TIOL-DDT 2143 · the untouched capture
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<p><font color="#663399" size="3"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font><font face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2143</font></strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
08.07.2013 <br>
Monday </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MCTP - Follow up Workshop - Hyderabad CC's Initiative </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER</strong> the Mid Career Training Programme (MCTP), recently 30 senior officers of the CBEC of the rank of Commissioner and Chief Commissioner were sent on a two weeks training at the Indian School of Business at Hyderabad followed by a two weeks tour of USA. Most of the officers who were sent for this pretty expensive training are to retire next year or in 2015 - and you call it Mid career Training; maybe it should have been called career ending jaunt. What are these officers supposed to do with the rich experience they have gained by this training? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Give back to the Nation at least a part of what you have taken from it” - this seems to be the goal that motivated the Hyderabad Chief Commissioner of Customs and Central Excise, BB Prasad who was one of the participants in the MCTP, to share what he has learnt, with his junior colleagues. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After returning from the US, Mr Prasad organised workshops in his zone for the Group A officers of the zone on the papers discussed/circulated during the MCTP.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He asked five of his Commissioners to present the MCTP papers on </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) High Performance factors </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Do Better at Doing Good </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) An Introduction to Marketing </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Promise-Based Management</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Putting the Service - Profit chain to work </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Focus was on how these ideas can be applied in tax administration. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Chief Commissioner Prasad presented the paper on “ The Sisyphus Trap". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sisyphus was a character in Greek mythology. As the story goes, he was condemned by the Greek gods to arduously roll a boulder to the top of a mountain, only to have that boulder return to the bottom. This ceaselessly unending task he must repeat for eternity. Nevertheless, with each passing attempt, Sisyphus regains his strength, in the hope that the boulder will remain at the top - one day. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt2143_sisyphus.jpg" alt="Legal Corner Icon" width="267" height="300" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Like the mythical Sisyphus, those in government face a daunting uphill fight. Too often, policy makers believe they can achieve results simply by devising the right strategy or passing the right law. They miss the critical ingredient of success because the problem of getting big things done in government isn't merely a systems problem. It isn't merely a policy problem. It's a human problem as well. Though understanding the systems of government is critical to successful implementation, we also need to understand the people rolling the boulder up the hill, particularly how their behaviours are shaped by the culture in which they toil. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exempt Income Tax on DA </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> National Mazdoor Conference (NMC) has demanded total income tax exemption on dearness allowance (DA) paid to salaried employees and pensioners as DA is linked directly with price index. What is the logic in taxing inflation - seems to be the point of the NMC. At present Central Government employees and pensioners get 80% of their Basic Pay as DA and if this portion is exempted from Income Tax, it would be a major relief for the employees. Though the demand appears to be fair, it would take years before the concept is understood and accepted. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Amendment in Import Policy of Electrical Energy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Government has made the following amendment in Chapter 27 of ITC (HS) 2012, Schedule 1 (Import Policy) and in terms of which the import policy of Electrical Energy under Exim Code 2716 00 00 is revised from ‘restricted' to ‘free'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Inasmuch as by this amendment import of Electrical Energy will not require authorization henceforth. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Policy till now was like this:</font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0" bordercolor="#C40040">
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exim Code </font></strong></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Item Description </font></strong></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Policy </font></strong></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Policy conditions </font></strong></p></td>
</tr>
<tr bgcolor="#F2DBDB">
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2716 00 00 </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Electrical Energy </font></p></td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Restricted </font></strong></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import subject to license to be issued by DGFT in consultation with Ministry of External Affairs, Ministry of Power and Department of Commerce, Government of India. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, import from SEZ will be ‘Free'. </font></p></td>
</tr>
</table>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not027.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification No. 27 (RE-2013)/2009-2014 dated July, 5, 2013 </strong></font></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Import of Methyl Ethyl Ketone without CBN's NOC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> of India vide notification No. G.S.R.191 (E) dated 26th March has issued Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order 2013 by which export and import of controlled substances mentioned in its schedule ‘B' and ‘C' require No Objection Certificate from Narcotics Commissioner, Gwalior prior to export/import of these substances. Methyl Ethyl Ketone (MEK) is one of them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has come to the notice of the Central Bureau of Narcotics that some firms are importing Methyl Ethyl Ketone (MEK) without obtaining No Objection Certificate (NOC) from the Narcotics Commissioner, Gwalior. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the Importers are again reminded that prior to the import of the substances mentioned in Schedule ‘C' of the said order shall apply and obtain NOC from the Narcotics Commissioner to avoid legal action. The firms intending to import MEK must apply for obtaining NOC with copy of agreement/contract/purchase order confirmation with the overseas seller. After obtaining the NOC the importer should start process of import. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The importing of the material without obtaining NOC from the Narcotics Commissioner, Gwalior is illegal and liable to be seized under the provisions of the Narcotics Drug and Psychotropic Substances Act 1985. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/public_notice_01_2013.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Narcotic Commissioner's Public Notice with no number and date </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Since S. 67 of FA, 1994 provided for exclusion of cost of spare parts sold while rendering repair services of automobiles, cost of 'handling' such spare parts would also not form part of taxable value - Revenue appeal dismissed </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>respondent is a Service Tax assessee registered as an ‘Authorised Service Station'. While rendering the said services, they also sell spare parts of automobiles and in respect of which they collect 'handling' charges. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue took a view that the handling charges for the spare parts should form part of the taxable value of the service rendered. Accordingly a ST demand of Rs.2,52,543/- for the period July 2001 to February 2004 was confirmed by the adjudicating authority.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The lower appellate authority noted that in the case of authorized service stations the cost of the spare parts are not to be included in the value of the services rendered as per section 67 of the Finance Act, 1994, as it stood at the relevant time. And since the cost of spare parts itself is not includible, therefore, handling charges incurred in respect of such spare parts also will not form part of the taxable value of the service rendered.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aggrieved Revenue is before the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench while dismissing the Revenue appeal as being devoid of merits observed - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"</font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">5.1 Section 67 as stood in the relevant time provided for exclusion of cost of spare parts sold while rendering repair services of automobiles. If that be so, the cost of handling of such spare parts incurred by the respondent would also not form part of the taxable value of the service rendered. Therefore, we do not find any infirmity in the reasoning adopted by the lower appellate authority…."</font></em></p>
</blockquote>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See
<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODg5NzU=" target="_blank"><font size="1">2013-TIOL-1023-CESTAT-MUM
</font></a></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"> - Tuesday'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">Import of old and used Datagraphic Display Tubes - covered by Hazardous Waste Rules - Liable to confiscation and re-export: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> goods imported are electronic assemblies for direct re-use and, therefore, the same would be covered by Serial No. 1110 of Part B of the Schedule-III to the Hazardous Waste Rules, 2008, which would require prior permission from Ministry of Environment & Forests and since these goods have been imported without permission from the Ministry of Environment & Forests, this import would have to be treated contrary to the restrictions imposed under Hazardous Waste Rules, 2008 and accordingly the same would be liable for confiscation under Section 111(d) of the Customs Act, 1962. And the same, in accordance with Rule 17(2) of the Hazardous Wastes Rules, 2008 have to be re-exported by the Importer at his cost. </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 penalty is warranted, when revised return disclosing capital gains arising out of share transactions is filed, only when assessee was confronted with adverse evidence, during process of investigation - YES: Madras 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 penalty proceedings are warranted, when the revised return disclosing the capital gains arising out of transaction in shares was filed, only when the assessee was confronted with adverse evidence, during the process of investigation and enquiry; Whether further, the fact that the assessee had filed revised returns and the same was accepted by himself, can efface the fact of non-disclosure of the income arising under the head of "capital gains" in the original return; Whether such conduct of assessee can be viewed as contumacious and <em>mala-fide</em> and Whether the application of penal provisions are not automatic and the levy itself depends upon the facts and circumstances of each case. 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">Tax on Service by club to its members held ultra vires: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is declared that Section 65(25a), Section 65(105) (zzze) and Section 66 of the Finance (No.2) Act, 1994 as incorporated / amended by the Finance Act, 2005 to the extent that the said provisions purport to levy service tax in respect of services purportedly provided by the petitioner club to its members, to be ultra vires.</font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tuesday for the judgements</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tuesday 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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