TIOL-DDT 2163 · 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 2163 </font><br>
05.08.2013<br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">If you are registered under 'All Taxable Services - Other than in Negative List' – Do get your Registration amended</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> ACES website informs, "<em>Assessees who got registration on or after 01.07.2012 with 'All Taxable Services - Other than in the Negative List' or those who have amended their Registration by adding the description 'Other than in the Negative List', are required to file amendment to their Registration online and give the relevant description(s) of Taxable Service(s) available in the drop-down list in the online amendment form.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was already informed by the CBEC in Circular No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2012/sercir165.htm" target="_blank">165/16/2012–ST</a></strong>, dated 20.11.2012 as, "<em>Registrations obtained under the positive list approach continue to be valid. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services given in the Annexure. Where registrations have been obtained under the description 'All Taxable Services', the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure</em>." </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Alternative Inputs - DGFT Policy Circular No.30 dated 10.10.2005 withdrawn </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PURSUANT</strong> to Representations received from the trade and industry on the issue of allowing alternative inputs as per SION under DFRC scheme even if exactly the same input, in the product value added chain, has not been utilized in the manufacture of the exported product, the DGFT had issued a <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir030.htm" target="_blank">Circular 30</a></strong> dated 10/10/2005 titled "<em>Importability of Alternative inputs allowed as per SION under DFRC Scheme</em>" and clarified thus - </font></p>
<blockquote>
<p align="justify"><em><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The matter was examined in detail and it has been decided to inform all concerned that since the objective of SION is to allow duty free import of the inputs which are actually used or are capable of being used in the export product, the exporter has the flexibility to import the alternative input/product mentioned in the SION as long as the same can be used in the manufacture of the exported product under the DFRC scheme. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18332" target="_blank">DDT-2162</a></strong> we had reported about issuance of DGFT <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not031.htm" target="_blank"><strong>Notification No.31</strong></a> dated August, 1, 2013 which stipulates that "<em>inputs actually used in manufacture of the export product should only be imported under the authorisation. Similarly inputs actually imported must be used in the export product</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, this goes contrary to the Policy<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2005/dgft05cir030.htm" target="_blank">Circular 30</a></strong> referred above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Quickly realizing this contradiction, the DGFT has come out with a Circular and clarifies - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"…Accordingly, the earlier Policy Circular No.30 dated 10.10.2005 becomes infructuous and hence stands withdrawn. </font></em></font></p>
<p align="justify"><font color="#663399"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. This is to reiterate that duty free import of inputs under Duty Exemption/Remission Schemes under Chapter-4 of FTP shall be guided by the Notification No. 31 issued on 1.8.2013. Hence any clarification or notification or communication issued by this Directorate on this matter which may be repugnant to this Notification shall be deemed to have been superseded to the extent of such repugnancy."</font></em></font></p>
</blockquote>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">This is what is expected of a government body – issuing clarification before any damage is done - when will others learn?</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2013/dgft13cir003.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Circular No. 3/(RE-2013)/2009-2014, Dated: August 02, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cotton Corporation of India Ltd. permitted to export cotton </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has decided to allow export of cotton by The Cotton Corporation of India Ltd., a Public Sector Undertaking under Ministry of Textiles, during the current cotton season 2012-13 under Tariff Item HS code 5201 & 5203 by relaxing certain conditions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Inasmuch as the condition for issue of RC as mentioned in para 2(ii) of Notification No 26 dated 30th November, 2012 and condition at para 2 (ii) of Notification No 17 dated 1st October, 2012 will <strong>not</strong> apply to grant of RC for export of cotton by Cotton Corporation of India. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2013/dgft13not032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 32 (RE-2013)/2009-14 dated August 2, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Computation of Cum-tax benefit in cases of abatement - Tribunal grants waiver of Pre-deposit</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HOW</strong> do you compute cum-tax benefit in case of construction service with 67% abatement from the gross value? Actually, there are two different methods which give different service tax liability. Let us assume the gross value (cum-tax) be Rs. 500/- and the rate of service tax is 12.36% including education cess. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Method 1: First cum-tax method:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under this method, the effective rate i.e., 4.08% is applied to the gross amount <em>(On service value of Rs 100/-, after abatement of 67%, the taxable value will be Rs 33/-. Applying 12.36% on Rs 33/-, the service tax will be Rs 4.08/-. So, the effective rate of service tax is taken as 4.08%.) </em>By applying this 4.08% to a gross cum tax value of Rs 500/-, service tax will be (500 X 100/104.08)*4.08% = Rs 19.6/-. The Service value will be Rs 480.4/- ( Rs 500/- less Service Tax of Rs 19.6/-) </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The invoice will be: </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service value </font></strong></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">480.4 </font></strong></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#FFE2D5"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement – 67% </font></strong></p></td>
<td valign="top" bgcolor="#FFE2D5"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">321.9 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Net taxable value – 33% </font></strong></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">158.5 </font></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#FFE2D5"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p></td>
<td valign="top" bgcolor="#FFE2D5"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19.6 </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gross value (including service tax) </font></strong></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">500.0 </font></p></td>
<a name="_GoBack"></a></tr>
</table>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Method 2: First abatement Method: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this, first abatement is extended on Rs 500/- and then the remaining 33% is taken as cum-tax value with rate of service tax as 12.36%. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this method, </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gross value </font></strong></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">500 </font></strong></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#D6E9EF"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement – 67% </font></strong></p></td>
<td valign="top" bgcolor="#D6E9EF"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">335 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Cum tax value – 33% </font></strong></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">165 </font></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#D6E9EF"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable value = 165*100/112.36 </font></strong></p></td>
<td valign="top" bgcolor="#D6E9EF"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">147 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>18</strong> </font></p></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As is evident, the tax payable under second method is less (Rs 18) compared to first method (Rs 19.6). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a recent case, before the Tribunal, revenue adopted method 1 and assessee adopted method 2. The Tribunal prima facie found that first abatement method (second method) will result in a bill consistent with this approach and granted waiver of pre-deposit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, unfortunately, the second method will not result in proper bill as explained below: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gross value is Rs 500/- and in this method, the service tax is Rs 18/-. So, the Service Value will be Rs 500 less Rs 18/- = Rs 482/-. Now, if we prepare a bill for this, it will be as under: </font></p>
<table width="90%" border="0" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Value </font></strong></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">482 </font></strong></p></td>
</tr>
<tr>
<td valign="top" bgcolor="#EDCDCD"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement - 67% </font></strong></p></td>
<td valign="top" bgcolor="#EDCDCD"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">322.94 </font></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxable value – 33% </font></strong></p></td>
<td valign="top"><p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">159.06 </font></p></td>
</tr>
<tr bgcolor="#EDCDCD">
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19.65 </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Total Bill value </font></strong></p></td>
<td valign="top"><p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">501.65 </font></strong></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the first abatement method will not result in proper Bill, but only first cum-tax method will give correct invoice. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see:
<a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkzNTU=" target="_blank"><font size="1">2013-TIOL-1177-CESTAT-MAD</font></a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">They are also Concerned - Hyderabad Customs and Excise Zone's Noble Gesture </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TAXMEN</strong> are generally compared to Shylocks and sharks but they too are concerned when calamity strikes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the initiative of Mr. Sanjay Rathi, Additional Commissioner and under the guidance of Mr. B. B. Prasad, Chief Commissioner, Customs & Central Excise, Hyderabad Zone, staff members of Hyderabad Central Excise Zone have contributed their one day's salary towards The Prime Minister's National Relief Fund. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A total amount of Rs.15.42 lakhs has been collected. This contribution is a small token of the <em><strong>concerned </strong></em>officers of Hyderabad Zone for the victims of recent tragedy in the state of Uttarakhand. The staff responded overwhelmingly to the appeal by Chief Commissioner Prasad. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I congratulated a lower level officer who contributed his one day salary. "What is after all one day's salary; any number of days' salary will only be too little", he said, but he hoped that the money sent to the PM's relief fund would be properly utilised. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The response of the staff members of Hyderabad Zone is commendable and will (hopefully) inspire others also. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Applicant importing parts of MV and clearing same after packing and labeling but without mention MRP and by reversing CENVAT credit - Revenue alleging ‘manufacture'</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicants are importing parts of motor vehicles on payment of appropriate customs duty as well as CVD and SAD. They were clearing the parts after packing and labeling <em><strong>except</strong></em> mentioning MRP by reversing the CENVAT credit availed in respect of the imported parts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue contention is that since the activity undertaken by the applicant amounts to manufacture and as the applicants are not putting any MRP, therefore, the assessable value is to be arrived at by following Rule 8 of the Central Excise Valuation Rules, 2000. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the <em>CCE, Pune-I</em> confirmed the demand of Rs.1,68,43,780/-with interest and also imposed penalty, the appellant is before the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is submitted that the credit which was reversed at the time of clearance of the parts, on the presumption that the parts are cleared as such, is much more than the duty confirmed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the last date of hearing, the Bench directed the Revenue to verify this aspect. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the hearing on 02.07.2013, the AR produced a letter from the office of the <em>Commissioner of Central Excise, Pune-I</em>, dated 24.06.2013 verifying that the applicants had reversed the credit of <strong>SAD</strong> of Rs.2,37,96,102/- during the period in dispute. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Noting that the demand is less than the credit reversed, the CESTAT observed that the applicants have made out a case for waiver of pre-deposit of the dues. Accordingly, the pre-deposit of the dues was waived and the recovery stayed. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <font size="1"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODkzNTQ=" target="_blank">2013-TIOL-1176-CESTAT-MUM</a></font></font></strong></p>
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<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Tuesday's cases</font></strong></font></strong></font></p>
<p><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"><strong><font color="#663399">Customs </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Importer filing an Advance B/E for import of vehicle and requesting that matter be adjudicated as they are not able to produce Type Approval Certificate (TAC) - letter issued by Ministry dated 13.05.1955 cannot be relied upon in matter as the same was issued when Sea Customs Act was in force - Commissioner is empowered to adjudicate advance Bill of Entry: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant filed an Advance Bill of Entry for import of a new vehicle from Dubai. The appellant requested the Commissioner of Customs (Import) for adjudication of the said Bill of Entry and also submitted that as the appellant is not able to produce Type Approval Certificate which is required as per ITC / Policy Conditions for import of new car the assessment be made as per Customs Manual 2010-11 and as per Circular No. 22/97-Cus dated 04.07.1997. </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 trade discount is nothing but Commission and same is liable to TDS u/s 194H - NO: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee, the Chief Treasury Officer, Agra, has questioned the legality and validity of the order passed by the Income Tax Officer (TDS), Agra passed under section 221(1)/221(1A) of the Income Tax Act whereby the Chief Treasury Officer was held as assessee in default having failed to deduct and pay the tax under section 194-H of the Income Tax Act, 1961 from commission. A tax liability along with interest amounting to Rs.2,77,648/- was created by the order dated 31st of March, 2002. The Revenue had conducted a survey in the office of the petitioner under section 133A and thereafter proceeding was initiated under section 221(1)/221(1A) of the Act on the allegations that the assessee sold general stamp papers, court fee stamps, copy stamps and other stamps either to the public directly or through licensed stamp vendors at a price less than 1% of the value of such stamps which amounted to 'commission' within the meaning of section 194-H of the Act. The assessee having failed to deduct the tax at source on the said 'commission amount' to which it was obliged under section 194-H of the Act, was assessee in default. The case of the assessee was that the it was not giving any commission to the stamp vendors. But the sales were made at discount of one per cent on cash purchases of stamp papers etc. by licensed vendors as per provisions of Rule 157 read with Rule 161 of U.P. Stamp Rules, 1942. </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">Appellant is mere lessor of land, plant and machinery owned by him - if agreement does not provide for transfer of assets at end of lease, such leasing activities would not fall under category of financial lease coming under "banking and financial service": Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant entered into a lease agreement for lease of land, building, plant and machinery and other equipment including rolling mills owned by them to M/s. FACOR under an agreement dated 20/05/1998, renewed from time to time and valid up to 31/01/2004. As per the lease agreement, the consideration was fixed at Rs.2.50 lakhs per month plus 1/3 rd of the net profit made by FACOR on operation of the plant.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department was of the view that the activity undertaken by the appellant is financial leasing and, therefore, would be liable to service tax under the category of "banking and financial service". </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tuesday for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tuesday with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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