TIOL-DDT 2010 · 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 2010</font><br>
26.12.2012<br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mystery shrouds Customs Notification</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has inserted a new entry in exemption Notification No 12/2012 Cus dated 17.3.2012. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This new entry reads: </font></p>
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<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">142A </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2711 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Liquefied petroleum gases (LPG), in excess of the quantity of petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene by the unit located in Domestic Tariff Area (DTA), received from the unit located in Special Economic Zone (SEZ) and returned by the DTA unit to the SEZ unit from where such Liquefied petroleum gases (LPG) were received. </font></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Explanation.- </font></em></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the purposes of this entry, the quantity of the petroleum gases and other gaseous hydrocarbons consumed in the manufacture of polyisobutylene shall be calculated by subtracting from the quantity of the said gases received by the DTA unit manufacturing polyisobutylene, the quantity of the said gases returned by the said unit to the SEZ unit. </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5". </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are pretty sure that this new entry is worded in such a complex manner that not many could understand this in the first reading. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us assume a DTA unit had received 100 kg from a SEZ unit and returned 20 kg to the SEZ unit. The consumed quantity would be 100-20 = 80 kg. The Notification exempts quantity in excess of the consumed quantity. Does it mean the Notification exempts 20 kg of LPG returned to the SEZ? When the goods are returned to the SEZ, is it necessary that the goods should be exempted? As per Rule 50(1) of the SEZ Rules, 2005, a SEZ Unit can remove goods to a DTA Unit for job work without payment of duty and as per Rule 51(4), the goods shall be brought back to the SEZ Unit within 120 days from the date of taking the goods out of the SEZ Unit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the exemption given because of some demands issued against DTA Units on goods returned to the SEZs? Why can't the CBEC emulate DGFT in explaining the effect of important amendments in the Notification itself? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More than two years ago, Gujarat Polybutenes Pvt Ltd (GPPL) a pioneer manufacturer of polyisobutylene (PIB) had requested the Government to permit net billing of LPG used in the manufacture of PIB, for the purposes of customs duty, CVD, SAD and any such levies when the source of LPG/PIB feedstock is an SEZ unit and the PIB manufacturing unit is located in the DTA. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it an outcome of that request? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2012/ctariff12_062.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 62/2012-Cus., Dated: December 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Aam Admi Insurance Exempted </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JANASHREE Bima Yojana:</strong> The objective of the scheme is to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above the poverty line. The insurance cover is for Rs. 30,000/-. The premium under the scheme is Rs.200/-per annum per member. 50% of the premium i.e. Rs. 100/- will be contributed by the member and/or Nodal Agency/State Government. Balance 50% will be borne by the Social Security Fund. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Aam Aadmi Bima Yojana:</strong> is a scheme of the Central and State Governments administered by LIC. This Scheme insures head of the family or one earning member in the family of rural landless household, for a sum of Rs. 30,000/-. The annual premium under the scheme isRs.200/- out of which 50% is subsidized from the Fund created for this purpose by the Central Government and the remaining 50% is to be contributed by the State Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has exempted Services of life insurance business provided under the above two schemes from Service Tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who benefits from the exemption? The Government of course - the premia were paid by the Government and now they need not pay Service Tax on the premium. Government has given itself a big benefit. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2012/stnot12_049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 49/2012-Service Tax, Dated: December 24, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on Choline Chloride </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has imposed anti dumping duty on Choline Chloride of all forms and concentrations for animal feed applications originating in, or exported from, the People's Republic of China for a period of five years with effect from 21.12.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There used to be an anti dumping duty on Choline Chloride originating in, or exported from, the People's Republic of China and the European Union, imposed by Notification No. 5/2002-Cus dated 14.01.2002, which lapsed on 29th March 2006. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=337&filename=notification/custom/2012/ctariffadd12_057.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 57/2012-Cus.,(ADD), Dated: December 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Modification in description of Import Item No. 1 of SION No. H - 471 of Plastic Product Group</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended Handbook of Procedure, Vol. II: In SION No. H-471 of Plastic Product Group (Product Code H) relating to export product "Polyacetal Resin Compound", the description of Import Item No. 1 ‘Polyacetal Resin (Fluff)' is amended to read as "Polyacetal Resin (Fluff)/Acetal Resin/Polyacetal Resin/Polyacetal". There is no change in description of the Export Product and rest of the Import Items. Further, there is no change in quantity allowed for any import item. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This amendment will provide flexibility to the exporter for procuring the import item with different terminologies prevalent in the international market. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn040.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 40/(RE-2012)/2009-2014, Dated: December 24, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has released a "<em>Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs)</em>". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the questions and answers: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q. </strong>What is Permanent Account Number (PAN) Card? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ans:</strong> Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by the Income Tax Department of India to any "person" to facilitate him in making tax payments filing, returns and claiming refunds. The number, along with other relevant details, is printed on a card called PAN card. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q.</strong> What are the tax related responsibilities of Qualified Depository Participants (QDPs)? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ans:</strong> In order to facilitate investments by QFIs, the QDPs have been assigned the responsibility to act as a single point of contact for QFIs for all purposes including tax. For tax purposes, a QDP will facilitate the QFI to obtain a PAN card. QDPs will be responsible for any withholding tax in India before making remittance to QFIs. QDPs will also be treated as a representative assessee/agent of the QFI. For this purpose, QDPs would be required to submit a declaration that they have no objection to being treated as a representative assessee/agent of QFI. A QDP may ensure that the broker engaged by it for undertaking QFI transactions deducts and deposits tax at source failing which the QDP should deduct and deposit the tax on such transactions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Q.</strong> Whether profits earned by QFI from their investments in Indian securities market would be treated as Capital Gain or business income? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ans:</strong> As per the Income-Tax Act, 1961, whether the profits earned from transaction in securities would be capital gains or business income will depend on facts and circumstances of each case like the number and frequency of transactions etc. Please refer to circular No.4/2007 dated 15/6/2007 issued by the Central Board of Direct Taxes. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/it_faqs.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> CBDT's Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs) </font></strong></a></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/img_office_outside.jpg" alt="" width="350" height="263" hspace="5" border="0" align="center"></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The Manik Bagh Palace </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PRINCE</strong> Yeswant Rao of Indore, got constructed in 1930 a modern marvel of architecture, the "Manik Bagh Palace - Jewel Gardens". Darkly tinted and clear window panes in metal frames for regulating the light of day, the first air conditioning system in India, unusually simple furniture of wood and metal, pictorial carpets, lighting fixtures as light sculptures, walls treated in alternating colours, Para vents as cubist paintings in space - highlighted the palace. Art for living made a fairy tale palace of modernism in India come true. Technical equipment, installation parts, water faucets for the bathrooms, even the marble flooring, banisters for staircases, furniture and lamps were made according to the architect's designs and instructions in Germany. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Manik Bagh Palace aroused in the early thirties much interest. Photographs of the residence, its architect and also inhabitants, the young maharaja family, were published in the international press. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the glamour of princes and privy purses dwindled, the Royal family had to give up Manik Bagh Palace and sell the residence, which finally landed up in the lap of a Government office. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today, the palace houses the Office of the Commissioner, Customs & Central Excise, Indore. </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">Customs</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Recovery from defaulters - Former Director's properties cannot be attached for recovering dues from Company: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>defaulter is the person from whom dues are recoverable under the Act, which in the present case undoubtedly is the company. There is no averment that the company has been or is being wound up. In that case, there cannot be any question about the separate juristic personality of an existing company and its former director; the dues recoverable from the former cannot, in the absence of a statutory provision, be recovered from the latter. </font></p>
<p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no provision in the Customs Act, 1962 corresponding to Section 179 of the Income Tax Act, 1961 or Section 18 of the Central Sales Tax, 1956 which enable the revenue authorities to proceed against directors of companies or such like third parties who are not defaulters.</font></em></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 is public limited company and also attracts provisions of Sec 179 because of complex nature of case, it is fit case for AO to invoke principle of lifting of corporate veil - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner is a director of a private limited company ("the company"). On 7.1.1999 there were search proceedings on the company u/s 132 of the Act. Pursuant to such operations, block assessment u/s 158BC of the Act was framed on 23.3.2001 computing total income of the company at Rs. 259,22,64,020/-. The company preferred an appeal before the Commissioner (Appeals) who by his order dated 18.9.2002 reduced the computation of total income to Rs. 130,54,95,443/-. On the ground that the tax could not be recovered from the company, the respondents initiated proceedings u/s 179 of the Act against the petitioner. In response to notice issued by the respondent, the petitioner opposed any recovery from him on the ground that the said company was a public limited company duly incorporated under the Companies Act, 1956. Provisions of section 179 of the Act would be applicable only where tax is due from a private company and, therefore, no recovery against the petitioner u/s 179 of the Act can be made for dues of the said company. </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">Order Passed by Commissioner while application was pending before Settlement Commission is non est : HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SETTLEMENT</strong> Commission was entitled to pass final orders not only in relation to matters covered by the application for settlement but also any other matter relating to the "case" not covered by the application, but referred to in the report of the Commissioner of Central Excise and Commissioner (Investigation) under sub section (1) or sub section (6). The matter relating to the lack of jurisdiction of the Settlement Commission was specifically raised by the Commissioner of Central Excise in his report dated 13-09-2004 submitted to the Settlement Commission under clause (1) of Section 32F and the said issue has been decided by the Settlement Commission in its order of admission dated 31-05- 2005. Therefore its finding that the order of the Commissioner of Central Excise dated 30-07-2004 is non est in law is a finding given by it in exercise of jurisdiction conferred on it under Section 32F (7). Therefore, it cannot be said that the said finding given by the Settlement Commission is without jurisdiction. Therefore, the said order of the Settlement Commission cannot be denuded of its efficacy by any collateral attack or in incidental proceedings. </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><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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></strong></font></p>
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