TIOL-DDT 1985 · 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 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 1985</font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>19.11.2012<br>
Monday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service
Tax on Renting of Immovable Property - Pay Tax with Interest by Nov
27 and avoid penalty</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Finance Act, 2012 inserted a new Section 80(2) in the Finance Act, 1994 to waive penalty for Service Tax on renting of immovable property if the tax is paid with interest by 27th November 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new Section 80(2) reads as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President </em>. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Budget Memorandum explained this provision as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>RENTING OF IMMOVABLE PROPERTY SERVICE: </em></strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Constitutional validity of the levy of service tax on renting of immovable property has been the subject matter of litigation leading to pronouncement of court judgments favorable to revenue, including those of Honourable Delhi High Court and Honourable Supreme Court. Taking an overall view, the Government has decided to waive the penalty for those taxpayers who pay the service tax due on the renting of immovable property service (as on 06.03.2012), in full along with interest. For this purpose, a new section 80A </em>[<font color="#FF0000">sic - this is 80(2)</font>] <em> is being inserted in the Finance Act, 1994. This scheme of penalty waiver will be open only for a period of six months from the date of enactment of the Finance Bill, 2012. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Bill was enacted on 28th May 2012 and thus the scheme is open till 27th of November 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is almost certain that the tax has to be paid on renting and the Government has liberally waived the penalty if the tax is paid with interest by 27th November 2012. This is an opportunity that all service providers should grab to avoid litigation and penalty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government should have given wide publicity to this beneficial legislation, but they are totally silent on this. Are they waiting for the deadline (a line beyond which you are dead) to pounce on the defaulters? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But on Friday, in a seminar organized in Hyderabad by FAPCCI, an Additional Commissioner in Hyderabad II Commissionerate, R S Maheshwari appealed to the FAPCCI to make this known to the trade and to pay up the tax with interest to avoid penalty. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Trade Body's Interactive Meeting With Service Tax Commissioner </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/interactive_meeting.jpg" alt="" width="556" height="328" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE</strong> Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) organised an interactive meeting with the Commissioner, Customs, Excise and Service Tax, Hyderabad-II, on Friday. The Commissioner MK Singh said that the department is conscious about the responsibility to provide explanations and guidance to the taxpayer so as to ensure that the new provisions are understood and implemented without any problem. He, assisted by his Additional Commissioners Maheshwari and Padmasri, answered several questions from the FAPCCI Members. The organisers appeared to be more in a hurry to complete the meeting rather than get clarifications from the Department, with the result that not many meaningful clarifications came forth. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[Picture shows N. Padmasri, Additional Commissioner, Devendra Surana, FAPCCI President, MK Singh, Commissioner and RS Maheshwari, Additional Commissioner.] </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - Indo-Myanmar Border Trade - 22 Items Added </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> terms of the provisions contained in the Foreign Trade Policy, import/export of the following commodities/items is permitted by the people living along both sides of the Indo Myanmar Border as per the prevailing customary practice: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>22 commodities/items notified by Public Notice No. 289(PN)/92-97 dated 10th April, 1995:</strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Bamboo, 2. Betel Nuts and Leaves, 3. Chillies, 4.Coriander Seeds, 5.Food Items for Local consumption, 6.Fresh Vegetables, 7.Fruits, 8.Garlic, 9.Ginger, 10.Katha, 11. Minor forest products (excluding Teak), 12. Mustard/Rape seed, 13.Onion, 14.Pulses and Beans, 15.Reed Broom, 16.Resin, 17.Roasted Sunflower Seeds 18.Sesame, 19.Soyabean, 20.Spices (excluding Nut Meg, Mace, Cloves, Cassia & Cinnamon), 21.Tobacco, 22. Tomato. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>18 commodities/items notified by Public Notice No. 106(RE-2008)/2004-2009 dated 7th November, 2008: </strong></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Agarbatti, 2. Bicycle's Spare parts, 3.Blades, 4.Bulbs, 5.Cosmetics, 6.Cotton fabrics, 7.Fertilizers, 8.Imitation jewellery, 9.Insecticides, 10.Leather footwear, 11.Life saving drugs, 12.Menthol, 13.Mosquito Coils, 14.Paints & Varnishes, 15.Spices, 16.Stainless steel utensils, 17.Sugar & Salt, 18. X Ray paper & Photo paper </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Now, the following 22 new commodities/items are added taking the total to 62 items </strong>. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Agricultural machinery/equipments/tools, 2. Bicycle, 3.Bleaching powder, 4.Coal, 5.Edible Oil, 6.Electrical & Electric Appliances, 7.Fabricated steel products, 8.Garments/readymade garments/cloths, 9.Handlooms and handicrafts items, 10.Hardware/minor construction materials and electrical fittings, 11.Lime, 12.Medicines, 13.Milk powder, tea, edible oil, beverages, 14. Motor Cycles & Motor Cycle Spare Parts, 15. Other items such as electronic/musical instruments, stationary item, torch light, 16. Plastic items: water tank, buckets, chairs, plastic pipes and briefcase, 17. Rice, Wheat, Maize, Millets & Oats, 18.Scented tobacco, 19.Semi precious stone, 20.Sewing machines, 21.Textile fabrics, 22.Three wheelers/cars below 100 CC. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn030.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Public Notice No.30(RE-2012)/2009-2014, Dated:November 16 2012. </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revenue
appeal involving Service Tax amount of Rs 5975 dismissed by CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH </strong>a view to reduce Government litigation, the CBEC has issued Instruction <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2011/cxinstruct03.htm"><strong>F.No. 390/Misc./163/2010-JC</strong> </a> dated 17-8-2011 prescribing monetary limits for filing of appeals by the Department before CESTAT and High Courts. According to the same, the Department is advised that appeals in the Tribunal shall not be filed where the duty involved is Rs. 5 Lakh and below. The earlier instruction dated 20.10.2010 laid the limit of Rs.1 lakh. As usual, there are riders to this advice too. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instructions notwithstanding, in the present case, Revenue has filed an appeal involving the Service Tax amount of Rs.5,975/-, and equal amount of penalty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the matter came up before the CESTAT, this is what the Single Member Bench held - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#FF0000">"...Since the amount involved in appeal is less than Rs.50,000/-, the appeal is not admitted. </font></em></font></p>
<p align="justify"> <font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>2. Appeal dismissed."</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, in the case of Asiatic Enterprises <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2006/2006-TIOL-1356-CESTAT-KOL.htm" target="_blank"><font size="1">2006-TIOL-1356-CESTAT-KOL</font></a></strong>, the Bench held - </font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>“5. </em></strong><em> The comparative study of the above-referred provisions of both the Acts reveal that Sub-Section (7) of Section 86 is limited in respect of exercising power by the Appellate Tribunal in hearing the appeals and making Orders under the Central Excise Act, 1944 and not in respect of admission of appeal. The Appellate Tribunal acquires powers to hear the appeals and make Orders under Section 35C of the Central Excise Act, 1944 and not under Section 35B of the said Act. <strong>The discretion vested with the Appellate Tribunal to refuse or admit an appeal where the value of the appeal is below Rs.50,000.00 </strong> (Rupees fifty thousand) under the second proviso to Section 35B(1) of the Central Excise Act, 1944, <strong>is not available to the Appellate Tribunal under Section 86(7) of the Finance Act, 1994 or any other provision of the said Act for refusing or admitting an appeal </strong>. No separate provision under the Finance Act, 1994 is incorporated for hearing appeals and making Orders by the Appellate Tribunal, as provided under Section 35C of the Central Excise Act, 1944. It is seen that Section 86(7) similar to the provisions of Section 35C of the Central Excise Act, 1944 and not Section 35B, as such, the second proviso to Section 35B cannot be pressed into service under the Finance Act, 1994....” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See <em><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1668-CESTAT-MUM.htm" target="_blank">2012-TIOL-1668-CESTAT-MUM</a></strong></font></em>) </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GAAR Amendments Finalised - FM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Finance Minister, P. Chidambaram disclosed that amendments to the General Anti Avoidance Rules (GAAR) have been finalised.<em> "I have finalised the amendments to the Chapter 10A of the Income Tax Act. Now it will go to the PMO and then we should be ready with the amendments and then the GAAR rules will reflect the amended Chapter 10A of the Income Tax Act, which deals with taxation of investments.That is under preparation and I think the work is almost complete. The drafting work is complete. So, GAAR is under control. I have taken the decisions, subject to Prime Minister's approval and then Cabinet,"</em> he said. The FM in an interview spoke on m any subjects: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Direct Taxes Code: </strong><em>"We have now started work. This morning I spent two hours on that. Earlier I had spent several hours. We are looking at it. We have tabulated it...will take final decision." </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No Major Fiscal Change before Budget</strong>:<em> "Anything on the fiscal side, we will come up with it only in the Budget. So, I don't plan any fiscal measure. There is no major fiscal legislative measure that is on the anvil." </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"> - Tuesday's cases</font></strong></font></strong></font></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" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></font>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Physician samples - as duty has been paid on MRP basis, abatement cannot be denied - Pre-deposit waived and stay granted: CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicants are paying duty in respect of physician samples on MRP basis under section 4A of the Central Excise Act, 1944 and claiming abatement. The Revenue denies the abatement on the ground that abatement given on MRP value on various counts cannot be applied to physician samples as the physical (sic) samples does not go under various stage of price appreciation, since it is not sold. </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 assessee is entitled to relief u/s 91 even if tax payable is yet to be paid in another country having no DTAA with India - YES: 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 providing technical services it is entitled to deduction u/s 80-O; Whether when there is no employer and employee relationship between the assessee and secondment persons, tax deduction u/s 192 is not required; Whether when the tax is payable in another country with which there is no DTAA, the assessee is entitled to relief u/s 91(1) even though tax is yet to be paid and Whether oversight in not filing the cross objection within the stipulated time is a reasonable cause for allowing condonation of delay. 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>Customs </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No proof produced by department to adduce that Order in original was served on appellant in year 1999 - appellant submitting that he had left for Dubai in 1997 and returned only in 2003 and o-in-o was received in year 2011 after which they filed appeal - since order was passed ex parte matter remanded to adjudicating authority: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is before the CESTAT against an order-an-original passed in the month of January, 1999 by the Commissioner of Customs, Nhava Sheva. It is submitted that the order was received by them in the year 2011 only and they had filed the instant appeal immediately. The appellant informed the Bench that he had left for Dubai in the year 1997 and had returned to India in the year 2003 and, therefore, he is not aware whether any show-cause notice or notice of hearing was sent to their address or not. In these circumstances, the appellant submitted that the impugned order is required to be set aside and the matter remanded to the adjudicating authority for fresh adjudication after giving them an opportunity of being heard. </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 <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 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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