TIOL-DDT 2046 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2046</font><br>
15.02.2013<br>
Friday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">One crore Service Tax case lost because Order is beyond the scope of SCN </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HASTE</strong> makes waste is an age-old proverb. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What better example than the present case to explain this. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Proceedings were initiated against the appellant by issuing three SCNs on the ground that the applicants are provider of <strong>Stock Broker Services</strong> and certain charges are not added to the assessable value of the service as stock broker. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner of Service Tax, Mumbai brushed aside all the submissions made by the service provider and confirmed the total demand of Service Tax of Rs.1.04 Crores made in the three SCNs along with penalties and interest on the ground that they have provided <strong>Stock Exchange Services</strong>. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Noticed something amiss in the order? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes, you are right - the adjudicating authority confirmed the demand by holding that the appellant provided “Stock Exchange Services” whereas the SCNs wanted it under the head “Stock Broker Services”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before the CESTAT, the appellant had nothing much to argue but highlight this “blunder”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Bench held -</font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"8. As the show-cause notices were issued demanding duty as provider of Stock Broking Services, whereas the adjudicating authority has confirmed the demand as provider of Stock Exchange Service, which is a different and distinct service. In these circumstances, we find merit in the contention of the appellant that the impugned order is beyond the scope of show-cause notice. </font></em></p>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">9. In view of this, the impugned order is set aside after waiving the requirement of pre-deposit of dues and the appeal is allowed. Stay petition is also disposed of accordingly."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One crore plus of Revenue down the drain…well, almost! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, has the Revenue filed any appeal against this “intriguing” order of the Commissioner at the behest of the Committee of Chief Commissioners? </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We will find out in the days to come.</font></p>
<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-298-CESTAT-MUM.htm" target="_blank">2013-TIOL-298-CESTAT-MUM</a></font>)</font></strong></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Gold Deposit Scheme</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government, with a view to bringing privately held stock of gold in circulation, reduce the country's reliance on import of gold and providing its owners with some income apart from freeing them from the problems of storage, movement and security of gold in their possession, had notified Gold Deposit Scheme 1999 on September 14, 1999. Accordingly, Reserve Bank of India vide circular No IBS 912/23.67.001/99-2000 dated October 5, 1999 had formulated guidelines for Gold Deposit Scheme to enable banks authorized to deal in gold to prepare their own Gold Deposit Schemes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government has now issued a Notification No.G.S.R.46(E) dated January 24, 2013 enabling Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations to deposit part of their gold with the banks under the scheme. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of this, the RBI has modified the guidelines as: </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Existing </font></strong></font></p></td>
<td valign="top"><p align="center"><font color="#FF0000"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Modified </font></strong></font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, the banks may either issue a passbook/statement of account or a certificate/bond to the depositors for deposit of gold, which will be transferable by endorsement and delivery. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Gold Certificate would also mean the final receipt, in dematerialised form or otherwise, issued to a subscriber of the Scheme after the gold tendered by him has been assayed and accepted as deposit by the bank. The gold deposit certificate shall be transferable by endorsement and delivery, as hitherto. However, in case of certificates issued in dematerialized form, the depository rules for transfer would apply. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There would be a preliminary assay to ascertain gold content/caratage in jewellery by a non-destructive technique such as X-Ray/karat meter followed by a fool-proof method like fire assay. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has now been decided that the exception from fire assay / destructive assay will be provided for physical Gold tendered by Mutual Funds/ Gold Exchange Traded Funds approved by SEBI and complying with the Good delivery norms of the London Bullion Market Association (LBMA) having a fineness of 995.0 parts per thousand accompanied by a certificate acceptable to the designated bank. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Resident Indians (Individuals, HUF, Trusts, Companies) may invest in the scheme. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Trust including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations may deposit under the scheme. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deposits may be made available within a maturity range from three to seven years. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has now been decided to change the maturity period, of gold deposits, ranging from six months to seven years. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Details of the scheme designed date from which it will be operational and the branches from which it will be operated, may be advised by the banks proposing to introduce a gold deposit scheme to RBI for obtaining its approval. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has now been decided that authorised banks would not be required to obtain prior approval of RBI for introducing the scheme. Banks should, however, inform the details of the scheme including names of branches operating the scheme to RBI. Banks would be required to report the gold mobilised under the scheme by all branches in a consolidated manner </font></p></td>
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<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=347&filename=notification/rbi/2013/rbi013noti005.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI/2012-13/415, Dated: February 14, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Exemption - EPCG Imports - New condition </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended Notifications 100, 101,102,103/2009-Cus dated 11.09.2009 relating to exemption to imports under the EPCG Scheme. In these notifications a new condition is added, <em>"that the catalyst for one subsequent charge shall be allowed, under the authorization in which plant, machinery or equipment and catalyst for initial charge have been imported, except in cases where the Regional Authority issues a separate authorization for catalyst for one subsequent charge after the plant, machinery or equipment and catalyst for initial charge have already been imported</em>."</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2013/ctariff13_003.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 03/2013-Cus, Dated: February 13, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prostitutes and beer in US Economy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>INVESTMENT</strong> Guru Marc Faber once wrote,</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"The Federal Government is sending each of us a USD 600 rebate. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we spend that money at Wal-Mart, the money goes to China. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we spend it on gasoline, it goes to the Arabs. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we buy a computer, it will go to India. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we purchase fruit and vegetables, it will go to Mexico, Honduras and Guatemala. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we purchase a good car, it will go to Germany. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we purchase useless crap, it will go to Taiwan and none of it will help the American economy. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. </font></em></p>
<p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I've been doing my part.” </strong></font></em></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon</font></strong></p>
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<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"> - Monday'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">In matters relating to Foreign Trade Policy, it is always advisable to take opinion of the Foreign Trade authorities whose decision is final - whether DEPB licence expires in middle of month or is valid till last date of month - Customs to seek opinion from office of DGFT in matter - Matter remanded: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant submitted release advises on 28/12/2011 for clearance of goods under three DEPB licences all of which had been validated up to 10/12/2011. As per the provisions of Foreign Trade Policy 1997-2002, if the date of expiry of a DEPB licence falls before the last day of the month, then the DEPB shall be deemed to be valid till the last day of the said month. Since in the instant case the DEPB were originally issued in respect of the exports made during August, 1997, the appellant was of the view that the licences are valid till 31/12/2011 and on the day of importation, the licence was a valid one. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Customs authorities were of the view that as per the provisions of 2004-2009 and 2009-2014 Foreign Trade Policy the licence should be valid on the date of debit and the provisions of 1997-2002 Policy has no application. Since in the present case the licence was presented on 27/12/2011 and the licence had already expired on 10/12/2011, the benefit of DEPB will not be available, held the Customs authorities. </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 FBT is leviable on promotional gifts given to customers and travel agents even if no employer-employee relationship exists in this case - NO: 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 for Fringe Benefit calculations, any free or concessional coupons provided by the employer for private journeys of his employees or their family members can be equated with the tickets given to general public, although such coupons neither confer confirmed traveling rights nor provide similar privileges provided to general public; Whether such tickets cannot be valued on the lines of "Frequent Flyer Programme" method followed by the assessee, although the same has been accepted as a correct valuation method in the previous AYs; Whether fringe benefit tax can be levied, even when there is no employee-employer relationship; Whether expenditure incurred on festival celebrations in favour of travel agents/various Govt. departments are subject to FBT and Whether FBT can be levied on promotional gift items given to customers and travel agents. And the ruling partly 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"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner(A) in remand proceedings enhancing demand from Rs.17,107/- to Rs.1,78,051.18 - quantum of demand cannot be justified - <em>prima facie</em> applicant has made out case for waiver of pre-deposit - Stay granted: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Commissioner (A) does the unthinkable. In the remand proceedings ordered by the CESTAT, the Commissioner (A) raised the demand by more than ten times and imposed equivalent penalty and interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let aside the issue involved in the proceedings for a moment and imagine as to what would have been the fate of the assessee had the field officers whipped him with the New Year Circular 967. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fortunately, nothing of this happened probably because the duty amount confirmed was Rs.1,78,051.18 [paise included - s. 37D of the CEA, 1944 notwithstanding]. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Monday for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend</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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