TIOL-DDT 1714 · 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 1714</font><br>
17.10.2011<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ITAT President Easwar is now Delhi High Court Judge </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_case.jpg" alt="Legal Corner Icon" width="86" height="105" hspace="5" border="0" align="left"><strong>THE</strong> President has appointed the ITAT President RV Easwar as an additional judge of the Delhi High Court. It is a matter of pride that a Tax Tribunal Member has been made a High Court judge. Ideally, we should have more Tribunal Members appointed as High Court judges. The Tribunal Members acquire unparalleled knowledge and acumen in deciding tax matters and their services should be used in the High Courts and even the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But unfortunately, it is only in the rarest of rare occasions that a Tribunal Member is elevated to the High Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the first President of the ITAT (in 1940) Muhammed Munir was made Chief Justice of Lahore High Court in undivided India and later Chief Justice of the Supreme Court of Pakistan in 1954. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps we should have a few posts of Judges in the High Courts and Supreme Court earmarked for ITAT and CESTAT Members. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even the present appointment of Easwar as a judge of the Delhi High Court was not without controversy. There was even a writ in the High Court challenging his proposed appointment. But is the office of an additional judge of the High Court an elevation for the ITAT President? As ITAT President, he was heading a tribunal having over a hundred judges and usually the CESTAT is headed by a retired Chief Justice!</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Art of Advocacy</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER </strong>joining the legal profession, one is expected to take up the client's brief and plead for him in the courts and the Tribunals. This involves arguments before the judges, legal research, a thorough knowledge of the facts of the case, the law applicable, the precedents bearing on the case, good anticipation of the arguments of the opponent, a deep insight into the strengths and weakness of one's case and the ability to think on one's feet. In addition, you are expected to be prepared for the questions coming from the bench. All these are collectively known as skills of advocacy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The art of advocacy is not a glib or superficial exercise. It is the result of hours of hard work and research. If you want to argue for 15 minutes in the court, it will require at least 3 hours of preparation. Please do not carry the impression that advocacy means only the gift of the gab. The gift of the gab is only part of it. But it is the mastery acquired by you over the facts and the law that will keep you in good stead before the court. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[<em>Excerpts from a speech of Justice Easwar</em>] </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vandana Global, no more valid? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REMEMBER</strong> the decision of the Larger Bench of the CESTAT in<em> Vandana Global Ltd v CCE, Raipur</em></font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-624-CESTAT-DEL-LB.htm" target="_blank">(2010-TIOL-624-CESTAT-DEL-LB)</a></strong></em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">. The Larger Bench held that <em>Goods like cement and steel items used for laying 'foundation' and for building 'supporting structures' cannot be treated either as inputs for capital goods or as inputs in relation to the final products and therefore, no credit of duty paid on the same can be allowed under the CENVAT Credit Rules.</em> This order was delivered on 30 th April 2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Supreme Court in <em>CCE, Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd</em>. - </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/2010/2010-TIOL-51-SC-CX.htm" target="_blank">2010-TIOL-51-SC-CX</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> held
that MS channels, plates, etc., used in its fabrication, were capital goods.
This judgement was delivered on 9th July 2010 – that is after the Larger
Bench decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, a Tribunal Bench has held that, in view of the Supreme Court judgement, the view of the Larger Bench is no longer valid. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this order tomorrow. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value decreased for Brass Scrap and Poppy seeds</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has decreased the tariff values of Brass Scrap (all grades) from USD 4365 to USD 3952 and decreased the tariff value of poppy seeds from USD 2290 to 2207. There is no change in the tariff value of other items. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2011/cnt11_073.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 73/2011-CUS (N.T.), Dated : October 14, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Dates - Duty at 20 percent </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified an effective rate of 20 percent Customs duty on import of Fresh Dates (excluding wet dates) and Soft Dates (chhohara or kharek) </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_097.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 97/2011-CUS, Dated : October 13, 2011</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Settlement of Export related receipts facilitated by Online Payment Gateways- Enhancement of value of transaction </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BANKS</strong> are permitted to offer the facility of repatriation of export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (OPGSPs). Requests received from exporters for suitable enhancement of the value of the transaction from USD 500. It has now been decided to increase the value per transaction from USD 500 to USD 3000 for export related remittances received through OPGSPS. The revised directions will come into force with immediate effect. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir035.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI A.P. (DIR Series) Circular No.35, Dated : October 14, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">In New Zealand, Customs Officers can accept gifts/tips</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COL.</strong> Gadafi's son visited New Zealand in 2010 and gave a gift packet containing 4000 dollars to a Customs Officer. The lady Customs Officer handed over the cash to her boss and the money was deposited into the Government account. It seems as per protocol in New Zealand, such gifts are not immediately rejected to avoid any cultural offence. Sometimes it is cash, sometimes it can be a gift and it is a routine affair. </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"> – Tuesday's cases</font></strong></font></strong></font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#663399"><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">Customs</font></font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Revocation of CHA licence - Whether Commissioner has to power to disagree with findings of Enquiry Officer - Matter referred to Larger Bench: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> judgment to the effect that the Commissioner of Customs has no power to differ with the report of the Enquiry Officer requires reconsideration. As a matter of first principle, an authority which is vested with the power under a statutory regulation to take a final decision on the basis of an enquiry to be conducted by another authority subordinate to the authority in whom the power to decide is vested, is entitled to differ with the findings which are arrived at by the enquiring authority. </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 merely incurring expenditure and paying by account payee cheques apart from deducting tax at source on such payments are not enough to claim an expenditure as revenue expenditure - Yes, rules ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> questions before the Tribunal are - Whether merely incurring business expenditure and paying by cheque apart from deducting tax at source on such payments are not enough to claim business expenses; Whether assessee is required to establish that such expenses were incurred wholly and exclusively for the purpose of business; Whether interest paid on capital can be disallowed notionally ignoring that no disallowance was made in earlier year in which such advances were made and the assessee had sufficient interest free funds and whether failure to attend proceedings before AO attracts penalty for non-appearance. And the verdict partly goes against the assessee. </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>
<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"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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