TIOL-DDT 1804 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font><font color="#663399" size="3">TIOL-DDT 1804</font></strong><br>
<strong>28.02.2012<br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Discount cannot be denied solely on the ground that discount amounts were not shown in sale invoices - SC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> division bench of the Kerala High Court has held that unless the discount was shown in the invoice itself, it would not qualify for deduction and further that any discount that was given by means of credit note issued subsequent to the sale of the article was in reality an incentive and not trade discount eligible for exemption under rule 9(a) of the Kerala General Sales Tax Rules, 1963 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court, yesterday ruled that <strong>Discount cannot be denied solely on the ground that the discount amounts were not shown in the sale invoices;</strong> The Supreme Court observed, "It is significant to note that the rule does not speak of invoices but stipulates that the discount must be shown in the accounts. On a plain reading of the provision it is clear that the exemption is allowable subject to two conditions; first, the discount is given in accordance with the regular practice in the trade and secondly, the accounts should show that the purchaser had paid only the sum originally charged less the discount. We find nothing in rule 9(a) to read it in the restrictive manner to mean that a discount in order to qualify for exemption under its provision must be shown in the invoice itself."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court further observed, "So far as the special discount is concerned, all that the authorities have to look into whether as a matter of fact, the petitioner received only the sum originally charged less the discount. It is the look out of the traders to see that the trade increase and it is for that purpose the trade discount is given. Hence, a person may not be able to clearly prove as to why the special discount was given. But if there has been a consistent practice of giving special discount, that has to be accepted by the assessing authority. The Assessing Authority shall not reject the appellants' claim for exemption of the amounts of trade discount solely on the ground that the discount amounts were not shown in the sale invoices."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The payment of discount by ‘credit notes' is cause for continuous litigation in all judicial forums, even in Central Excise matters and nobody seems to be sure on the exact position. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this ‘yesterday's judgement today'. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14376" target="_blank">Breaking News </a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Gold on Loan Basis - RBI Clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> had notified the maximum tenor of gold loan as 240 days consisting of 60 days for manufacture and exports +180 days for fixing the price and repayment of gold loan as per the Foreign Trade Policy 2004-2009 of the Government of India and that the tenor of the Standby Letter of Credit (SBLC), for import of gold on loan basis, wherever required, should be in line with the tenor of gold loan. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 4A 23.2 and para 4A 23.3 of the Hand Book of Procedures (HBP) Vol. I of the Foreign Trade Policy (FTP) 2009-14 states that, "the export has to be completed within a maximum period of 90 days from the date of release of gold on loan basis", and that, "the exporter shall have flexibility to fix the price and repay gold loan within 180 days from date of export".</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, the maximum tenor of gold loan becomes 270 days at present (i.e. 90 days for manufacture and export + 180 days for fixing the price and repayment) as per <a href="ftp://FTP 2009-14"><strong>FTP 2009-14</strong></a><strong>.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, RBI clarifies that:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the maximum period of gold loan shall be as per the Foreign Trade Policy 2009-14 or as notified by the Government of India from time to time, in this regard and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the tenor of SBLC, for import of gold on loan basis, wherever required, should also be in line with the tenor of gold loan.</font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir083.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI A.P. (DIR Series) Circular No. 83, Dated: February 27, 2012</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants Directors, Under Secretaries/ STOs
Have some proof-readers also! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIVE</strong> posts at the level of Director, Nineteen posts at the level of Under Secretary/ Senior Technical Officer (STO) and three posts at the level of Technical Officer (TO) in the CBEC/ Revenue Hqrs. are to be filled up shortly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants Chief Commissioners to send applications of willing officers by 15 March 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> has often suggested that CBEC should also hire a couple of proof-readers and English teachers to correct their horrible spelling and language blunders. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even this letter calling for applications, has a couple of spelling mistakes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The original letter reads as,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"I am directed to say that five posts at the level of Director, <strong>Ninteen</strong> posts at the level of Under Secretary/ Senior Technical Officer (STO) and three posts at the level of <strong>Tecnhical</strong> Officer (TO) in the CBEC/ Revenue Hqrs. are required to be filled up shortly.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If there is no provision for appointment of proof-readers, the learned officers of the CBEC should know that in MS WORD, there is a great feature called spellcheck, which the officers should start using.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/vacancy_CBDT_2012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. A. 35017/ 10 /2012-Ad.II, Dated: February 27, 2012</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget is On - Don't Move</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Department of Expenditure in the Ministry of Finance has issued an Office Memorandum, "In view of the fact that the Union Budget is to be presented on 16th March 2012, all Financial Advisers are advised to remain in station and defer any plans for leave or travel on tour till the presentation of the budget."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even some Central Excise Commissionerates direct their staff not to go on leave before the budget and until further orders . These instructions are given every year and further orders are never given. That means the instructions given in 1944 are still valid! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/office_memorandum_23_2012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoF, Dept of Expenditure No. 23(3)/E.Coord/2012, Dated: February 27, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CII wants 30% depreciation for Plant and Machinery </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> a time when investment expansion in the economy has been spiralling down, the Confederation of Indian Industry (CII) in its pre-Budget memorandum has emphasized on its earliest revival through necessary policy interventions. "Given that the scope of fiscal and monetary manoeuvrability is limited owing to widening fiscal deficit and inflation, the revival in investment growth has to essentially come from private sector and the Union Budget for next fiscal can do a lot in this direction"</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the wake of deteriorating fiscal health of the Union Government, CII wants the Union Budget to announce initiatives that can accelerate the pace of private investments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Among various measures, CII has recommended that depreciation rates for plant and machinery be raised from 15% to 30%, at least for a period of two years to encourage more capital investment. "It is a well-known fact that technology is changing very fast and unless we are able to replace our assets accordingly, we cannot match with other countries in terms of productivity”. Besides, this is a sure shot measure to kick start investments, according to CII. Besides, CII advocates a higher depreciation rate of 50% in case of retrofitting technologies, which are more energy efficient and environment friendly in order to encourage companies to go green. There is also a strong need for retaining the current rates of excise and service tax to spur investment by industry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CII also recommends that money received from sale of an asset be exempted from capital gains tax if the same is reinvested in setting up new business or expansion of existing unit. Such a move would make available investible resources for use by industry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To incentivize companies to go in for R&D, CII favours that a weighted deduction of 200 percent on in-house R&D be extended to all sectors in order to make India an attractive base for R&D. </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"> – Wednesday'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">Penalty - Duty paid before Show Cause Notice - Matter remanded for reconsideration in view of observations made by Supreme Court in <em>Dharamendra Textile Processors case</em>: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue in this appeal is, whether penalty and interest can be levied and collected when the duty has been paid before the issue of Show Cause Notice under the provisions of the Central Excise Act, 1944. Counsel appearing for the assessee would submit that though the issue is now covered by the decision of this Court in the case of<em> Dharamendra Textile Processors</em>, the matter requires to be remitted to the Tribunal for fresh consideration and decision. </font></p>
<p><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 expression 'any other person' in Sec 269 excludes Directors of assessee company which accepts loans or deposits - NO; Penalty upheld: Delhi HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the course of assessment proceedings, the AO noticed that a sum of Rs. 66.50 lakhs was shown to have been received by the assessee from three persons by way of unsecured loans. What was significant was that, out of the said amount of Rs. 66.50 lakhs, a sum of Rs. 23.25 lakhs was received by the assessee from the said three persons in cash / bearer cheques in excess of the limit of Rs. 20,000/- laid down in section 269SS of the Income Tax Act, 1961. Inasmuch as the Assessing Officer felt that loans to the extent of Rs. 23.25 lakhs had been received and accepted by the assessee company in a manner prohibited by section 269SS of the said Act, he initiated penalty proceedings under section 271D of the said Act. </font></p>
<p><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">Asphalt Hot Mix Plant imported by appellant for construction of roads in UP consequent upon winning contract but diverted and used in state of Rajasthan and Tamilnadu as a sub-contractor - Pre-deposit Ordered: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the year 2006, the appellant imported one unit of "Asphalt Hot Mix Plant Batch Type MSD 2000 Capacity 160 TPH"and claimed the benefit of duty exemption amounting to Rs. 73,00,663/- under serial no. 230 of notification 21/2002-Cus dated 01.03.2002 as amended. Investigation carried out by the department in 2008 revealed that the appellant did not use the imported equipment for construction of roads in the State of UP at all but had diverted the same and used the equipment for carrying out construction of road in the State of Rajasthan as a sub-contractor of Punj Lloyd Ltd., and thereafter, since November 2008, the imported equipment was shifted to Chidambaram in Tamilnadu for carrying out a contract of road construction for M/s Oriental Structural Pvt. Ltd. as a sub-contractor. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p><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>
<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>
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