TIOL-DDT 1780 · 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 1780 </font><br>
23.01.2012 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax – Big Blow to Builders - High Court Dismisses Writ Petition </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NETIZENS</strong> may recall Finance Act, 2010 added this ‘Explanation' to sub-clauses (zzq) and (zzzh) of sub-section (105) of Section 65 of Finance Act, 1994 </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Explanation. - For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer;"</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This had been challenged in the Bombay High Court by about 800 members of the Maharashtra Chamber of Housing Industry and the High Court had granted an interim relief – </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2010/2010-TIOL-526-HC-MUM-ST.htm" target="_blank">2010-TIOL-526-HC-MUM-ST</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mumbai Service Tax Commissioner Sushil Solanki, had advised the builders to collect and deposit the Service Tax with the Department or Court, in their own interest, because in case they lost the writ, they would be saddled with huge liability. It seems many builders heeded to his advice and deposited over Rs. 180 Crores with the Court. The Department is in need of huge revenue – they approached the High Court for withdrawing the amounts deposited in Court and last week, the High Court allowed the Department to withdraw the money. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the High Court has dismissed the writ petitions filed by the builders and this comes as a tonic to the Revenue in the last quarter of the fiscal, when they want to collect as much revenue as possible by any means. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you the High Court order as soon as possible. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11836" target="_blank">DDT 1513 – 23.12.2010</a> and</strong> <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=13590" target="_blank">DDT 1729 – 09.11.2011</a></strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone Judgement – No Retrospective Amendment; Please </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> the Vodafone judgement has received universal acclaim – from the trade, the Government is maintaining a studied silence – they are studying the judgement. There is a lurking fear that the Government might resort to the dubious power of retrospective legislation to undo the Supreme Court judgement. The Government may lose a few thousands of Crores by accepting the Supreme Court judgement, but by negating it, we are going to lose credibility in the international market. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, the Direct Tax Code, is supposed to have taken care of this issue and so the future is taken care of and a little money lost in the past should be simply treated as a loss and forgotten. Let us retain the tremendous respect the country has earned through the Supreme Court judgement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Did the DTC also contribute to Vodafone victory?</strong> In para 71 of the Vodafone judgement, the Supreme Court observed, "<em>Direct Tax Code (DTC) Bill, 2010 proposes to tax income from transfer of shares of a foreign company by a non-resident, where at any time during 12 months preceding the transfer, the fair market value of the assets in India, owned directly or indirectly, by the company, represents at least 50% of the fair market value of all assets owned by the company. Thus, the DTC Bill, 2010 proposes taxation of offshore share transactions. <strong>This proposal indicates in a way that indirect transfers are not covered by the existing Section 9(1)(i) of the Act. In fact, the DTC Bill, 2009 expressly stated that income accruing even from indirect transfer of a capital asset situate in India would be deemed to accrue in India. These proposals, therefore, show that in the existing Section 9(1)(i) the word indirect cannot be read on the basis of purposive construction</strong>"</em>. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty - Excess; Circumvention - Rules Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Determination of amount paid in excess of actual margin of dumping.</strong> A new Rule 21A is inserted which stipulates: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where an importer is of the opinion that he has paid any anti-dumping duty imposed on any imported goods, in excess of the actual margin of dumping in relation to such goods, he may file an application for determination of the actual margin of dumping in relation to such goods before the designated authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ On receipt of the application with complete information, the designated authority shall initiate an investigation to determine the actual margin of dumping in relation to such goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The designated authority shall, after investigation, determine the actual margin of dumping for the goods and if the anti-dumping paid on the goods is in excess of the margin of dumping so determined, the authority shall make recommendation to the Central Government within nine months and in no case more than 12 months, from the date of receipt of the application, complete in all respects, to refund the difference between the two to the importer. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Circumvention of anti dumping duty:</strong> A new Rule 25 has been inserted which stipulates that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In certain cases, where an article subject to anti dumping duty is imported into India from any country including the country of origin or country of export notified for the purposes of levy of anti dumping duty, in an unassembled, unfinished or incomplete form and is assembled, finished or completed in India or in such country, such assembly, finishing or completion shall be considered to circumvent the anti dumping duty in force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where an article subject to anti dumping duty is imported into India from country of origin or country of export notified for the levy of anti-dumping duty after being subjected to any process involving alteration of the description, name or composition of an article, such alteration shall be considered to circumvent the anti dumping duty in force if the alteration of the description or name or composition of the article subject to anti dumping duty results in the article being altered in form or appearance even in minor forms regardless of the variation of tariff classification, if any. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where an article subject to anti dumping duty is imported into India through exporters or producers or country not subject to anti dumping duty, such exports shall be considered to circumvent the anti dumping duty in force if the exporters or producers notified for the levy of anti-dumping duty change their trade practice, pattern of trade or channels of sales of the article in order to have their products exported to India through exporters or producers or country not subject to anti dumping duty. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rules
26, 27 and 28 stipulate, <strong>Initiation of investigation to determine
circumvention, Determination of circumvention</strong> and<strong> Review
of circumvention</strong>. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 6/2012-CUS (NT), Dated: January 19, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund
of Anti - Dumping Duty Rules, 2012 - Notified </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified Refund of Anti - Dumping Duty (Paid in Excess of Actual Margin of Dumping) Rules, 2012. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure
for claiming refund of excess payment of Anti-dumping duty – </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where an importer has paid any anti-dumping duty in excess of the actual margin of dumping in relation to any imported goods, he may submit an application as per format specified for refund of such excess duty to the Assistant Commissioner or the Deputy Commissioner of Customs, at the port of importation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The application shall be accompanied by documents evidencing payment of anti dumping duty in respect of which refund has been claimed. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Time limit for filing refund.- </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Every application shall be filed within three months from the date of publication of notification, issued by the Central Government under sub-section (1) of section 9AA of the Act, in the Official Gazette. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Where such duty becomes refundable as a consequence of judgment, decree, order or direction of the Court, Appellate Tribunal or Authority, the limitation of three months shall be computed from the date of such judgment, decree, order or direction. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deficiency in application for refund.- </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ On receipt of the application, it shall be scrutinized for its completeness by the Assistant Commissioner or Deputy Commissioner of Customs and where the application is found to be deficient in any material particulars, it shall be returned to the importer within one month pointing out the deficiencies. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The importer may re-submit the application after making good the deficiencies to the Assistant Commissioner or Deputy Commissioner of Customs within one month of receipt thereof. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Disposal of refund claim. </strong>- If, on receipt of any such refund application, the Assistant Commissioner or the Deputy Commissioner of Customs, is satisfied that the whole or part of the anti dumping duty, as notified by the Central Government, is refundable, he may make an order accordingly and the amount so determined shall be refunded to the importer within 90 days of the receipt of the application or application resubmitted after rectification of deficiency, as the case may be, under rule 5: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Unjust Enrichment applicable:</strong> Provided that the amount of duty refundable shall, instead of being refunded to the importer be credited to the fund, if he had passed on the incidence of such duty to any other person. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_005.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 5/2012-CUS (NT), Dated: January 19, 2012 </font></strong></a></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><font 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 color="#663399"><strong>Central Excise</strong></font></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Immovable property purchased by petitioner in public auction conducted by bank under SARFAESI Act – Central Excise authorities cannot enter its charge in village land records for recovery of dues from mortgagee by claiming that they have first charge: Gujarat HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISO</strong> to section 11 permits the Department to recover its dues in a case where the person whose liability to pay the dues transfers or otherwise disposes of his business or trade in whole or any part or effects any change in the ownership thereof, and in consequence thereof, same person succeeds in such business or trade. In the present case, it is not a case of transfer of business or trade, but transfer of property under compulsory sale of the property through auction by the financial institution in exercise of powers under the SARFAESI Act. </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 assessee is entitled to rebate for STT paid even if total income is computed u/s 115JB - YES: Karnataka HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is engaged in the business of purchase and sale of shares for more than a decade. It filed its return of income declaring taxable income as nil. The assessee had also made a payment of STT. The AO issued a notice u/s 148. The AO rejected the claim of the assessee for rebate on STT and computed the tax liability against the income computed u/s 115JB. The CIT (A) confirmed the said order. The Tribunal held that the rebate u/s 87 is to be granted from the amount of income tax chargeable on the total income of the assessee. </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">Since amounts of Passenger Service Fees and Airport Taxes collected by airlines were not for services provided by them, it is prima facie doubtful whether these can be considered as value of service rendered - Pre-deposit waived & stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Section 67 of the Finance Act, 1994, the value of any taxable service shall be the gross amount charged by the service provider for such service provided or to be provided. The amount in question is not paid for the services provided by the appellants and therefore, prima facie it is doubtful whether these can be considered as value of service rendered by them. We also note that in a similar case of SriLankan Airlines the Madras Bench has given full waiver vide decision reported at <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-1758-CESTAT-MAD.htm" target="_blank"><font size="1">2010-TIOL-1758-CESTAT-MAD</font></a></strong>. </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><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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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