TIOL-DDT 1930 · 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 1930</font><br>
29.08.2012 <br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Vocational Education - Board Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CLARIFICATION</strong> has been sought in respect of levy of service tax on certain vocational education/training/ skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Clarifies: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a VEC is offered by an institution of the Government or a local authority, question of service tax does not arise. In terms of section 66D (a), only specified services provided by the Government are liable to tax and VEC is excluded from the service tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the VEC is offered by an institution, as an independent entity in the form of society or any other similar body, service tax treatment is determinable by the application of either sub-clause (ii) or (iii) of clause (l) of section 66D of the Finance Act, 1994. Sub-clause (ii) refers to "qualification recognized by any law" and sub-clause (iii) refers to "approved VEC". In the context of VEC, qualification implies a Certificate, Diploma, Degree or any other similar Certificate. The words "recognized by any law" will include such courses as are approved or recognized by any entity established under a central or state law including delegated legislation, for the purpose of granting recognition to any education course including a VEC. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2012/sercir164.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No. 164/15/2012-Service Tax, Dated: August 28, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Nonyl Phenol - Another Resurrection </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI</strong> Dumping Duty on ‘Nonyl Phenol', falling under heading 2907 of the First Schedule to the Customs Tariff Act, originating in, or exported from, the Chinese Taipei was imposed by Notification No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2007/ctariff07_094.htm" target="_blank">94/2007-Cus</a></strong> dated 22.08.2007 and had expired on 22.08.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is extended till 21.08.2012 two days after its expiry. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have a Board that cannot keep track of its own notifications and they expect the assessees to follow all the Rules. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_039.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 39/2012 - Customs, (ADD), Dated: August 24, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Institutional Mechanism for Forming Departmental View on Contentious Legal Issues - CBDT Initiative </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> observes that a large part of litigation in the Direct Taxes matters involves interpretation of legal provisions. Lack of desired clarity on a contentious legal issue, amongst the officers of the department, sometimes leads to inconsistent approach on the same issue giving rise to further litigation. With a view to provide clarity on contentious legal issues, promote consistency of approach on a given issue and reduce litigation, it has been decided to set up an institutional mechanism to formulate 'Departmental View' on contentious legal issues: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There will be a Regional Technical Committee (RTC) and a Central Technical Committee (CTC) which will formulate a "Departmental view" on any contentious issue and if approved by the Board, the 'Departmental View' will be issued as Circular u/s 119 of the IT Act by ITJ division of the CBDT for compliance by all concerned. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where any High Court decides an issue contrary to the 'Departmental View', the 'Departmental View' thereon shall not be operative in the area falling in the jurisdiction of the relevant High Court. However, the CCIT concerned should immediately bring the judgement to the notice of the CTC. The CTC shall examine the said judgement on priority to decide as to whether filing of SLP to Supreme Court will be adequate response for the time being or some legislative amendment is called for. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a right step worthy of emulation by CBEC. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/office_memorandum_12_249.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F. No. 279/M- 61 /2012-ITJ, Dated: August 28, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income-tax (Dispute Resolution Panel) Rules, 2009 Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has amended the Income-tax (Dispute Resolution Panel) Rules, 2009 as follows: </font></p>
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<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Existing </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Amended </font></strong></p></td>
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<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3(2) </font></strong></p></td>
<td valign="top" bgcolor="#E1D8E7"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board shall assign<strong> by name</strong> three Commissioners of Income-tax to each panel as Members who by name, in addition to their regular duties as Commissioners, shall also carry on the functions of the panel. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board shall assign <strong>by designation</strong> three Commissioners of Income-tax to each panel as Members who by name, in addition to their regular duties as Commissioners, shall also carry on the functions of the panel. </font></p></td>
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<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3(3) </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Where any Member of the panel is transferred, the Board shall assign, by name, another Commissioner of Income-tax in the place of the outgoing Member of the panel to carry out the functions of the panel. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board shall assign one Commissioner of Income-tax as a Reserve Member to each panel, who, in addition to his regular duties as Commissioner, shall also carry on the functions of the panel, in place of any Member, as and when required by the Director General of Income-tax (International Taxation). </font></p></td>
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<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3(3A) </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">New Sub rule </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Director General of Income-tax (International Taxation) may, after giving the eligible assessee an opportunity of being heard and after recording the reasons, transfer a case from one panel to another panel. </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Board need not issue a notification every time a Commissioner is transferred. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2012/it12not033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 33/2012 [F.NO.133/13/2012-SO(TPL)]/SO 1967(E), Dated: August 24, 2012</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amendment in ITC (HS) 2012 Schedule 1 - Import Policy. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended Schedule 1 - Import Policy of ITC (HS) - 2012, under Chapter 87, Para 2 (II) (a) (iv):- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"2 (II) the import of new vehicles shall be subject to the following conditions: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. The new vehicle shall- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) have a speedometer indicating the speed in Kilometers per hour; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) have right hand steering, and controls (applicable on vehicles other than two and three wheelers); </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) have photometry of the headlamps to suit "keep-left" traffic'; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) be imported from the country of manufacture. <font color="#FF0000"><strong>The country of manufacture will also mean a Single Market like the European Union (EU).</strong></font>"</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The text marked in red is the new addition. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 13 (RE-2012)/2009-2014, Dated: August 28, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amendment in Notification No. 5 dated 02.07.2012 regarding conditions for export of Carpets, Handicraft items and Silk items</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended Notification No.5(RE-2012)/2009-14 dated 02.07.2012: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The provisions in the "Nature of Restriction" of Notification <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not005.htm" target="_blank">No. 5 (RE-2012)/2009-14 dated 02.07.2012</a></strong> in respect of S. No. 8B (relating to Handicraft Items) will come into effect from 01.01.2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) S. No. 8C of Notification No. 5 (RE-2012)/2009-14 dated 02.07.2012 relating to Silk garments, Made ups, Fabrics and Accessories is deleted. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 14 (RE-2012)/2009-2014, Dated: August 28, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Not a Hounding Tax Administration - Chidambaram</font></strong></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/administration_chidambaram.jpg" alt="Legal Corner Icon" width="400" height="266" hspace="5" border="0" align="center"></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Chidambaram yesterday interacted with Chief Commissioners and DGs of Customs, Central Excise and Service Tax and told them not to hound taxpayers. Mr. Chidambaram told the Chief Commissioners to concentrate on the top 100 assessees in each zone who contributed 95 percent of the revenue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM later told the media, "I have held this philosophy very long; We should be friendly to the large number of tax payers who wish to be compliant with tax laws and we have to be firm with the small numbers (who do not comply) with tax laws'' </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM is to meet the Chief Commissioners and DGs of Income Tax later this week. </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"> - Thursday'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 - Advance Ruling </font></strong></p>
<p><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mere labelling does not amount to manufacture - AAR </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> activities that would be undertaken by the applicant in the warehouse are stated mainly to be assortment, packing and stickering (affixing of stickers) in relation to the goods purchased by the customers of the various merchants through the applicant's website. Legal fictions are created only for some definite purpose", and a legal fiction is to be limited to the purpose for which it was created and should not be extended beyond that legitimate field. It is clear that each and every case of fixing a label or a sticker cannot come within the purview of S. 2(f) (ii) and (iii). </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 when AE pays higher rate of interest on delayed payment as compared to third parties, no fault can be found with AO for initiating reassessment for transfer of profits to assessee eligible for Sec 80IA benefits - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench is - Whether when the AE pays higher rate of interest on delayed payment as compared to third parties, no fault can be found with AO for initiating reassessment for transfer of profits to assessee eligible for Sec 80IA benefits. And the verdict goes against 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">Legal infirmity in revisionary order in demanding tax under a category of service different from one for which demand was initially issued - Service recipient has taken godown on rent from service provider itself - this has to be seen as case of tax planning rather than tax evasion: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is a legal infirmity that tax is demanded under a category of service different from the one for which demand was initially issued. There is also the issue that Clearing and Forwarding Service could be rendered using a godown made available by the service recipient. In this case, the service recipient has taken godown on rent from the service provider itself. So, this has to be seen as a case of tax planning rather than tax evasion. So, extended period of time could not have been invoked for demanding the impugned tax. </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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no evidence on record to show that applicants undertook any activity which amounts to manufacture after clearance from Customs - RSP is affixed before clearance from Customs area as mandated in terms of DGFT notification for discharge of CVD - Strong case in favour - Pre-deposit of 58.34 Crores duty waived and stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is the case of the Revenue that applicants are affixing retail sale price on the imported cosmetic products and this activity amounts to manufacture in terms of section 2(f)(iii) of the CEA, 1944 w.e.f 01.03.2003 and, therefore, the applicants are liable to pay Central Excise duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CCE, Thane-I confirmed the duty demand of Rs.58.34 Crores on the applicant and imposed an equal penalty and also interest. </font></p>
<p align="justify"><a href="#663399" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></a></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><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day.</font></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>
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