TIOL-DDT 2155 · 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 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="3">TIOL-DDT 2155 </font><br>
24.07.2013 <br>
Wednesday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Indian rice - delicious but dangerous-CBEC's Damage Control Exercise</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RUSSIA</strong> has recently imposed temporary sanctions on the import of rice, rice-grain and peanuts from India. Russian Radio reported, "<em>The ban is associated with the repeated detection of a dangerous pest, the Khaprabeetle. Moscow has several times in the recent past imposed temporary moratorium on the import of Indian rice, which is a traditional product of national agriculture, well known and well appreciated in Russia. Of course, only if it is of good quality. It has become a sad tradition that the Indian side lets the situation with exports to Russia get out of control. In other words, it does not take adequate measures to establish a clear system of control over its products</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Indian Customs has reacted after the Ministry of Agriculture has raised the issue of temporary ban on Import of Rice and Peanuts from India due to detection of quarantine pest in an import consignment and highlighted that CFSs conducting phytosanitary measures have no designated area for fumigation and separate storage for keeping fumigated/ treated cargo which leads to cross contamination from untreated goods/commodities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has decided that all Customs Cargo Service Providers (CCSP)/ Custodians shall provide separate and dedicated storage space meant for fumigation and storage of post fumigated sites to enable Plant Quarantine Authorities to carryout necessary checks for both imported and export consignments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board <strong>desires</strong> the Commissioner of Customs <strong>concerned</strong> (<font color="#FF0000">not the <strong>concerned </strong>Commissioner - DDT is grateful for the correct usage</font>) to ensure that the directions are complied with scrupulously and immediately. Board wants a compliance report by 14.08.2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will the Commissioners fulfil the Board's <strong>desire</strong>? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/instruction13_005.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F.No. 450/19/2005- Cus IV, Dated: July 23, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">LNG & Natural gas imports allowed at Nil rate of duty </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LIQUEFIED</strong> natural gas (LNG) and natural gas when imported by </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">Gail NTPC JV or Petronet LNG Ltd. </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">for supply to a generating company as defined in section 2(28) of the Electricity Act, 2003 to supply electrical energy or to engage in the business of supplying electrical energy, for generation of electrical energy was subject to Nil rate of Basic customs duty subject to the content of the proviso and the satisfaction of condition no.100 of the longest customs notification 12/2012-Customs, dated 17/03/2012. [See Sr. no. 139A] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Central government has extended this largesse to "importers" who satisfy the twin criteria mentioned above. This has been done by substituting the words and letters “Gail NTPC JV or Petronet LNG Ltd.” with the words “an importer”. </font></p>
<p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Level playing field? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2013/ctariff13_036.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 36/2013-Cus, dated July 22, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Frozen Hilsa Fish imports made attractive </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended notification 46/2011-Cus which prescribes a reduced import tariff on more than 1500 items imported from ASEAN and Philippines. This amendment introduces a new proviso and a new entry sr. no. 31A which reads - </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TABLE </strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<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 and Tariff item </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description </font></strong></p></td>
<td valign="bottom" colspan="2"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate (in percentage unless otherwise specified) </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) </font></strong></p></td>
<td valign="bottom"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) </font></strong></p></td>
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">31A </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">03038910 </font></p></td>
<td valign="top"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Frozen Hilsa Fish </font></p></td>
<td valign="bottom"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5% </font></p></td>
<td><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the proviso, this attractive rate is frozen only in respect of goods imported into the country from Myanmar. The desire to build stronger economic relations via the Hilsa route coupled with some gastronomic diplomacy led to the issuance of this notification, it can be said. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">For much of the world's 230-million Bengali population, there is fish, and then there is Hilsa - a silvery tropical variety that has celebrity status on local plates. Last year, as local prices spiralled due to overfishing, Bangladesh, the largest Hilsa producer in the world banned exports so that Bangladeshis get to fill their insatiable appetite of their ‘National fish'. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">That action of the Bangladesh government had prompted the West Bengal Chief Minister to write to the Commerce Ministry seeking clarification on Hilsa imports from Myanmar, the other major producer in the region. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">In response, the Commerce Ministry had made it clear that there were no import restrictions on Hilsa from Myanmar, but nonetheless there were persistent fears over smuggling of the fish into India from Bangladesh. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">But for all its cross-border clout, the Hilsa is still swimming in troubled waters. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2013/ctariff13_037.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 37/2013-Cus, Dated: July, 22, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Cadre Review - Chief Commissioners Get big salary hike </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> cadre restructuring in CBDT is going at a fast pace at least for the senior officers. All the Chief Commissioners of Income Tax are upgraded from the scale of Rs. 67,000-79,000 to Rs.75,500-80,000 with effect from 23.05.2013 as per a memorandum issued by CBDT issued yesterday. Now, a Chief Commissioner with two years of service will get the pay of Rs. 80,000 which will remain same even if he becomes a Member of the Board or even its Chairman. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">116 existing Chief Commissioners will get the new scale and out of them 26 will be promoted to the cadre of Principal Chief Commissioner on a pay of Rs. 80,000. 184 Commissioners of Income Tax will soon get promotion as Principal Commissioners in the scale of Rs. 67,000-79,000. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the new scenario, you will have Principal Chief Commissioners on a pay of Rs. 80,000 reporting to the CBDT Members who are also on the same pay. These CBDT Members report to the CBDT Chairperson who is also in the same pay. The CBDT Chairperson will report to the Revenue Secretary who also is in the same pay of Rs. 80,000. And there will be some Chief Commissioners also in the pay band of Rs.80,000. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is rather a little too crowded at the top.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=353&filename=pitara/sernews/order/Office_Order_12_13.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT O.M. in F. No.HRD/CM/102/3/2009-10-110617(PT),Dated: July 23, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax dodgers should be punished, not pampered with pardons - Islamabad HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTc2NTU=" target="_blank">DDT 2096 02.05.2013</a></strong>, we had reported about the Amnesty Scheme announced by the Pakistan Government for smuggled or non-duty paid motor vehicles. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had also reported in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgwNzY=" target="_blank">DDT 2136, 27.06.2013</a></strong> that the President of Defense of Human Rights of Public Services Trust had filed a Petition in the Islamabad High Court against this scheme and the Court had quashed the Amnesty Scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed that the amnesty scheme is bad in law for the following reasons:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It favours tax evaders and puts the honest taxpayers at a disadvantage. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Such schemes, announced at random, are against Article 25 of the Constitution as these violate the guarantee against arbitrary decisions under the whims and fancies of the rulers in power. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It favours unscrupulous taxpayers, leading to unjustified and hostile discrimination resulting in a violation of equality clause of the Constitution. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. This scheme, amounting to approving the crimes of tax evasion, rent seeking and money laundering will have pernicious effect on the general moral fabric of society. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. All such moves put integrity at a discount and place a premium on vulgar and ostentatious display of wealth. This shatters the faith of the common man in the dignity of honest labour and virtuous living. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. It does not provide a level playing field for all stakeholders, especially the local automobile manufacturers to benefit from the Amnesty Scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. It promotes anti-competitive market behaviour by saturating the market with cheaper, older and high maintenance vehicles; effectively collecting long term junk and attracting the middle class to opt for such affordable cars as opposed to buying new or relatively less used and more efficient imported vehicles. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. It creates a black/grey market for vehicles or a special deal offer to the corrupt elements of society by not only financially incentivizing but also encouraging smuggling of more and more vehicles if such Amnesty Scheme is allowed to persist. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. It discriminates against law abiding and taxpaying citizens and discourages them from gaining confidence in the legal system, especially in the tax regime which is to be administered justly and fairly across the board. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. It is imperative that the tax dodgers should be punished, not pampered with pardons. If the perpetrators of law are not checked and placed in order, the impression that it does not pay to follow the rules and that there are ways to defeat the law will manifest itself in permanently detrimental ways. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. It would appear more akin to the state settling/compromising with the tax evaders where the state is positioned with the weaker bargaining position. The failure of state institutions to apprehend the violators and subject them to the law of the land must not be an excuse to allow for amnesty schemes to prevail. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Corruption must be uprooted and all state agencies must be regulated, scrutinized and held strictly accountable, but such type of schemes encourage illegality in the financial sphere, by promising to turn ‘black' money into ‘white'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The Amnesty Scheme is benefitting only a few influential, tax evading citizens and corrupt government officials at a time when the country requires a level playing field where the protected stakeholders are also taxed similar to the common man. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The Amnesty Scheme is not only a slap on the face of honest taxpayers but also aimed at decriminalizing the crime of tax evasion and plundering of national wealth. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. If one looks at the needy economy of Pakistan, culture of corruption, budget deficit, per capita income, begging for financial assistance by all Governments and ever increasing gap between rich and poor, there is hardly any justification to import luxury vehicles that too through illegal modes and by exercising lucrative influence. </font></p>
</blockquote>
<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. All cars registered under the Amnesty Scheme must be ceased and reverted back to pre-SRO position. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Corrupt customs/government officials must be uprooted - and legal action by way of initiating criminal proceedings to be investigated by FIA against all Government officials including Chairman FBR involved in introducing, approving and executing Amnesty scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. A committee may be established to examine the corrupt practices and suggest a code of ethics to be strictly complied with by all Government departments, so that against the cancer of commerce i.e corruption law must strike hard at it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Vehicles smuggled after announcement of scheme be confiscated forthwith and entry of those vehicles which have still not been brought to Pakistan be banned and if brought be confiscated and auctioned in according with law. All vehicles above the age of three years may also be confiscated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Tighter border controls must be placed to ensure that smuggling is prevented and all violators severely punished. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In these peculiar condition and the economy, in future no government department be allowed to import luxury vehicles and all the departments may be directed to use the locally manufactured vehicles. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Work allocation of Departmental Representatives before ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>supersession of earlier Instruction No. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2008/instruct0813.htm"><strong>13/2008</strong></a>, the CBDT has laid down fresh parameters for allocation of work between the CIT (DRs) and the Sr. DRs for representation before ITAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the noticeable changes that have been made <em>vis-à-vis</em> the instructions of year 2008 in respect of cases to be argued by the CIT (DRs) are - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ All appeals in assessment cases, in which the aggregate of the additions made by the A.O. which are under dispute/subject matter of appeal in a case, is more than; </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Rs. 10 crores in the cities of Mumbai and Delhi. [<font color="#FF0000">Rs. 2 Crore earlier</font>] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Rs. 6 crores in the cities of Chennai, Kolkata, Ahmedabad, Hyderabad, Bangalore and Pune. [<font color="#FF0000">Rs.1 Crore earlier</font>] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Rs. 3 crores in other cities. [<font color="#FF0000">Rs.50 lakhs earlier</font>] </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Performance reports are required to be submitted in the prescribed format - as if the DRs have all the time in the world to fill them at the end of the month. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, in the earlier instruction of the year 2008, there was a specific mention of SCAM related cases which were to be argued by the CIT(DRs) but nothing is forthcoming about them in the present Instruction.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably, we have become a SCAM Free nation or have we accepted scams as a part of the system?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2013/instruct1309.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Instruction 09/2013, Dated: July 22, 2013</font></strong></a></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"> - Thursday'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/COFEPOSA</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Preventive Detention order cannot be quashed merely because order remained unexecuted for long period: SC by majority </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> a preventive detention order is to be quashed or declared illegal merely on the ground that the order remained unexecuted for a long period without examining the reasons for such non-execution, the legislative intention contained in provisions such as Section 7(b) of the COFEPOSA Act would be rendered wholly nugatory. </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 assessee, an SSI with value of plant worth less than Rs 1 Cr, excludes costs of spares, Revenue is justified to take aggregate value of all equipments to deny assessee benefits of Sec 80IB - 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 when the assessee, claiming to be a small scale unit, with value of plant and machinery under Rs 1 crore, had excluded the cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores while determining value of its plant and machinery, the Revenue is justified to take the aggregate value of plant and machinery of the business as a whole to disqualify the assessee as a small scale unit and make a disallowance of the deduction claimed under section 80IB and Whether when the assessee had paid royalty to its AE for knowhow imparted to the assessee at the rate of 5 per cent of the net ex-factory selling price, which was a small fraction of the assessee's turnover, the Revenue is justified to disallow the royalty payment. And the verdict 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">Applicant issuing duty paying invoices without supplying goods - consignee taking <em>CENVAT credit </em>and proceedings for recovery initiated for recovery thereof settled by Settlement Commission on payment of duty & penalty - contention that penalty not imposable in such circumstance against applicant is <em>prima facie </em>not sustainable - Pre-deposit ordered: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AGAINST</strong> an o-in-o passed by the CCE, Thane-II imposing a penalty of Rs.25 lakhs under Rule 26(2)(i) of the CER, 2002, the applicant is before the CESTAT with a Stay application. The penalty is imposed on the ground that the applicants issued duty paying invoices without supplying the goods to M/s Arrow Engineers and M/s Arrow Engineers availed credit without receipt of the inputs. Incidentally, against the proceedings initiated against M/s Arrow Engineers for recovery of the CENVAT credit allegedly fraudulently availed, the assessee M/s Arrow Engineers approached the Settlement Commission and settled the dispute by payment of appropriate duty and penalties. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Thursday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Thursday with more<strong> DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</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>
</body>
</html>