TIOL-DDT 1763 · 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 1763</font><br>
29.12.2011<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - No Deemed Export Benefit if Imported Capital Goods are directly supplied to Project Authority</font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> clarifies:</font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deemed exports benefits are admissible in terms of paragraph of 8.2 of FTP, if goods are manufactured in India. In the case of non-mega power projects, for instance, if capital goods such as boilers, turbines, generators (BTGs) are being supplied to project authorities, then deemed export benefits are admissible only if such BTGs are manufactured in India.<font color="#FF6633"><strong> If these are imported and supplied as such, then such supplies do not amount to deemed exports, and hence deemed export benefits will not be admissible. </strong></font></font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is further clarified: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"In case capital goods have been imported by the contractor/sub-contractor and supplied as such to project authorities, then custom duties paid on such imports <font color="#FF6633"><strong>can not be refunded back as deemed export duty drawback</strong></font> under paragraph 8.3(b) of FTP. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir050.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 50/2009-2014 (RE 2010) , Dated: December 28, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cotton Export - DGFT Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THROUGH</strong> Notification No. 40 (RE-2010)/2009-14 dated 31.03.2011, export of <strong>cotton yarn</strong> was made “Free” subject to registration of export contracts with DGFT. Procedure for registration of contracts of cotton yarn was notified through Policy Circular No. 27 of 01.04.2011. Thereafter, Trade Notice No. 19 dated 30.08.2011 stipulating procedure for imposition of penalty for failure to export cotton yarn in terms of Policy Circular No. 27 was issued. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 62 (RE-2010)/2009-14 dated 02.08.2011, removed the cap on export of <strong>cotton</strong> for the remaining part of cotton year 2010-11 (October-September) and export of cotton was made “Free” subject to registration of export contracts with DGFT. Procedure for registration of contracts of cotton was notified through Notification No. 63 of 04.08.2011. This procedure continues for the current cotton year w.e.f. 01.10.2011 except that the performance guarantee is no longer required in terms of Notification No. 74 (RE-2010)/2009-14 dated 12.09.2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many representations have been received from RAs and exporters seeking clarification about revalidation, cancellation or partial modifications of RCs as well as about imposition of penalty in case of failure to export full quantity of cotton and cotton yarn in terms of the above notifications/Policy Circulars. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has given clarifications on ten issues like: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether request for amendment of quantity (either enhancing or reducing) may be accepted:<em> It is permitted with the condition that export has to be completed within the validity of RC</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Whether loading of cargo meant for export (by rail/road) at any place in the country within the validity of RC should be accepted as fulfilment of export: <em>No. The goods which have been physically handed over to the customs at relevant ports and Let Export Order(LEO) issued within the validity of RC can only be treated as fulfilment of export against RC</em>. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir051.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 51/2009-2014 (RE 2010), Dated: December 28, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DTAA with Swiss Confederation - Amendments effective 1st April 2012 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Protocol amending the Agreement between the Republic of India and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income with Protocol, signed at New Delhi on the 2nd day of November, 1994, as amended by the supplementary Protocol signed at New Delhi on the 16th day of February, 2000, was signed at New Delhi on the 30th day of August, 2010. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has notified that Article 26, which provides for exchange of information will be effective for information that relates to any fiscal year beginning on or after the 1st day of April, 2011 and other amended provisions will be effective in respect of income arising in any fiscal year beginning on or after the 1st day of April, 2012</font></p>
<p align="justify"><a href="http://taxindiainternational.com/content.php?qwer43fcxzt=MTI4Ng==" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 62/2011[F.NO.501/01/1973-FTD-I], Dated: December 27, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange of Information - Cayman Islands - Comes into Force </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Agreement between the Government of the Republic of India and Government of the Cayman Islands for the exchange of information relating to taxes was signed at Cayman Islands on the 21st day of March 2011; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government directs that all the provisions of the said Agreement, shall be given effect to in the Union of India forthwith. </font></p>
<p align="justify"><a href="http://taxindiainternational.com/content.php?qwer43fcxzt=MTI4Nw==" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 61/2011[F.NO.501/03/2009-FTD-I], Dated: December 27, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Online ACRs of CBEC Gr. B Officers - Linked to promotion? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a DO letter to the Chief Commissioners, the Member (P&V), CBEC says, "DGHRD has been assigned the task to expedite the preparation for the implementation of the proposed Cadre Restructuring by the Department. Completion of the APARs/ACRs of all the officers including those covered under the ad hoc DPC forms an important aspect of the entire exercise". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She wants the <strong>concerned </strong>Cadre Controlling Authorities (CCA), to upload the data on <u><strong>Group B Gazetted officers</strong></u> [Superintendent (CE), Superintendent (P) and Appraisers] for last 10 years. She wants the Chief Commissioners to personally monitor the updation of APAR/ACR in their respective zones. Due priority should be given for this job, and a time frame fixed, under intimation to the Board, for completion of this task. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the time frame is not fixed by the Board – the Chief Commissioners can fix their time – different frames for different Chief Commissioners. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And are they going to wait for this exercise to be completed before promoting those frustrated Superintendents who have been stagnating in their posts for the last twenty years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Going by this proposed exercise, they can hope to get promotion around the time the Lokpal of India concludes his first case! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/DO_Letter_for_APAR_Updation.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No.8/89/DB/HRD(HRM)/2011; Dated: December 27, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Transfers Online </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSISTANT </strong>Commissioners and above in the income Tax Department who want transfer in the year 2012 have to apply for it online. The Chief Commissioners will also approve the representations online for their officers. The online applications are to be submitted by 15th January 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But there is a catch – a printout of the online application has to be submitted within 15 days. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An officer asked his boss for permission to destroy old records. The Boss was pleased to grant permission, subject to the condition that Xerox copies of all the documents to be destroyed may be taken! </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/cit_transfers_agt.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F.No.DBC/Policy/AGT-2012/3174; Dated: December 27, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Three Indian Engineers Crash into Bangladesh in a car </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> seems three Indian drunk engineers, one of them a Tripura Government employee, entered Bangladesh breaking five barricades of the border guards and customs of the two countries. It happened on Tuesday morning at Akhuara check post, when the three young men in a Chevrolet car had entered around 1.5 km inside the Bangladesh territory before their car fell into a ditch. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the three engineers under the influence of alcohol, crossed in to Bangladesh through Akhaurah check post breaking all five bamboo checking gates on both sides of the border. They could have been hit by bullets of Border Security Force (BSF) as well as Border Guard Bangladesh troopers, who were posted at the check posts. But they were puzzled when the speeding vehicle broke the barricades before entering into Bangladesh territory. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They were arrested by Bangladesh Police and a court remanded them to judicial custody for 14 days – reports bdnews24.com. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Surrounded by international borders on three sides, Tripura shares 856 km border with Bangladesh </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Hilary is the Most Admired Woman of the Year </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> annual Gallup/USA Today Poll has chosen Hilary Clinton as the most admired woman and president Obama as the most admired man of 2011. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In India, whom will you choose? Your choice could be from: </font></p>
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<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most Admired Woman: </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most Admired man: </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Sonia Gandhi <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Sushma Swaraj <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Kiran Bedi <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Pratibha Patil <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Mamta Banerjee <br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Vidya Balan </font></p> </td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Pranab Mukherjee <br>
2. Anna Hazare <br>
3. Manmohan Singh <br>
4. Sachin Tendulkar <br>
5. Vinod Rai, CAG<br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Amitab Bachchan </font></p> </td>
</tr>
</table>
<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"> – Friday'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">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">When Service Tax and Interest Paid, No penalty; by evading payment of service tax, appellant stands to lose rather than getting any undue benefit: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> was no need for the appellants to resort to suppression or mis-declaration since whatever service tax was to be paid, they were eligible for the credit. By evading the payment of service tax, the appellant stands to lose rather than getting any undue benefit. By delaying payment of service tax, the assessee had to pay interest on the amount, which is not available as CENVAT credit. Therefore, in this case, suppression of fact or mis-declaration could not have been invoked for imposition of penalty under Section 78 of the Finance Act, 1994. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wealth Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether land occupied by building which is under construction approved by municipal authority, is to be excluded for purpose of wealth tax, within meaning to be given to urban land - NO, rules ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> individual assessee, his late mother and his brother - each owned one-third share of a property, a vacant land, at Dahisar. A portion of this property had been given to realtors under a development agreement and construction activity was going on in the property. The realtors were constructing a building on the land owned by the assessee with the approval of the appropriate authority. Construction was in progress for the various assessment years. </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">Undervaluation of goods imported and supplied to GAIL - Appellants did not provide any justifiable reason for abnormal discounts - Order rejecting transaction value maintainable: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong> authorities found that appellant had imported goods at 1/5th to 1/4th of the prices which were initially negotiated by GAIL with original supplier – Appellants did not provide any justifiable reason for abnormal discounts – In terms of Rule 10(1)(b) of Customs Valuation Rules, 1988 department authorized to call for manufacturer's invoices in such circumstances but appellants chose not to submit such invoices – In terms of <em>CC, Bombay vs. Shibani Engineering Systems, Bombay</em> = <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=26&filename=legal/sc/2002/2002-TIOL-667-SC-CUS.htm"><strong><font size="1">2002-TIOL-667-SC-CUS</font></strong></a>, such abnormally discounted prices not acceptable.</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><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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