TIOL-DDT 1940 · 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=iso-8859-1"> </head> <body> <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 1940 </font><br> 12.09.2012 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excise Exemption to Mega and Ultra Mega Power Projects - CBEC specifies projects </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALL</strong> items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipments, power cables used within the power generation plant, auxiliary equipment, etc, used for setting up of an ultra-mega power project, or supplied to mega power projects or for expansion of an existing mega power project are exempted vide sl. Nos 337, 338 and 339 of Notification No. 12/2012 - CE dated 17.03.2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Government has specified the mega power projects, ultra-mega power projects and existing projects which would be eligible for the exemption. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/etariff12_34.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 34/2012 - CE dated: September 10, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">And in Customs too </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> similar amendment is made to Customs Notification No. 12/2012. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 49/2012 - CUS Dated: September 10, 2012</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to Export Promotion Schemes - Irungattukottai added </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER </strong>several exemption notifications pertaining to imports under the various promotional schemes, the imports are allowed only through certain ports and ICDs. Now Irungattukottai, SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk, Kanchipuram District, Tamil Nadu is added to the list. 31 Notifications are amended and the Board needs to be congratulated for amending all the notifications, which were required to be amended. Now they have a right list with them. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_050.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 50/2012 - CUS Dated: September 10, 2012</font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT Members' Retirement Age Enhanced to 65 - Vice-President Post Abolished</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNEXPECTEDLY</strong>, a notification surfaced amending the <em>Customs, Excise And Service Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules</em>, 1987 , bringing in major changes. And as usual with these sudden and secret amendments, they are full of confusion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Salient Features: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>No More Vice-President</strong>: The post of Vice-President appears to have been abolished. In the definitions, the definition of Vice-President is in Rule 2(h). Now this sub-rule is deleted. Similarly, the Rule relating to Vice-President, Rule 12 is deleted. And Rule 5 relates to initial constitution before the rules were framed. Even from this rule, the Vice-President is deleted. Strangely, the reference to Vice-President in Rule 2(c), where a Member is defined to include a Vice-President, is not deleted. What happens to the present Vice-President? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>Only High Court Judge to be President</strong>: As of now, a serving or retired judge of a High Court or a Member of the Tribunal can be appointed as President. Now a Member of the Tribunal cannot be appointed as the President. Only serving or retired High Court judges can be appointed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>President to retire at 68</strong>: The President will now hold office for five years or till he attains 68 years of age, whichever is less. This Tribunal has now become a very attractive place for a retired judge who wants to work. He can do so till 68 years and that is three years more than the Supreme Court Chief Justice! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <strong>Members to retire at 65</strong>: Members will now be appointed for a five year tenure extendable by another five years, but they cannot hold office after they attain the age of 65. The present age of retirement for Members is 62 and for President it is 65. So, there is a three year extension for both. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <strong>Rs. 80,000 pay for President: </strong>As per the existing rules, the pay of the President is Rs. 26,000/- and that of the Member is Rs. 22,400-26,000. Now these are enhanced to Rs. 80,000 and Rs. 75,500-80,000 respectively. But the President and Members were getting the enhanced scales from 1.1.2006 - only the rules are amended now. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Several doubts arise: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. When are the amendments effective? The rule says they shall come into force on the date of their publication in the official Gazette. Now, when was it published? God and Mayapuri Press know! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Are the amended rules prospective or retrospective? Now a Member can hold office only for a maximum of ten years - what about-existing members who have already crossed ten years? And what about existing members who have completed five years; will they be reappointed? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. What will happen to the existing Vice-President? Will he continue as a Vice-President? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The Customs Act in Sections 129(4), (5) and (6) mentions the vice-president of the Tribunal and as per the Act, the vice-president can perform certain functions of the President. In the absence of a vice-president, who will run the Tribunal when there is no President? </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope to get answers in the days to come.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/notification_dor_50050.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOR Notification in F.No.A.50050/22/2011-Ad.IC (CESTAT) Dated: August 31, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Court can direct postponement of reporting - No guidelines - Supreme Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court yesterday delivered the media guidelines judgement. A Constitution Bench of five judges headed by the Chief Justice declined to lay down broad guidelines but held that <em>anyone, be he an accused or an aggrieved person, who genuinely apprehends on the basis of the content of the publication and its effect, an infringement of his/ her rights under Article 21 to a fair trial and all that it comprehends, would be entitled to approach an appropriate writ court and seek an order of postponement of the offending publication/ broadcast or postponement of reporting of certain phases of the trial (including identity of the victim or the witness or the complainant), and that the court may grant such preventive relief, on a balancing of the right to a fair trial and Article 19(1)(a) rights, bearing in mind the abovementioned principles of necessity and proportionality and keeping in mind that such orders of postponement should be for short duration and should be applied only in cases of real and substantial risk of prejudice to the proper administration of justice or to the fairness of trial. Such neutralizing device (balancing test) would not be an unreasonable restriction and on the contrary would fall within the proper constitutional framework</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court observed, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The very object behind empowering the courts to devise such methods is to see that the administration of justice is not perverted, prejudiced, obstructed or interfered with. At the same time, there is a presumption of Open Justice under the common law. Therefore, courts have evolved mechanisms such as postponement of publicity to balance presumption of innocence, which is now recognized as a human right vis-a-vis presumption of Open Justice. Such an order of postponement has to be passed only when other alternative measures such as change of venue or postponement of trial are not available. In passing such orders of postponement, courts have to keep in mind the principle of proportionality and the test of necessity. The applicant who seeks order of postponement of publicity must displace the presumption of Open Justice and only in such cases the higher courts shall pass the orders of postponement under Article 129/Article 215 of the Constitution. Such orders of postponement of publicity shall be passed for a limited period and subject to the courts evaluating in each case the necessity to pass such orders not only in the context of administration of justice but also in the context of the rights of the individuals to be protected from prejudicial publicity or mis-information, in other words, where the court is satisfied that Article21 rights of a person are offended . </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, such orders of postponement should be ordered for a limited duration and without disturbing the content of the publication. They should be passed only when necessary to prevent real and substantial risk to the fairness of the trial (court proceedings), if reasonable alternative methods or measures such as change of venue or postponement of trial will not prevent the said risk and when the salutary effects of such orders outweigh the deleterious effects to the free expression of those affected by the prior restraint. The order of postponement will only be appropriate in cases where the balancing test otherwise favours non-publication for a limited period.</font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you this judgement today. Please see <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2012/2012-TIOL-72-SC-MISC-CB.htm" target="_blank"><font size="1">2012-TIOL-72-SC-MISC-CB</font></a></strong></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">Income Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether once Sec 35AB comes into play, then Sec 37 has no application for claiming deduction of expenditure incurred on transfer of technical knowhow - YES: SC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE </strong>Company manufactures equipments which were used for mining. It entered into an Agreement with an American company under which the American company was required to transfer technical know-how to the assessee for a consideration of USD 2,25,000/- to be paid in three instalments. The first instalment in convertible Indian currency amounting to Rs.17,49,889/- was paid. Subsequently, disputes arose between the contracting parties and the know-how was not transferred by the American company. The question which arose for determination was whether the amount of Rs.17,49,889/- could be claimed by the assessee as a deduction u/s 37. The claim of the assessee u/s 37 was rejected by the Department. However, the Department allowed the expenditure to be amortized u/s 35AB. Assessee contended that Section 35AB was not applicable to this case. </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">For levy of service tax under category of Tour Operator Service, tour is to be operated in tourist vehicle having any permit permissible under Motor Vehicle Act/Rules: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPELLANT</strong> are neither holding tourist permit nor having tourist vehicles, therefore, they are not liable to pay service on their activities for the period prior to 10/09/2004 - for the activity of Bus Reservation Agreement wherein the vehicles have been provided to other commercial concern/schools, etc. the appellants are liable to pay service tax for the normal period of limitation since issue involves interpretation - appellants are directed to pay service tax for their activity of BRA other than ITDC on their own computation for the normal period of limitation with a detailed chart within 30 days and the same to be submitted before the adjudicating authority for verification - since issue involved is of interpretive nature, no penalty is warranted. </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">Valuation - Tooling advance and value of inputs received free of cost is required to be included in the AV of goods supplied to M/s M & M - although rule 6 of Valuation Rules, 2000 is correct rule to be applied adjudicating authority has confirmed duty u/r 11 - such an invocation can be termed superfluous: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1) THE </strong>amount of tooling advance received by the appellant from M/s Mahindra & Mahindra is includible in the assessable value of the goods supplied to them in terms of Section 4(3)(d) of the Central Excise Act itself. Merely because, the demand has been confirmed under rule 11 read with section 4 (3) (d), it does not become infructuous. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) The value of inputs received free of cost by the appellant from M/s Mahindra & Mahindra is required to be included in the assessable value of goods supplied to them and the extended period for demand of differential duty has been rightly invoked. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) The extended period of time has been correctly invoked to demand ineligible CENVAT credit taken in respect of inputs found short, which have been written off in the books of accounts. </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise - Valuation - ‘marker', ‘test kit' and ‘IAS column' are different items used for different purposes - As Test kit and IAS column are traded items, same cannot be considered as part of manufactured goods i.e Marker so as to add their value in AV of ‘Marker' - pre-deposit of adjudged dues in excess of Rs.1.62crores waived and stay granted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the present case, the marker is used for mixing in the kerosene by the Petroleum companies and the ‘test kit' and ‘IAS column' are used for checking the adulteration in other petroleum product such as petrol and diesel. The Revenue relied upon the decision of Hon'ble Supreme Court in the case of Frick India Ltd. and Siddhartha Tubes Ltd. where the bought out item is cleared as parts of the manufactured goods. The facts of the present case are different as the ‘marker', ‘test kit' and ‘IAS column' are different items used for different purposes. The marker is mixed with kerosene oil and test kit and IAS column are used for finding out any adulteration in the petroleum products. Therefore, the ratio of the relied upon judgments by the Revenue is not applicable to the facts of the present case. As the test kit and IAS column are traded item, the same cannot be considered as a part of the manufactured goods i.e. marker. Therefore, the applicant had made out a strong case for waiver of pre-deposit of dues adjudged </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><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> </body> </html>