TIOL-DDT 1875 · 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 1875 </font><br>
08.06.2012 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IRS v IRS - Transport of Goods by Rail - ST @12.5% (?) from 01 July - Will Didi Agree? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALL</strong> the major newspapers today reported quoting CBEC Chairman that a 12.5% Service Tax is to be levied on rail freight from 1st July 2012. The Chairman is reported to have made this statement at a function organised by ASSOCHAM yesterday. Nobody, not even a very respected newspaper like the HINDU bothered to check if there is any rate of Service Tax at 12.5%. The ASSOCHAM Press Release stated 12.5% and all the top newspapers simply copied the text. Certainly, the Chairman would not have made such a statement. No way; he surely knows that service tax rate is 12%; he must have mentioned 12.36% (including Cess). This is how the top media in the country report tax matters – very junior reporters who have absolutely no idea of the subject are appointed to cover important tax events and they go round asking irrelevant questions to the top officers who are only too glad to oblige for the sake of a little media glare. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Coming back to our service tax on transport of goods by rail, all the efforts of the Revenue to tax transport of goods by Rail were thwarted by the Rail Ministry and it had been postponed several times. Will the Railways relent this time? Now they propose to tax even passenger tickets. Will Didi agree? We will have to wait for a few weeks to know. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exchange Rates Notified - At last </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NORMALLY</strong> the exchange rates for imported goods and export goods are notified in the last week of the month and are applicable from the 1st of the following month. During the last week of May 2012, CBEC did not notify the exchange rates and frantic importers and exporters started calling us up and some of them were very angry with us for not publishing the notification. "Why didn't you publish the exchange notification?", asked an angry caller without any perfunctory courtesy. We had to patiently explain that we don't make the notifications - we only report them. There was no way we could report a notification that was yet to be issued by the CBEC! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Are you sure they have not issued the notification?”, asked the Director of a top firm. We assured him that the notification was not issued. Then he said, “What I am worried about, is that they will issue the notification on 8 th June and put the date as 1st June and we will be stuck with the new rates retrospectively." We had to convince him that no such thing is going to happen. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CBEC has issued the Notification determining the rates of exchange for imported goods and export goods with effect from 08.06.2012. So, there is no worry – the rates are effective prospectively. The Import Rate for a US Dollar is Rs. 55.55 and export rate is 54.70. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 49/2012-CUSTOMS (N.T.) Dated June 07 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value of Gold Hiked</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has hiked the Tariff Value of Gold from 501 to 531 dollars per 10 grams. There is no change in the Tariff Value of other items including silver. Now there would be no incentive in importing gold on payment of duty as the price would be same abroad and in India. This may lead to a spurt in smuggling and corruption. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_048.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 48/2012-CUSTOMS (N.T.) Dated June 07 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Assessee Dead - Can dues be collected from Son? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Karnataka High Court dealt with an interesting case recently. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Whether a dead person's legal representative can be made liable for excise duty, when the father was even not issued a demand/ SCN when he was alive or when no adjudication order was passed against him? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Whether a dead person's legal representative (son/ family member) can be issued a SCN for the acts or omissions of his deceased father? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. What is the operative effect of section 11A on deceased person's legal representatives, in the light of absence of recovery mechanism in that provision in Central Excise law? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. What is the scope of section 11 amended from 10.9.2004? </font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this case today - Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15175" target="_blank">Breaking News</a>. </strong></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><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">Cenvat Credit taken on strength of challans and not Bills of Entry - fact of payment of duty on imported goods and their usage in manufacture of final products cleared on payment of duty not in dispute - pre-deposit waived and stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPLICANT</strong> paid the appropriate duty; the same has been accepted by the customs authorities and imported goods released and thereafter used in the manufacture of final product cleared on payment of duty. These facts are not in dispute. Therefore the pre-deposit of duty, interest and penalty is waived and recovery of the same is stayed during the pendency of the appeal…. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether proviso to Sec 272A(2), which was introduced to scale down
quantum of penalty to amount of tax deductible is remedial in nature, and
thus it is retrospective in operation - YES: Gujarat HC</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue before the Bench is - Whether the proviso
to section 272A(2) inserted by the Finance Act, 1998 which was introduced
with the intention to obviate the unintended consequences of section 272A
by scaling down the quantum of penalty to the amount of tax deductible
or collectible at source and is remedial in nature, and the proviso is
be treated as retrospective in operation. And the answer goes to favour
the assessee.</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">Availment of Cenvat Credit on common Input services - even during year 2007-08, rule 6(5) of CCR, 2004 entitled an assessee to avail CENVAT credit of whole of service tax paid in respect of specified services - restricting same to 20% is not sustainable in law - Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in Commercial and Industrial Construction Services and availed CENVAT Credit facility. They also undertake non-commercial construction services i.e. construction not used for commerce and industry such as construction of education Institutions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the course of audit of the records, it was noticed by the department that the assessee had taken CENVAT Credit in respect of input services amounting to Rs.14,82,515/- during 2007-08 and as per the Rules 6(3)(c) of the CENVAT Credit Rules, the appellant was entitled to avail CENVAT credit only to the extent of 20% of the service tax payable whereas the appellant had availed 100% of the CENVAT credit. After adjusting the 20%, the appellant was required to pay Rs.11,14,303/- being excess of CENVAT credit availed in respect of input services during 2007-08. </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 Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a Nice Weekend </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>
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