TIOL-DDT 2277 · 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><img width="115" height="125" border="0" align="right" src="image/ddt/10yearsDDT.jpg" alt="" /></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img width="175" hspace="5" height="120" border="0" align="right" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" /></a></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong><font color="#663399" size="3">TIOL-DDT 2277 </font><br>
22.01.2014 <br>
Wednesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax - Arrest - Applicant accused of collecting and not paying ST
of Rs. 2.2 Cr - Conditional bail granted on undertaking that the entire
amount will be paid in three months - HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> an
application under Section 439 of the Code of Criminal Procedure, 1973, the
applicant who has been arrested in connection with the offence punishable
under Section 89 read with Section 90 of the Finance Act, 1994, has prayed
for his release on bail. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Senior Advocate appearing on behalf of the applicant submits that out of
Rs.2.17 crores, the applicant has deposited Rs. 87,60,475/- and <strong>only </strong>Rs.
1,29,86,207/- is outstanding. The applicant has also pleaded that he will
deposit three post-dated cheques of Rs.43,28,736/- each and will
pay the entire dues within three months. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Advocate submitted that the applicant has deposited service tax regularly
and he also deposited all the dues of service tax, in accordance with law.
The applicant is in custody since 15-10-2013, therefore, he is not in a position
to deposit service tax, which he has recovered. The Senior Advocate further
submitted that an undertaking has been given that in case of any default,
the conditional bail automatically be cancelled and the applicant will abide
all the conditions imposed upon him. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On
the other hand, the Standing Counsel for Central Excise and Customs opposed
the bail and submitted that the applicant has evaded the liability to pay
service tax, which he has recovered, and about more than Rs.4 crores of service
tax is due against the applicant, which he is evading. This is not the case
in which the applicant will recover his service tax and thereafter, he will
deposit, but even as per the statement, the applicant has recovered Rs.2.17
crores as service tax for the State and he is keeping the same with him.
The applicant is only a trustee of public money and he is under obligation
to discharge the entrustment in accordance with law i.e. to deposit service
tax immediately, which he has recovered from the parties. Withholding of
service tax amounts to criminal misappropriation of State money. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
High Court observed, "Considering period of detention of the applicant,
liability of the applicant, amount due against the applicant, grounds taken
in the applications for conditional bail and undertaking, and offer of the
applicant, it would be appropriate to provide one opportunity to the applicant
in the light of his offer/ proposal." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently,
application for conditional bail/temporary bail to the applicant is partly
allowed under following conditions: - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
If the applicant fulfills the condition/proposal and deposits three post
dated cheques for payment of dues on 6-12-2013, 6-1-2014 and 6-2-2014
at the time of furnishing bail bond and furnishes a personal bond of Rs.50,00,000/-
(Rupees fifty lakhs only) with two sureties of Rs.25,00,000/- (Rupees
twenty five lakhs only) each to the satisfaction of the Chief Judicial
Magistrate, Durg, he be released on conditional & temporary bail for
a period of three months. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
The applicant shall not leave the territory of the State of Chhattisgarh
without permission from the Chief Judicial Magistrate, Durg before payment
of aforesaid dues. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
He shall fulfill the conditions mentioned in the undertaking. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
The applicant and the sureties shall affix their photographs along with
authenticated copies of documents showing their competency. At the time
of furnishing bail bond, the Chief Judicial Magistrate, Durg shall ensure
the identity and competency of sureties. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
The applicant shall regularly appear before the court during the course
of inquiry or trial. In case of breach of any condition and in case of
two continuous defaults in appearance of the applicant before the court,
this order shall automatically stand cancelled. </font></p>
</blockquote>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please
see <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTE2NzM=" target="_blank"><font size="1">2014-TIOL-85-HC-CHHATISGARH-ST</font></a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government increases effective rate of Customs duty on edible oils </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No 12/2012 - Cus dated 17.03.2012 is amended to increase the effective rate of duty on most of the edible oils from the existing 7.5 percent to 10 percent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Cabinet Committee on Economic Affairs had approved the proposal for increasing the import duty on refined edible oils of vegetable origin from the existing level of 7.5 percent to 10 percent at its meeting on 9th January 2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
The approval has been given in order to maintain a reasonable differential between import duty on crude and refined vegetable oils to protect the domestic refining industry and domestic farmers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems the industry is not very happy with this 2.5 percentage increase as they wanted at least a 5 percentage increase. They feel it is too little too late. Domestic refiners are not able to meet the competition from importers - India is the largest buyer of edible oils and there was a 173 per cent increase in imports during November 2013. The industry suffers from the consequences of a negative inflation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The changes in the Notification are as tabulated below. </font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr valign="top">
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No. in the Notification </font></strong></p></td>
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">tariff item </font></strong></p></td>
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">description </font></strong></p></td>
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Existing rate of duty </font></strong></p></td>
<td><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revised rate of duty </font></strong></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">56. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15079010 (edible grade soya bean oil) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">58. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1508 (ground nut oil), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1509 (Olive oil), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1510 (other oils from olive), 1512 (sun flower seed oil), 1513 (coconut oil), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1514 (Rape, colza or mustard oil) or </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1515 (other vegetable oils) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, refined and edible grade </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">59. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1511 90 (palm oil) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">63. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15121910 (edible sun flower oil) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">66. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1514 19 (other oil) or </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15 14 99 (other) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, edible grade </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">69. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1516 20 (vegetable fat and oils) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, edible grade </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
<tr>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">71. </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1517 10 21 (vegetable margarine), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1517 90 10 (Sal fat), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1517 90 20 (-), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1518 00 11 (linseed oil), </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1518 00 21 (castor oil) or </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1518 00 31 (other edible vegetable oil) </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All goods, edible grade </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.5% </font></p></td>
<td><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10% </font></p></td>
</tr>
</table>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2014/ctariff14_002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.2/2014-Cus., Dated: January 20, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">India - Pakistan Trade - Customs Efficiency </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CUSTOMS</strong> efficiency in terms of processing time of documents, time taken for lab testing and checks for security was seen to be the worst at the rail Land Customs Station (LCS) compared to road, sea and airports in India. In India even though a 100 percent security check is conducted on all consignments from Pakistan, the checks were perceived as being excessive at sea ports as they were conducted only on Pakistani consignments and not on consignments from other countries. Therefore, for expediting the movement of goods, the process of electronic submission of bill of entry, randomized checking of consignments, and provision of authorized trader status should be introduced, especially at the sea and land ports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Overall infrastructure at the seaports was perceived to be the worst compared to that at other ports in both India and Pakistan. Congestion at the port gate was significantly higher at the road and seaports for Indian traders but there was no significant difference between different modes for Pakistani respondents. Warehousing at the road LCS was found to be problem for Indian traders trading by the road route compared to other modes. Pakistani respondents found warehousing a problem largely at the rail and road LCS. Availability of rail wagons was perceived to be a problem on the Indian side but not as much on the Pakistan side. To deal with these issues, increasing the number of gates at customs stations and operating hours of customs would help relieve the impending problem of congestion at ports. Efficiency could also be improved by allowing containerized cargo movement via road and rail modes; along with a provision for adequate rail wagons for exports from India to Pakistan. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Overall, the highest proportion of respondents in both India and Pakistan felt that bilateral trade will increase by up to 25 percent, with the growth of exports from India to Pakistan to be greater than 10 percent for agricultural commodities; chemicals; pharmaceuticals; processed food items including biscuits; cotton; engineering and mechanical goods; glass; jewellery; metal alloys; machinery; paper; pharmaceutical items; tea; textile items including yarn and fabric; and tyres. On the other hand, imports from Pakistan are expected to increase by more than 20 percent for dates; dry fruits; gemstones; and sugar. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[<em>Source: India Pakistan Trade Perception Survey by Indian Council for Research on International Economic Relation</em>] </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI seeks Comments on Depositor Education and Awareness Fund Scheme </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Reserve Bank of India, yesterday placed on its website, the <strong> draft Depositor Education and Awareness Fund Scheme</strong> for public consultation. Members of public, banks, academia, industry and other stakeholders can send their comments on the scheme by <strong>email</strong> by February 5, 2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pursuant to the amendment of <em>The Banking Laws (Amendment) Act, 2012</em>, Section 26A has been inserted in the Banking Regulation Act, 1949 that empowers the Reserve Bank to establish a fund called Depositor Education and Awareness Fund. The Fund will be created by taking over inoperative deposit accounts which have not been claimed or operated for a period of ten years or more or any deposit or any amount remaining unclaimed for more than 10 years within a period of three months from the expiry of the period of ten years. The Fund shall be utilised for promotion of depositors' interest and for such other purposes which may be necessary for the promotion of depositors' interests as specified by the Reserve Bank from time to time. The depositor would, however, be entitled to claim from the bank his deposit or operate his account after the expiry of ten years, even after the unclaimed deposit funds have been transferred to the Fund. The bank would be liable to pay the deposit amount to the depositor and claim refund of such amount from the Fund. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26A. Establishment of Depositor Education and Awareness Fund - </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(1) The Reserve Bank shall establish a Fund to be called the "Depositor Education and Awareness Fund" (hereafter in this section referred to as the "Fund"). </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) There shall be credited to the Fund the amount to the credit of any account in India with a banking company which has not been operated upon for a period of ten years or any deposit or any amount remaining unclaimed for more than ten years, within a period of three months from the expiry of the said period of ten years: </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that nothing contained in this sub-section shall prevent a depositor or any other claimant to claim his deposit or unclaimed amount or operate his account or deposit account from or with the banking company after the expiry of said period of ten years and such banking company shall be liable to repay such deposit or amount at such rate of interest as may be specified by the Reserve Bank in this behalf. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Where the banking company has paid outstanding amount referred to in subsection (2) or allowed operation of such account or deposit, such banking company may apply for refund of such amount in such manner as may be specified by the authority or committee referred to in sub-section (5). </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) The Fund shall be utilised for promotion of depositors' interests and for such other purposes which may be necessary for the promotion of depositors' interests as may be specified by the Reserve Bank from time to time. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) The Reserve Bank shall, by notification in the Official Gazette, specify an authority or committee, with such members as the Reserve Bank may appoint, to administer the Fund, and to maintain separate accounts and other relevant records in relation to the Fund in such forms as may be specified by the Reserve Bank. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(6) It shall be competent for the authority or committee appointed under subsection (5) to spend moneys out of the Fund for carrying out the objects for which the Fund has been established. </font></em></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Thursday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">SAFEMA</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Forfeiture under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 is not violative of Article 20: SC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> all started forty years ago in 1974 when the appellant was detained under the provisions of the Maintenance of Internal Security Act, 1971 (since repealed) and later under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 ("COFEPOSA") on the ground that he in collaboration with his brother, who was living in London at that point of time, was indulging in activities which are prejudicial to the conservation of foreign exchange. The appellant unsuccessfully challenged the detention order. He was eventually released in 1977. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Expression "illegally acquired property" is defined in elaborate terms under the Act. Broadly speaking the definition covers two types of properties: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1) acquired by the income or earnings; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2) assets derived or obtained from or attributable to any activity which is prohibited by or under a law in force. Such law must be a law with respect to which parliament has the power to make law. </font></p>
</blockquote>
<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 interest income arising out of deposits with banks and EEFC account is eligible for deduction u/s 10A - YES: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a 100% EoU, engaged in exports of computer software. It earned interest income from deposits lying in the EEFC account and advancing of inter-corporate loans out of its own fund. The assessee had outstanding borrowings by way of External Commercial Borrowings (ECBs) obtained in earlier years. The assessee had to repay this borrowing only in accordance with the repayment schedule. It was stated that RBI had imposed restriction on prepayment of instalments. The borrowings were for the business of STP undertaking. Under the Exchange Control Regulation, the assessee was prohibited from any pre-payment of ECBs. For any pre-payment of the loan, the assessee had to seek prior permission of the Central Government. In the year 1999, the Government had formulated a policy on pre-payment and the policy stated that approval of pre-payment would be granted only to the extent of 10% of the outstanding loan. Hence, even after going through the regulation, the assessee would have to repay a small portion of its outstanding loans, though it had the liquidity to do so. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issue before the Bench is - Whether interest income arising out of deposits with banks and EEFC account is eligible for deduction u/s 10A. And the answer goes in favour of the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Haryana General Sales Tax </font></strong></p>
<p align="justify"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Haryana General Sales Tax Rules, 1975: Clubbing of units not permissible for availing exemption: Supreme Court </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent assesse was allowed sales tax exemption under Rule 28A of the Rules for the period 13.12.1991 to 12.12.1998 for an amount of Rs.498.80 lakhs. This benefit was granted subject to the conditions laid down in the sub-rule 11 of Rule 28A of the Rules. The conditions postulated in sub-rule 11 (a) are that the industrial unit after availing of the benefit shall continue its production at least for the next five years not below the level of average production for the preceding five years. There is also stipulation in the sub-rule 11 that if the unit violates any of the conditions laid down in clause (a) of sub-rule 11, it shall be liable to make, in addition to the full amount of tax benefit availed of by it during the period of exemption, payment of interest chargeable under the Act as if no tax exemption was ever available to it. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held: The grant of exemption unit wise can be best understood by way of example. An entrepreneur can get an exemption of a unit and thereafter establish number of units and try to club together the production of all of them to get the benefit for all. It would be well nigh unacceptable, for what is required is that each unit must meet the condition to avail the benefit. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p>
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