TIOL-DDT 1731 · 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 1731 </font><br>
14.11.2011 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Classification of TV Tuners - CBEC Clarification </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFERENCES</strong> have been received on divergent practices being followed by field formations regarding classification of TV tuners. It was reported that external TV tuners are being classified in heading 8528 or 8529, and internal PCI TV tuners / cards are being classified in subheading 8528 or 8529 or subheading 8473. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board clarifies that: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">External TV Tuners merit classification under CTH 8528; Whether external or internal, the principal function of TV tuner cards remains the same, that is, to provide the television function through the reception of broadcast signal from television station. The conversion into audio and video information of the broadcast signal enabling television broadcasts to be viewed on the screen remains the secondary reception. Taking into consideration the principal function of TV tuners, and provisions of paragraph 5(D) and 5(E) to chapter 84, internal TV tuner cards are found to be outside the ambit of heading 8473. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also, TV tuners are other than those devices, which simply isolate high-frequency television signals (sometimes called video tuners) and hence cannot be classified as parts in the heading 85.29. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TV tuners, both internal and external are more appropriately classifiable in Harmonised Customs Tariff in tariff item 85287100 . </font></strong></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_052.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 52/2011-Customs, dated: 11 November 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Exemption to goods imported from SAFTA countries </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has issued a notification superseding Notifications 51/2008-Cus and 85/2011-Cus whereby all goods other than those falling under Chapters 2203 to 2206, 220710, 2208 and 24 are exempt from the whole of Customs duty leviable under the first schedule to the Customs Tariff Act, 1975, when imported from the following SAFTA countries viz., Bangladesh, Nepal, Bhutan, Maldives and Afghanistan. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_099.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 99/2011-Cus dated November 9, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Location of Forex Counters in Airports - CBEC Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RESERVE</strong> Bank of India vide Circular No. 38 dated Oct 25, 2011 <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13505" target="_blank">[DDT 1721 - 27.10.2011</a><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13505">]</a></strong> had clarified that: - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Foreign Exchange Counters in the arrival halls in international airports in India shall ideally be established after the Customs Desk (Green Channel/Red Channel). However, Foreign Exchange Counters may also be established between the Immigration Desk and the Customs Desk in international airports in India, subject to the condition that these counters shall only purchase Foreign currency and sell Indian Rupees (INR) and ‘Encashment Certificates', shall invariably be issued by the money changers to the customers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Similarly, Foreign Exchange Counters in the departure halls in international airports in India shall be established only before the Customs Desk or the Immigration Desk, whichever comes first. Putting up suitable display at these counters, reminding the passengers that the area is the last point for non-residents to possess Indian Rupees (INR) may be followed up with the Airport Authorities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Foreign Exchange Counters of Authorised Dealers Category-I banks, Authorised Dealers Category-II and Full Fledged Money Changers, not conforming to the above, should be relocated in accordance with the above instructions, latest by 31.12. 2011. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants Commissioners in charge of International airports to ensure that the directions contained in the Circular are complied with scrupulously. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_051.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 51/2011-Customs, dated: 11 November 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessment of construction equipment under Project Imports Regulations - CBEC Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFERENCES</strong> have been received that divergent practice are being followed by field formations regarding assessment of import of construction equipments required for the initial setting up of a unit, for a specified project under Customs Tariff Heading No. 98 01 (Project Imports). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the case of <em>Commissioner of Customs, Mumbai vs. M/s. Toyo Engineering India Ltd.- <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2006/2006-TIOL-111-SC-CUS.htm" target="_blank"><strong>(2006-TIOL-111-SC-CUS)</strong></a></font></em>, it has been observed; “<em>The goods imported by the respondent such as hydle truck cranes, excavator, shovel loader, truck, forklift truck, power generators, diesel welder, welding rectifier, containers tools and tackles instruments, level Nako with tripod and theodlite Nako with accessories & tripod would certainly be auxiliary equipments which would help in the initial setting up of the industrial plant.” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board now clarifies that the scope of the items eligible for import under the Project Import Regulations 1986, shall cover construction equipments as auxiliary equipment; if essentially required for initial setting up or substantial expansion of registered projects. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is also clarified that ‘Plant Site Verification Certificate' (PSVC) required to be submitted for finalization of project as per <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2006/cuscir06_14.htm"><strong><em>Circular No. 14/2006-Cus F.No. 528/9/2006-Cus (TU)</em></strong> </a> shall also incorporate the details of construction equipments imported and used for the project, to ensure proper utilization of goods imported. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2011/cuscir11_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 49/2011-Customs, dated: 04 November 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SEZ Policy and Operating Framework - Discussion Paper </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>OBJECTIVES</strong> of the SEZ: </font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Generation of additional economic activity </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Promotion of exports of goods and services; </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Promotion of investment from domestic and foreign sources; </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Creation of employment opportunities; </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Development of infrastructure facilities </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The SEZ sector has grown significantly since the enactment of the SEZ Act 2005 and Rules in 2006, in terms of the number of SEZs, investment attracted, and employment and exports generated. While these achievements are irrefutable and significant, a comprehensive analytical assessment of the performance of the sector and certain key developments in the politico-economic environment in recent years reveals aspects of the SEZ Policy and Operational framework that perhaps require a re-look with a view to possible reform. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Challenges facing the SEZs: </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Issue of availability of land for SEZs and difficulties involved in procuring / acquiring land. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Issue of maintaining attractiveness of the SEZ scheme in face of fiscal regime e.g. imposition of MAT/ DDT; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Issues related to effectiveness of the Single Window Mechanism and coordination across departments at the Central and State Government level. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The issue of a large number of States not having an SEZ Policy / Act to enable provision of the benefits envisaged under the SEZ Act and Rules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Issue of constraints leading to slow pace of development of infrastructure within the SEZs and their operationalisation, as also inadequacies in the timely and adequate provision of external support infrastructure related to connectivity, provision of public utility services etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Increasing unattractiveness of the SEZ incentive package vis-a-vis DTA units receiving benefits under schemes such as Focus Product Scheme, Focus Market Scheme, DPEB, Duty Drawback, VKGUY etc., which are unavailable to SEZ units. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this context, Ministry of Commerce requests actionable responses from stakeholders by way of suggestions for possible reform of the SEZ framework. Some of the key questions that require resolution are: </font></p>
<div align="justify">
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ What are the reasons for lack of spread of SEZs to States other than a select few? How can they be addressed? How can SEZ investments be attracted in backward regions within the States? </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ What are the constraints coming in the way of greater manufacturing investments under the SEZ scheme and how can we overcome them? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ What are the reasons for lack of operationialisaton of many approved SEZs? How can we overcome these problems and what are the incentives and disincentives that can be created towards this end? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ What are the categories of SEZs that should ideally be envisaged? What should be the minimum area requirements in each case and what should be the sectoral broadbanding permissible in each case? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can contiguity norms / practices be revised to facilitate easier fulfillment of land requirements without compromising regulatory concerns? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can vacancy norms be revised to facilitate easier fulfillment of land requirements without compromising the requirement that SEZs should not result in diversion of existing investments from DTA areas? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ What should be the norms for permitting social/other infrastructure for dual SEZ / DTA use to balance the considerations of availability of quality infrastructure for SEZ use, viable scale / operation and avoidance of grant of undue benefits for non SEZ purposes? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can broad parity be maintained in the quantum of benefits permissible to SEZ units vis a vis non-SEZ exporters? What specific adjustments can be considered? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can better coordination be ensured between the Centre and the State Governments to ensure that elements of SEZ framework related to State level benefits and infrastructure provision etc. are smoothly implemented? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can the SEZ framework attract FDI and other investment by leveraging the large domestic market, within the SEZ framework? </font></p>
</blockquote>
</div>
<div align="justify"><blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ How can various specific operating procedures and processes related to approvals, reporting requirements etc. be simplified and made more transparent and user friendly? (Specific suggestions may be made) </font></p>
</blockquote>
</div>
<div align="justify">
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/SEZ_REVIEW.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Draft Discussion Paper to Facilitate Stakeholder Consultation on Potential Reform of the SEZ Policy and Operating Framework </font></strong></a></p>
</div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - ANF2A Amended </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PART</strong> A - Applicant Firm Details - of ANF2A - Application form for IEC, is amended. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Complete PAN details, Telephone Numbers, Email IDs, and Mobile Number (of the Signatory of the ANF2A) have been made mandatory fields; while Alternate Email ID, Website Address are optional. This is required to facilitate updating the IEC records. No payment of application fee is required till 31.3.2012 for such updating of IEC Records. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Email ID of the Banker would assist RA to cross-check the issuance of the Bank Certificate from the Banker, if in doubt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Several instances have come to the notice of DGFT wherein several IECs get allocated when the applicant does not indicate the full name of the individuals. Hence it is now being made mandatory that full name (in the order - First Name, Middle Name and Last Name) should be filled up, without using any abbreviations wherever in ANF2A the name of an individual is required to be filled up. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An illustrative example is given in Annexure A to this Public Notice. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn084.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 84/(RE2010)/2009-14, Dated: November 11, 2011 </font></strong></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a><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 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">Default in payment of monthly duty - When appellant does not challenge order passed by Assistant Commissioner directing them to pay duty consignment wise, it attains finality: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant, a manufacturer, defaulted in payment of excise duty within the due date. The Assistant Commissioner, in exercise of powers under Rule 8(3A) of Central Excise Rules, 2002, passed an order dated June 5, 2006 directing the assessee to pay excise duty on consignment basis by debiting in PLA for a period of two months from the date of communication of the order or till all dues including interest thereon were paid, whichever was later. This order dated June 5, 2006 was not appealed against by the assessee and thus, attained finality. </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 deduction u/s 10A is allowable without setting off of brought forward loss and unabsorbed depreciation of other units - YES, rules Karnataka HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is in the business of Manufacture and Trading of Process Control Instruments. Assessee claimed exemption u/s 10-A, for its STP unit before set off on brought losses and depreciation. AO held that the deduction u/s 10-A has to be allowed from the total income of the assessee as per section 80B(5) and after setting off of all brought forward losses within the context of Section 32(1) r.w.s. 72(2). Accordingly, after re-computation, the assessee was held to be not entitled for exemption u/s 10-A. </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">Appellant, owner of different brands of IMFL getting the same manufactured from contract bottling units under agreements - whether franchisee service - issue is debatable - Pre-deposit waived and stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are owners of the different brands of Indian Made Foreign Liquor (IMFL) and engaged in getting the said branded alcoholic beverages manufactured from different contract bottling units (CBUs) on contract basis under agreements. These agreements provided for manufacture of branded alcoholic beverages by the CBUs with the condition that the same were supplied on sale to the specified distributors of the applicants. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGCEI held a view that manufacture and sale of branded beverages amounted to grant of representational right and the said service is taxable under the category 'Franchisee Service' for the period 1.7.2003 to 30.9.2006. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Employees Provident Fund </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Assets of Companies - Dues payable by an employer under Section 11 of Employees' Provident Funds and Miscellaneous Provisions Act, has first charge and precedence over other dues: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question which arises for consideration in these appeals is whether priority given to the dues payable by an employer under Section 11 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is subject to Section 529A of the Companies Act, 1956 in terms of which the workmen's dues and debts due to secured creditors are required to be paid in priority to all other debts. </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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