TIOL-DDT 1886 · 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 1886 </font><br>
25.06.2012 <br>
Monday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bharti Airtel - Huge Win for Revenue in Rs. 440 Crores Case</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong>WE </strong>are reminded of an overcautious passenger traveling by bus who purchased two tickets though he was traveling alone. When a curious co-passenger enquired as to why he was purchasing two tickets when he was traveling alone, he clarified that it was to avoid embarrassment before the ticket examiner in the event of one of the tickets being lost. The co-passenger further queried as to what would happen if both the tickets purchased by him were lost or misplaced and thereupon, the overcautious passenger confided that he was already having a monthly pass"! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You think this is a copy and paste mistake? What is this story about a cautious passenger in a report about a tax case? Well this is an extract from the mega order delivered by CESTAT recently in the now (in)famous Bharti Airtel case where the duty and penalties involved were over Rs. 400 Crores. For the last four years, the case was heard by several benches of the CESTAT. Finally, the present Bangalore bench of the Tribunal delivered recently an exhaustive judgement running into 96 pages. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellants imported telecom equipment with the related software along with backup etched into the hardware. The appellants also imported the software in CDs/ODs. The latest software could also be downloaded through Internet. If the software was already etched into the hardware and there was backup and it could be downloaded, why did they import the CDs/ODs (which were incidentally not opened for years!)? It is this situation which reminded the Tribunal about the over cautious passenger. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Other interesting quotes from the Tribunal's Order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A cat may resemble a tiger in certain respects. The cat and the tiger may belong to the same family among animals. However, cat and tiger cannot be treated to be identical on all respects. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A computer with a printer performs all the functions of a typewriter. However, computer is much more than a mere typewriter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Computers are excisable goods and the software meant for computers are also excisable goods. It is not as if every software is to be treated separately for the purpose of classification and valuation. It depends upon various factors like the nature of products and the purpose for which the software is to be used, whether the said software is marketable separately, whether the software is so essential to give the identity to the computer and without which the same becomes dysfunctional or whether the software is meant to enhance its utility. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As usual, we are the first to bring you the latest judgement. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15295" target="_blank">Breaking News</a></strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Awards for Income Tax Officers</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Finance Minister has approved a scheme of awards to officers and staff of the Income Tax Department who render exceptional meritorious service and display outstanding devotion to duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"The Certificate of Appreciation" would be conferred on employees for display of specific acts of exemplary devotion to duty including performance of an act of extremely arduous nature beyond the call of duty, involving extreme effort and resulting in substantial/potential benefit to the Government and/or acts involving grave personal risk etc,. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Certificate of Meritorious Service" would be for employees who have put in at least 15 years of service and who have rendered consistently high levels of meritorious service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is already such a scheme in CBEC. It's a mystery why no such scheme existed in CBDT for so long.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An award, a little praise, a small pat - these are great motivating factors for many employees, though many awards are looked down with contempt these days, because awards are not conferred but manipulated and managed. And you know there is an unofficial quota system in these awards. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And in the Revenue Departments, there is the ignominy of awardees being caught by CBI and going to jail. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/CBDT_Awards_Scheme.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">F.No.HRD/PM/425/2 /2012-13/716 ; Dated June 22 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Live Webcast of CBEC Seminar</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TODAY</strong> CBEC Member (Service Tax) Shiela Sangwan is to address a Seminar today in Hyderabad on <strong>Impact of Budgetary changes - Taxation of Services</strong>. The programme is to be webcast live from 11 am to 1.30 pm at <a href="http://bonlive.in/hyderabad-customs.aspx"><strong>http://bonlive.in/hyderabad-customs.aspx</strong> </a>and the CBEC website. Do watch the webcast to see what the top brass of the Department has to say on the negatives and positives of the new Service Tax regime. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable Territory? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Service Tax Law has introduced a new concept - "Taxable Territory" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 65B(35) of the Finance Act, 1994 defines "<strong>non-taxable territory</strong>" as the territory which is outside the <em><strong>taxable territory</strong></em>; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 65B(52) of the Finance Act, 1994 defines "<strong>taxable territory</strong>" as the territory to which the provisions of this Chapter apply. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 64(1) of the Act stipulates <font color="#FF6633"><strong>that the Chapter extends to the whole of India except Jammu and Kashmir. </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Therefore, the "Taxable Territory" is India except</font></strong> Jammu and Kashmir. The Guidance Note 5.2.2 issued by the Board states, </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is "taxable territory"? What is its significance? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">Taxable territory has been defined in sub-section 52 of section 65B. It means the territory to which the provisions of Chapter V of the Finance Act, 1994 apply i.e. whole of India excluding the state of Jammu and Kashmir. "Non-taxable territory" is defined in sub-section 35 ibid accordingly as the territory other than the taxable territory. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">"India" is defined in sub-section 27 of section 65 B, as follows: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">"India" means-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">(a) the territory of the Union of India as referred to in clauses (2) and (3) of article 1 of the Constitution; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">(b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">(c) the sea-bed and the subsoil underlying the territorial waters; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">(d) the air space above its territory and territorial waters; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#CCCCCC" span="span">(e) the installations structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof; </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#CCCCCC" span="span">The new charging section, section 66B, enables taxation of only such services as are provided in taxable territory. <strong>Thus, services that are provided in a non-taxable territory are not chargeable to service tax</strong>.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New FM Tomorrow </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Pranab Mukherjee is all set to put in his papers tomorrow. 21 years ago, in 1991, an academician found himself in the North Block as the Finance Minister of India with the task of saving the Fiscal India. He managed to pull out a drowning economy and put it on a fast track with no possible reverse gear. 21 years later, the academician is grappling with third rate politics over which he has no command or control and he finds the Finance Ministry slot vacant - too tempting to resist! And the economy is almost back in the 1991 position in spite of all positive factors. The Rupee is low at indecent levels; Corruption is high at levels that are more indecent and fiscal law making is at its height of indecency. Now, we need a Finance Minister who can instil confidence and pull the economy out of the mess it is in, lest we should end up eating lizards. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The attitude that all businessmen are evaders and that all foreign investors are out to loot India, should change. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We need a Statesman as Finance Minister who can see beyond the next elections. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon</font></strong></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt25june.jpg" alt="DDT Cartoon" width="424" height="479" hspace="5" border="0" align="center"></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 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">Service Tax </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">ST
- Collection of Passenger Service Fees (PSF) from passengers on behalf
of Airports Authority of India and depositing the same with AAI – collection
charges obtained thereon from AAI is prima facie chargeable to Service
Tax under the category of “Business Support Services” and not
BAS – Pre-deposit of ST of Rs.1.05 Crores waived and stay granted:
CESTAT</font><br>
<br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JET</strong> <em>Airways</em> is
the applicant seeking a Stay of the Service Tax demand of Rs. 1.05 Crores
confirmed against them along with interest and penalties by the CCE,<em> Thane-II</em>.</font></p>
<p><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 - </strong> <strong>Whether when the genuineness of the transaction
is not in doubt, even then 20% disallowance is warranted for violation
of Sec 40A(3) - YES: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues before the Bench are - Whether
when the genuineness of the transaction is not in doubt, even then 20%
disallowance is warranted for violation of Sec 40A(3) and Whether the disallowance
made u/s 40a(ia) can be made only on the amounts payable by the assessee.
And the answers go against the assessee.</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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notfn. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_010.htm" target="_blank">10/2006-CE</a> -Central
Railway Printing Press, Mumbai is engaged in printing of registers, accounts
books, various forms, order books, receipt books and similar articles – there
is no evidence on record to show that the goods in question are capable
of being bought and sold in the market - Prima facie strong case in favour – Pre-deposit
of C.Ex. duty of Rs.2.18 Crores along with penalty and interest waived
and stay granted: CESTAT </strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">HEREIN</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> below
is the Table extracting the entries as appearing in the Notification <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=29&filename=notification/excise/2003/etariff03_010.htm" target="_blank">10/2003-CE</a></strong> dated
01.03.2003. </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 align="justify"><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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