TIOL-DDT 1997 · 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 1997</font><br>
06.12.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Effect of MAT on SEZ on Investors </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> provisions of Minimum Alternate Tax (MAT) have been made applicable to Special Economic Zone (SEZ) Developers and Units with effect from 1st April, 2012. The SEZ sector has seen a sharp slowdown due to a number of reasons including withdrawal of exemption from MAT and Dividend Distribution Tax (<strong>DDT</strong>) provisions, uncertain fiscal regime for SEZs, global slowdown in exports etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The number of applications for de-notification of SEZs has shown a significant increase in the last two financial years and the trend is continuing in the current financial year also with 40 of the total 52 de-notifications of SEZs having been approved in Financial Years 2010-11, 2011-12 and 2012-13 (upto 23.11.2012). Similarly, the number of new SEZs set up in 2010-11, 2011-12 and 2012-13 (as on 23.11.2012) has been 16, 9 and 3 respectively. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This information was given by the Minister of State for Commerce & Industry Dr. D. Purandeswari in written reply to a question in Rajya Sabha yesterday. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Amendment in SION A-1189</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended SION A-1189. The existing SION A-1189 is applicable for Sodium Silicate in Liquid form, but does not say so specifically. To make the SIONs more specific, separate norms for liquid and solid forms are notified.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn034.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 34 /(RE 2012)/2009-14 , Dated: December 05, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Katargam ICD Notified </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified ICD, Katargam ,Chauryasi (Surat) in Gujarat for Unloading of imported goods and the loading of export goods. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_107.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 107/2012 - Cus., (N.T.), Dated: December 04, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Corruption Perception - India 94th out of 176 Countries </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ACCORDING</strong> to Transparency International's Corruption Perception Index (CPI) 2012, India ranks 94th out of 176 countries. India scored a very poor 36 on a scale from 0 (Most Corrupt) to 100 (Least Corrupt). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Denmark, Finland and Switzerland are the least corrupt nations with a score of 90, while Afghanistan, North Korea and Somalia were perceived as the most corrupt countries scoring just 8 out of 100. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sri Lanka and China are less corrupt than India while Iran, Nepal, Pakistan and Bangladesh are more corrupt than us. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Indira Gandhi said that corruption is a global phenomenon. Transparency International has now proved it with figures. 70% of the countries in the world scored less than 50 indicating a serious corruption problem. Corruption is the most talked about problem in the world today with all nations suffering from it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Transparency International says, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Looking at the Corruption Perceptions Index 2012, it is clear that corruption is a major threat facing humanity. Corruption destroys lives and communities, and undermines countries and institutions. It generates popular anger that threatens to further destabilise societies and exacerbate violent conflicts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Corruption translates into human suffering, with poor families being extorted for bribes to see doctors or to get access to clean drinking water. It leads to failure in the delivery of basic services like education or healthcare. It derails the building of essential infrastructure, as corrupt leaders skim funds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Corruption amounts to a dirty tax, and the poor and most vulnerable are its primary victims. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How do we counter the effects of public sector corruption? Transparency International says, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Governments need to integrate anti-corruption actions into all aspects of decision-making. They must prioritise better rules on lobbying and political financing, make public spending and contracting more transparent, and make public bodies more accountable . </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But which Government is interested in eradicating corruption? They are there to make money, not to make stupid laws against corruption. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Superintendent in CBI Net for Colluding with Red Sander Smugglers</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is learnt that a Customs Superintendent in Cochin has been booked by CBI for colluding with red sander smugglers. Sometime back, the DRI has seized a container cleared by Customs said to contain coir, but had red sander. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Matters listed before the CESTAT are put up on website - applicants imposed costs for restoration of Stay application </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> application for waiver of pre-deposit was fixed on 18.06.2012, however, since none appeared, the same was adjourned to 06.08.2012 and notice was issued to the applicant in this regard. But, on 06.08.2012 also none appeared on behalf of the applicant nor any request for adjournment was made. Resultantly, the application for waiver of dues was dismissed for non-prosecution. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the applicant is before the CESTAT with an application for restoration of their Stay petition and submits that on <strong>04.08.2012</strong> at<strong> 2.28 p.m </strong>they had sent a letter through Speed Post seeking adjournment and probably the same was not placed before the Bench at the time of hearing held on 6th August. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench observed that the applicant had been issued the notice of hearing on 18.06.2012, however, the request for adjournment was made only on 04.08.2012; that the applicants are interested only in delaying the proceedings; that the matters listed before the Bench are put up on the website of the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Holding that the applicant was interested in undue delay in disposing of the application for waiver of dues, the Restoration application was allowed subject to the applicant depositing a cost of Rs.20,000/- with the jurisdictional Commissioner within a period of two weeks. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2012/2012-TIOL-1790-CESTAT-MUM.htm" target="_blank">2012-TIOL-1790-CESTAT-Mum</a>)</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mention Case Law - High Court Advises Tribunal </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a recent case, the High Court noted:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Though while deciding the issue, the Tribunal did not refer to any case law on the subject, yet the view taken by the Tribunal is in accordance with the law laid down by the Supreme Court. In fact, it would have been better if the Tribunal had taken note of the law on the subject laid down by the Supreme Court and then should have expressed their view. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We consider it apposite to mention that whenever, any issue is decided by the Supreme Court or/and High Court then it has to be first referred to by the Authorities/Tribunals and then decision should be rendered on the issue involved in the case keeping in view the law laid down in decided cases. </font></em></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will bring you this case tomorrow. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Supreme Court Upholds Election of President Pranab </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PURNO</strong> Sangma, the defeated candidate had filed a petition in the Supreme Court challenging the election of Mr. Pranab Mukherjee as President of India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Ram Jethmalani, Senior Advocate, appearing for the Petitioner, submitted that the Respondent's election as President of India, was liable to be declared as void mainly on the ground that by holding the post of Chairman of the Indian Statistical Institute, Calcutta, on the date of scrutiny of the nomination papers, the Respondent held an office of profit, which disqualified him from contesting the Presidential election. Mr.Jethmalani urged that apart from holding the office of the Chairman of the aforesaid Institute, the Respondent was also the Leader of the House in the Lok Sabha which had been declared as an office of profit. Urging that since the Respondent was holding both the aforesaid offices, which were offices of profit, on the date of filing of the nomination papers, the Respondent stood disqualified from contesting the Presidential election in view of Article 58(2) of the Constitution.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a judgement delivered yesterday, the Supreme Court by majority declined to set down the election petition for regular hearing and dismissed the same. Chief Justice Kabir, Justice Sathasivam and Justice SS Nijjar constituted the majority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Ranjan Gogoi gave a dissenting judgement that <em>No conclusion that a regular hearing in the present case will be a redundant exercise or an empty formality can be reached so as to dispense with the same and terminate the Election Petition at the stage of its preliminary hearing under Order XXXIX Rule The Election Petition, therefore, deserves a regular hearing under Order XXXIX Rule 20 in accordance with what is contained in the different provisions of Part III of the Supreme Court Rules, 1966.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Chelameswar also gave a dissenting order, but his reasons would be pronounced shortly.</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"> - Friday'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">Hot Melt unit is used for packing finished goods and being in nature of incidental or/and ancillary to main manufacturing activity, assessee was rightly held entitled to claim MODVAT credit: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“<strong>HOT</strong> Melt Unit" was admittedly used by the assessee while packing their finished goods - "welding electrodes". Since packing is held to be one of the essential components of the manufacturing process of the finished goods and being in the nature of incidental or/and ancillary to the main manufacturing activity, the assessee in this case was rightly held entitled to claim modvat credit on the item - "Hot Melt Unit" treating the same as capital goods under the Rule 57-Q ibid for claiming benefit. </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 deduction can be claimed for an expense incurred for purpose, which constitutes an offence - NO: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPELLANT </strong>is a financial enterprise engaged in accepting fixed deposits and pays interest. During assessment, AO had made an addition on account of an amount which was claimed as interest paid to the depositors. It was disallowed on the basis that the maximum rate of interest payable under the Kerala Money Lenders Act was 14%. The amount, which was disallowed, represented the amount paid in excess of the legal limit. On appeal CIT(A) and Tribunal confirmed the AO's order. THE issues before the Bench are - Whether deduction can be claimed for an expense incurred for the purpose which constitutes an offence - Whether deduction can be claimed beyond the express provisions of the Act and Whether the expenditure incurred by way of payment of interest in excess of the limit imposed under the State Money Lenders Act, is allowable as business expenditure. 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">Appellant undertakes processing of data and which are exported electronically by transmitting to server of telecom authorities in India and thereafter uplinked/transmitted to foreign service recipient - dedicated telecom lines are essential for this purpose & is
to be considered as Input Service - ST paid on leased telecom lines is
available as CENVAT credit - matter remanded: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> claims were rejected by the lower authorities on the following three grounds - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>+ a part of the amount on which CENVAT credit was taken was distributed by their Head Office as Input service distributor and at the relevant time the Head Office was not registered as an input service distributor and, therefore, they could not have distributed the input service tax credit. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ the other part of the refund claim was rejected on ‘directly availed services' on the ground that the service provided by the telecom service providers who leased the telecommunication lines to the appellant and charged service tax on the same, is not an eligible input service. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ and that the appellants have not directly exported the output service from their premises but have routed the same through telecom authorities located in India and, therefore, the definition of export is not satisfied.</font></em></p>
</blockquote>
<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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