TIOL-DDT 2045 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 2045 </font><br> 14.02.2013 <br> Thursday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Baba Ramdev's Patanjali Yogpeeth asked to deposit Rs. 2.10 Crores </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PATANJALI</strong> Yogpeeth was issued a demand of Rs.34,68,87,165/- for the assessment year 2009-10. The Stay application was rejected by the Assessing Officer, by virtue of his order, dated 02.11.2012.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By an order 14.12.2012, the Director of Income Tax directed the TRUST to pay a sum of Rs.15 crores in instalments. The first instalment of Rs.2.25 crores was to be paid by 07.01.2013 and the balance amount of Rs 12.75 crores was to be paid in 17 equal instalments of Rs.0.75 crores each every month commencing from January, 2013 onwards. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the petitioner had not paid the first instalment of Rs. 2.25 crores by the due date, 11 bank accounts of the petitioner were attached by virtue of the order dated 14.01.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Petitioner Trust is before the High Court.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court noted that the petitioner has already filed an appeal which is pending before the Commissioner of Income Tax (Appeals). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court directed that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Commissioner of Income Tax (Appeals) may dispose of the appeal by 31.03.2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Attachment Order be lifted </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Petitioner to pay a sum of Rs. 2.10 Crores by 15.03.2013. </font></p> </blockquote> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2013/2013-TIOL-118-HC-DEL-IT.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Click Here for the High Court Order </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax - Export Rebate - Condition 3 of Notification No. 12/2005 - Impossible to comply with requirement before export - Rebate Allowed - HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> happens if the conditions of a notification are impossible to comply with? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 12/2005-S.T dated 19.04.2005, Rebate was granted of the whole of the duty paid on excisable inputs or the whole of the service tax and cess paid on all taxable input services used in providing taxable service exported out of India. Condition 3.1 of the Notification stipulated that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Filing of declaration. - The provider of taxable service to be exported shall, prior to date of export of taxable service, file a declaration with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, describing the taxable service intended to be exported with,- </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) description, quantity, value, rate of duty and the amount of duty payable on inputs actually required to be used in providing taxable service to be exported; </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) description, value and the amount of service tax and cess payable on input services actually required to be used in providing taxable service to be exported. </font></em></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a case before the Delhi High Court, the appellant is in the business of rendering IT-enabled services such as technical support services, customer-care services, back-office services etc. which are considered to be “business auxillary services” under the Finance Act, 1994 for the purpose of levy of service tax. The nature of the services is such that they are rendered on a continuous basis without any commencement or terminal points; it is a seamless service. It involves attending to cross-border telephone calls relating to a variety of queries from existing or prospective customers in respect of the products or services of multinational corporations. The appellant's unit in Okhla is one of those places which are popularly known as “Call Centres” - business process outsourcing (BPO) centres. The wealth of skilled, English-speaking, computer-savvy youth in our country are a great source of manpower required by the multinational corporations for such services. The BPO centres become very active from evening because of the time-difference between India and the European and American continents. The mainstay of the call centres is a sophisticated computer system and a technically strong and sophisticated international telephone network. The service consists of providing information relating to the products and services of the MNCs, queries relating to maintenance and after-sales services, providing telephonic assistance in case of glitches during operating the consumer-products or while utilising the services and so on. For instance, the customer sitting in USA has a problem operating a washing machine sold to him by an American company. When he calls the company, the local telephone number would be linked to the call centre number in India and it will actually be an employee of the Indian call centre who would answer the queries and assist the customer in USA get over the problem. Another example could be of a person in USA wanting to book an international air-ticket from an airline; his queries over the phone will be answered by the employee of the Indian call centre, sitting in some place in India. The American manufacturer of the washing machine or the American airline company is the source of revenue for the Indian call centre or BPO centre . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The services rendered by the appellant in its call centre or BPO centre are considered exported, as the services are rendered to persons outside the country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, in this case, it would be impossible for the appellant to furnish <em>prior to date of export of taxable service, the description , value and the amount of service tax and cess payable on input services actually required to be used in providing taxable service to be exported. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, "Any condition imposed by the notification must be capable of being complied with. If it is impossible of compliance, then there is no purpose behind it." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Deputy Commissioner, Commissioner (Appeals) and Tribunal were unanimous in their view that the requirement, though one of procedure, is nevertheless inflexible as it is conceived with a view to preventing the evasion of service tax and dispensing with the same would deprive the service tax authorities from carrying out the necessary preventive and audit-checks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the High Court found it strange that none of the authorities below has demonstrated as to how the appellant could have complied with the requirement prior to the date of the export of the IT-enabled services. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Certainly, Law does not expect you to do the impossible - even if you are an assessee!. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the High Court allowed the appeal yesterday. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16991" target="_blank">We bring you the judgement today. </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - SION - Pesticides deleted as permissible input </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Public Notice 63 dated 07.07.2011 included Pesticides (Biocides/ Fungicides/Herbicides/Insecticides) as the fifth input under SION J-373. This input is now deleted from SION J-373 of the Textile Product Group. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn049.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 49(RE:2012)/2009-2014;Dated February 13 2013 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FM Not Happy with drafting of 'Substantial Question of Law' in SLPs </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DG</strong>, Income Tax (Legal and Research) has conveyed to the Chief Commissioners and Commissioners that the Finance Minister has expressed serious concern about drafting of 'Substantial Question of Law' in the proposals to file SLP. He has also expressed dissatisfaction over lack of assistance to the Law officers/appearing counsels by field officers. DGIT has instructed the senior officers on filing SLPs. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. CCIT/DGIT and CIT/DIT concerned shall ensure that the controversy regarding interpretation of any provision of the statute is properly brought out while drafting the Substantial Question(s) of Law proposed in the appeal to be filed in the High Court as it is the basis for raising the issue in SLP. A proper SLP can be drafted only when the issues have been properly agitated in the Courts below. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. CCIT/CIT should again pay serious consideration to the drafting of the Substantial Questions of Law, in light of the decision of the High Court, while proposing SLP. Proposals for filing SLP in a mechanical manner and on frivolous grounds create infructuous work. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Once decision to file SLP is taken at Board's level and work of drafting SLP is assigned to drafting counsel by Central Agency Section (CAS) of MOL&J, the CIT/DIT concerned shall have to provide assistance to the drafting counsel for proper drafting. The CIT will also have to vet and approve the final draft of SLP by e-mail within two days of receipt. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. In the SLPs admitted by Supreme Court and converted in Civil Appeals, the CIT/DIT concerned shall prepare the 'Brief about facts of the case and other relevant factual/legal developments since the time of filing SLP.</font></p> </blockquote> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether table space provided by Automobile dealers to financial institutions are taxable under BAS? - Matter placed before President for referring to LB </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AGAINST</strong> the appellant, an automobile dealer, Service Tax has been demanded under the category “Business Auxiliary Services” for providing table space to various financiers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the CESTAT, the appellant submitted that they are not liable to Service Tax in view of the decision in <em>Tribhuvan Motors Ltd. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2010/2010-TIOL-57-CESTAT-BANG.htm" target="_blank"><font size="1">(2010-TIOL-57-CESTAT-BANG)</font></a></strong></em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative countered this submission by relying upon the decision in<em> Brij Motors P. Ltd.</em> <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2011/2011-TIOL-1992-CESTAT-DEL.htm"><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><em>(2011-TIOL-1992-CESTAT-DEL)</em></font></a></strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Single Member Bench observed - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"4. Considering the fact that on the issue there are contrary decisions of this Tribunal, therefore, matter be placed before the Hon'ble President to refer the matter to the Larger Bench for decision on the following issue: </font></em></font></p> <p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Whether the table space provided by the Automobile dealers to financial institutions fall under Business Auxiliary Service or not.""</font></em></font></p> </blockquote> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(See <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2013/2013-TIOL-289-CESTAT-MUM%20.htm" target="_blank">2013-TIOL-289-CESTAT-MUM</a></font>)</font></strong></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><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Service Tax</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">There is nothing in notification 17/2009-ST that it should be compulsorily availed by manufacturer exporter - notification being conditional one, it is for manufacturer to decide whether to avail said exemption or not - no merit in department's contention that appellant should have availed benefit of notfn. 17/2009-ST - Denial of CENVAT Credit on Input services is not legal and proper - Appeal allowed: CESTAT </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION </strong>No. 17/2009 dated 07/07/2009, exempts the taxable services received by an exporter of goods and used by him for export of goods. This exemption is subject to certain conditions and one of the conditions stipulated is that no CENVAT credit of service tax paid on the specified service used for export of the said goods has been taken under the CENVAT Credit Rules, 2004. This condition clearly implies that in a case where the exporter avails CENVAT credit, he cannot avail the benefit of exemption. There is no bar stipulated in the said notification that he cannot avail CENVAT credit and the availment of CENVAT credit will be entirely governed by the terms and conditions of the CENVAT credit rules. The fact that input or input services, on which duty/tax has been paid, have been received and used in the manufacture of excisable goods which have been exported is not in dispute. In the show cause notice, the only ground taken for denying the credit is that benefit of notification No.17/2009 should have been compulsorily availed by the exporter manufacturer. The said notification being a conditional exemption notification, it is for the manufacturer to decide whether to avail the said exemption or not. </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 recourse to recovery proceedings u/s 226 is taken against a public trust, then no prior notice is warranted, although there exists no apprehension of diversion of funds - Assessee's writ allowed: HC </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 recourse to recovery proceedings u/s 226 is taken against a public trust, then no prior notice is warranted, although there exists no apprehension of diversion of funds; Whether money recovered from the bank account of a public trust under such recovery proceedings, when appeals and stay applications are pending, amounts to abusive usage of coercive process of law; Whether in such a case an equitable relief can be granted to the assessee in the exercise of the jurisdiction under Article 226 of the Constitution; Whether the option of not serving a prior notice to the assessee in recovery proceedings u/s 226, can be applied uniformly to all cases; Whether application for stay pending before the Department needs to be disposed off expeditiously and Whether interest of the Revenue can take precedence over the fairness of proceedings, merely because it is before the quasi judicial authorities of the Department. And the verdict goes in favour of the assessee. </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"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633" size="2">INPUTS stored in premises outside factory and which Plot is sought for inclusion in Registration Certificate - As Assistant Commissioner accepted the request and included same in Registration Certificate albeit after more than year, applicant has a <em>prima facie </em> strong case in favour: CESTAT </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, due to paucity of space in the factory premises situated at Plot N-65, the appellant stored these ‘inputs' in Plot No. 66, and which premises they sought to include in their Central Excise Registration Certificate. To this effect they addressed a request letter to the jurisdictional Assistant Commissioner on 07.05.2010. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps, the Assistant Commissioner was too busy and, therefore, this request remained pending…pending…pending! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Someone must have got a whiff of the <strong>pending </strong> application and immediately a case was booked against the appellant and the CENVAT Credit of Rs.1,04,92,036/- was proposed to be denied. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em>CCE, Nagpur </em> completed the final rites. </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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></strong> </font></p> </body> </html>