TIOL-DDT 1876 · 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 1876 </font><br> 11.06.2012 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisional Anti Dumping Duty on Gypsum Boards </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed Provisional Anti Dumping duty on imports of <em>Plain Gypsum Plaster Boards of all thicknesses and dimensions, excluding Gypsum Boards having water absorption up to and including 5%, generally referred to as Moisture Resistant Boards, and Gypsum Boards having a minimum breaking load of 24 Newtons in the transverse direction and 50 Newtons in the longitudinal direction per millimetre of thickness of the Board, characterized as Impact Resistant Boards or Fire Resistant Boards</em>, originating in or exported from, China PR, Indonesia, Thailand, and UAE. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The anti dumping duty is valid up to 06.12.2012 - of course the Government can extend it any time before or after expiry of the notification.</font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 32/2012-Customs (ADD), Dated June 07 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it compulsory to seek refund of CENVAT Credit in respect of Final products/Intermediate products cleared for export under bond or LUT? </font></strong></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A netizen sent us this mail – </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Take a look at the evolution of Rule 5 of the CENVAT Credit Rules, 2004 over the years - </font></p> <p align="justify"><u><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Year 2004</font></strong></u></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. Refund of CENVAT credit.</strong> - Where any input or input service is used in the final products which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) duty of excise on any final products cleared for home consumption or for export on payment of duty; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) service tax on output service, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund </strong>of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification: </font></p> <p align="center"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2004/exnt04_23.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 23/2004-CE(N.T) dated 10.09.2004 </font></strong></a></p> <p><u><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a>Year 2006 </a></font></strong></u></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. Refund of CENVAT credit . </strong>- Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) service tax on output service,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund </strong>of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification : </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that x x x.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided further that x x x </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Explanation: </em> x x x </font></p> <p align="center"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/exnt06_04.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[Notification No. 4/2006-C.E. (N.T.), dated 14-3-2006] </font></strong></a></p> <p><u><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Year 2012 </font></strong></u></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. Refund of CENVAT Credit. - (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit</strong> as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette: </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">x x x </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) This rule shall apply to exports made on or after the 1st April, 2012: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that the refund may be claimed under this rule, as existing, prior to the commencement of the CENVAT Credit (Third Amendment) Rules, 2012, <strong>within a period of one year from such commencement: </strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">x x x </font></p> <p align="center"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/exnt12_18.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[Notification 18/2012-CE(N.T) dated 17.03.2012 [w.e.f 01.04.2012]] </font></strong></a></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apart from the other complexities that were involved in “getting refund u/r 5” which have now become a staple part of the litigation pending before the CESTAT, I want to highlight one <strong>misconception</strong> (if I can say so) that has cropped up since 01.04.2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whereas, in terms of the earlier Rule 5 (reproduced above) that was prevalent till 31.03.2012, the Refund of Cenvat Credit was possible only when a manufacturer/service provider had used Cenvat credit on input/input service and exported the final product/intermediate product under bond/LUT or exported an output service and was not in a position to utilize the Cenvat Credit so earned for clearance of final products for home consumption or for export on payment of duty or for payment of service tax on output service. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The usage of the words “<strong>and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund</strong>” is a clear indication in this regard. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in the new rule 5 of CCR, 2004 w.e.f 01.04.2012, no such criteria of entitlement to refund is seen giving rise to a presumption that – </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ if the final/intermediate product is exported under bond/LUT OR the output service is exported, <font color="#FF0000"><strong>then the Cenvat Credit earned on inputs/input service has to be necessarily claimed as refund</strong></font>; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ in the above scenario, the <font color="#FF0000"><strong>Cenvat Credit so earned on inputs/input service CANNOT be used for clearance of final products for home consumption or for export on payment of duty or for payment of Service Tax on output service</strong></font>. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I feel that this could not have been the intention of the Central Government. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">And by the way, why is the old notification 5/2006-CE(N.T) dated 14.03.2006 still around when the fact of the matter is that the earlier rule 5 of CCR, 2004 has been substituted w.e.f 01.04.2012 OR will it be <strong>valid till 31.03.2013</strong> in view of the first proviso to the new rule 5(2) of CCR, 2004? So also, where is the notification that is supposed to be issued under the new rule 5 of the CCR, 2004? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I request<strong> DDT</strong> to highlight this quagmire so that the CBEC issues a clarification at the earliest before SCNs start flying. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Export of Skimmed Milk Powder Free </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended entry number 38 in Chapter 4 of Schedule 2 of ITC(HS) Classification of Export & Import Items. Export of Skimmed Milk Powder (HS Code 04021010) which was prohibited as per Notification No. 23 (RE-2010)/2009-2014 dated 18.02.2011, is now made free. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However export of Milk and Cream, concentrated or containing added sugar or other sweetening matter including <strong>Whole</strong> Milk Powder, Dairy Whitener and Infant Milk Foods, continue to be prohibited. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 2 (RE-2012)/2009-14 Dated June 08 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP – Skimmed Milk Powder added to (VKGUY)</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Appendix 37A of Vishesh Krishi and Gram Udyog Yojana (VKGUY), to add Skimmed Milk Powder with an admissible rate of 5%. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn004.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 4 (RE-2012)/2009-14 Dated June 08 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT - An Independent Agency? </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> its letter to Anna Hazare, the PMO states; </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Agencies like CBI, ED, CAG and <font color="#FF0000">CBDT</font> continue to function independently as per their mandates. In fact, the term of this Government has been especially marked by zero interference in the functioning of these agencies.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Has the PM seen and approved this letter? He was the Finance Minister once – he knows how independent the CBDT is. And why has he not included the CBEC? Both CBDT and CBEC are under the direct control of the Revenue Secretary/the Minister of State and ultimately the Finance Minister. And what is their independent functioning? They cannot transfer their officers, they cannot purchase stationery items and they don't have enough staff to work in their BOARDS – and the PMO says they are independent and the PMO is right – independence means “in – dependence”, which they certainly are in. And it is unfair to criticize an honest helpless Prime Minister! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM to Inaugurate Income Tax Chief Commissioners' Conference Today </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Pranab Mukherjee inaugurates the two day conference of Chief Commissioners and Directors General of Income-Tax, today at Vigyan Bhavan. The conference will be addressed by Dr. Kaushik Basu, Chief Economic Advisor, Ministry of Finance and Nandan Nilekani, Chairman, UIDAI apart from MoS Palanimanickam. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Conference will discuss: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Exchange and Sharing of Information with other Tax Administrations, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Latest Trends on International Taxation and Transfer Pricing, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Central Action Plan for 2012-13, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• National Judicial Reference System, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Overview of recent Audit and Judicial initiatives undertaken by the Department, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Ethics in Governance and Taxpayers Service, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Direct Tax Code, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Areas of Revenue Mobilization and Augmentation, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Human Resource Management, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Tackling Refund Frauds and Emerging Needs of In-Service Training in the Department, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• New Management Information Systems regime. </font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prostitution under Service Tax? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> an article that we are carrying today in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15195" target="_blank">SERVICE TAX- NEW LAW +VE or -VE</a> </strong>, a learned advocate wonders whether prostitution will be taxable as it does not figure in the negative list. But the negative list also does not have, smuggling, murder, Transfer Pricing (i.e arranging transfers of babus), doing official favours for a price and a host of<font color="#FF0000"><strong> illegal</strong></font> activities. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And if prostitution is taxable, will CENVAT credit be allowed on condoms? Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10336" target="_blank">DDT 1291 03.02.2010</a></strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10336"></a> </font></p> <p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on Escort Services By Clara An escorted Netizen Please see<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6787" target="_blank">DDT-801 11.02.2008 </a></strong></font> </p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">NEGATIVE LIST - POSITIVE SERVICE </font></strong></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_cartoon.jpg" alt="Legal Corner Icon" width="500" height="297" hspace="5" border="0" align="centre"></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"> – Tuesday's cases</font></strong></font></strong></font></p> <p><strong><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"></font><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">CHA Licence - examinations held under 1984 Regulations did not get nullified with the enactment of 2004 Regulations and candidates who had qualified examinations held under 1984 Regulations are not required to again qualify examination which may be held under 2004 Regulations; Board is not empowered to make Regulation with Retrospective Effect: SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> language of the opening paragraph of the 2004 Regulations and proviso to Clause 8(1) thereof make it clear that those who have already passed the examination are not required to appear in any further examination. It is also evident from the plain language of the opening paragraph of the 2004 Regulations that the actions already taken under the earlier regulations, that is, the 1984 Regulations were saved. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The language of that section and other provisions of the Customs Act do not indicate that the Board is empowered to make Regulations with retrospective effect. Therefore, the 2004 Regulations would operate prospectively and would not in any manner affect the eligibility and entitlement of those who had qualified the examination held under the 1984 Regulations for grant of licences to act as Custom House Agents. </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's representative actively participates in assessment proceedings, it can still dispute validity of service of notice u/s 143(2) - NO: Delhi HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a partnership firm consisting of two partners namely Manoj Gupta and his wife. The income declared in the return was Rs. 7,83,554/-. The return was processed on 01.03.2004 u/s 143(1)(a). Subsequently it was taken up for scrutiny and accordingly a notice u/s 143(2) was issued on 30.12.2004. Pursuant to the notice issued on 12.09.2005 u/s 142(1) and several notices issued thereafter, the assessee actively participated in the assessment proceedings and partly furnished the details, documents and information called for by the AO. The assessment proceedings ultimately resulted in an assessment order passed u/s 143(3) r/w Section 144. The total income assessed was Rs. 8,51,12,030/-. The AO did not allow the claim u/s 80HHC. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CIT (A) held that so far as assessment completed u/s 144 was concerned, it was correct, and in accordance with the law, and therefore its validity was upheld. In appeal, the Tribunal agreed with the contentions of the assessee and concluded that the notice u/s 143(2) had not been served on any of the two partners of the assessee-firm and that it was not even the case of the AO that it was so served and quashed the assessment order. </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">Duty on ‘plastic ropes' increased from 4% to 8% on 07.07.2009 - since as per rule 5 of CER, 2002, date for determination of duty is rate in force when such goods are removed from “factory”, <em>prima facie</em> differential duty cannot be demanded on clearances made to “consignment agent” prior to this date - 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> applicant is engaged in the manufacture of plastic ropes. Certain quantities of these goods were cleared on payment of duty from the factory to the “consignment agent” on 'stock transfer' basis. With effect from 07.07.2009, rate of duty on ‘plastic ropes' was increased from 4% to 8%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the goods would, in all probability, be removed from the premises of the ‘consignment agent' on and after the date of 07.07.2009, the lower authorities, took a view that the goods cleared to the consignment agent on 'stock transfer' basis prior to 7.7.2009 will also attract duty @ 8%. The lower authorities issued and confirmed the differential duty demand. </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> <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> </body> </html>