TIOL-DDT 1745 · the untouched capture
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<p align="justify"><font size="2"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 1745 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong>02.12.2011 <br>
Friday </strong></font></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Exemption for Import of Sugar - Extended for four more months </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORT</strong> of Raw Sugar and Refined or White Sugar are exempted from Customs duty vide Sl. Nos 37I, 37J and 37K of the table to Notification No. 21/2002 - Cus. As per Clause (m) of the proviso in the preamble to the Notification, this exemption ceases to have effect on or after 1 st December 2011. Now it is extended and will cease to have effect on or after 1 st April 2012. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2011/ctariff11_105.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 105/2011-Cus., Dated: November 30, 2011 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Early Compulsory Retirement for IAS/IPS/IFS Officers? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government seems to be seriously considering the process of weeding out unwanted officers. At present as per Rule 16(3) of the All India Services (DCRB) Rules, an IAS/IPS/IFS officer can be compulsorily retired after completing thirty years of service or attains fifty years of age. There is a similar Rule 56(j) for other Central Civil Services. This was mainly used to weed out corrupt officers the easy way as the officers are sent out with full State honours like pension, gratuity and all other benefits and it is not really considered a punishment. But in the last twenty five years or so, perhaps as corruption has come to be accepted as a legitimate fringe benefit of Government service, these provisions were rarely used. Anyway, it is not fair for a corrupt officer to compulsorily retire another corrupt officer - each one owes it to the other in the tribe to protect the collective interest. This was implemented when the senior officers used to be fairly honest - not now, when the highest officers are well known to be corrupt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government proposes to amend the Rules for intensive review and it is proposed to have the power to compulsorily retire after 15 years of service instead of 30 as at present. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 16(3), at present reads as: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Central Government may, in consultation with the State Government concerned and after giving a member of the Service at least three months previous notice in writing, or three months' pay and allowances in lieu of such notice require that member to retire in public interest from service on the date on which such member completes <strong>thirty years </strong> of qualifying service or attains <strong>fifty years </strong>of age or on any date thereafter to be specified in the notice.</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is proposed to amend the rule as: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Central Government may, in consultation with the State Government concerned and after giving a member of the Service at least three months previous notice in writing, or three months' pay and allowances in lieu of such notice require that member to retire in public interest from service on the date on which such member completes <strong>fifteen years </strong> of qualifying service or attains <strong>fifty years </strong>of age or on any date thereafter to be specified in the notice.</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prematurely retired officers will be eligible for pension benefits. The DOPT has written to the Chief Secretaries of all States for the comments of the State Government. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/AIS.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DOPT Letter No. 25013/02/2005-Cus., Dated: November 28,2011 </strong></font></a></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong><font color="#006600"><strong>70
per cent of global TP litigations emanate from India - ASSOCHAM </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RADICAL</strong> changes are underway with the Direct Taxes Code likely to come into effect from next financial year (2012-13) but there is no formal mechanism for mediation under the law at present, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer price refers to the amount used in accounting for cross-border transfer of goods or services from one responsibility centre to another or from one company to another, which belongs to the same group. It is a mechanism for distributing revenue between different divisions, which jointly develop, manufacture and market products and services. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The transfer pricing disputes in India have so far involved officers and taxpayers locking horns on complex economic concepts relating to creation of intangibles, location savings and benefits commensurate with payments. A sizeable number of disputes arise solely on the ground of comparability or benchmarking analyses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Transfer pricing regulations should introduce the concept of multiple years data not only from the perspective of compliance but more importantly for improving the quality of comparability analyses as repeatedly voiced by the Organisation for Economic Cooperation and Development (OECD) for comparability analyses, said ASSOCHAM secretary general. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ASSOCHAM says that nearly 70 per cent of global transfer pricing litigations emanate from India. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Mandatory publication of Tender Enquiries on Central Public Procurement Portal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> will be mandatory for all Ministries/ Departments of the Central Government, their attached and subordinate offices, Central Public Sector Enterprises (CPSEs) and autonomous/ statutory bodies to publish their tender enquiries, corrigenda thereon and details of bid awards on the CPP (Central Public Procurement) Portal using e-publishing module with effect from the following dates: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Ministries/ Departments and their attached and subordinate offices w.e.f. 1st January 2012; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ CPSEs w.e.f. 1st February 2012; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Autonomous/statutory bodies w.e.f. 1st April, 2012. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CPP Portal will be accessible at the URL eprocure.gov.in </font></p>
<p align="center"> <font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Command
of law can claim allegiance of law only by simplicity in legislation</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong></strong>"<strong>TO</strong> return what has been taken wrongly is as much a duty and grace of government as to levy relentlessly and fully what is due. Default in either, not altogether unfamiliar, brings down the confidence of the community in the administration. That a party should have been put to two expensive and elongated litigations to recover a relatively small sum is regrettable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assuming that the tax officers have an alibi of two interpretations of the given notification, the question is whether plainer use of language is an art beyond the draftsman's skills. We think not. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To liquidate obscurity in legislative language, by abandoning obsolescent vocabulary and style of expression is an overdue measure if we remember the Renton Committee's observations made for British consumers but applies a fortiori to our Republic:</font> </p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"There is hardly any part of our national life or of our personal lives that is not affected by one statute or another. The affairs of local authorities, national industries, public corporations and private commerce are regulated by legislation. The life of the ordinary citizen is affected by various provisions of the statue book from cradle to grave."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The rule of law is the corner-stone of democracy and how can there be a rule of law society if the members, the bulk of whom are too poor to buy legal services, cannot decode the legislator's law and therefore obey it? Incomprehensible law annoys the administration and estranges the citizen at a time when quick justice and less sterile litigation are the desiderata. <strong>The command of the law can claim the allegiance of the law only by simplicity in legislation</strong>."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The above extract is from a judgement delivered by Justice VR Krishna Iyer in 1975 </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em><strong>[<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-328-SC-CX.htm" target="_blank">2002-TIOL-328-SC-CX</a>]</strong></em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">.
After 36 years, is there any change in the attitude? Yes - for the worse.
If you don't get a stay, the Central Excise Department will pounce on you
to collect their arrears, but should you win a case, they will use all their
might and intelligence to deny the refund to you. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Corruption: Neta - babu - lala - jhola - dada Nexus </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Srilakshmi.jpg" alt="Legal Corner Icon" width="300" height="200" hspace="5" border="0" align="left"></font>A</strong> decade ago, the then Central Vigilance Commissioner, N. Vittal used to speak about the five major players on the corruption scene interdependent, strengthening and supportive of the vicious cycle. They are the <em>neta,</em> the corrupt politician; the <em>babu,</em> the corrupt bureaucrat; the <em>lala,</em> the corrupting businessman; the <em> jhola,</em> the corrupt NGO; and the <em>dada,</em> the criminal of the underworld. Vittal believed that if we could control at least the babu and the neta, perhaps the lala, jhola and the dada could be controlled. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are we now in that direction? Recently several Netas and babus have been housed in the top jails of the country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is Y. Sri Lakshmi, a 1988 batch IAS officer. When she joined the coveted service in 1988, she was the youngest officer of her batch - just 22. Yesterday, she was sent to jail on judicial remand by a CBI Court. She was put in a barrack with 10 other prisoners, who all have to sleep on the floor and share a common toilet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The once powerful District Collector and Secretary who must have comforted many a crying woman, was herself in tears and with folded hands requested the CBI judge to keep her in the CBI office during judicial custody, instead of being sent to jail. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Look at the plight of this young officer. She could have become the Cabinet Secretary of India. Her career with the IAS is almost over - even if she comes out of the case clean, it would take about twenty years and by that time winning or losing may not make much of a difference! </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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font><font color="#663399">Service Tax </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax - No Registration required if no tax liability; rebate - filing of declaration though procedural, has to be complied with: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THOUGH </strong>the requirement of filing of declarations prior to export of the services and its verification by the jurisdictional Asstt./ Dy. Commissioner is a procedural requirement, the purpose of this procedure is to ensure that there is no evasion of duty by misuse of this facility. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee incurs expenses on purchase of technical knowhow, such expenses are business expenditure or covered under Sec 35 AB - rules in favour of Revenue: Madras HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> AO while considering the amounts spent towards purchase of designs and drawings and towards consultancy charge as the amounts spent for the purchase of obtaining technical know-how considered the amounts spent under the provisions of Section 35AB, and accordingly allowed only 1/6 th as deduction. The CIT (A) held that the assessee would be entitled for deduction for the entire amount u/s 37(1). To arrive at such a conclusion, the CIT(A) held that the sum of Rs.1,00,000/- being the expenditure incurred for market survey of raw-materials used in the assessee's business, it should be allowed as a business expenditure u/s 37(1). </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Interest on short paid duty - payable even when duty paid is available as credit to recipient unit of same assessee: CESTAT by majority </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EVEN</strong> where the duty is short paid by an assessee, is available as credit to the recipient unit of the same assessee, interest in terms of provisions of Section 11AB is required to be confirmed and interest is leviable. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements </strong></font></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 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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