TIOL-DDT 2149 · the untouched capture
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<p align="justify"><font size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font 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" face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2149</font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>16.07.2013 <br>
Tuesday </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax –Refund vs Demand -
Past adjustment of refunds against the arrears where procedure u/s 245 of Income Tax Act was not followed – CBDT Clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DELHI </STRONG>High Court vide its judgement in the case of <em>Court On Its Own Motion Vs. UOI and Others in W.P.(C) 2659/2012 dated 14.03.2013 = <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2013/2013-TIOL-207-HC-DEL-IT.htm"><strong><font size="1">(2013-TIOL-207-HC-DEL-IT)</font></strong> </a></em>had issued directions for necessary action by the Income Tax Department. One Mandamus is on past adjustments of refunds against the arrears; in particular, where procedure prescribed under <strong>Section 245 </strong> of the Income Tax Act, 1961 has not been followed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 245 of the Act empowers and authorises an Assessing Officer to adjust refunds against pending demands and arrears, and reads as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“245. Set off of refunds against tax remaining payable.- Where under any of the provisions of this Act a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Chief Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, <strong>after giving an intimation in writing to such person of the action proposed to be taken under this section </strong>.” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, “ <em>Section 245 mandates and envisages prior intimation to the assessee so that he/she can respond before any adjustment of refund is made towards the demand relating to any other assessment year. Thus, an opportunity of response/reply should be given and after considering the stand and plea of the assessee, justified and valid order or direction for adjustment of refund can be made. The Section postulates two stage action; prior intimation and then subsequent action when warranted and necessary for adjustments of the refund towards arrears </em>”. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But in the case of returns processed at Central Processing Unit at Bengaluru, the computer itself adjusts the refund due against the existing demand, i.e., there is adjustment but without following the two-stage procedure prescribed in Section 245 of the Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So in cases <em>where returns have been processed by the CPC, Bengaluru and refunds have been fully or partly adjusted against the past arrears while passing or communicating the order under Section 143(1) of the Act, without following the procedure under Section 245 of the Act </em>, the High Court directed that:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>A. All such cases will be transferred to the Assessing Officers; </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">B. The Assessing Officers will issue notice to the assessee which will be served as per the procedure prescribed under the Act. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">C. The assessees will be entitled to file response/reply to the notice seeking adjustment of refund; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">D. After considering the reply, if any, the Assessing Officers will pass an order under Section 245 of the Act permitting or allowing the refund. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">E.</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <em>The Board will fix time limit and schedule for completing the said process. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In compliance of (E) above, CBDT has fixed 31st of August 2013 (positively) for completing the process mentioned at A to D above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants Chief Commissioners to bring the instructions to the notice of all officers working under their jurisdiction for necessary and strict compliance within the time frame prescribed above. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2013/instruct1306.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction No. 6/2013, Dated: July 10, 2013 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Values for Gold & Silver increased </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Government has increased the Tariff Value of Gold & Silver. There are changes in the Tariff value of various oils; Brass Scrap value nosedives but Poppy seed value remains adamant and refuses to budge. Joining poppy seeds is Areca Nuts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The rates as on 28.06.2013 and with effect from 15.07.2013 are as under: </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Table 1 </strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>S. No. </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter/ heading/ sub-heading/tariff item </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Description of goods </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff value USD(Per Metric Tonne) <br>
from 28.6.2013 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff value USD(Per Metric Tonne) <br>
from 15.7.2013 </strong></font></p></td>
</tr>
<tr bgcolor="#CC9999">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1) </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(2) </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(3) </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(4) </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(5) </strong></font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 10 00 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Palm Oil </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">854 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">834 </font></p></td>
</tr>
<tr bgcolor="#CC9999">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 10 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBD Palm Oil </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">859 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">867 </font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 90 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others - Palm Oil </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">857 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">851 </font></p></td>
</tr>
<tr bgcolor="#CC9999">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>4 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 10 00 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Palmolein </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">875 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">876 </font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 20 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBDPalmolein </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">878 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">879 </font></p></td>
</tr>
<tr bgcolor="#CC9999">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>6 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 90 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Others - Palmolein </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">877 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">878 </font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>7 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1507 10 00 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Crude Soyabean Oil </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1020 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">975 </font></p></td>
</tr>
<tr bgcolor="#CC9999">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>8 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7404 00 22 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Brass Scrap (all grades) </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3917 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3759 </font></p></td>
</tr>
<tr>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>9 </strong></font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1207 91 00 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Poppy seeds </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4395 </font></p></td>
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4395 (no change) </font></p></td>
</tr>
</table>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Table 2 </strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr bgcolor="#FFFF00">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>S. No. </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Chapter/ heading/ sub-heading/tariff item </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Description of goods </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff value <br>
(USD) from 28.6.2013 </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff value <br>
(USD) from 15.7.2013 </strong></font></p></td>
</tr>
<tr bgcolor="#FFFF00">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1) </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(2) </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(3) </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(4) </strong></font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(5) </strong></font></p></td>
</tr>
<tr bgcolor="#FFFF00">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71 or 98 </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gold, in any form in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">401 per 10 grams </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">416 per 10 grams </font></p></td>
</tr>
<tr bgcolor="#FFFF00">
<td width="0" valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71 or 98 </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Silver, in any form in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">604 per kilogram </font></p></td>
<td width="0" valign="top" bgcolor="#FFFF00"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">638 per kilogram </font></p></td>
</tr>
</table>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Table 3 </strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr bgcolor="#FFFF00">
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">S. No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter/ heading/ sub-heading/tariff item </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description of goods </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value (US $ Per Metric Tons) from 28.6.2013 </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tariff Value (US $ Per Metric Tons) from 15.7.2013 </font></strong></p></td>
</tr>
<tr bgcolor="#FFFF00">
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(1) </strong></font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(2) </strong></font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(3) </strong></font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(4) </strong></font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(5) </strong></font></p></td>
</tr>
<tr bgcolor="#FFFF00">
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">080280 </font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Areca nuts </font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1613 </font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1613 (no change) </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_075.htm"><strong>Notification No. 75/2013-Cus (NT), Dated: July15, 2013 </strong></a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The Falling Rupee – RBI measures to address Exchange Volatility </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ACCORDING</STRONG> to RBI, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The market perception of likely tapering of US Quantitative Easing has triggered outflows of portfolio investment, particularly from the debt segment. Consequently, the Rupee has depreciated mark <a></a>edly in the last six weeks. Countries with large current account deficits, such as India, have been particularly affected despite their relatively promising economic fundamentals. The exchange rate pressure also evidences that the demand for foreign currency has increased vis-a-vis that of the Rupee in part because of the improving domestic liquidity situation</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against this backdrop, and the need to restore stability to the foreign exchange market, RBI has announced the following measures: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. The Marginal Standing Facility (MSF) rate is recalibrated with immediate effect to be 300 basis points above the policy repo rate under the Liquidity Adjustment Facility (LAF). Consequently, the MSF rate will now be 10.25 per cent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Accordingly, the Bank Rate also stands adjusted to 10.25 per cent with immediate effect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. The overall allocation of funds under the LAF will be limited to 1.0 per cent of the Net Demand and Time Liabilities (NDTL) of the banking system, reckoned as Rs.75,000crore for this purpose. The allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling. This change in LAF will come into effect from July 17, 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv.
The Reserve Bank will conduct Open Market Sales of Government of India
Securities of Rs.12,000 crore on July 18, 2013. Details of the securities
included for the OMO sale auction will be announced through a separate
press release tomorrow. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/rbi_press_release.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI Press Release 2013-2014/100 Dated: July 15, 2013 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rules cannot be interpreted in such a way so as to make them nullity </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondents are rendering taxable service such as Beauty Parlour Services, Health Club and Fitness Centre Service, Internet Cafe, Dry Cleaning and Mandap Keeper Services. They were also rendering exempted/non-taxable services such as hotel accommodation, restaurant and bar services. The appellant availed CENVAT credit of service tax paid on certain input services which were utilised both in respect of taxable services and exempted services as per Rule 6 (5) of the CCR, 2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Rule 6(5) read thus - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“(5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clause (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services.” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue authorities harboured a view that the said rule permits <strong><em>only taking </em></strong> of the credit in respect of input services and not utilisation thereof whereas the respondent in the present case has utilised it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So started the cat and mouse game. The adjudicating authority confirmed the demand in excess of Rs.40 lakhs with the usual penalty and interest. However, the Commissioner(A) held that once the appellants are allowed to take credit the same would include utilisation of the credit also. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the order was set aside, the Revenue has taken its revolutionary views in appeal to the higher level. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT observed – </font></p>
<blockquote>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>“6. …The purpose and objective of CENVAT credit Rules it to allow a manufacturer/output service provider not only to take the credit but also to utilize the same for the purposes specified in the said Rules. The respondents herein are output service providers who discharge service tax liability. Therefore, if they are allowed only to take credit and not to utilize the same, the objective of the CENVAT Credit Rules cannot be achieved. There is no reason for interpreting the term “allow” in a narrow and restrictive manner as urged by the Revenue. The said interpretation urged by the Revenue defeats the object and purpose of the CENVAT Credit Rules. Rules cannot be interpreted in such a way so as to make them nullity.” </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue appeal was dismissed. </font></p>
<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkxMDE=" target="_blank"><strong><font size="1">2013-TIOL-1078-CESTAT-MUM</font></strong></a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Wednesday's cases</font></strong></strong></font></font></p>
<p align="justify"><font 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"></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Seizure of gold imported under Indo-Thailand Free trade Agreement - Show Cause Notice cannot be interfered with in writ - High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>petitioner has imported gold jewellery classified under the customs tariff heading 711319 from Thailand duly supported by the original Certificate of Origin issued by the designated authority in Thailand. Governments of India and Thailand have entered into a Treaty called "Indo-Thailand Free Trade Agreement" under which certain specified goods can be imported from Thailand into India by Indian importers without having to pay the basic customs duty and countervailing duty. The Customs Department on a belief that the petitioner was not entitled to the benefit, seized 12742.5 grams of gold jewellery valued at Rs.3.63crores from the petitioner and issued a Show Cause Notice proposing demand of duty, confiscation etc. The petitioner is before the High Court challenging the Show Cause Notice. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when assessee is restrained by court from sale of factory land till labour case is settled, any advance taken from a real estate developer can be subjected to capital gains even before land user change permission is granted - NO: Bombay High Court </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 the assessee is restrained by the court from sale of the factory land till the labour case is settled, any advance taken from a real estate developer can be subjected to capital gains even before the land user change permission is granted by the municipal authorities and Whether when the assessee's Board had decided to treat the factory land as stock-in-trade, the same is to be treated as merely paper entry for lack of construction activities. And the answers go against the Revenue. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">COD - Vacancy in government departments are well known and this cannot be a reason for non-filing of appeals where statutory time limits have been laid down - the reason stated is merely of bureaucratic red tape - COD applications and appeal rejected: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the COD application it is stated that the delay in filing the above appeal was mainly due to vacancy in the position of Junior Manager (F&A) in the organization of the appellant during 01.07.2011 to 23.12.2011. It is further submitted that during 23.12.2011 to 31.07.2012 the Junior Manager looking into the legal affairs of the appellant did not have the requisite expert legal knowledge and therefore he did not take steps to challenge the order of the lower appellate authority. Only in November, 2012, another Junior Manager (F&A) joined and this Junior Manager apparently had the requisite knowledge to appoint a counsel and hence the delay. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ground stated for the delay is not at all satisfactory to this Bench. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Wednesday for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Have a nice day. </strong></font></p>
<p align="justify"><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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