TIOL-DDT 1994 · 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 1994</font><br>
03.12.2012<br>
Monday </strong></font></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_illus.gif" alt="" width="150" height="89" hspace="5" border="0" align="left"></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ninth Year of DDT </font></strong></p>
<p> </p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Welcome </strong>to the first edition of the Ninth Year of DDT. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax Registration Form Amended to include Accounting Codes </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">GOVERNMENT has amended the S.T-1 FORM; Sl. No. 7 of the Form now is as: </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Description of taxable services provided or to be provided by applicant </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S.No </font></em></p></td>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of service </font></em></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Relevant clause of section 65 of the Finance Act, 1994, to be indicated, if possible </font></em></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is now changed to: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S.No </font></em></p></td>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of taxable service (Choose from ANNEXURE) </font></em></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></em></p></td>
<td valign="top"><p align="center"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></em></p></td>
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</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Annexure gives the <strong>DESCRIPTIONS OF TAXABLE SERVICES AND ACCOUNTING CODES FOR PAYMENT OF SERVICE TAX.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No 120 in this list is Other taxable services . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier the requirement of mentioning the classification was only 'if possible'. Now it is mandatory to choose from one of the 120 in the list. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner, Service Tax in the Board has written a letter to all the Chief Commissioners and Commissioners informing them that: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 48/2012-Service Tax dated 30-11-2012 seeks to amend Form ST-1 so as to <strong>enable</strong> applicants seeking registration to choose the description of the service being provided by them . </font></em></p>
</blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Looks as if it is a favour to the assesses to first remove all the accounting codes and introduce one code for all services, then to bring back all the codes for statistical purposes and then make the assessee commit it in the Registration Form and then give all these codes in the registration application to <strong>enable</strong> the assessee ! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After sometime, the assessees will be struck with notices for paying Service Tax under the wrong head! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_048.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 48/2012 - Service Tax, Dated: November 30, 2012 and </strong></font></a></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/letter_12_01.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Commissioner(Service Tax) Letter in F. No. 137/22/2012 - Service Tax, Dated: November 30, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - CBEC Needs a JS(TRU) Urgently - but on Short Term Basis </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Budget is just three months away and apparently, the high-powered Board is without a Joint Secretary in TRU. TRU is the BUDGET manufacturing wing of the CBEC and just three months before the Budget, there is no JSTRU for Service Tax. A letter from the Revenue Department addressed to all Chief Commissioners and DGs says, </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The post of Joint Secretary (TRU II) is to be filled up immediately on short-term basis from 26.11.2012 to 31.05.2013 . </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This means, they need a Joint Secretary just for the Budget and he would be shunted out after the Finance Bill is passed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Officers in the grade of Commissioners are eligible to apply. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But did they appoint a JS (TRU II) on 26th November?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/order_12_35017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MOF DOR Letter F.No.A.35017/55/2012-Ad-II., Dated: November 12, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Needs a Member - Applications Invited </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VACANCY </strong>of a post of Member in the CBEC is to arise on 31.12.2012. Revenue has invited applications from eligible officers in the pay scale of 67,000-79,000 (Chief Commissioners grade). </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/order_12_12026.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MOF DOR Letter F.No.A.12026/15/2011-Ad-I., Dated: November 16, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Ceftriaxone Sodium Sterile - JIT Extension </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ANTI </strong>Dumping Duty on Ceftriaxone Sodium Sterile was imposed by Notification No. 98 /2008-Customs, dated the 27th August 2008, with effect from 30.11.2007 and would have expired on 30.11.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This time, they got it Just in Time (JIT) and extended it till28.11.2013, just a day before its death! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_050.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 50/2012 - Cus(ADD), Dated: November 29, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Caustic Soda - The Resurrection </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Notification No. 98/2006-Cus dated 13.09.2006, anti dumping duty was imposed on Sodium Hydroxide commonly known as caustic sodaoriginating in, or exported from, Saudi Arabia, Iran, Japan, USA and France. The notification very clearly mentioned, "<font color="#FF0000">This notification shall be effective for a period of five years, unless revoked, suspended or amended earlier</font>". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the notification was effective till 12.09.2011 and after that not valid. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In January 2012, nearly three months after its demise, the Government woke up and extended the validity of the notification till 1st September 2012 by Notification No. 1/2012-Cus (ADD) dated 06.01.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Notification had a second death on 02.09.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government did not go for a resurrection, but re-imposed the anti dumping duty for another five years, but from 26.11.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, between 02.09.2012 and 25.11.2012, there was obviously no dumping and injury to domestic industry! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No. What the Designated Authority found was that there was continuous dumping and it is likely to cause injury to domestic industry and so what it recommended was continuation of anti dumping duty, not re-imposition. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who is responsible for the loss of anti dumping duty for more than two months and the injury to Indian Industry? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 49/2012 - Cus(ADD), Dated: November 26, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Procedure and conditions for registration of contracts for export of cotton </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended the procedure and conditions for registration of contracts for export of cotton under Tariff Item HS code 5201 & 5203 [ Sl. Nos. 197 & 199 of ITC(HS) Classification of Export & Import Items] as stipulated in Notification No. 17 of 1st October, 2012, with immediate effect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maximum limit for obtaining RC has been increased to 30,000 bales. Multiple RCs can be applied within this eligibility. RAs Ludhiana, Rajkot and Vishakhapatnam have also been designated for issue of RCs for export of cotton. RC quantities will be in MTs. Other conditions stipulated in Notification No. 17 dated 1st October, 2012 remain. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2012/dgft12not026.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 26/(RE - 2012)/2009-2014, Dated: November 30, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Modification of SION </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has made certain changes in SION </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Existing SION C-469 has been modified. Non Alloy Cold Rolled Steel is added as an input. Based upon the thickness of the export product, quantity of corresponding inputs has been prepared in tabular form as mentioned in Engineering Tables 1A, 1B and 1C. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Two new SIONs are notified for export products, "Cold Rolled colour coated non alloy steel sheets" and "Cold Rolled Zinc & Aluminium Silicon Alloy Coated Colour Coated Non Alloy Steel Sheets". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Engineering Table 1 is substituted by comprehensive Engineering Tables 1A, 1B, 1C, 1D, 1E, 1F and 1G which denote the export product and corresponding inputs.</font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn033.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 33/(RE-2012)/2009-2014, Dated : November 30, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Share premium in excess of fair market value to be treated as income - Determination of Fair Market Value of shares: Rule 11U amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> new Clause (viiib) was inserted in Section 56(2) of the Income Tax Act in the Finance Act 2012, effective from 1st April 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Budget Memorandum explained: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 56(2) provides for the specific category of incomes that shall be chargeable to income-tax under the head "Income from other sources". </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is proposed to insert a new clause in section 56(2). The new clause will apply where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares. In such a case if the consideration received for issue of shares exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income tax under the head "Income from other sources. However, this provision shall not apply where the consideration for issue of shares is received by a venture capital undertaking from a venture capital company or a venture capital fund. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM in his Budget speech explained this as ‘ a measure to deter the generation and use of unaccounted money '. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CBDT has amended Rule 11UA of the Income Tax Rules for determination of the Fair Market value. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2012/it12not052.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 52/2012, Dated: November 29, 2012 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Smuggling Falcons </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Smuggling_Falcons.jpg" alt="" width="188" height="190" hspace="5" border="0" align="left"><strong>SOME</strong> years ago, I met a man who told me that he was in the business of ‘selling tigers' - in Dubai. He told me that a domesticated tiger would fetch around Rs. 15 lakhs in the Gulf. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A tiger roaming around the house is a status symbol with many rich and powerful people in some countries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even in Pakistan, the son of a chief minister is reported to have imported two Siberian tigers for his residence and after a public uproar, donated them to a zoo. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is even a website which promises to sell tigers online - directly from their India breeding! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But somewhere down the line, the Customs will enter and seize this import and export of tigers and such other wild life. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last week, the Pakistan Customs is reported to have seized seven falcons attempted to be smuggled to Bahrain. </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><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">Roller blinds [Hdg 3925, 6303 and 7019] come into existence in factory premises and these blinds are installed at site - since these blinds can be shifted, though in dismantled condition, same cannot be said to be part of immovable property. limitation is mixed question of law and fact - revenue interest has to be safeguarded - pre-deposit ordered: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant are in the business of installing rollers blinds, curtain tracks, etc. at site. For this purpose, items like fabrics, aluminium tubes, aluminium tracks, plastic brackets, metal brackets, chain, etc. are procured from outside. The roller blinds are of textile fabrics as well non-textile items (plastic). The aluminium sections are cut to the required size and after fixing the plastic brackets or metal brackets on the wall, the sections are fixed on which the roller blinds/vertical blinds are mounted. The department was of the view that the rollers or vertical blinds are chargeable to duty. </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 assessee hives off part of business to own sister concern for consideration, including non-compete fee, it can be said that when Management of both units are common, payment of non-compete fee is colourable device - YES: ITAT </font></strong></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 hives off a part of its business to own sister concern for a consideration, including non-compete fee, it can be said that when the management of both the units are the same and the CEO is also the same, the payment of non-compete fee is a colourable device; Whether the final consideration received by the assessee in such a transaction also includes a part payment for goodwill generated over the years; Whether invocation of powers u/s 263 is sustainable in such a case; Whether assessee is entitled to deduction u/s 10B in respect of interest income earned on deposit as margin money and Whether the amount of reimbursement received relating to various expenses incurred for business will be considered as income from business and is eligible for deduction u/s 10B. And the verdict partly goes against the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund of SAD - When process undertaken on the imported goods does not amount to manufacture, refund of SAD cannot be denied: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REFUND</strong> of SAD rejected as the importer had undertaken further working/processing on the imported goods before the goods are sold. The importer had undertaken cutting and slitting of the coils imported by them before they are sold. Also, classification of the goods imported is different from the classification of the goods sold. HELD - It is a settled law that, while considering whether the process amounts to manufacture is whether a new article with distinct name, character and use has emerged or not and not whether the tariff heading has changed. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p><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>
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