TIOL-DDT 2224 · the untouched capture
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<!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 align="justify"><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 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></strong></font><font color="#663399" size="3">TIOL-DDT 2224</font><br> 05.11.2013<br> Tuesday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Wrong availment of CENVAT Credit by Beer manufacturing units - DGST alerts</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIRECTOR</STRONG> General, Service Tax has informed the field that investigations revealed that a Beer manufacturing unit had discharged service lax liability on its output service namely 'franchise service' by utilizing CENVAT Credit taken on raw materials and packing goods used for manufacturing of alcoholic beverages. This unit was not eligible to avail CENVAT Credit on inputs and packing materials as their final product was alcoholic beverage for human consumption, which are not 'excisable goods' under the Central Excise Act, 1944. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGST further informs that as per Rule 6(1) of CENVAT Credit Rules. 2004, the CENVAT Credit shall not be allowed on such quantity of input used in or in relation to the manufacture of exempted goods or for provision of exempted services, or input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services, except in the circumstances mentioned in sub-rule (2). Credit of the raw materials and packing materials would not be available for payment of service tax as those inputs were used in the manufacture of non-excisable goods. The total service tax liability detected on account of mis-utilisation of CENVAT Credit is substantial. On being pointed out, this unit has agreed to discharge service tax liability with interest. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGST alerts the field that similar practice might be followed by various beer manufacturing units and others. DGST wants the field to take necessary action to safeguard the Government revenue in such cases. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please also see</strong> <a href="http://www.taxindiaonline.com/RC2/print_story.php?newsid=4081" target="_blank"><strong>Beer manufacture and service tax - intaxicating? </strong></a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Email Account and Website Security - DG, Systems Instructions</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Directorate General of Systems has been receiving several communications from Indian Computer Emergency Response Team (CERT-in) relation to defacement of websites maintained at the local Commissionerate level and email accounts being compromised due to reasons like weak passwords. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DG, Systems cautions that website security should be an integral part of website maintenance contracts and it should be ensured that the websites are hosted on Indian servers only (eg., on NIC infrastructures.). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Regarding e-mail account security and password management, the DG had sent advisories from time to time. DG wants the Commissionerates to ensure the security of independently hosted websites under their jurisdiction and sensitise officers in respect of secure email account usage. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Security of Email Accounts </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN </strong>a letter to Chairperson (CBEC), the Director General, Computer Emergency Response Team India (CERT-In), has emphasised the need for maintaining email account security in respect of official correspondence. The following points are to be noted:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The password of the mail account should be more than 8 characters having a combination of alphanumeric and special character. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The password should be updated regularly (at least once a month) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The user owning the mail account should not share the password with anyone </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The contact details of the officer should be up-to-date with the System/Mail Administrator so as to receive regular updates and alerts. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The user should keep track of his/her mail account access through ‘last login' facility. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Caution should be exercised in opening the email messages especially keeping in mind phishing, malware infected and targeted attack emails. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The users should be sensitized regularly about latest security threats and targeted attacks. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. The computer system/desktop/laptop used to access official email account should be secure, i.e., authorised OS (operating system), Anti-virus and Firewall should installed and updated regularly </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The official (as well as personal) email account should never be accessed from the computer systems having weak security or public systems like Cyber Café since these are easy targets for hackers with malicious intent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. Recent revelations have brought to light the fact that mail service providers based outside India - like Gmail, Yahoo, Microsoft, etc. are sharing data with surveillance agencies. Hence <strong>the use of Gmail, Yahoo etc for official communication may result in sensitive and confidential information being made available to foreign agencies. Therefore official communication (especially carrying information of national interest) should be made using only Email accounts of icegate.gov.in or nic.in domains </strong>. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> had taken up this issue on several occasions.<strong> <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTEyMzM=" target="_blank">DDT 1418 06.08.2010</a></strong> asked, "Why are the government officers using private email ids and not the government ones?"</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTEyOTk=" target="_blank"><strong>DDT 1428 20.08.2010</strong> </a>asked, <font color="#0000FF"><em>"<strong>Can Government Officials use Private Email ids for Official Correspondence?" </strong></em></font></font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">A senior Revenue officer was furious with us and asked us as to why he should use a private site like TIOL. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Company Law - Relaxation of last date and additional fee in filing of e-Form 23C for Appointment of Cost Auditor</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per General Circular No. 14/2013 dated 3rd September, 2013 the last date of filing and to relax the additional fee applicable on e-form 23C was extended up to 31st October, 2013 or within 30 days of the commencement of the company's financial year to which the appointment relates, whichever is later. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It has now been decided to extend the last date of filing and to relax the additional fee applicable on e-form 23C to 30th November, 2013 or within 30 days of the commencement of the company's financial year to which the appointment relates, whichever is later.</font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_circular_17_2013.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ministry of Corporate Affairs General Circular No. 17/2003, Dated: November 01 2013 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CAG Shashi Kant Sharma elected to UN Board of Auditors </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Shashi_Kant.jpg" alt="" width="200" height="254" hspace="5" border="0" align="left"></font>SHASHI</STRONG> Kant Sharma, the Comptroller & Auditor General of India has been elected as Member of the United Nations Board of Auditors for a six year term. The election was held on 1st November at UN Headquarters in New York. India defeated Philippines with a convincing margin. Out of the 186 votes cast, India got 124 votes against 62 for Philippines. As a result of Friday's victory, India will replace China beginning 1st July, 2014 as China will be completing its term in June 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG of India will now get access for audit of the UN organizations, the prominent one being the UN Headquarters itself. He, along with other two members of the board will also be responsible for audit of UN bodies like UN Peacekeeping Operations, UN Development Programme (UNDP), UNICEF, UN High Commissioner for Refugees (UNHCR), UN Environment Programme (UNEP), UN Human Settlements Programme (UN-HABITAT), UN Women and UN Framework Convention on Climate Change (UNFCCC). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The General Assembly appoints three members to the Board of Auditors, each of whom must be the Auditor-General (or officer holding the equivalent title) of a Member State. The members of the Board have joint responsibility for the audits. The present members of the Board of Auditors are: Mr. Amyas Morse, CAG, United Kingdom of Great Britain and Northern Ireland (Term expires 30 June 2016); Mr. Ludovick Utouh, CAG of United Republic of Tanzania (Term expires 30 June 2018) and Mr. Liu Jiayi, Auditor-General of the National Audit Office of the People's Republic of China (Term expires 30 June 2014) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sharma, a 1976 batch IAS officer of the Bihar cadre took over as the CAG of India in May 2013. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/UN_Board.pdf">CAG Press Release, Dated: November 02, 2013</a></strong></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 align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appellant providing vessels to ONGC on charter hire basis - primary object is transportation of crude from place of production i.e. in High Sea to refineries and not for 'Storage and Warehousing' - such services are correctly classifiable under category of "Supply of tangible goods for use" service-Demands set aside and appeals allowed: CESTAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant had provided shipping vessels to M/s. ONGC on charter hire basis for which they were receiving consideration. The said vessels were used during monsoon period and on call out basis for storage and transportation of crude oil from Bombay High. From the agreement for charter hire it appeared that the vessel is to be used at a particular place or site for operation and service, which indicated that the vessel is stationary and primarily not used for voyage/transport of oil. The vessel is sought to be moored to the ONGC rig and acts as a mother vessel receiving oil from the rig and pumping it to other daughter vessels which does actual transporting. The vessel used as mother vessel is required to carry out ship to ship transfer of cargo to daughter vessel. Therefore, the department was of the view that the activity undertaken by the appellant in charter hiring the mother vessel was primarily for the purpose of storage of crude oil at Bombay High and the transportation was only an incidental function to the primary function of storage. </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 who was gifted plot of land from her father, constructed eight flats by demolishing her bungalow and sold four of them, such income is to be treated as business or adventure in nature of trade - NO: ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Assessee is an individual. The AO noticed that Assessee's father owned a plot of land admeasuring 809 Sq.Yds and the same was transferred in the name of Assessee vide gift deed. The Assessee constructed a bungalow on the said land. The bungalow was dismantled to construct 8 flats. Four flats were retained by Assessee for her own use and the remaining 4 flats were sold. On the 4 flats sold, Assessee worked out LTCG on sale of land and short term loss on sale of construction of flats and offered the same for tax. The AO considered the construction of flats to be as adventure in the nature of trade and therefore the income is to be treated as "business income" and not "capital gains". He also noticed that the 4 flats retained by the assessee for her own use were on two different floors, independent units and therefore according to him the 4 flats cannot be considered to be a single unit for the purpose of claiming exemption u/s 54F and therefore held that Assessee was not eligible for deduction u/s 54F. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">No cause for denial of exemption on ground that Tug was diverted into service of salvage operation of MSC Chitra in Mumbai Harbour for period of 22 days - Appeals allowed with consequential relief: CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> applicant had imported self-propelled Tug Smit Jaguar and claimed exemption under Notification No.21/2002-Cusdt.01.03.2002, Sl.No.216, List No.12 and condition Sr.No.31. As per the condition No.31, the importer was required to obtain a Certificate from a duly authorized officer of the Director General of Hydrocarbons, in the Ministry of Petroleum and Natural Gas, Govt. of India to the effect that the imported goods are required for petroleum operations referred to in Clause (a) and have been imported under the contract referred to in that clause. The goods were cleared and exemption was granted. The applicant also executed a bond for Re-export after completion of the contract period. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow 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>