TIOL-DDT 1857 · the untouched capture
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<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 1857 </font><br>
15.05.2012 <br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shameful Backdoor Amendment to Notification by CBEC </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FACED </strong>with scathing criticism for its callous attitude in manufacturing defective notifications, CBEC has found a new way to overcome the problem - not of defects in notification but of criticism. THEY SIMPLY CORRECT IN THEIR COPY WITHOUT INFORMING ANYONE. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Take the recent
Notification <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/etariff12_24.htm" target="_blank"><strong>24/2012-CE</strong> </a>dated
08.05.2012. In the Notification as released and as carried by the CBEC website,
the first entry read as: </font></p>
<table width="90%" border="1" align="center" cellpadding="5" cellspacing="0">
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) </font></strong></p></td>
</tr>
<tr bgcolor="#FFE9D2">
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“70A </font></p></td>
<td valign="top"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2710 12 11,<br>
2710 12 12,<br>
2710 12 13, </font></p></td>
<td valign="top" bgcolor="#FFE9D2"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, other than <br>
goods at serial No. 70 </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-”; </font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was carried by us and several other sites.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But a few days later, without informing anyone, the Board simply corrected its copy of the Notification and added two more items 2710 12 20 and 2710 12 90. So, now in the corrected notification, the first item would read as,</font></p>
<table width="90%" border="1" align="center" cellpadding="5" cellspacing="0">
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) </font></strong></p></td>
</tr>
<tr bgcolor="#FFE9D2">
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“70A </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2710 12 11,<br>
</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2710 12 12,<br>
2710 12 13, <br>
<font color="#FF0000">2710 12 20, <br>
2710 12 90</font> </font></p> </td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, other than goods<br>
at serial No. 70 </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14% </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-”; </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This illegally and secretly amended notification was promptly uploaded in the website of CBEC, giving an impression that all other websites and maybe print publications are wrong! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the print publications must have already printed this notification and now, they don't even have an official amendment to correct what they printed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If an assesse does this kind of fudging, the CBEC would be glad to send him to jail and maybe if an officer indulges in this kind of fraud, he may even lose his job. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Board has all the impunity - after all, they are experts in misleading the Parliament of India and one of the shrewdest Finance Ministers in the world. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/etariff12_24.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New Notification No. 24/2012-CE, Dated: May 08 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RSP Assessment - Notification Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/exnt08_49.htm" target="_blank">49/2008</a></strong> - CE NT dated 24.12.2008, specifies the goods to which Section 4A of the Central Excise Act applies and allows the abatement as a percentage of the Retail Sale Price as mentioned in Col.4 of the table to the Notification. Now, several entries in this notification are amended. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/exnt12_26.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 26/2012-CE NT, Dated: May 10 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Sugar - Export Policy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended entries against Sl. No. 93 in Chapter 17 of Schedule 2 of ITC(HS) Classification of Export and Import Items. With this amendment, Export Licensing Note 1 of Chapter 17 would cease to be applicable for export of sugar, which is not against Advance Authorisation. For such exports, registration of quantity with DGFT would be mandatory. For export against Advance Authorisation Scheme, there would be no change. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Conditions for obtaining Registration Certificates (RCs) for export are specified in policy circular issued separately. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not117.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 117 (RE - 2010)/2009-2014, Dated: May 14 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Sugar - Export Policy - Conditions and modalities for registration of contracts </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>mentioned above, DGFT has issued a Policy Circular for Registration. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Each intending exporter has to first send an e-mail addressed to sugarexport-dgft@nic.in before filing hard copy of the application to the <em><strong>concerned</strong></em> RA for issue of RC. The subject header of this e-mail shall be “Name of applicant / IE Code / quantity applied in Metric ton / Name of the RA where application is being filed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The content of the e-mail would be a brief description of where the exporter wants to export and such other details that he may like to give. But it must contain the name, address, telephone number and other contact details, L/C number and date/ FIRC details and IEC Number of the applicant. <strong>An applicant can submit one application for issue of RC subject to a maximum quantity limit of 10,000 MT (Metric Tonnes) during the current sugar season (1st October 2011 - 30th September 2012)</strong>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. A printout of the e-mail sent to sugarexport-dgft@nic.in shall be enclosed to the hard copy of the application to be submitted to the RA within 2 days of sending e mail. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. If the documents received are found in order, the applicant shall be issued a Registration Certificate. Export against this registration certificate <u>shall be completed within a period of 30 days from the date of issuance of such certificate</u>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Failure to export the allowed quantity within the stipulated time would invite debarment from further registration. In addition, penal action as per Section 11(2) of the Foreign Trade(D&R) Act would be initiated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. A subsequent registration certificate will be issued only after submission of proof of having exported against previously obtained RC. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir062.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 62 (RE-2010)/2009-14, Dated: May 14 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Affordable IT Equipment Enabled India to Become a Powerhouse in Consulting Services - Lamy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the 15th Anniversary celebrations of the Information Technology Agreement yesterday, WTO Director General Pascal Lamy said, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The story of today's celebration started in 1996, when a group of WTO members overcame numerous political difficulties and technical obstacles, and finally came together to eliminate tariffs and expand trade in IT products. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They did this in a sector, which is a driver of productivity, innovation, development and economic growth. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">They did this in a pragmatic manner, by giving participants flexibilities to reach the end goal of eliminating tariffs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although developed countries still account for a large share of the investment and consumption of IT products, in recent years investment in this sector has increased considerably in some emerging economies - such as China, India and ASEAN countries. These countries have now turned into indispensable producers and consumers in global value chains of IT products. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Developing countries have also used IT products and technologies as effective means to establish their competitiveness and market position in other areas. For example, access to affordable IT equipment has been instrumental in enabling India to become a powerhouse in consulting services and software development. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In southern India, mobile phones have helped fishermen address information asymmetries with traders and consumers. Better market coordination has resulted in increased profits for the fishermen, lower fish prices for poor consumers as well as a reduction in wastage of fish.</font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the Indian Customs, Excise and Service Tax officers understand this concept when they book great gigantic cases against IT Companies . </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Data Cards for Babus </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has decided to allow use of data card for Internet subject to the conditions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. No Data-Card (Hardware etc) would be provided by the office and only re-imbursement for data use, through data card, will be allowed on submission of bill. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The User has the liberty to choose any operator/plan beneficial to them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Re-imbursement would be allowed for one data card connection only. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. There would be no separate ceiling for the internet through data card and the reimbursement will be allowed to the entitled officer according to the ceiling. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The maximum monthly reimbursable amount, towards charges on residential telephone/mobile phone/broadband/data card use (for internet purposes), to a category of a officer will be as under:- </font></p>
</blockquote>
<table width="90%" border="1" align="center" cellpadding="5" cellspacing="0">
<tr bgcolor="#B3D9E1">
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rank/Designation</font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ceiling Amount (in Rs.) </font></strong></p></td>
</tr>
<tr bgcolor="#B3D9E1">
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Secretary to the Government of India and equivalent rank </font></p></td>
<td valign="top" bgcolor="#E7F1F5"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2800 </font></p></td>
</tr>
<tr bgcolor="#B3D9E1">
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Additional Secretary to the Government of India and equivalent rank</font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2500 </font></p></td>
</tr>
<tr bgcolor="#B3D9E1">
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Joint Secretary to the Govt. of India and equivalent rank </font></p></td>
<td valign="top" bgcolor="#E7F1F5"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2000 </font></p></td>
</tr>
<tr bgcolor="#B3D9E1">
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Director and Deputy Secretary to the Government of India and equivalent rank</font></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1500 </font></p></td>
</tr>
<tr bgcolor="#B3D9E1">
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Below the rank of Deputy Secretary to the Government of India (restricted to 25% of Group 'A' Officers below the rank of Deputy Secretary)</font></p></td>
<td valign="top" bgcolor="#E7F1F5"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">800 </font></p></td>
</tr>
</table>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/Internet_Facility_Data_Card.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department of Expenditure OM No. No. 24(5)/E.Coord/2012 Dated: May 11 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"> - 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">CENVAT Credit</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">By no stretch of imagination, playing cards can be construed as an input for manufacture of spray guns; playing cards cannot be construed as ‘input service' as they are goods: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant are manufacturers of spray gun and spares falling under chapter 84 of the CETA, 1985. As a marketing gimmick, along with spray guns they supply playing cards as free gift. They procured playing cards on payment of excise duty and took CENVAT credit thereon. While discharging central excise duty on spray guns, they included the cost of the playing cards in the assessable value even though they claimed that playing cards are supplied free. </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 assessee pays commission to its Director, who holds 1% equity, for services rendered, such sum can be said to be in lieu of dividend and to be treated as a ruse to minimise overall tax effect - NO, rules ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> had claimed expenses on account of commission to director amounting to Rs. 39 lacs. Since in the opinion of AO this claim was prima-facie not allowable as per the provisions of 36(1)(ii), he required the assessee to furnish details of commission to director with the basis thereof and to also justify its allowability u/s 36(1)(ii). The assessee submitted that commission amounting to Rs. 39 lacs had been paid @ 1% of net profit. It was further pointed out that the commission was paid as remuneration for the services rendered by her for running the business and this sum was not otherwise payable as profit or dividend. The AO did not accept the assessee's contention and held that the commission of Rs. 39 lacs was not allowable as per the provisions of sec. 36(1)(ii). The CIT(A) confirmed the AO's view. </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">Notification No. 14/1997-CE (NT) dated May 3, 1997 restricting admissibility of Modvat credit for all petroleum products to extent of 10% irrespective of fact that whether inputs were manufactured in India or inputs were imported into India, is ultra vires: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> objective of the amendments so made vide Notification No.14/1997 and Section 87 of the Finance Act, 1997 was to restrict Modvat credit to 10% for inputs produced and manufactured in India is thus an undisputable position. By clubbing non-APM products, i.e. inputs imported on payment of full duty at the rate of 15%, the objective was not achieved and the amendments had no rationale relation with imports of petroleum products at full rate of duty. </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>
<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></p>
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