TIOL-DDT 1827 · 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 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></strong></font><font color="#663399" size="3">TIOL-DDT 1827</font><br> 30.03.2012<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - POT Rules - Board Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Rule 7(c) of the Point of Taxation Rules 2011, the point of taxation in respect of individuals or proprietary firms or partnership firms providing taxable services referred to in sub-clauses (g) <em>consulting engineer , (p) Architect, (q) Interior Decorator, (s) Chartered Accountant, (t) Cost Accountant, (u) Company Secretary, (za) Scientific and Technical consultancy and (zzzzm) Legal Consultancy, </em>was the date on which payment was received or made. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 4/2012 - Service Tax dated the 17th March 2012 amended the Point of Taxation Rules 2011 with effect from 1st April 2012, amending Rule 7 The provisions have been amended both in the Point of Taxation Rules 2011 and the Service Tax Rules 1994 such that from 1st April 2012 the payment of tax shall be allowed to be deferred till the receipt of payment upto a value of Rs 50 lakhs of taxable services. The facility has been granted to all individuals and partnership firms, irrespective of the description of service, whose turnover of taxable services is fifty lakh rupees or less in the previous financial year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has received representations, in respect of the specified eight services, requesting clarification on determination of point of taxation in respect of invoices issued on or before 31st March 2012 where the payment has not been received before 1st April 2012. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board Clarifies:</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For invoices issued on or before 31st March 2012, the point of taxation shall continue to be governed by the Rule 7 as it stands till the said date. <strong>Thus in respect of invoices issued on or before 31st March 2012 the point of taxation shall be the date of payment.</strong></font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2012/sercir154.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 154/5/2012-ST, Dated : March 28, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CE Exemption for Mega Power Projects - Board Clarification </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SL.</strong> No. 91B of Notification No.6/2006-CE dated 1.3.2006 (present entry no. 338 of Notification No. 12/2012-CE dated 17.3.2012) prescribes exemption to specified goods when supplied to Mega Power Projects. The exemption is available subject to condition No.28 which, inter alia, prescribes that in case the certificate issued by the Joint Secretary in the Ministry of Power regarding the project having the status of Mega Power Project is provisional, the Chief Executive Officer of the Project has to furnish a Fixed Deposit Receipt (FDR) for an amount equal to the Central Excise duty payable for a term of thirty six months or more to the Deputy Commissioner or the Assistant Commissioner of Central Excise having jurisdiction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Certain clarifications were sought with regard to this Notification and CBEC Clarifies: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) <strong>Whether the FDR is required to be submitted to the jurisdictional officer in-charge of the Mega Power Project or to the jurisdictional officer in-charge of the factory from where the goods are cleared for supply to such project:</strong> It is clarified that the FDR is required to be submitted to the jurisdictional Deputy Commissioner or Assistant Commissioner, in-charge of the factory from where the goods are cleared in terms of this notification and not to the jurisdictional officer, in-charge of the Project. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) <strong>Whether only one FDR is required to be submitted in respect of the clearances which are likely to take place over a period of time or the fixed deposits can be submitted at regular intervals:</strong> It is clarified that the notification does not provide for submission of a single FDR. The FDRs can be submitted by the Project Director at regular intervals as and when the clearances take place. However, each FDR has to be for a period of thirty six months or as stipulated in the notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Whether the provisions of Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 are applicable to such clearances: These rules are applicable in case the inputs are removed for further use by a manufacturer and not for use in a project. In fact, neither entry No.91B of Notification No.6/2006-CE, nor condition No.28 corresponding to the said entry prescribes that to avail the exemption, the procedures prescribed under the above mentioned Rules have to be followed. Therefore, it is clarified that the provisions of Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 are not applicable in case of such removals. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2012/excircular963.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 963/06/2012-CX., Dated: March 29, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prohibition on Import of Filter Rod - Government Amends Notification</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per Notification No. 16/2011-Cus (N. T.), dated, the 1st March 2011, import of Filter Rod is prohibited except when imported for use in the manufacture of Filter Cigarettes. Now, the notification is amended to add bidis or Pharmaceutical products of Chapter 30 to cigarettes. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_027.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 27/2012 - Cus.,(N.T.), Dated: March 28, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government Response - Fertiliser Enigma </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> our Post Budget stories we carried an article - <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14599"><strong>CVD Rate on Imported Fertilizers – Existing Enigma</strong>,</a> in which the problem with the CVD rate in sl. No. 200 of Notification No. 12/2012 – Cus had been highlighted and a possible solution was suggested. While the Board responded by changing the ‘-‘ to 1%, it is doubtful whether this would solve the problem. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_024.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 24/2012- Cus, Dated: March 28, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Utilizing Refunded SAD for Duty Payment (DEPB) - Extended Again </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Circular No 27/2010-Customs, dated 13.08.2010, provided the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD (SAD) refunds for payment of duty in case of re-credited DEPB/Reward Scheme scrips upto 30.12.2010. However several representations have been received from trade and industry to extend the time up to 30th June, 2011 for using re-credited 4% CVD(SAD) amount in DEPB as they have not been able to utilize the re-credited DEPB / Reward Scheme scrips within the stipulated time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Circular No.11/2011-Customs, dated 24.02.2011, Government had extended this time till 30.06.2011. Still there were representations that the trade could not use this facility within the stipulated time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, a benign Government had extended it till 15.09.2011 by Circular No. 30/2011-Cus dated 19.07.2011, with a rider that <strong>no further extension shall be given</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The by Circular No. 2/2012 dated 16.01.2012, they have further extended it till 31.03.2012, with a rider that " <strong>No further extension shall be given under any circumstances</strong>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow is 31.3.2012 – DDT had carried the agony of a Netizen in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14386" target="_blank">DDT 1805 – 29.02.2012</a></strong> - <em>The CBEC did their work rather a favour by extending the time upto 31/03/2012 with a strong message that no further extension shall be granted; however a new problem has cropped up. Who will ring the bell at the DGFT????? The DGFT regional offices have refused to re-credit the scrips. Why? Sir, CBEC Circular has no binding force on us and there are no instructions from DGFT, New Delhi to do so, so far (read as 28/02/2012). It has been more than a month; any request to DGFT New Delhi is falling on deaf ears. With just a month remaining to go........ Where does trade ring the bell????????? What is the value of the Circular so issued by the CBEC???????? If 31/03/2012 goes by who shall be responsible for the loss???????</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the CBEC has answered that - the importers may be advised to make the initial payment of 4% CVD in cash. DGFT has also informed that no re-crediting shall be done if such payment is made by means of scrips. In other words, in future exporters should pay SAD component in cash if they want a refund . </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the time is extended till 30.06.2012.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_010.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 10/2012-Cus., Dated: March 29, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI Arrests Customs Superintendent – Finds over 30 Lakhs cash </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Bureau of Investigation, Chennai has registered a case against a Superintendent of Customs (Authorised Officer, ELCOT Special Economic Zone, Sholinganallur, Chennai) U/s 7 of Prevention of Corruption Act, 1988 on the allegation that he demanded a sum of Rs. Fifty thousand as illegal gratification from the complainant for obtaining Bill of Entry in the name of the complainant's firm for taking out Scrap from Special Economic Zone. He was caught red handed while demanding and accepting the bribe of Rs.50,000/- from the complainant. He was produced before the Principal Special Judge for CBI Cases, Chennai who remanded him to judicial custody till 10.04.2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Search was conducted at his residence and cash of Rs. 14.7 lakhs was seized. CBI got cash of Rs. 20 Lakh from two of his lockers, apart from deposits and investments to the tune of Rs. 50 Lakhs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nobody seems to be afraid these days – even as a CBI raid goes on in one part of the building, people are taking bribes in another part, not bothered about the plight in jail or the social stigma or the hell, which the family has to go through. Once an officer is caught red handed; he is finished for life – but still people are ready to take the risk, in spite of reasonably good salaries now.! </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 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"><strong><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Intellectual Property - Using brand name of Motorcycle Company on Oil Company's products - Taxable Service: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> goods manufactured by the oil companies are to be used in the vehicles manufactured by the appellant companies and have a strong connection with the same. The appearance of the trade mark "Hero Honda" and "Hero Honda 4T plus" on the oil company's products definitely indicates a connection between the said companies and the appellants product. If the oil companies would have used the said trade mark without entering into an agreement with the appellant, the same would have amounted to infringement of their right in terms of the sub-clause (4) of the Trade Mark Act. This explains the need to enter into an agreement with the appellant and for payment of royalty to them. </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 benefits of Sec 80IA(4) are available only to a company and not to persons like HUF, firm and Individual - YES, rules ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> Company claimed deduction under section 80IA of the Act as the profit and gains were from industrial undertaking engaged in infrastructure development. The same was denied by the lower authorities on the reason that the assessee had not developed any new infrastructure facility as required under section 80IA(4)(i)(b) of the Income-tax Act. According to the Revenue, the assessee had only taken up the renovation and modernisation of the existing net work/infrastructure facilities. It was also observed that as per the agreement, the assessee entered for building or constructing the whole or part of the project for which the entire investments were made by the Government and the assessee was paid ‘on running bill to bill' basis. Hence, there was no stipulation in any of the contracts that the facility built would be transferred or handed over back to the owner/employer. Being so, such contracts were not eligible for deduction under section 80IA of the Act. </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">Appellant clears parts of Drums and C.S columns on payment of C.Ex duty for erection at site - Revenue seeking valuation on contract price - Since assessee also discharges Service Tax on activity of erection and commissioning of same goods, prima facie strong 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>THE</strong> contention of the applicant is that appropriate duty has been paid at the time of clearance of the goods and thereafter on the activity of erection and commissioning the applicants are paying service tax which is much more than the demand of duty in the present proceedings. Therefore, the demand is not sustainable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As applicants are paying service tax in respect of erection and commissioning of the same goods, therefore, prima facie, the applicants have a strong case in their favour. Therefore, pre-deposit of duty, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal. </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> <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> </body> </html>