TIOL-DDT 1912 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></strong></font><font color="#663399" size="3">TIOL-DDT 1912 </font><br>
31.07.2012 <br>
Tuesday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Amendment in General Note for Fuel for Product Group at Sl. No. 23. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DESCRIPTION</strong> of Sl. No. 23 of General note for fuel in HBP Vol. II has been amended to harmonise it with SION C-593, as modified on 02.06.2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The export product under SION C-593 was modified from "Carbon Steel Submerged Arc Welded Pipes as per API Grade/ASTM Grade or equivalent OR Hot Formed Steel Bends as per API, ASTM Grade or equivalent grade Degree: 0-180 Degree"to "Non Alloy/Alloy Steel Submerged Arc Welded Pipes as per API Grade/ ASTM Grade or equivalent OR Hot Formed Steel Bends as per API, ASTM Grade or equivalent grade Degree: 0-180 Degree"vide Public Notice No. 51/2010 dated 02.06.2011. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The General Note for fuel at Sl No. 23 in Handbook of Procedures, Vol. 2 (SION Book) continues to mention the export product as "Carbon Steel submerged Arc welded pipes coated/ uncoated"which was the description prior to amendment of SION C-593. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, Sl No. 23 in the General Note for fuel is amended and will now read as under:-</font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Non Alloy/Alloy Steel Submerged Arc Welded Pipes Coated/ Uncoated."</font></em></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn013.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No. 13 ( RE: 2012 )/2009-2014, Dated: July 30, 2012 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Courier Imports and Exports (Electronic Declaration and Processing) Regulations - <em>Are they in force? </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong>, DDT mentioned about the amendment to the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, laying down the procedure for revoking registration of Couriers . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A concerned Netizen points out that the amendment does not practically serve any purpose at this point of time simply because these Regulations, 2010 are yet to be implemented, while the old Courier Regulations, 1998 (manual mode) are still in force. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He informs: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">M/s Wipro was entrusted with the task of development of EDI module under the tripartite agreement reached between the Govt. of India (represented by D.G . Systems), M/s EICI , (custodian at the Mumbai and Delhi Courier Terminals ) and M/s WIPRO with the objective of speedy clearance of cargo arriving through the courier mode. The pilot project of automation tried out several times in the past two years at Mumbai and Delhi has failed. The apparent reasons being slow server, inherent problems in the software developed, system does not capture entire data fed by Couriers, etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Courier Import & Export (Clearance) Regulations, 1998 are in force in Mumbai, Delhi, Bangalore and all other stations notified for courier clearance. Hence, Notification No. 65/2012 amending electronic regulations Notification No.36 /2010 will have any relevance only after EDI is introduced. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is the fate of our Systems! </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revocation
of CHA licence - Commissioner has power to disagree with findings of Inquiry
Officer: High Court LB </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question before the Larger Bench of the Bombay High Court was: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Under the provisions of Regulation 22 of the Custom House Agents Licensing Regulations, 2004, is the Commissioner of Customs entitled to differ with the findings which have been arrived at by the Deputy Commissioner of Customs or, as the case may be, the Assistant Commissioner of Customs in the report submitted under clause (5) of the Regulation </em>? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under Regulation 22(1), it is the Commissioner who is empowered to issue notice to the CHA setting out the grounds on the basis of which he proposes to suspend or revoke the CHA license and require the CHA to submit his written statement of defense to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by the Commissioner of Customs. Under Regulation 22(2), the Commissioner is empowered to direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are disputed by the CHA. Regulation 22(3) to Regulation 22(5) set out the mode and the manner in which the inquiry is to be conducted by the inquiry officer and submit the report to the Commissioner. Regulation 22(6) requires the Commissioner to furnish to the CHA a copy of the inquiry report and require the CHA to give his representation against the findings of the Inquiry Authority. Regulation 22(7) requires the Commissioner to consider the inquiry report and the representation if any made by the CHA and pass such orders as he deems fit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, under Regulation 22 it is the Commissioner who is empowered to issue showcause notice to the CHA to suspend or revoke the CHA license and it is the Commissioner who is empowered to pass 'such orders as he deems fit' after considering the inquiry report and the representation of the CHA, if any. Therefore, whether the inquiry report is in favour of the CHA or not, it is the Commissioner who has to pass the final order as he deems fit on the showcause notice issued by the Commissioner. The words 'such orders as he deems fit' in Regulation 22(7) leave no manner of doubt that it is entirely at the discretion of the Commissioner, whether to agree or disagree with the inquiry report and pass such orders as he deems fit on the Show Cause Notice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Larger Bench of the High Court held that under Regulation 22 of the 2004 Regulations, the Commissioner is empowered to disagree with the findings recorded in the inquiry report and pass such orders as he deems fit and if the CHA is aggrieved by the order of the Commissioner, he is entitled to challenge the said order by filing an appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see
<em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2012/2012-TIOL-568-HC-MUM-CUS-LB.htm" target="_blank"><font size="1">2012-TIOL-568-HC-MUM-CUS-LB </font></a></em></strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Jurispruden</font></strong><font color="#FF6600" size="4" face="Verdana, Arial, Helvetica, sans-serif"><strong>tiol</strong></font><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> – Wednesday's cases</font></strong></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" width="100" height="84" hspace="5" align="left" /></font>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Intention of customer whose brand name is affixed on goods is not relevant and so long as goods manufactured for a customer bear the brand name of that customer, SSI exemption would not be available: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INTERESTINGLY</strong>, in the present case, the allegation is exactly opposite - the department found fault in the assessee paying "normal" rate of duty on "branded" goods. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant manufactures car alarm system, power window circuit, car security system, car cassette players and speakers, CCTV camera, transmitter-receivers, etc. under their own brand name as well as under the brand name " Maruti " of Maruti Udyog Ltd. ( MUL ). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No, the demand of duty was not on these ‘branded' goods but on those goods which were cleared under concessional rate of duty by availing Cenvat in terms of SSI notification <strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=29&filename=notification/excise/2003/etariff03_009.htm">9/2003-CE</a></strong>. It is the case of the department that the assessee could not have paid ‘normal' rate of duty on these purportedly ‘branded' goods as these were not "branded goods" in the first place as defined in the notification and, therefore, their clearance values too should have been added while computing the aggregate value of Rupees one crore and if this had been done, the assessee would have crossed the turnover limit much earlier and the other goods could not have been cleared at concessional rate of duty but at normal rate. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether when assessee is engaged in R&D in material science and process technology, and is also a STPI unit involved in software development, Sec 10A benefits can be denied on the ground that its activities are IT-assisted and not IT- enabled - NO: 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 assessee is engaged in the research and development activity in the areas of material science and process technology, and is also a STPI unit involved in software development, the Sec 10A benefits can be denied on the ground that its activities are IT-assisted and not IT-enabled; Whether its alternate claim u/s 80IB ( 8A ) can also not be allowed and Whether when the cases laws relied on by the assessee are not considered in the orders of the lower authorities, it can be said that the assessee had not been given proper opportunities to present his case. And the answers go in favour of the assessee. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commission paid to foreign service provider - before enactment of s. 66A of FA, 1994 on 18.04.2006 no authority vested by law to levy service tax - so also since commission remained unpaid on 31.03.2006, same too would not be within the purview of demand - cum-tax benefit also requires consideration - no penalty for the period prior to 18.04.2006 - Matter remanded: CESTAT </strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> short issue is leviability of Service Tax on the commission paid to the foreign service provider. In adjudication proceedings a liability of Rs.72.18 lakhs along with associated penalties and interest was confirmed against the appellant by the Commissioner of Service Tax, Delhi . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant is before the CESTAT and submits that - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ in view of the decision of the Supreme Court in Union of India v/s. Indian National Ship owners Association <font size="1"><strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=42&filename=legal/sc/2009/2009-TIOL-129-SC-ST.htm" target="_blank">2009-TIOL-129-SC-ST</a>)</strong></font> confirming the decision of Bombay High Court <font size="1"><strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2008/2008-TIOL-633-HC-MUM-ST.htm" target="_blank">2008-TIOL-633-HC-MUM-ST</a>) </strong></font> before enactment of Section 66A (w.e.f 18.04.2006) there was no authority vested by law to levy service tax on a person who is resident in India, but who receives services outside India and resultantly a demand of Rs.20.01 lakhs will not sustain; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ further , since a commission of Rs.93.41 lakhs remained unpaid to the foreign service provider as on 31.03.2006, as evident from the balance sheet, the same too would not be within the purview of service tax demand as it relates to service provided before 18.04.2006; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ the appellant had paid service tax of Rs.49.03 lakhs and the same is required to be appropriated against the balance service tax liability; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ that cum-tax benefits are also to be extended to the appellant; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Board's Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2001/sercircir36_01.htm" target="_blank">36/4/2001</a></strong> dated 8.10.2001 (as withdrawn vide Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2007/sercir93.htm" target="_blank">93/4/2007</a></strong> dated 10.05.2007) is also cited in support. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Tomorrow for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </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">vijaywrite@taxindiaonline.com </a></font></p>
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