TIOL-DDT 1838 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 1838 </font><br>
18.04.2012 <br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone Serves Notice on Indian Government </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> everyone knew that, immediately after the ‘Finance Bill' 2012 is enacted, Vodafone would challenge the retrospective levy of Income Tax in the Supreme Court, Vodafone yesterday sprang a surprise. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone informed the London Stock Exchange yesterday that it has taken a different route, maybe as the first option. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone has yesterday served the Indian government with a Notice of Dispute ("Notice") regarding proposals in the Indian Finance Bill 2012 that violate the international legal protections granted to Vodafone and other international investors in India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"The Notice, served by the group's Dutch subsidiary Vodafone International Holdings BV ("VIHBV")", according to Vodafone, "is the first step required prior to the commencement of international arbitration under the Bilateral Investment Treaty ("BIT") between India and the Netherlands. VIHBV is a company constituted under the laws of the Netherlands and therefore an investor as defined under Article 1(d) of the Treaty."</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone says, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The dispute arises from the retrospective tax legislation proposed by the Indian government, which, if enacted, would have serious consequences for a wide range of Indian and international businesses, as well as direct and negative consequences for Vodafone. The proposed legislation would also countermand the verdict of the Indian Supreme Court in January 2012, which ruled that Vodafone had no liability to account for withholding tax on its acquisition of indirect interests in Hutchison Essar Limited in 2007. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the BIT, the Indian government is obliged, among other things, to: </font></em></p>
<ul>
<li><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">accord fair and equitable treatment to investors; </font></em></li>
<li><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">provide full protection and security; </font></em></li>
<li><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">not breach the legitimate expectations of investors in making investments; </font></em></li>
<li><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">not deny justice or breach previously provided assurances; and </font></em></li>
<li><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">not take steps to indirectly expropriate the investment. </font></em></li>
</ul>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone believes that the retrospective tax proposals amount to a denial of justice and a breach of the Indian government's obligations under the BIT to accord fair and equitable treatment to investors. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian government's retrospective tax proposals have also raised significant and widespread concern within India and internationally and have been criticised by businesses and industry bodies representing more than 250,000 companies across the US, Europe and Asia. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone has asked the Indian government to abandon or suitably to amend the retrospective aspects of the proposed legislation, as <strong>Vodafone would prefer to reach an amicable solution to this matter</strong>. However, if the Indian government is not willing to do so, Vodafone will take whatever steps are necessary to protect its shareholders' interests, including commencing ‘investment treaty arbitration proceedings' under the BIT against the Indian Government. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the Indian Supreme Court has emphatically held in several cases that the Parliament has the power to make retrospective legislation, this new twist of a notice under the Bilateral Investment Treaty, has added a new dimension to the case. Vodafone is not going to simply hand over a cheque for Rs. 12,000 Crores to the Indian Government on a platter, but what is more interesting is Vodafone's assertion that it prefers an <em><strong>amicable solution</strong></em>. What is <strong><em>amicable solution</em></strong>? Will they pay half the disputed amount? Interesting days ahead indeed! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Disposal of Confiscated Goods - Board Clarifications </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has issued clarifications on disposal of goods confiscated by the department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u>Sale through Army canteen/ CSD:</u></strong> The requirements of Army authorities/Military Canteens/ Canteen Stores Department (CSD) for purchase of confiscated/seized goods may be allowed since they provide consumer goods of high quality to the troops wherever they are situated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u>Sale through National Cooperative Consumers' Federation (NCCF)/ Kendriya Bhandar (KB)/consumer cooperatives:</u></strong> Any lot of confiscated / seized consumer goods of value not exceeding Rs. Five lakhs which are ripe for disposal shall be offered to NCCF/KB/Other Central Government Employees Consumer Cooperative Society/ Multi-State Consumer Cooperative Societies/ State Consumer Cooperatives, subject to the following conditions. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) They should be functional for at least 10 preceding years and should submit Income-Tax returns and VAT/ST returns showing their activities in sale of goods to the consumers and that appropriate taxes have been duly paid and relevant laws/rules and regulations are complied with. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Only those Co-operative Societies or National/State level Cooperative Federations that are duly verified and certified as genuine, every year by an officer not below the rank of AC/DC, and those that have been duly registered under Multi-State Cooperative Societies Act, 2002 or concerned State Cooperatives Act, should be permitted to purchase the confiscated/seized goods. The genuineness of co-operative societies/federation may also be verified through <em><strong>concerned</strong></em> Commissionerates or other field formations of this department, wherever required. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) They should be obliged to sell such seized/confiscated goods directly to bona fide consumers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) No pick and choose of items would be allowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) Seized/confiscated consumer goods shall be offered on first come first served basis . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) Any lot of confiscated/seized consumer goods of value exceeding Rs. Five lakhs shall not be sold directly to the aforesaid cooperative societies/federation and shall be sold by E-auction or auction-cum-tender basis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) Complete accounts may be called for scrutiny by the department as and when necessary, to ensure that the seized/confiscated goods, which are sensitive to smuggling are not misused; or to verify that their disposal has not been made to a single party/ individual; or to ensure that sale has not been made to any persons where in purchase vouchers etc. had been misused by unscrupulous elements in legitimizing smuggling. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sale through e-auction/auction cum tender:</strong> In respect of confiscated/seized goods of all types and confiscated/seized consumer goods exceeding value of Rs. Five lakhs in single lot, may be disposed through e-auction or auction-cum-tender, since it offers enhanced transparency and accountability for quick disposal of goods. In such e-auction or auction-cum-tender process, all persons including NCCF, KB, other CG employee's consumer cooperatives, Multi-State/State cooperatives or National/State level Cooperative Federations can also participate. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No. 11/2012 - Cus., Dated: April 12, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Reduces Repo Rate </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> has reduced the repo rate under the liquidity adjustment facility (LAF) by 50 basis points. The repo rate will accordingly drop from 8.5 to 8.0 per cent. Consequent to this, the reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, gets calibrated to 7.0 per cent. Similarly, the marginal standing facility (MSF) rate, which has a spread of 100 bps above the repo rate, stands adjusted to 9.0 per cent. In order to provide greater liquidity cushion, RBI has also decided to raise the borrowing limit of scheduled commercial banks under the marginal standing facility (MSF) from one per cent to two per cent of their net demand and time liabilities (NDTL). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Risk Factors:</strong> The RBI Governor has highlighted the risks to indicative projections of growth and inflation for 2012-13: </font></p>
<ul>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">First, a major risk to our growth and inflation projections stems from the outlook for global commodity prices, especially of crude oil. Although upside risks to oil prices from the demand side are limited, geo-political tensions are a concern. Any disruption in supplies is likely to lead to further increase in crude oil prices.
</font>
</div>
</li>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">The second risk emanates from the fiscal situation. Even though the Budget has proposed a reduction in the fiscal deficit in the current year, there are several upside risks. Any slippage in the fiscal deficit will have implications for inflation.
</font>
</div>
</li>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Third, the large Government borrowing budgeted for 2012-13 has the potential to crowd out credit to the private sector. If that happens, the supply response required to accelerate growth could be inhibited.
</font>
</div>
</li>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">Fourth, the financing of the current account deficit will continue to pose a major challenge.
</font>
</div>
</li>
<li>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">And finally, structural imbalances in protein-rich foods persist, and consequently, food inflation is likely to remain under pressure. </font></div>
</li>
</ul>
<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><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">Central Excise</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wires and Cables cleared in running length of 25 and 100 metres prima facie cannot be considered as parts of automobiles: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicants are engaged in the manufacture of wires and cables and paying duty as per the provisions of Section 4 of the Central Excise Act, 1944. The case of the Revenue is that the impugned goods are liable to be assessed in terms of section 4A of the CEA, 1944 by virtue of Notf. 11/2006-CE(NT) dated 29.05.2006 which notified parts, components and assemblies of automobiles falling under any heading. The issue involved in this case is whether the cables, which were cleared in running length of 25 and 100 meters, can be considered as parts, components or assembly of automobile. The applicants have a strong case. Therefore, the amount already deposited is sufficient for hearing of the appeal. Pre-deposit of the balance of duty, interest and penalty is waived and recovery thereof stayed. </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 undertakings of assessee were eligible for Sec 10B benefits prior to 1.4.1999 when period of tax holiday was extended to 10 years, assessee can continue to claim extended exemption for old as well as new but independent units - YES, rules ITAT Special Bench</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> is a company engaged in the manufacture and mainly export of cotton yarn, grey & finished knitted cotton fabrics & readymade garments. During the assessment year 2001-02, the assessee claimed income exempt u/s 10B of I.T. Act for three units namely original unit, which started production from A.Y. 1992-93, spinning unit no. III, which started production from A.Y. 1996-97 and spinning unit no. IV, which started production from A.Y. 1999-2000. During the course of assessment, the Assessing Officer observed that the first year of operation of original unit was assessment year 1992-93 and as there was loss, as per provisions of Section 10B(3), the assessee company exercised its option not to avail exemption u/s 10B of Income-tax Act, 1961, for assessment years 1992-93, 1993-94 and 1994-95. </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">Import of Oats - Tribunal directed Customs to release goods under certain conditions - Customs directed to implement Tribunal Order: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is clear that the petitioner would have to comply with a number of conditions before the goods in question are released. Sufficient safeguards had been incorporated in the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, to make sure that the goods in question are fit for human consumption, as they would be released only after appropriate inspection by the Port Health Authorities. The respondents are directed to implement the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 27.10.2011, within a period of two weeks. </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>
</body>
</html>