TIOL-DDT 1791 · 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 1791 </font><br>
08.02.2012 <br>
Wednesday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export Obligation Period - Extended for Silk </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>DGFT has amended Sl. No. 6 of the Appendix 30A relating to Export Obligation Period under Advance Authorization/DFIA Schemes. Export Obligation Period for import of “silk in any form” is increased from six months to nine months. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn096.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 96 (RE-2010)/2009-2014, Dated: February 07, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Direct Tax Collections Up </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GROSS</strong> direct tax collection during April-January of the current fiscal was up by 14.57 percent at Rs.4,25,274 crore as against Rs.3,71,188 crore in the same period last fiscal. While gross collection of corporate taxes was up 11.87 percent (Rs.2,85,837 crore against Rs.2,55,514 crore last year), gross collection of personal income tax was up by 20.43 percent (Rs.1,38,730 crore against Rs.1,15,192 crore last year). Net direct tax collections stood at Rs.3,46,959 crore, up from Rs.3,17,500 crore in the same period last fiscal, registering a growth of 9.28 percent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Growth in wealth tax was 45.11 percent (Rs.682 crore against Rs.470 crore), while growth in securities transaction tax (STT) -27.19 percent (Rs.4,145 crore against Rs.5,693 crore). </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Source : CBDT Press Release </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">External Commercial Borrowings - Simplification of procedure </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> a measure of simplification of the existing procedures, RBI has decided to delegate powers to the designated AD category-I banks to approve the following requests from the ECB borrowers, subject to specified conditions: </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Reduction in amount of ECB: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The designated AD Category-I bank may approve requests from ECB borrowers for reduction in loan amount in respect of ECBs availed under the <strong>automatic</strong> <strong>route</strong>, subject to ensuring the following conditions:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the consent of the lender for reduction in loan amount has been obtained;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the average maturity period of the ECB is maintained; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) the monthly ECB-2 returns in respect of the LRN have been submitted to the Department of Statistics and Information Management (DSIM); and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) there is no change in the other terms and conditions of the ECB. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>b) Changes/modifications in the drawdown schedule when original average maturity period is not maintained:</strong> the designated AD Category-I bank may approve requests from ECB borrowers for changes/modifications in the drawdown schedule resulting in the original average maturity period undergoing change in respect of ECBs availed both under the automatic and approval routes, subject to ensuring the following conditions:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) there are no changes/modifications in the repayment schedule of the ECB; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the average maturity period of the ECB is reduced as against the original average maturity period stated in the Form 83 at the time of obtaining the LRN; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) such reduced average maturity period complies with the stipulated minimum average maturity period as per the extant ECB guidelines; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) the change in all-in-cost is only due to the change in the average maturity period and the ECB complies with the extant guidelines; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) the monthly ECB-2 returns in respect of the LRN have been submitted to DSIM. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>c) Reduction in the all-in-cost of ECB:</strong> The designated AD Category-I bank may approve requests from ECB borrowers for reduction in all-in-cost, in respect of ECBs availed both under the automatic and approval routes, subject to ensuring the following conditions:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the consent of the lender has been obtained and there are no other changes in the terms and conditions of the ECB; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the monthly ECB-2 returns in respect of the LRN have been submitted to DSIM. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir075.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI /2011-12/390 , Dated: February 07, 2012</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Achieving
Budget Target is Non-negotiable - CBDT Chairman Writes </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> new Chairman of CBDT has written to his Chief Commissioners and Commissioners that he has taken over as Chairman at a time when the Revenue Collections seem to be far far away from the budget target, with less than two months at hand. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chairman tells his senior officers, “Among the parameters of performance in your work area, achievement of revenue collection target will obviously be given the highest weightage while writing your APAR and will also be a major factor while considering placements during AGT 2012.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He adds, “I trust that each of you understands <strong>that achieving the budget target is non-negotiable.”</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can an earlier recorded statement be relied upon in subsequent periodical demand notices? </font></strong></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE </strong>received this mail from a netizen –</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Issuances of show-cause notices at the drop of a hat are a norm nowadays. Probably, this gives a sadistic pleasure to the authorities concerned. The recently reported decision in Hino Motor Sales India <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-122-CESTAT-MUM.htm" target="_blank"><font size="1">(2012-TIOL-122-CESTAT-Mum)</font></a></strong> is a classic example in this regard. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In my case, a demand notice was issued by the Anti Evasion authorities proposing to deny the benefit of the exemption notification availed in respect of clearances made against International Competitive Bidding. Statements of company officials are a part and parcel of the relied upon documents. The demand notice invokes the extended period and also makes a few company officials as noticees for imposition of penalty under rule 26 of CER, 2002. While the matter is pending adjudication, the range authorities have been issuing periodical demand notices. I too have been diligently accumulating the same and replies are being submitted by adopting the copy-paste technique. Incidentally, I observed that even the periodical demand notices refer and rely upon the statements of the company officials recorded three years ago. Similarly, although some of the referred company officials left their jobs for greener pastures, the present day SCNs continue to make a reference to their statements and also seek to impose penalty on them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following basic questions came to my mind – </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Can a statement recorded u/s 14 of the CEA, 1944 at the time of booking the case be relied upon for demanding Central <br>
Excise duty in respect of similar clearances for the subsequent period? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ If the officials have left the company and are no longer in the decision making process in respect of the subsequent clearances, can their statements be relied upon and can there be a proposal to make them liable to penalty under rule 26? </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">My understanding yielded the following answers – </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Since the case was booked on a particular day/date and statements were obtained of the company officials on that day/date, the same can be relied upon in respect of the clearances effected on that day/date and the prior period extending up to five years; for the subsequent period these statements cannot be relied upon as evidence which inference can be drawn from the Indian Evidence Act, 1872, and their continuing employment in the company or otherwise being of no consequence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ The company officials can be saddled with penalty under rule 26 of CER, 2002 if and only if they were a part of the decision making process during the material period and attract the contents of rule 26(1) of CER, 2002. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No doubt, I may have to face a tough legal battle ahead, but cannot such preliminary issues be incorporated by the Central Board of Excise & Customs in its Supplementary Manual, which was last updated and issued in March, 2005. </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">I request DDT to carry this query and seek netizen response. </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">BUDGET 2012 – Your suggestions, Please </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Pranab Mukherji is likely to present the 2012 BUDGET on 16 March 2012. We will start our “BUDGET RUN UP” soon – Please send in your suggestions to <a href="mailto:editor@taxindiaonline.com"><strong>editor@taxindiaonline.com</strong></a><strong>. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will tell the FM what <strong>you </strong>want in <strong>his </strong>budget.</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"> – Thursday'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">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Limitation under Section 11B of Central Excise Act, 1944, will not apply to rebate claim made under Central Excise Notification No. 19 of 2004: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> is not prescribed in the notification cannot be imported into the said notification. No time limit has been prescribed in the relevant notification No.19 of 2004 dated 6.9.2004. When the statutory notification issued under Rule 18 does not prescribe any time limit, section 11 B is not applicable, and based on which the benefit cannot be denied to the petitioner. </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 a sum is awarded to assessee through a process of arbitration, interest received on such award is to be treated as income from other sources - NO, business income: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a Civil Contractor. In respect of a contract executed during 1986 to 1989, there was a dispute between the assessee and Lucknow Development Authority. Finally, the dispute was referred to an Arbitrator by the Court. On 22.12.1999, the sole Arbitrator made an award of Rs.12.65 lakhs along with interest at the rate of 6%, which was also upheld by this Court. During the assessment year under consideration in reassessment proceedings, the A.O. opined that the interest received on the award is an "income from other sources", and not an "income from business" as claimed by the assessee in the original return. The view taken by the A.O. was upheld not only by the First Appellate Authority but also by the Tribunal. Still being not satisfied the assessee has filed the present appeal. </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 Facilitation charges and additional handling charges are included in assessable value, they are not liable for Service Tax - Prima facie case in favour – Pre-deposit waived and Stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is an agreement for sale of the goods imported by the applicant on High Seas Sale basis. It has included facilitation charges and additional handling charges in the assessable value as per the agreement. Prima facie, these charges, are included in the assessable value, therefore, they are not liable for service tax. </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>
<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>
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