TIOL-DDT 2016 · 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 color="#663399" size="3">TIOL-DDT 2016</font><br> 03.01.2013<br> Thursday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indirect Taxes - Revenue Secretary Shows Whip - Bose is Boss - Issues Stern Warning to Indirect Tax Evaders</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a statement made to the media yesterday, the Revenue Secretary, Sumit Bose issued a stern warning to indirect tax evaders to pay up or else… He is the boss; he knows what to do. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise:</strong> The Revenue Secretary observes that that a number of Central Excise assessees continue removing goods clandestinely, sometime even without registration, misusing CENVAT Credit or simply not paying Central Excise duties which are due to the Government, in disregard of the law. He is keeping a very close watch on such elements. They are advised to come forward to pay all due taxes and avail of the benefit of reduced penalty. If they fail to do so, they should be ready for the consequences, which include: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Recovery of duty along with interest and penalty up to 100%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Suspension of CENVAT Credit </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Provisional attachment of property, and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- Arrest and Prosecution </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax:</strong> The Revenue Secretary says,<em> "all services are taxable with effect from 1.7.2012, except those in the Negative List and exempted services. However, a number of service providers who should be paying service tax now have not yet registered themselves. It is also noticed that more than half of the service providers who are registered with us are not filing returns. The Department has also gathered information that a number of service providers are collecting service tax from the receivers of service but not depositing the tax with the Government. Let me warn them that all such service providers will not only be liable to pay the service tax along with interest and penalty which may be equal to the service tax evaded, but they can also be prosecuted for these offences. Money due to them from a third party can also be appropriated by the Government". </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs:</strong> exporters are indulging in under-invoicing in import/over-invoicing in exports and mis-declaration of goods and are misusing exemptions and various incentive schemes, to evade customs duty. When 70 per cent of the consignments are being cleared by Customs on self assessment basis, without any assessment and examination by the Department, it is incumbent upon the importers/exporters to discharge their correct duty liability. Some unscrupulous elements are already on the radar of DRI and intelligence wings of Customs houses. Such importers and exporters should be ready to face legal consequences including arrest and prosecution besides payment of duty with interest, fine and penalty up to 100% of duty evaded. The only window for them is to come forward and deposit the duty now and avail of the benefit of reduced penalty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue Secretary emphasized that in these times of electronic availability of transactional and financial data from various sources on real time basis, it is not difficult for the tax authorities to reach the doors of those who are evading tax payment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He urged all assessees to ensure that they make timely and correct payment of customs duty, central excise duty and service tax for continued trade facilitation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the Revenue Secretary's exhortation and warning mean well, it is a little puzzling as to why they don't go ahead and book all those evaders whose information, he says he has? We don't need to show any leniency towards the established evaders. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But Mr. Secretary, can you prevent your officers from their harassment of genuine businessmen who are ready to pay the taxes, if there is clarity in the laws. Just for record, your officers book hyperactive technical hair splitting and nit picking cases - your senior officers confirm demands with least or no application of mind and now your Board wants to kill industry and trade in India by killing judicial process and vexatious arrears collection. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Believe me Mr. Secretary - you close down your Customs and Central Excise Department for the next three months - give all the officers a paid holiday for three months and then make your appeal to the trade and industry that they will not be harassed for three months and request them to pay the maximum possible taxes. YOU will get far more Revenue than what you can ever expect to from these revenue antics of your officers like arrears recovery. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - No TDS in Certain Cases </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified that "No deduction of tax under Chapter XVII of the Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, excluding a foreign bank, namely:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) bank guarantee commission; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) cash management service charges; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) depository charges on maintenance of DEMAT accounts; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) charges for warehousing services for commodities; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) underwriting service charges; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) clearing charges (MICR charges); </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) credit card or debit card commission for transaction between the merchant establishment and acquirer bank. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2012/it12not056.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], DATED December 31 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Assessment of Preceding Years in Search Cases During Election Period</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per section 153A and 153C of the Income Tax Act, the Assessing Officer is required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2012, the Government amended the Income Tax Rules to insert a new Rule 112F after the existing Rule 112E, specifying the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. This amendment was made with a view to reduce infructuous and unnecessary proceedings under the Income Tax Act, 1961 in cases where a search is conducted u/s 132 or requisition made u/s 132A and cash or other assets are seized during the election period, generally on a single warrant, and no evidence is available, or investigation required, for any assessment year other than the assessment year relevant to the previous year in which search is conducted or requisition is made. In such cases, the investigating officer with the approval of the Director General of Income Tax, shall certify that - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the search is conducted under section 132 or the requisition is made under section 132A of the Act in the territorial area of an assembly or parliamentary constituency in respect of which a notification has been issued under section 30, read with section 56 of the Representation of the People Act, 1951; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the assets seized or requisitioned are connected in any manner to the on-going election process in an assembly or parliamentary constituency; and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) no evidence is available or investigation is required for any assessment year other than the assessment year relevant to the previous year in which search is conducted or requisition is made. </font></p> </blockquote> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2012/it12cir10.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No.10/2012, [F. NO. 282/22/2012-IT (INV. V)], Dated: December 31, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Inclusion of Offices of FIEO in HOP </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has added three additional Chapter Offices of Federation of Indian Export Organizations ( FIEO) in Appendix-2 of the Handbook of Procedures-Volume 1 (Appendices and Aayat Niryat Forms), 2009-2014. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn044.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No.44 (RE: 2012)/2009-2014, Dated: January 02, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Modification of SIONs </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the Handbook of Procedure Vol.II (SION Book), to allow different forms of silver uniformly as inputs for the export products. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn043.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No.43 (RE: 2012)/2009-2014, Dated: January 02, 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Vision and Mission - NADT's Training of Trainers</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBDT has set a target of reducing compliance cost of the taxpayers by </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Better communication with taxpayers </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Better management and development of Human Recourses in the Income Tax Department to enhance taxpayers services. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Strengthening IT enabled services for taxpayer services. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As part of this strategy National Academy of Direct Taxes (NADT) has been entrusted with the job of providing proper training to the available manpower so that they are equipped to deliver the desired level of services to the taxpayers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accordingly, NADT is organising a training for trainers from 9th January to 11th January 2013. One day in the training is for training on "Ethics and Values" </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/deputation/cbdt_trainers.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NADT F. No.NADT/P&R -1/RFD/2012-2013, Dated: December 31, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Wants to Reduce Glitter of Gold </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong>, yesterday released a draft report of the Working Group to study<em> issues related to Gold</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Report finds: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Gold loans have a causal impact on gold imports substantiating the emergence of a liquidity motive for holding gold. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• International gold prices and exchange rate significantly and positively affect the gold prices in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Increase in gold prices appears to be one factor that increase the gold loans outstanding. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Increase in gold loans extended by NBFCs and banks, does not impact significantly the gold prices in India. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• On the basis of empirical analysis of volatility in gold price, it is difficult to estimate future prices of gold. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Going by the past trends, a sharp sudden drop in gold price by 30 to 40 per cent is a remote possibility causing financial distress to the gold loan NBFCs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The extant loan to value ratio (LTV) ratio should provide a reasonable risk cover in case the gold prices fall by 10 per cent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Asset quality, NPAsas percent of total credit exposure and Capital adequacy of gold loan NBFCs are not a cause for concern at present. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The sources of funds of gold loan NBFCs do not appear to be an immediate cause of concern giving rise to concentration credit risk. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The striking growth of gold loan NBFCs business warrant that their operations may be closely monitored. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Some gold loan NBFCs have been raising public deposits surreptitiously through unincorporated bodies raising concerns. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Banking sector's existing exposure in the form of their individual gold loans appears small and may not have any significant repercussions for the stability of the banking sector at present. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Probability of volatility in gold prices impacting the gold loan market is low. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Gold loans NBFCs are subjected to prudential regulations and reporting requirements. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Gold loans NBFCs are doing a socially useful function and that provides a strong rationale for a careful regulation of the activities of these NBFCs. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And Recommends: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a need to moderate the demand for gold imports considering its impact on the current account deficit </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Fiscal measures to reduce the gold imports may be revisited </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Banks need to design innovative financial instruments that can provide real returns to investors </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Need to convert both rural and urban demand for gold into investment in gold-backed financial instruments through dematerialisation of gold </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Introduction of tax incentives on instruments that can impound idle gold may be considered </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a need to recycling of domestic scrap gold </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Limits on the volume and value of gold to be imported by banks may be considered, if required under extreme situation </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Consider imposing export obligation on bulk gold importers </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Banks may expand their gold jewellery loan portfolio to monetise the stocks of idle gold </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The debate on setting up of a gold bank may be revisited </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Banks may continue their role as nominated agencies in gold imports </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Differential pricing of banking services and finance for gold imports may be considered </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Bank finance to purchases of gold bullion may be prohibited </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There should not be any curb or limits on advances against gold jewellery and gold coins by individuals </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Banks may continue retailing of gold coins, given their small volume </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is no strong case to exempt Metal Gold Loans from the base rate stipulations </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is an imperative need to consider introducing new gold-backed financial products to unlock the hidden economic value in the idle gold in the economy </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Products like Gold Accumulation Plan, Gold Linked Account, modified Gold Deposit and Gold Pension Product may be considered for introduction </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Careful evaluation of each of the proposed gold-backed product is critical </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The rapid growth of the assets, borrowings and branch network of gold loan NBFCs need to be monitored continuously </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• The exemption available to secured debentures from the definition of "deposit" may be reviewed </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a need to thoroughly review the operational practices followed by gold loans NBFCs </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a need to ensure transparent communication of loan terms by gold loans NBFCs </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Need to review the auction procedure by gold loans NBFCs </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Location of auctions should be same Taluka where the borrower is located </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Standard documentation to be followed by gold loans NBFCs </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Use of PAN Card for large gold loan transactions </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Payment through cheque for large gold loan transactions </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• As of now, there is no case for conceding level playing field for the gold loan NBFCs with the banks </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a case for review of the extant ‘loan to value ratio' </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is need for a clearly-defined and standardised concept of the term ‘Value' for prescribing appropriate ‘Loan to Value Ratio' </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Unbridled growth of branches by large gold loan NBFCs needs to be moderated </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• There is a need for an ombudsman to address the grievances of gold loan borrowers </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">• Rationalisation of interest rate structure by gold loans NBFCs </font></p> </blockquote> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see today's <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16654" target="_blank">CobWeb </a></strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise Superintendents Threaten Mass Resignation</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FRUSTRATED</strong> with the failure of the Government to consider their pleas for better promotions and pay structure, the Central Excise Superintendents All India Association has given a notice to the Finance Minister that they would observe a protest week from 25.02.13 to 01.03.13; that they would observe ‘work to rule' in relation to budget and revenue mobilisation works; that they would boycott Central Excise Day function on 24.02.13 and as a last step, all their members may submit mass resignations on 30.04.13. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not easy for the Government to sort out the issues as there are internal disputes among various cadres like appraisers, Customs Superintendents and Central Excise Superintendents and there are cases pending in several courts. </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">Merely because manufacturer has discharged his duty liability along with interest and penalty equal to 25% in terms of s.11A(1A) of CEA, 1944, proceedings against co-noticees cannot be held to be conclusive in nature - CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner (Appeals) set aside the penalties imposed upon the respondents u/r Rule 26 of CER, 2002 on the ground that the respondents are employees, authorised signatories/directors etc. of the main manufacturing units, who have discharged duty liability along with interest and penalty equal to 25% of the duty in terms of provisions of section 11A(1A) of the CEA, 1944. By adverting to the 1st proviso of section 11A(2), he has held that if full duty demanded along with interest and penalty equal to 25% of the duty specified in the notice is paid within 30 days of the receipt of notice, the proceedings in respect of such person and other persons to whom notices are served shall be deemed to be conclusive as to the matter stated in the notice. </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 loan advanced by JV partner for purchase of capital assets is converted into share premium of loss-making assessee company, same can be treated as trading receipt - NO: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ASSESSEE</strong> was a joint venture between ‘F' and ‘O', a Government owned trading organization from Russia. Assessee was not doing any activity for last six years due to heavy losses. AO made addition for loan converted into shares, share application money and for liabilities converted into share capital and premium. Assessee contended that it received outstanding share application money and other loans from foreign collaborator. Due to heavy losses, promoters agreed to convert share application money and other loans outstanding in the books of account for enhancement of share capital to the extent of authorized capital available and balance as share premium account enabling the company to get it closed under Simplified Exit Scheme as the company had already disposed off its trawlers in the previous years. </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">Co-operative society promoted by six banks to provide training to employees of member banks to efficiently handle business of the banks - banks pay charges to society - whether liable to ST under category of "Commercial Coaching or Training"- Pre-deposit waived and Stay granted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is a co-operative society promoted by six different banks like Oriental Bank of Commerce, Bank of Baroda, Punjab and Sind Bank etc. They provide training to the employees of these member banks. They also provide training to employees of other banks in the field of banking which enables the employees to efficiently handle the business of the banks of which the trainees are staff. The benefit of the training accrues to the Banks, which send their employees for training and pay the appellant. </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> </body> </html>