repaired, metal scrap is bound to be generated. Now, is this metal scrap excisable? There are occasions when the Department had demanded duty on scrap generated while demolishing a shed. A Commissioner even held that withering of metals in the factory by nature would amount to manufacture! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a judgement delivered yesterday, the Supreme Court emphatically held that metal scrap or waste generated while repairing of worn out machineries do not amount to manufacture and so are not excisable. The Supreme Court observed that the goods have to satisfy the test of being produced or manufactured in India. It is settled law that excise duty is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subjected to payment of excise duty. Simply because a particular item is mentioned in the First Schedule, it cannot become exigible to excise duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court further noted that the charging Section 3 of the Act comes into play only when the goods are excisable goods under Section 2(d) of the Act falling under any of the tariff entry in the Schedule to the Tariff Act and are manufactured goods in the terms of Section 2(f) of the Act. Therefore, the conditions contemplated under Section 2(d) and Section 2(f) has to be satisfied conjunctively in order to entail imposition of excise duty under Section 3 of the Act. The manufacture in terms of Section 2(f) includes any process incidental or ancillary to the completion of the manufactured product. This '<strong>any process</strong>' can be a process in manufacture or process in relation to manufacture of the end product, which involves bringing some kind of change to the raw material at various stages by different operations. </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Act charges duty on manufacture of goods. The word ‘manufacture' implies a change but every change in the raw material is not manufacture. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Keeping up our tradition of bringing important Supreme Court judgements to you the day after they are delivered, we bring you today this important judgement delivered yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13420" target="_blank">Breaking News </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to Imports From SAFTA Countries - Afghanistan Included</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has included Afghanistan in the list of countries for exemption from SAFTA countries. Notification Nos 67/2006, 68/2006 and 85/2011 (all Customs) are amended. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_096.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 96/2011-Cus., Dated: October 12, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Re-Export of goods imported under reward schemes and DEPB - CBEC Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>CBEC has clarified that in respect of reward schemes specified under Chapter 3 of FTP and DEPB scheme, re-export of imported goods, which are found to be defective /unfit and/ or for re-export on account of any other reason, may be permitted by the Commissioner of Customs, subject to fulfillment of the following conditions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ re-export of goods shall take place from the same port from where the goods were imported; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the goods are re-exported within 6 months from the date of import; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the Asstt. /Dy. Commissioner of Customs is satisfied about the identity of the goods; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The goods are not put into use after import; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ At the time of allowing the re-export, Customs shall issue a re-credit Certificate containing particulars of scrip used, date of import of re-exported goods and amount debited while importing such goods. There shall be no need for issue of fresh scrip in such cases by DGFT regional offices; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Customs shall permit use of the said re-credit amount to the extent of 98% only; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The validity of re-credit certificate shall be for six months from the date of issuance of re-credit certificate; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The remittances have to be properly accounted for as per the prevalent guidelines for the import and the export of the goods. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_045.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 45/2011 - Cus Dated: October 13, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sale Agreement/General Power of Attorney - Do not Convey Title - SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a landmark judgement on 11 October, the Supreme Court held that <strong>Immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance:</strong> Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed that these kinds of transactions were evolved to avoid prohibitions/conditions regarding certain transfers, to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest unaccounted money (black money) and to avoid payment of `unearned increases' due to Development Authorities on transfer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This judgement is sure to have its impact on the real estate sector, especially in the Capital. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see </strong></font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2011/2011-TIOL-101-SC-MISC.htm" target="_blank">2011-TIOL-101-SC-MISC</a></strong></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"> – Monday'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">Once demand for previous period has been held as time barred, demand for subsequent period has also to be necessarily held as time barred: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONCE</strong> the demand for the previous period has been held as time barred, the demand for the subsequent period has also to be necessarily held as time barred especially when a copy of the agreement was available with the department and all the facts were known to it. Therefore, without going into the merits of the case or expressing any opinion thereon, we hold that the entire demand is time barred and consequently we set aside the same. As the duty demand is set aside, the demand of interest and imposition of penalty also do not sustain. </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 when registered society of company employees receives voluntary contribution from company, such receipt can be treated as income within meaning of Sec 2(24) - NO, rules HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a registered society comprising of the employees of M/s. BHEL, and the same is registered under the Karnataka Societies Registration Act. According to the assessee except the grant received from M/s. BHEL which was a voluntary one, there was no other income which could be termed as taxable for the AY. The issues before the Bench are - Whether when registered society of company employees receives voluntary contribution from company, such receipt can be treated as income within meaning of Sec 2(24) and whether the contribution received by the club from its members only for their benefit and without being indulged in any charitable activities can be brought within the purview of the provision of section 2(24) as income. <strong>NO is the High Court's decision. </strong></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">Anti-Dumping Duty on Acrylonitrile butadiene rubber - Notification No. 1/2009-Cus dated 01.02.2009 upheld: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SUNSET</strong> review can be initiated by the Designated Authority, to ascertain the need for continuance of definite Anti-dumping duty and hence is prospective in nature. Since the continuance of Anti-dumping duty is of prospective nature, it is also settled law, that the Designated Authority need not follow the rigours of the original investigation initiated for imposition of definitive Anti-dumping duty. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more<strong> DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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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