TIOL-DDT 1749 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1749</font><br> 09.12.11<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Payment of Service Tax on Own Volition – Not Barred</font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> concerned Netizen sent us this:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“A manufacturer is debarred from paying Central Excise duty on own volition if the goods are exempted absolutely. The following sub-section (1A) inserted in Section 5A by the Finance Act, 2005 w.e.f 13.05.2005 lays an embargo in this regard. </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I came across a demand notice issued to a Service provider viz. a job worker alleging that he ought not to have paid any Service Tax as he was entitled for the benefit of the Service Tax notification No. 8/2005-ST dated 01.03.2005 as amended. Incidentally, the demand notice alleged violation of section 5A(1A) of the CEA, 1944 in this regard. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interestingly, the provisions of section 5A of the CEA, 1944 have not been made applicable to Service Tax matters as this section does not figure in the bunch of sections listed in section 83 of the Finance Act, 1994. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the entire proceeding initiated by the department is going to come to a naught sooner or later and the only good thing that would happen is a family of Consultants laughing all the way to the bank!” </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cost Accounting Records Rules 2011 Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Ministry of Corporate Affairs has notified the Cost Accounting Records (Telecommunication Industry) Rules, 2011 and the following rules: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/SUGAR_CARR_872E.pdf" target="_blank">The Cost Accounting Records (Sugar Industry) Rules, 2011</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/PHARMA_CARR_874E.pdf">The Cost Accounting Records (Pharmaceutical Industry) Rules, 2011</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/PETROLEUM_CARR_870E.pdf" target="_blank">The Cost Accounting Records (Petroleum Industry) Rules, 2011</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/Fertilizer_CARR_873E.pdf" target="_blank">The Cost Accounting Records (Fertilizer Industry) Rules, 2011</a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/ELECTRICITY_CARR_871E.pdf" target="_blank">The Cost Accounting Records (Electricity Industry) Rules, 2011</a></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These Rules basically prescribe that cost records shall be maintained in accordance with the generally accepted cost accounting principles and cost accounting standards issued by the Institute and that cost records shall be kept on regular basis in such manner so as to make it possible to calculate per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities for every financial year on monthly or quarterly or half - yearly or annual basis. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG Elected Chairman of UN Panel of External Auditors </font></strong></p> <p><img src="http://www.taxindiaonline.com/RC2/image/stories/vinodrai.jpg" alt="Legal Corner Icon" width="250" height="166" hspace="5" border="0" align="left"></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAG</strong> of India Vinod Rai has been elected Chairman of the Panel of External Auditors of the United Nations, according to a Finance Ministry Press release. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He succeeds Mr.Norbert Hauser, Vice-President, Federal Court of Auditors, Germany. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The accounts and management operations of the United Nations, the Specialised Agencies (WHO, WFP, WIPO etc.) and the International Atomic Energy Agency are required to be audited and reported on periodically by independent external auditors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Much of the Panel's work is undertaken by the Technical Group which is mandated to research and review specific topics of interest to the Panel. The Technical Group reports to the Panel at its regular meetings on the topics reviewed and its recommendations. Director General, in the office of the CAG of India, Jagbans Singh has been elected as the Chairman of the Technical Group of the Panel. </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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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</strong> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When there is violation of conditions of Notification No. 13/81-Cus, demand of duty under section 28(1) and imposition of penalties under sections 112(a) and 114A justified: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONCE</strong> a benefit is extended to the assessee under a notification for discharge of ‘nil' duty and if the conditions therein were violated, it would amount to short levy which requires to be demanded only under section 28(1) of Customs Act, 1962. Further, violation of conditions regarding import of goods would attract penalties under section 112(a) and 114A of Customs Act, 1962 in as much as the appellant could not produce appropriate reconciliation of materials imported duty free. </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 assessee makes payment from his own account for purchase of new house but gets same registered in joint name, exemption u/s 54F is not available on entire consideration paid - No, it is available: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Objective of Section 54F and the like provision such as Section 54 is to provide impetus to the house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. </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">CENVAT Credit taken without receipt of inputs - Pre-deposit ordered: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is clear that the goods have not reached the appellant's premises and have been diverted in-between and, therefore, the credit taken by the appellants without actually receiving the goods is a clear case of fraud. The appellant could not produce before the department even the consignees' copies of the transportation document. If they had actually received the goods, they should be in possession of the consignee's copy of the transport document which has not been produced by the appellant in the instant case. Thus, there appears to be very strong case against the appellants in the instant case. </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> </body> </html>