TIOL-DDT 1927 · the untouched capture
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<p align="justify"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><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></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><font color="#663399" size="3">TIOL-DDT 1927 </font><br>
24.08.2012 <br>
Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export Oriented Doubt </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CENVAT</strong> Credit on inputs received from a Hundred Percent EOU is governed by second proviso to Rule 3(7) of the CENVAT Credit Rules, 2004. This proviso reads: </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided further that the CENVAT credit in respect of inputs and capital goods cleared on or after the 7 th September, 2009 from an export-oriented undertaking or by a unit in Electronic Hardware Technology Park or in a Software Technology Park, as the case may be, on which such undertaking or unit has paid - </font></p>
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) excise duty leviable under section 3 of the Excise Act read with <strong><u>serial number 2 of the notification no. 23/2003</u> </strong>-Central Excise, dated 31st March, 2003 [G.S.R. 266(E), dated the 31st March, 2003]; and </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) the Education Cess leviable under section 91 read with section 93 of the Finance (No. 2) Act, 2004 and the Secondary and Higher Education Cess leviable under section 136 read with section 138 of the Finance Act, 2007, on the excise duty referred to in (A), shall be the aggregate of - </font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(I) that portion of excise duty referred to in (A), as is equivalent to - </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, which is equal to the duty of excise under clause (a) of sub-section (1) of section 3 of the Excise Act; </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act; and </font></p>
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(II) the Education Cess and the Secondary and Higher Education Cess referred to in (B) </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In some cases, the EOUs do not avail the benefit of reduced duty on DTA clearances under Sl No 2 of the Notification (which is allowed only for clearances under specified paras of the FTP) and pay full duties. <a></a>However, they avail the benefit of Sl No 1 of the Notification No 23/2003 CE dated 31.03.2003. This Sl No exempts payment of special additional duty of 4% levied under sub-section 5 of Section 3 of the Customs Tariff Act, 1975 if the EOUs pay sales tax / VAT on such DTA clearances. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the question is whether the restriction under the second proviso to Rule 3(7) of the CENVAT Credit Rules is applicable to such clearances?If yes, how? And if not, why? Will the Board look into it? EOU Scheme was started in early 80s and even today, there is lot of confusion on how much education cess an EOU has to pay on domestic clearances and how much CENVAT Credit the buyer can take. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tax on Film Artists Services </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERVICE</strong> tax of 12.36 per cent has been imposed on the taxable services provided by the Film Artists. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a preparation for the introduction of a nationwide comprehensive Goods and Service Tax (GST), comprehensive approach to taxation of services has been brought into effect from the 1st day of July, 2012. Under the new approach, service tax is levied on all taxable services, which meet the definition of ‘service', provided in section 65B (44) of the Finance Act, 1994, other than those services described in the negative list and exempt list. Service Tax is levied on an activity whereas income tax is levied on the cumulative income earned by a person during a specific period. Service tax being a consumption tax, incidence is on the service receiver. The service provider, <strong>by default, is bound to collect the service tax from the service receiver in accordance with the law and pay the same to the Government. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A general exemption is available for low-value service providers, up to an aggregate value of ten lakh rupees in a financial year, to address such persons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was stated by the Minister of State for Finance, Mr.S.S. Palanimanickam in written reply to a question in the RajyaSabhayesterday </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> FTP - Conditions and modalities for registration of contracts of sugar with DGFT- relaxation of (-) 5% by weight in export of sugar</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THROUGH </strong>Policy Circular No 62 (RE-2010)/2009-14 dated 14.05.2012, conditions and modalities for registration of contracts with Regional Authorities of DGFT for export of sugar in the current sugar season (1st October, 2011-30th September, 2012) were notified. This was amended vide Policy Circular No. 63 (RE-2010)/2009-14 dated 16.05.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has been decided with the approval of Competent Authority that a variation of (-) 5% in weight against Registration Certificates issued for export of sugar shall be allowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thus, a variation of (-) 5% in weight in exports of sugar against registered contracts shall not be treated as default for the purpose of imposition of penalty or debarment from future registrations. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2012/dgft12cir003.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Policy Circular No. 3 (RE-2012)/2009-14, Dated: August 23, 2012</strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commissioner is busy - With FM's Meeting </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> new FM, Mr. Chidambaram has called for a conference of Chief Commissioners of CBEC on 28th August and of CBDT on 31st. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whenever the FM calls for such a meeting, there is frenetic activity in the Commissionerates. Everybody is busy preparing colourful and impressive looking brochures and these are printed and reprinted many times before the Chief Commissioner carries the final copy to the sanctimonious meeting with the FM - where nobody sees it. These brochures are prepared year after year - why this frenzy now? For one, the FM has not given them any agenda - that means he can ask anything, and for another they all know that the FM is very knowledgeable andtechnically sound and so, facing him is not an easy task. So, now senior officers are busy brushing up their knowledge data - some could be seen actually reading manuals, tariffs and budget notifications. The name Chidambaram sends a chill down the spine - down the country among Revenue Officers. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please use your email - Board tells Chief Commissioners </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBDT had created email ids for all Chief Commissioners and administrative Commissioners of Income Tax. Member (A&J) wants all Chief Commissioners and Commissioners to activate their email accounts and use it for official communication. The email id and password should be intimated to the successor-in-office at the time of handing over charge. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/cbdt_official_Email.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Letter No.DIT(L&R)-I/e-comm/2012-13/480 dated: August 23, 2012 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT Cartoon</strong></font></p>
<p align="center"><font 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_1927.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></font></strong><br>
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</font><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"> - Monday's cases</font></strong></font></strong></font></p>
<p align="justify"><font 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" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></font><font color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rebate u/r 18 of the CER, 2002 - assessee is eligible for interest under Section 11BB: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not the case of the Revenue that but for the letters addressed by the assessee, the Revenue would have allowed the rebate claim of the assessee. In fact, in the present case, showcause notices were issued calling upon the assessee to show cause as to why the rebate claims should not be rejected. </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 deduction u/s 10A can be restricted on basis of formation of new undertaking with old customers, contracts and employees - NO: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issues before the Bench are - Whether deduction u/s 10A can be restricted on the basis of formation of new undertaking with old customers, contracts and employees and Whether interest expenses can be netted off with interest income earned as income from other sources. And the verdict partly goes 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>Prima facie the activity of Maharashtra Knowledge Corporation Ltd. is not in the nature of business - therefore service rendered by the applicant to MKCL does not fall under BAS - Pre-deposit waived and stay granted: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPLICANTS </strong> are engaged in providing services to M/s Maharashtra Knowledge Corporation Ltd. (MKCL) in relation to- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Promotion or marketing of services provided by MKCL; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Services incidental or auxiliary to the activity of promotion or marketing such as evaluation or development of prospective customer or vendor, public relation services, management or supervision on service activity; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Sale of services of MKCL. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Torches imported from China not for retail sale but for repacking, labelling and branding - importer registered with C.Ex department as such activity is 'manufacture' u/s 2(f) of the CEA, 1944 and discharging C.Ex. duty on the basis of MRP of M/s Bajaj Electricals Ltd. to whom the goods are sold in bulk for further retail sale - appellants were not required to declare MRP and discharge duty liability of additional Customs duty on MRP basis as they are not covered u/r 3 of the Legal Metrology (Packaged Commodities) Rules, 2011 - Appeal allowed: 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">appellant imported Energy Efficient Lighting Fixtures viz. Torch of various models. Examination of the import consignment by the Customs Officers revealed that the product is fully functional and electrically charged and is in retail packing. As the consignment is intended for retail sale and the goods have been notified under the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011, the Customs officers directed the appellant to declare the retail sale price on the goods </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend. </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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