TIOL-DDT 1888 · 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=utf-8"> </head> <body bgcolor="#FFFFFF"> <p><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><a href="https://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img align="right" alt="DDT in Limca Book of Records" border="0" height="120" hspace="5" src="https://taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" width="175"/></a></font></strong></font><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="3">TIOL-DDT 1888</font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><br/>27.06.2012<br/>Wednesday</font></strong></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"> Good Bye Pranab Da</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong></strong></font> </p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong></strong></font> </p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>YESTERDAY</strong> Pranab Mukherjee left his North Block Office for good – never to return and possibly to occupy the palace right across. </font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><br/><img align="center" alt="Pranab Mukherjee" border="0" height="234" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/pranab_off.jpg" width="400"/> </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Picture above shows him with his staff, just before leaving North Block. Pranab Da was very popular with his staff. He was a babu's dream minister. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Addressing the media before leaving North Block, Pranab Da said, </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>I know you have many questions but today, my very last day in the Finance Ministry, is not the time to open up new dialogues. So let me just say how good it has been for me to have had these dialogues with you over the years. </em></font></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Today, I stand ready to embark on a new journey. I feel honoured and humbled on my nomination as a candidate to contest the Presidential election by UPA-II supported by SP, BSP, JD(U), Shiv Sena, CPI(M), FB and some other Parties for which election is scheduled to be held on 19 th of July. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Yet, standing on the brink of such an honour, I also feel a tinge of sentiment at the thought of leaving behind my life as a political activist, spanning over four decades. I will miss my colleagues in the Ministry of Finance. And I will also miss not being stopped while getting into my car and getting out of my car in front of the Ministry of Finance by you all. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Friends, I have travelled a great distance in my life but I always remind myself that I was born in a remote village in Bengal. I saw the lives of poor farmers and simple folks of rural India. I know that not every decision I have taken might have been right. But I have taken those decisions always keeping in mind those simple and poor people I knew from my childhood. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">You, members from the Media, have always reminded me of my responsibility, most of the time through your criticism, and sometimes, through your appreciation. I do hope our relationship will continue. </font></em></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">For a super-active politician like Pranab Mukherjee, Rashtrapati Bhavan would be a boring place – but maybe the man deserves a break. TIOL wishes Pranab Da all the very best in his new journey. </font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><img align="center" alt="Pranab Mukherjee" border="0" height="311" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/fm_pranab.jpg" width="400"/></font></p> <p align="center"><font color="#ff0000" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Just before the 1983 Budget </strong></font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">No Tax on Import of Services and no Exemption for Export of Services? </font></strong></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>WE</strong> received this from a <strong>concerned</strong> Netizen. </font></p> <blockquote><p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><em>Tax India On Line is publishing many pitfalls under the new regime of service tax discovered by its team as well as the Netizens. After going through each blunder, it feels like things cannot go worse than this. But to my disappointment, I came across one more notification, which can cause a difficulty for the babus. </em></font></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Notification 28/2012 dated 20 June 2012 intends to implement Place of Provision of Service Rules, 2012 (‘POP Rules'). Rule 1(2) of the rules lays down the date of implementation of the rules as 1 July 2012. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">However, while initiating the implementation of the rules, the first para of the notification is drafted to supersede Export of Service Rules, 2005 (Notification 9/2005 dated 3 March 2005) as well as Services (Provided from Outside India and Received in India) Rules, 2006 (Notification 11/2006 dated 19 April 2006). </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The catch here is that while the POP Rules will come in to force w. e. f. 1 July 2012 vide Rule 1(2) of the said rules, the notification is dated 20 June 2012 and once published in the Gazzete of India, will be effective from the date of notification itself. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Further, the notification is issued in supersession of the earlier notifications of Export and Import of services rules. There is no mention that the said rules will be superseded once the POP Rules comes in to force. </font></em></p><p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Accordingly, is it that the export and import rules are already superseded with effect from 20 June while POP Rules will be implemented from 1 July? </font></em></p><p align="justify"><strong><em><font color="#ff0000" face="Verdana, Arial, Helvetica, sans-serif" size="2">If it is so, are we living in an era (though of 11 short days) where in there will be no exemption on export of services and no service tax levy on import of services?</font></em></strong></p></blockquote> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Here is a simple notification, which supersedes two notifications and they have complicated matters to such an extent that vital limbs are chopped off. In this notification, they should have mentioned that the notification comes into force with effect from 1st July 2012. In fact, Notification No. 29/2012–S.T, clearly mentions at the end, "This notification shall come into force on the 1st day of July, 2012."</font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">There seems to be no limit to the ingenuity of the Board in messing up the law. Perhaps they should postpone this adventure by at least three months and get their act together, rectify all the lapses, clarify the doubts and then maybe, we can go for this new regime from 1st October. </font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">FTP - additional 1% Duty Credit Scrip for North Eastern States </font></strong></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>DGFT </strong>has added a Note in Appendices 37A and 37D of the Handbook of Procedures (Vol. I) (Appendices and Aayat Niryat Forms) 2009-14. </font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">"Note: Export of product listed in Table 1 & Table 2 above through any of the Land Custom Stations (LCSs) situated in the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim shall be entitled for additional Duty Credit Scrip @ 1% of FOB value."</font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">So, Export of the specified products through all Land Custom Stations of North Eastern Region and Sikkim are entitled for additional 1% Duty Credit Scrip. </font></p> <p><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn007.htm" target="_blank"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">DGFT Public Notice No. 07/(RE-2012)/2009-2014, Dated: June 26, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">CESTAT – Appeals to be Listed Within Four Weeks </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>BY</strong> a Circular dated 30th March 2012, the Registrar of CESTAT had directed that Appeals/Misc Applications received by hand in the Registry shall be listed before the Benches latest by third day of the receipt of appeal/application after issue of notice to the parties. Similarly, appeals/applications received by Registered Post/Speed Post shall be listed within one week.</font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Apparently, these directions were not practically feasible. So, the President has partially modified the instructions. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Now, Appeals received by hand shall be listed by the fourteenth day and those received by post are to be listed within four weeks. </font></p> <p><font face="Verdana, Arial, Helvetica, sans-serif" size="2">It is doubtful whether this would be possible. </font></p> <p><a href="https://taxindiaonline.com/RC2/inside2.php3?filename=wnew/circular_02_12.htm" target="_blank"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2">CESTAT CIRCULAR; Dated: June 26, 2012</font></strong></a></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2">DDT Cartoon</font></strong></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><img align="center" alt="DDT Cartoon" border="0" height="451" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/brilliant_advice.png" width="400"/></font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><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 color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><img align="left" alt="Legal Corner Icon" border="0" height="84" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" width="100"/>Central Excise</strong></font></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Central Excise - When legislature specifically fixes time limit within which duty with interest and penalty at 25% is to be paid for availing incentive, it would neither be open to appellate authority nor any other authority to permit assessee to pay 25% penalty at any time other than time prescribed under Section 11AC: Bombay: HC</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>SUBSTANTIAL</strong> question of law before the High Court was: - </font></p> <p align="justify"><em><font face="Verdana, Arial, Helvetica, sans-serif" size="2">"Whether the CESTAT was justified in directing the assessee to pay 25% of the penalty levied under Section 11AC within 30 days from the date of communication of the order passed by the Tribunal, when the first and second proviso to Section 11AC specifically provide that the benefit of reduced penalty at 25% shall be available only if the duty determined under Section 11A(2), interest payable thereon under Section 11AB and penalty at 25% of the duty determined under Section 11A(2) has been paid within thirty days from the date of communication of the order of the Central Excise Officer determining duty payable under Section 11A(2) of the 1944 Act?"</font></em></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">Income Tax </font></strong></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Whether pre-operative legal expenses incurred for expansion of same line of business but with new production facility can be said to be revenue in nature - YES: ITAT </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE </strong> issues before the Tribunal are - Whether pre-operative legal expenses incurred for expansion of the same line of business but with a new production facility can be said to be revenue in nature - Whether expenditure incurred on product Registration, Trade-mark Registration fees and Patent Registration creates any intangible asset and hence it is capital in nature not allowable as deduction u/s 37(1) – Whether clinical trial expenditure incurred by the assessee is eligible for weighted deduction u/s 35(2AB) even if it was incurred outside the approved R&D facility - Whether, for the purpose of deduction u/s 80IC, the profit of the eligible Undertaking has to be worked out by excluding the indirect cost incurred towards exploitation and free usage of the marketing network established by the assessee over a number of years and also the value of the self-generated brand and allocating such cost to the said Unit. And the verdict partly goes against the assessee. </font></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">Service Tax </font></strong></p> <p align="justify"><strong><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2">Appellant borrowing funds under scheme of External Commercial Borrowing from foreign lenders - commitment charges, up-front fee, arrangement fee, agency fee etc. whether chargeable to Service Tax under reverse charge mechanism - Stay granted and matter referred to CBEC Chairman for opinion: CESTAT </font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>THE</strong> appellant had borrowed funds under the scheme of External Commercial Borrowing (ECB) from various foreign lenders including International Finance Corporation (IFC) and Asian Development Bank (ADB) to augment fund requirement for its upcoming UMPP at Mundra. In respect of the loans taken from ADB and IFC apart from the payment of interest, the appellant also made certain other payments i.e commitment charges, up-front fee, arrangement fee, agency fee and out of pocket expenses to the lenders. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">It is the stand of the department that as per the provisions of section 68 of the Finance Act, 1994 in relation to the payments made towards commitment charges, up-front fee, arrangement fee, agency fee and out of pocket expenses paid to ADB and IFC, the appellant had not discharged their service tax liability on import of service under the category “Banking and Financial Services” on reverse charge mechanism. </font></p> <p align="justify"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until Tomorrow with more <strong>DDT</strong></font></p> <p><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Have a Nice Day</font></p> <p><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Mail your comments to </font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>