TIOL-DDT 2164 · 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 2164</font><br>
06.08.2013<br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption from getting ‘unregistered premises' registered for purpose of subjecting Scheduled formulations to re-printing, re-labeling, re-packing or stickering in pursuance of DPCO provisions </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> reporting Notification No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_22.htm" target="_blank">22/2013-CX</a></strong>., Dated: July 29, 2013 in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18315" target="_blank">DDT 2160</a></strong> dated July, 31, 2013, we had mentioned this - </font></p>
<blockquote>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Admittedly, scheduled formulations falling under Chapter Heading 3004 are notified in the Third Schedule to the Central Excise Act, 1944 and any process in relation to these goods involving packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer shall amount to manufacture u/s 2(f)(iii) of the CEA, 1944. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#FFFF00" span="span">So, as not to impose any duty liability that arises because of the aforesaid process, of re-printing, re-labeling, re-packing or stickering, mandated by the DPCO but being construed as manufacture u/s 2(f) of the CEA, 1944, the Central government has in its wisdom issued the exemption notification. </font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Nonetheless, what would be the duty liability if this activity is carried out by a formulation manufacturer in his registered manufacturing premises is a foregone conclusion. Also, if the ‘premises' carries a dealer registration whether he too would be out of this exemption remains unanswered. Another interesting fact is that the re-printing, re-labeling, re-packing or stickering, of the scheduled formulations should result in <strong>downward revision</strong> of the MRP else duty liability is attracted. A similar issue was discussed long back by the Board in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2001/excircular576.htm"><strong>Circular 576/13/2001-CX</strong></a>, dated May, 16, 2001." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, the person whose <strong>unregistered</strong> premises is used for affixing a sticker or re-printing or re-labeling or re-packing of pharmaceutical products falling under Chapter 30 of the First Schedule to the CETA, 1985 with lower ceiling price to comply with the notifications issued by the National Pharmaceutical Pricing Authority under DPCO, 2013 and claiming the exemption under the notification <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_22.htm" target="_blank">22/2013-CX</a></strong> <font color="#FF0000">could be held to be a "manufacturer" in terms of section 2(f)(iii) of the CEA, 1944 and if so he would be required to take a registration under section 6 of the CEA, 1944 read with rule 9 of the CER, 2002 and this again could complicate the entire exemption notification.</font> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Central Government has now come out with a notification <u><strong>granting exemption from registration</strong></u> under sub-rule (1) of rule 9 of the CER, 2002 to such persons who undertake the mandated activity in an ‘unregistered premises'. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">But such manufacturers are already exempted from registration by Notification No. 36/2001-CENT dated 26.06.2001. Is there any need for another exemption? Board knows! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/exnt13_11.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 11/2013-CE(NT)., Dated: August 2, 2013 </font></strong></a></p>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/DPCO2013.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Drugs (Prices Control) Order, 2013</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mega Power Projects exemption - amendments made, new project included </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERIAL</strong> no. 338 of Notification <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2012/etariff12_12.htm" target="_blank">12/2012-CE</a></strong>, dated March, 17, 2012 grants exemption as under - </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a></a>338 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Any Chapter </font></p></td>
<td valign="top"><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All items of machinery, including prime movers, instruments, apparatus and appliances, control gear and transmission equipments, power cables used within the power generation plant, auxiliary equipment (including those required for research and development purposes, testing and quality control), as well as all components (whether finished or not) or raw materials for the manufacture of aforesaid items and their components, supplied to mega power projects specified in <font color="#FF0000">List 11</font>, from which the supply of power has been tied up through tariff based competitive bidding or a mega power project awarded to a developer on the basis of such bidding. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Explanation. - For the removal of doubts, it is clarified that goods required for setting up of "mega power project" include the goods required for development of facilities such as ash disposal system including ash dyke, water intake including treatment and storage facilities and coal transportation facilities for such a project, notwithstanding the fact that such facilities are set up inside or outside the power plant's designated boundary. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil </font></p></td>
<td valign="top"><p><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">43 </font></p></td>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">List 11 referred above lists 104 mega power projects. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government has made some changes to these as below - </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ Entries of this list viz. 45 & 46 have undergone a substitution inasmuch as for the figures, letters and words "2x660= 1320 MW" at serial no. 45, the figures, letters and words "2x800= 1600 MW" have been substituted & for the figures, letters and words "2x800= 1600 MW" at serial no. 46, the figures, letters and words "2x660= 1320 MW" have been substituted. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The entries before and after amendment read as under: </font></p>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Before </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After </font></p></td>
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<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">45 Gadarwara Super TPP, M.P. - 2x660= 1320 MW (NTPC) <br>
</font></em></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">45 Gadarwara Super TPP, M.P. - 2x800= 1600 MW (NTPC) </font></em></p></td>
</tr>
<tr>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">46 Katwa Super TPP, West Bengal - 2x800= 1600 MW (NTPC) </font></em></p></td>
<td valign="top"><p><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">46 Katwa Super TPP, West Bengal - 2x660= 1320 MW (NTPC) <br>
</font></em></p></td>
</tr>
</table>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Probably, this was an inadvertent error with which the notification began its journey and has been corrected now. Whether these amendments operate retrospectively we will know in the days to come. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ So also, entry 50 has been substituted in its entirety by "<em>50. Shree Singaji Thermal Power Project- 2X600=1200 MW</em>". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The previous entry 50 read as: Khandwa, Madhya Pradesh - 2x500 = 1000MW (MPPGCL). Apparently, it is the same project but now with a higher capacity. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ There is also an addition to the list of mega power projects. A new mega power project "<em>105 Neyveli New Thermal Power Station, Tamil Nadu - 2X500 MW= 1000MW (Neyveli Lignite Corporation)</em>" makes its appearance. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">All said and done, the condition 43 (a) which a manufacturer is required to satisfy to avail this exemption mentions - <em>an officer not below the rank of Joint Secretary to the Government of India in the Ministry of Power certifies the project as Mega Power Project before the 19th day of July, 2012; </em></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, how will he certify the aforesaid projects, in a backdated manner, is not understood. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2013/etariff13_24.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 24/2013-CE, Dated August, 2, 2013. </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">I-T
- Rules Amended - Information to be Furnished by Non Residents done away
with</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has amended the Income Tax Rules - in Rule 21 AB, sub rules 1 and 2 are substituted regarding the information to be provided by an assesse not being a resident as sub-section (5) of section 90 and sub-section (5) of section 90A. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A new form 10F is prescribed for this purpose. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Rules are amended with retrospective effect from 1st day of April 2013. The Notification states, "<em>They shall be deemed to have come into force with effect from the 1st day of April, 2013.</em>" </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2013/it13not057.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No.57/2013, Dated August, 1, 2013 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can the CBDT amend rules retrospectively? </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YES</strong>, it can!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 295(1) of the income Tax Act, stipulates, "<em>The Board may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 295(4) states: "<em>The power to make rules conferred by this section shall include <strong>the power to give retrospective effect</strong>, from a date not earlier than the date of commencement of this Act, to the rules or any of them and, unless the contrary is permitted (whether expressly or by necessary implication), no retrospective effect shall be given to any rule so as to prejudicially affect the interests of assessees</em>." </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">After conclusion of final hearing, both sides directed to file written submission - appellant filing affidavit and analytical report - Miscellaneous application filed by Revenue seeking opportunity to rebut contents allowed as fair chance needs to be given</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> this matter, hearing was concluded on 03.05.2013. Both sides were directed by the Bench to file written submission within seven days. The appellant filed an affidavit and analytical report taken by them in their factory in Jammu along with written submissions. The said affidavit and analytical report were submitted to the Revenue also. After going through the same, the Revenue moved a Miscellaneous application seeking an opportunity to rebut the contents of the affidavit and the analytical report. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After hearing both sides the Bench noted that the application filed by the revenue was not opposed by the appellant's counsel, and, therefore, opining that fair chance be given to both sides, the Revenue application was allowed and the matter was listed for further proceedings. This was the view taken by the Member (Judicial). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member (Technical) agreed but recorded a separate finding thus - </font></p>
<blockquote>
<p align="justify"><em><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">"…However, I would like to record that in this case, final hearing was completed on 03.05.2013 and appellant was asked to file written submissions with bullet points. However, appellant has instead prepared an Affidavit and some additional evidences copy of which was given to Ld. Counsel for the respondent and to my learned Brother. Consequent to this, respondent have filed the Miscellaneous Application that if the same is being taken into consideration, they should be heard. In my view appellant should have made application for additional evidence and after hearing respondents, Tribunal should have decided about it. Now since the matter is listed for 26.07.2013, we may leave the issue as it is." </font></em></p>
</blockquote>
<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=ODkzNjg=" target="_blank">2013-TIOL-1184-CESTAT-MUM </a></font></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Born to serve till 62? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY, DDT</strong> was flooded with calls from Officers in the Revenue department asking for confirmation of the news that they had read in a pink paper - that a proposal to increase the retirement age of government employees from 60 to 62 years snaked its way to the Cabinet but a decision was deferred - <font color="#FF0000"><em>deferred for announcement from the ramparts of the Red Fort by the Prime Minister in his Independence Day address</em></font> (his last before the general elections in 2014). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are around fifty lakh central government employees in India and whether they would like to continue beyond the current retirement age is another question - with promotions nowhere to be seen they are a dejected lot and may be two more years of service may or may not prolong their dejection. The last time when the retirement age was increased by an increment of 2 years was in the year 1998 when it was raised from 58 to 60. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was this interesting incident doing the rounds those days - an officer who had had a few months to attain 58 requested the BOSS to give him a sensitive posting - he wanted to retire a <strong><em>contended</em></strong> man and the BOSS agreed, much to the chagrin of others well connected. But then, they too felt it was only a matter of months and left it at that. The 2+ year announcement made these officers sulk in disbelief and the about to retire officer thanked his stars more than anything else. He completed his full tenure in the sensitive range and bid goodbye to the department truly and <strong><em>fully contended</em>! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As for the pink paper announcement, at the moment it is better to give it a pink slip. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">After all, it is prudent to wait and watch, for the Independence Day is only 10 days away. </font></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"> - Wednesday'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">Refund of duty paid under protest - Interest payable only on expiry of three months from date of claim after final order by Tribunal: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOING</strong> by the clear provisions available under Section 27A of the Customs Act, held that the assessees would be entitled to interest on the expiry of three months from the date of receipt of the application to the date of refund of such duty and on no account they would be entitled to interest on the amount paid under protest from the date of payment, as had been claimed by them. It is also made clear that the refund claim could be validly held to be made only on the disposal of the appeals by the Tribunal and not any date prior to that, which means, the date on which the order was passed by Collector of Customs (Appeals) would not be of relevance for the purpose of limitation. </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 word 'manufacture' has not been defined, common parlance meaning can be resorted to and Sec 10B benefits cannot be denied - 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 the activities of moulding, cleaning, grading and undertaking a detailed line of processing for exporting dried plants and potpourri involves any manufacturing; Whether deduction u/s 10B can be claimed, when the final product was created through an irreversible process giving rise to a product commercially different from the raw materials; Whether in the absence of specific definition of manufacture in section 10B, common parlance can be relied on; Whether the mere presence of three of the Directors of the company as partners in the assessee firm, by itself, would make the firm as one, split up from the company, although they dealt in different line of products and Whether further when some workers are working both for the company and the assessee firm, it suggests that the firm was formed through splitting of the company. And the verdict 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">Refund of pre-deposit - Petitioner is entitled to interest for delayed refund of pre-deposit: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>question here is not of interest on refund of the duty amount but of the pre-deposit. There is no express provision of payment of interest on the refund of predeposit. However, drawing analogy from Section 11B of the Central Excise Act, which provides for the refund of the duty, Section 11BB speaks of the interest on the refund of the duty as there would arise a requirement of payment of interest if the duty is not refunded within a period of three months from the date of receipt of application to be submitted under subsection (1) of Section 11B of the Act. Such interest needs to be paid at such rate fixed by the Central Government on expiry of period of three months from the date of receipt of application. The deeming fiction under Section 11BB says that for the purpose of this Section, the order made by the Higher Appellate Authority or the Court shall be deemed to be the order made under sub-section (2) of Section 11B. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Wednesday for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday 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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