TIOL-DDT 1917 · 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 1917</font><br>
07.08.2012<br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Cross Objection Before Commissioner (Appeals) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> response to DDT's comments yesterday on the facility of filing Cross Objections before the CESTAT, an alert Netizen asked us why similar facility is not allowed before Commissioner (Appeals). Well, the Law does not provide for this. So, if you are aggrieved by any part of an order passed by an Authority lower in rank to the Commissioner of Central Excise, you have to invariably appeal to the Commissioner (Appeals). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact, this issue was agitated before the Tribunal. In <em>Ecoboard Industries vs Commissioner of Central Excise - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2007/2007-TIOL-374-CESTAT-MUM.htm" target="_blank"><font size="1">2007-TIOL-374-CESTAT-Mum</font></a></strong>, the Tribunal observed, "Section 35B(4) provides that "On receipt of notice that appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within 45 days of the receipt of the notice, memorandum of cross objections verified in the prescribed manner against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) of Section 35B." Section 35B(4) of the Central Excise Act is therefore applicable to appeals filed before the Tribunal and does not apply to appeals filed before Commissioner (Appeals). The CEGAT Procedure Rules 15 and 15A also provide specifically for filing of memorandum of cross objection before the Tribunal, which is to be treated as an appeal. No similar provisions exist under the Central Excise (Appeals) Rules, 2001. Therefore, <strong>there is no legal provision providing for filing of cross objection before Commissioner (Appeals)".</strong></em></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Order passed by wrong Review Committee - Technical error, rectifiable! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NETIZENS</strong> may recall the CESTAT decision in <em>Commissioner of Customs (Import), Mumbai vs. Gudel India Pvt. Ltd.</em><strong> <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2011/2011-TIOL-101-CESTAT-MUM.htm" target="_blank">(2011-TIOL-101-CESTAT-Mum)</a></font></strong> where the issue was whether an appeal filed on the strength of Review order passed by a "wrong" Committee of Commissioners could be considered proper and legal. Suffice to say that the CESTAT had thrown out the Revenue appeal as non-maintainable. Unabashedly, Revenue had gone back to the CESTAT with a fresh appeal based on an order passed by the "correct" Committee and an application for Condonation of Delay of 697 days only to meet the same fate of dismissal. See <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=28&filename=legal/cestat/2012/2012-TIOL-810-CESTAT-MUM.htm" target="_blank"><font size="1">2012-TIOL-810-CESTAT-Mum</font></a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this scenario, it would be interesting to see the recent order passed by the CESTAT in the case of CCE, Raigad vs. Preeti Logistics where the Bench has held that such an error is rectifiable since technical in nature. Kindly see <strong> <font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-983-CESTAT-MUM.htm" target="_blank">2012-TIOL-983-CESTAT-MUM </a></em></strong></font></strong>. Incidentally, the respondent was not represented during the hearing. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No
Higher Transport Allowance for Babus in Faridabad & Gurgaon</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has been brought to the notice of the Government that some Central Government Offices located in Faridabad and Gurgaon are paying Transport Allowance to their employees at the rates other than that applicable to such areas. <strong>Such payment is irregular.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Department of Expenditure clarifies that the Central Government Employees posted at Faridabad, Gurgaon, Ghaziabad and Noida are entitled to Transport Allowance at the rates applicable to 'other places' i.e. other than 13 classified cities as per the conditions laid down in the Ministry's O.M. No. 21 (2)/2008-E-II(B) dated 29.08.2008. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/oms/travelling_allowance.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoF Deptt. of Expenditure OM No. 21(8)/2010-E-II(B); Dated August 01 2012. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">PC Wants to Regain the Confidence of Stakeholders? When did we lose it? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a Press Statement yesterday, Finance Minister Chidambaram said, "Uppermost in my mind is the duty to <strong>re-gain</strong> the confidence of all stakeholders. Obviously, where necessary, our policies have to be modified or fine-tuned in order to meet the expectations of different stakeholders".</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it an admission that we have lost the confidence of the stakeholders? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary will provide great assurance to investors", said the FM.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr Chidambaram, please sit with your officers and try to understand the new negative Service Tax Regime. If it is difficult even for you to understand the complex law and procedure, please dump the provisions and let your assesses have a little peace of mind. You can get all the foreign investment you want, but please be a little kind to the unfortunate Indian investors who invest in India - not all of them are evaders - as your officers may like you to believe. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM has directed a review of the retrospective tax amendments and this should bring cheers to Vodafone and Co. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Stalin Envelopes </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is said that before handing over charge to Krushchev, the Russian leader Stalin had given him two envelopes and asked him to open them when he faced his worst crises. For sometime, Krushchev ran the country smoothly and when he faced a major crisis, he opened the first envelope. There was a letter in the envelope, "Blame me for all the wrong things in Russia". This trick worked and Krushchev became a beloved Statesman and people believed that Stalin was responsible for all the problems. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But good things do not last and Krushchev faced his second crisis and he opened the second envelope. Inside there was a note,<em> "Prepare two envelopes and give them to your successor" </em></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"> - Wednesday'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">Valuation - Non-declaration of collection of Digital and Pulsation Study (DPS) charges from customers in RT-12 returns cannot be held against appellant as they could have entertained a bona fide belief that same is not includible in AV as it is done only in respect of few customers - appellant has made a case for setting aside demand on point of limitation - Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants were engaged in the manufacture of LPG Compressors and CNG Compressor and spares thereof and availing CENVAT Credit. During the course of scrutiny of their records, it was revealed that the appellants had provided "Digital and Pulsation Study" to their customer and collected the charges for the same from their customers. The "Digital and Pulsation Study" is carried out as per customers request, it is a sort of study where operational conditions of particular package are simulated in computer, findings are noted and the study is complied. The study report is furnished to customers prior to actual dispatch of product/ package and that is an ongoing project that to start/carry out the study, certain input/feed back is necessary from the customer end like their piping layout etc and that "Digital and Pulsation Study" is aimed at providing 100% perfection in project/package application. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department viewed that the said charges recovered from the customers are includible in the assessable value. </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 while computing sum allowable u/s 40(b)(v) as partners' remuneration, net profit includes income from other sources also and not income from business alone - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE </strong>is a partnership firm. Four assessments were completed u/s 143(1)(a). AO issued notice u/s 154 for all the years alleging that assessee had claimed excessive deduction on account of partners' remuneration stating that income by way of consultancy fees, interest on bank deposit, profit on disposal of assets and interest on advance tax which had been shown as income under the head ‘other sources' could not be considered as part of the book profit for computation of allowable partners' remuneration. Assessee objected to reopening of the same raising the question of jurisdiction, as the point raised in the notice was debatable and arguable. AO did not accept the appellant's contention and passed the orders. The CIT (A) also rejected the appeals of the assessee. ITAT also disallowed the appeal of 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">Appellant engaged in promoting, marketing and distributing various medical equipment manufactured by Viasys International Corporation, US of A, in India for which they are receiving commission - prima facie, for period from March, 2005 onwards activity is not "Export of Service" - as per GATT on which is based Export of Service Rules, only when the user and use of services are located outside India, transaction amounts to export and not otherwise - Pre-deposit ordered of Rs.25 lakhs: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants are exclusive distributors of various medical equipments manufactured by M/s. VIASYS International Corporation, Pennsylvania, USA. Intelligence received by the DGCEI, Mumbai unit, indicated that the appellant was engaged in promoting, marketing and distributing the various medical equipment manufactured by VIASYS, in India, for which they are receiving commission and this service appeared to be liable to service tax under the category of ‘Business Auxiliary Services' w.e.f. 01/07/2003. </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><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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