TIOL-DDT 2162 · the untouched capture
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<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 2162</font><br>
02.08.2013<br>
Friday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">ACES
Mess - Woes of Assessee - High priority for Helpdesk </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PLEASE</strong> see our report <strong>ACES Mess - Woes of an Assessee - Low Priority for Helpdesk</strong> in <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTgzMTU=" target="_blank">DDT 2160 - 31.07.2013</a></strong>, in which we had highlighted the plight of an assessee trying to revise a return.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ADG, Systems, Chennai, Hariharan responded promptly; He says, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"With ref to Ur DDT dated 31.7.2013 captioned --ACES Mess-Woes of Assessee -Low priority for Helpdesk,</em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I would like to mention that we are aware that there was an error in the application in calculating the period of 90 days and the vendor has been informed to rectify it and also resolve the issue (in respect of those Assessees who had tried to file the revised return on the 90th day but was not allowed by the system). </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards, priority, please note that the classification of priority of tickets is a relative classification vis-a-vis other tickets received for resolution, which is subject to change and may be re-classified with highest priority, if the situation so demands. But let me assure you that even a ticket with low priority gets our <strong>highest priority and attention</strong>. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The inconvenience caused to the assessee(s) is regretted." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thank You Mr. Hariharan, for your prompt response and your clarification that even low priority tickets get your highest priority and attention and your regrets for the inconvenience caused to the assesse. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is only because of some responsible and responsive officers like Mr. Hariharan that the Department still commands some public confidence. May his tribe increase! </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">It was raining notifications and clarifications yesterday. Quite possibly, after issuing the Promotion order of Commissioners, the Board was relaxed and decided to get down to brass tacks. </font></p>
<p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">So, here they are - </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ceramic Building Bricks exempted </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CERAMIC</strong> building bricks [6904 10 00] were subjected to a concessional 2% adv. rate of Central Excise duty in terms of notification 1/2011-CE provided that no credit of duty on inputs or tax on input services had been taken under the provisions of the <em>CENVAT Credit </em>Rules, 2004. Now, the Central Government has <strong>exempted</strong> these goods. For this purpose, they have omitted the serial number 82 and the entries relating thereto appearing in the notification 1/2011-CE and substituted the serial no. 187A& entries thereto appearing in the notification 12/2012-CE with a new serial no. 187A& entries which include Ceramic building bricks [6904 10 00] and which is subject to Nil rate of duty - no conditions applied. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">This notification although dated July 31, 2013 was made available only yesterday afternoon and so the implications on the clearances already made would be known in the days to come. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can we not fix a date from which an exemption would be effective? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_23.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 23/2013-CE, Dated: July, 31, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rice Bran and Rice bran oil cake to attract Nil rate Customs duty </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended the<em><strong> Godzilla </strong></em>notification 12/2012-Cus, dated March 17, 2012.By inserting new serial numbers and entries thereto, Rice bran [2302 40 00] and Rice bran oil cake [2306 90 90] have been subjected to Nil rate of Customs duty. This exemption would be available only till <strong>30th September, 2013</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Another amendment to the notification 12/2012-Cusseeks extension of exemption to <em><strong>parts of</strong></em> fasteners, snap fasteners, zip fasteners etc. Earlier, only Fasteners including buttons and snap fasteners, zip fasteners including zippers in roll, sliders/pullers and end stoppers were exempted. However, the condition no. 24 is to be satisfied by the importer. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Here again, this notification came to everyone's knowledge yesterday evening. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2013/ctariff13_039.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 39/2013-Cus, Dated: July, 31, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">New Exchange Rates </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has notified new exchange rates effective from <strong>02.08.2013</strong> for export and imported goods. The earlier notification <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_076.htm" target="_blank">76/2013-Cus (NT)</a> </strong> had a lifespan of exactly two weeks. <font color="#FF0000">Whereas the earlier notification prescribed a US dollar value of Rs. 59.65 for imported goods, the new exchange rate admits that the rupee has breached the 60 mark. It is Rs.61.55 for One US dollar. And the global investment bank <em><strong>Goldman Sachs</strong></em> says that rupee can hit Rs.65 to a dollar. </font></font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2013/cnt13_081.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 81/2013 - Cus., (N.T.), Dated: August1, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Classification of "multifunction speaker system" - Board clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Board informs that Representatives of trade have <font color="#FF0000"><em><strong>claimed</strong></em></font> classification of "multifunction speaker system" (combination of one or more of the following: Universal Serial Bus (USB) port, USB playback, Frequency Modulation (FM) radio) as loudspeakers under heading 8518 based on premise that the principal function is that of a speaker system which involves conversion of digital signal to analogue, amplification, and relay to the listener. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pursuant to the discussion on this issue at the Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013, at Vishakhapatnam, the following general agreement was reached - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) "Speaker with USB port but without USB playback or FM radio", the product would be classified in heading 8518, by application of General Rules 1. Speakers classified under heading 8518 include both passive speakers and active speakers. Active speakers, like many subwoofers, contain a built-in audio amplifier. The subheading under which speakers are classified depends on the number of ‘drive units' - the actual loudspeaker cones or ribbons - in each cabinet or enclosure. Speakers with a single drive unit in each cabinet are classified under subheading 851821. Speakers with more than one drive unit in each cabinet - for example one woofer and one tweeter - are classified under subheading 851822. Speakers that are not mounted in a cabinet or enclosure are classified under subheading code 851829. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) "Speaker with USB Port having USB playback but without FM radio", the principal function of the device is imparted by USB playback facility. Therefore the said multifunction speaker system is classifiable in subheading 851981 of the Harmonized Customs Tariff. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) "Speaker with USB port having FM radio but without USB playback" the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under subheading 852799 by virtue of General Rules 1, Note 3 to Section XVI and 6. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) "Speaker with FM, USB port and USB playback", if it is held that the principal function of the device is imparted equally by Radio (reception apparatus for radio-broadcasting) and USB playback facility then it would be classified by sequential application of GRI, according to Rule 3(c). Hence the said product is classifiable under subheading 852799 by virtue of General Rules 1, Note 3 to Section XVI, 3(c), and 6. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board says that the issue was also examined at its end and in view of the general consensus arrived at the Conference, the Board desires that, as mentioned above, based on the specifications "multifunction speaker systems" may be classified under heading 8519, heading 8527 or the appropriate heading, as the case may be. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">It would be pertinent to note that since the classification has been arrived at by ‘general consensus' the field formations should not have any difficulty in the matter. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_027.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No.27 / 2103 - Customs Dated: August, 1, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Classification of "Cockroach traps" and "Mosquito Repellent" - Board clarifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">IT</font></strong><font color="#FF0000"> seems that the Board is on a clarification spree. </font></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">This Circular too owes its origin to the general consensus arrived at the Vishakhapatnam Conference of Chief Commissioners of Customs and Directors General on Customs Tariff and Allied Matters, held on 05-06 June 2013 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has noted that in National Import Data Base products like "Cockroach Traps", and "Mosquito Repellent", are classified under various Customs tariff headings 3506, 3822, 3808, 3926, 4823, etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, after referring to the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975, <em><strong>all legal texts</strong></em>, the HS Explanatory Notes the consensus arrived at the Vishakhapatnam Conference is that the classification under heading 3506, 3822, 3926 and 4823 is not proper and appropriate classification is under heading 3808, subheading 3808 91. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Board informs that they too have examined the issue and subscribe to the views arrived at by consensus. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board desires that such products should merit classification under heading 3808, subheading 3808.91, and tariff item 3808 91 99 ("Other"), by application of GRIs 1 and 6. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/cuscir13_028.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Circular No.28 / 2013-Customs, Dated: August, 1, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Processing of Drawback claims - CBEC Instructions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has issued the following instructions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Audit (CAG) had observed processing of time barred drawback claims under Section 74 of the Customs Act, 1962. It is directed to ensure due diligence is exercised in the application of provisions of Rule 5 of Re-Export of Imported goods (Drawback of Customs duties) Rules, 1995 in dealing with such cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Audit also noticed instances where the specifications/ details of the goods exported were somewhat differently described in the export documents and in the brand rate letters issued by Central Excise. The different manner of describing the goods creates unnecessary room for doubt. To avoid such situations, it is directed that full and comprehensive details of the exported goods should be indicated clearly in the brand rate letters. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2013/instruction13_006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instructions in F. No. 603/01/2011-DBK , Dated: July, 31, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Goods procured against SFIS scrips can be alienated after 3 years </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has amended paragraph 3.12.7 of FTP to read as under: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Entitlement/goods (imported / procured) shall be non-transferable (except within group company and managed hotels) and be subjected to Actual User condition. However, these goods can be alienated on completion of 3 years from the date of import / procurement." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The effect of this notification is that goods imported/procured against SFIS scrips can be alienated on completion of 3 years from the date of import / procurement. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not030.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 30/(RE-2013)/2009-2014, Dated: August 01, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Inputs actually used in export product should only be imported and those actually imported must be used in export product </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has inserted a new para 4.1.15 in the FTP 2009-2014 and consequently Para 4.2.3 of FTP is also amended. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new paragraph reads - </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"4.1.15 Wherever SION permits use of either (a) a generic input or (b) alternative inputs, unless the name of the specific input(s) [which has (have) been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly the name/description endorsed in the shipping bill. At the time of discharge of export obligation (EODC) or at the time of redemption, RA shall allow only those inputs which have been specifically indicated in the shipping bill." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The long and short of this insertion is that Inputs <em><strong>actually used</strong></em> in manufacture of the export product should only be imported under the authorisation. Similarly inputs <strong><em>actually imported</em></strong> must be used in the export product and this has to be established in respect of every Advance Authorisation / DFIA. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excellent fodder for the agencies to run riot. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not031.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 31/(RE-2013)/2009-2014, Dated: August 01, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure for availing VCES Scheme </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> website informs:Service Tax Voluntary Compliance Encouragement Scheme, 2013 provides you with a golden opportunity to pay all your ‘tax dues' from the period 01.10.2007 to 31.12.2012 without interest, penalty and other legal proceedings including prosecution. Apply on or before 31.12.2013 in the prescribed format. </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
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<td width="12%" valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Step 1: </font></p></td>
<td width="88%" valign="top" bgcolor="#FEEEDE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the declarant is not registered, then he is first required to get himself registered and then apply for this scheme. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Step 2: </font></p></td>
<td valign="top" bgcolor="#FDD8B3"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After registration, the declarant shall make a declaration in Form VCES-1 to the designated authority (AC/DC Technical, Head quarter office) before 31.12.2013. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Step 3: </font></p></td>
<td valign="top" bgcolor="#FEEEDE"><p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On receipt of Form VCES- 1, the designated authority will issue acknowledgement of declaration in Form VCES-2 within 7 working days from the date of receipt of declaration. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Step 4: </font></p></td>
<td valign="top" bgcolor="#FDD8B3"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The declarant is required to pay not less than 50% of tax dues by 31st December 2013. Balance by 30th June 2014 and if not paid, can be paid by 31st December, 2014 along with interest from 1st July 2014. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cenvat credit cannot be utilized for payment of dues (Rule 6(2)). </font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Amount paid shall not be refundable. </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Step 5: </font></p></td>
<td valign="top" bgcolor="#FEEEDE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On full payment of taxes, the designated authority will issue acknowledgement of discharge in VCES-3 within 7 working days from the date of furnishing of details of tax dues paid in full, along with interest if any. Last date for payment of first installment of 50% of total tax dues is 31.12.2013 and balance amount by 30.06.2014 or 31.12.2014 (with interest). </font></p></td>
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<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Persons not eligible for the scheme </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I. Person cannot make declaration of tax dues for which </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) SCN (u/s 73 or 73A) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Order (u/s 72, 73, 73A) </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">has been issued as on 01-03-2013. [section106(1)] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">II. A person who has filed return, declared tax liability but not paid [106(1) proviso] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If a SCN or order has been issued on any issue (say taxability or valuation), declaration cannot be filed on same issue for subsequent period [106 (1) proviso] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A. Where any inquiry or investigation has been initiated and is pending as on 01.03.2013 by way of </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Search u/s 82 of FA 1994 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Issue of summons u/s 14 of CEA 1944 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) Issue of notice requiring production of accounts or documents u/s 72 (for best judgment assessment) or under Rule 5A of STR 1994 [Section 106(2)] </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">B. Where audit has been initiated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, letters requiring production of documents, not mentioning sections 14 (CEA), 72(FA) and rule 5A(STR), would not be treated as covered under section 106(2). [TRU Circular dated 13.05.2013]</font></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">Filing writ/appeal in wrong court - Forum Shopping deprecated: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner filed a writ petition before the Delhi High Court against an order in original passed by the Commissioner of Customs, Kanpur. The very filing of writ petition by the petitioner in Delhi High Court against the order in original passed by the Commissioner of Customs, Kanpur indicates that the petitioner took chance in approaching the High Court at Delhi which had no territorial jurisdiction in the matter. Filing of the writ petition or for that appeal before Delhi High Court was not at all bona fide. The appellant was assisted and had the services of the counsels, who are expert in the central excise and customs cases. They took a chance, which apparently appear to be the practice of the counsels appearing in such matters at Delhi High Court and succeeded in getting interim orders. </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 expression 'wholly and exclusively' appearing in Sec 37 does not mean necessarily - YES: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Bench are - Whether when an expenditure is claimed to have been incurred by an assessee for promotion of his business, there is a legal obligation to prove that the expenditure was necessary for promotion of his business; Whether for the allowability of an expenditure u/s 37, it is relevant as to whether the benefit, expected to be accrued out of an expenditure incurred, is to accrue immediately or after a lapse of time, whether directly or indirectly; Whether the expression "wholly and exclusively", appearing in Section 37, does not mean necessarily; Whether expenditure incurred on foreign visits by directors and garden managers for promoting the sales of tea can be questioned, merely because the assessee has appointed a selling agent abroad and Whether expenditure incurred in connection with the travels of the wives of the tea estate managers can be allowed, when it is customary in the European countries for the wives to accompany their husbands. And the verdict goes against the Revenue. </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">In definition of Mandap keeper Service, crucial word is ‘temporary occupation' - appellant leased out premises to a hotel for an interest free deposit - since premises is not given for temporary occupation, demand of service tax is not sustainable - appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant rented out their premises at Ajivasan Hall, Juhu Tara Road, Mumbai to M/s Hotel Siddharth in terms of agreement entered into between the two parties. As per the said agreement, Hotel Siddharth agreed to furnish an interest free deposit of Rs.40 lakhs to the appellant, of which they had already paid a sum of Rs.25 lakhs and the balance payment to be paid at the time of occupation of the premises. The department classified the said activity under the category of "Mandap Keeper Service" and demanded Service Tax on the sum of Rs.25 lakhs received by the appellant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the words of the CESTAT, even the lower appellate authority ‘mechanically' confirmed the demand and rejected the appeal. </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 align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT </strong></font></p>
<p align="justify"><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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