TIOL-DDT 2358 · the untouched capture
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<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><s><strong><font size="2"><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=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s></font></strong></font></strong></font></strong></font></strong></font><font color="#663399" size="3">TIOL-DDT 2358 </font><font color="#663399" size="3"></font><font size="2"><br>
</font></strong><font size="2"><strong>22.05.2014 </strong><br>
<strong>Thursday </strong> </font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Gold by Nominated Banks/Agencies/Entities - RBI Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JEWELLERS</strong>, bullion dealers, AD banks, and trade bodies have represented to the Government of India and RBI to rationalise the guidelines for import of gold. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has decided to modify the guidelines for import of Gold by the nominated banks/agencies/entities. These revised guidelines which will come into force with immediate effect are:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Star Trading Houses/Premier Trading Houses (STH/PTH) which are registered as nominated agencies by the Director General of Foreign Trade (DGFT) may now import gold under 20:80 scheme subject to the following conditions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) The STH/PTH should have imported gold prior to the introduction of 20:80 scheme. STH/PTH should get the required verification done by the Department of Customs at any port where they have imported gold consignment in the past. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) The first lot of gold under this scheme would be based on the highest monthly import during any of the last 24 months prior to the RBI's notification dated August 14, 2013, subject to a maximum of 2000 Kgs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) As in the case of other nominated agencies, the eligible quantity may be imported by STH/PTHs from any port, subject to their eligibility limit/maximum quantity allowed to them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) For proper compliance, before import, they must submit the import plan, port-wise and quantity-wise, to the <strong>concerned </strong> Customs office, where the verification of the figures of past performance was done. This information will be sent to all the other ports from which imports are permitted. The overall discipline of exporting 20% of each imported consignment before the next consignment is imported will be equally applicable to such STH/PTH importers. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has also decided to permit the nominated banks to give Gold Metal Loans (GML) to domestic jewellery manufacturers out of the eligible domestic import quota of 80% to the extent of GML outstanding in their books as on March 31, 2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The directions have been issued under Sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999). </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2013/rbi13cir133.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI/2013-14/600 - A.P. (DIR Series) Circular No.133, Dated: May 21 2014 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Goods - Long Term Export Advances - RBI Directives </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> of now, prior approval of the Reserve Bank is required to be obtained by an exporter for receipt of advance where the export agreement provides for shipment of goods extending beyond the period of one year from the date of receipt of advance payment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AD Category- I banks have been permitted to allow exporters to receive advance payment for export of goods which would take more than one year to manufacture and ship and where the 'export agreement' provides for the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On requests from exporters, RBI has decided to permit AD Category- I banks to allow exporters having a minimum of three years' satisfactory track record to receive long term export advance up to a maximum tenor of 10 years to be utilized for execution of long term supply contracts for export of goods subject to the conditions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) Firm irrevocable supply orders should be in place. The contract with the overseas party /buyer should be vetted and clearly specify the nature, amount and delivery timelines of products over the years and penalty in case of non- performance or contract cancellation. Product pricing should be in consonance with prevailing international prices. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) Company should have capacity, systems and processes in place to ensure that the orders over the duration of the said tenure can actually be executed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) The facility is to be provided only to those entities, who have not come under the adverse notice of Enforcement Directorate or any such regulatory agency or have not been caution listed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) Such advances should be adjusted through future exports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">e) The rate of interest payable, if any, should not exceed LlBOR plus 200 basis points. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">f) The documents should be routed through one Authorized Dealer bank only. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">g) Authorised Dealer bank should ensure compliance with AML/KYC guidelines and also undertake due diligence for the overseas buyer so as toensure it has good standing/sound track record. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">h) Such export advances shall not be permitted to be used to liquidate Rupee loans, which are classified as NPA as per the Reserve Bank of India asset classification norms. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) Double financing for working capital for execution of export orders should be avoided. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">j) Receipt of such advance of USD 100 million or more should be immediately reported to the Trade Division, Foreign Exchange Department, Reserve Bank of India, Central Office, 5th Floor, Amar Building, Mumbai under copy to the <strong>concerned </strong> Regional Office of the Reserve Bank of India. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The directions have been issued under Sections10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999). </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2013/rbi13cir132.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI/2013-14/597 - A.P. (DIR Series) Circular No.132, Dated: May 21 2014 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CVC Wants Disciplinary Authorities to give Reasoned and Speaking Orders </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Central Vigilance Commission has reiterated that Disciplinary Authorities (DAs) should issue a self-contained, speaking and reasoned order which must indicate, inter-alia, due application of mind by the authority issuing the order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commission has observed that in spite of instructions, the orders issued in disciplinary matters by the Disciplinary Authorities concerned are sometimes not in the form of a speaking and reasoned order indicating due application of mind. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commission again advises all administrative authorities to ensure that officials exercising disciplinary powers conferred under the applicable statutory rules/CDA Rules etc. governing the public servants <strong>concerned </strong> in the CPSUs/PSBs/Ministries/ Departments/Organizations to issue the orders which are self-contained, speaking and reasoned indicating due application of mind by them especially when they differ with the advice/recommendations of CVO or Inquiry Officer or the Commission as the case may be giving cogent reasons thereof. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instances have also come to the notice of the Commission wherein the orders passed by Disciplinary Authorities only indicate their designation in the organization and the name of the officer is not indicated in the orders issued. Commission advises that in all such orders issued in disciplinary matters, the name and designation should also be clearly indicated. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cvccir/2014/circvc_14_002.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CVC No. 003/DSP/3, Dated: May 19 2014 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Orders passed under section 264 of Income Tax Act - Administrative supervision- CBDT Instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>UNDER</strong> Section 264 of the Income Tax Act, 1961, the Commissioner of Income Tax (CIT) may, either of his own motion or on an application made by the assessee, revise an order passed by an authority subordinate to him. The CIT may, before revising such, order, make enquiry or cause such enquiry to be made and subject to the provisions of the Act, pass such order which is not prejudicial to the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The statutory function under Section 264 performed by the CIT is required to be reported by the CIT and also appraised by the supervisory Officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has decided to issue the following guidelines to be complied forthwith in respect of orders passed under section 264 of the Act:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) The CIT shall prepare a brief of the orders passed under section 264 of the Act and report the same to the Principal Chief Commissioner of Income Tax/ Chief Commissioner of Income Tax (CCIT) in the monthly DO letter along with a copy of such order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) The Pr. CCIT/ CCIT shall report the number of orders passed under section 264 of the Act by the CsIT under his/her jurisdiction along with his/her observation in relation to any order,if deemed fit, to the Zonal Member of the CBDT in the monthly DO letter. The Pr. CCIT/CCIT shall also communicate his/her observation to the CIT. </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2014/instruct14_11.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT Instruction No. 11/2014 in F. No. 279/Misc./M-115/2013-ITJ, Dated: May 16 2014 </strong></font></a></p>
<p align="center"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2">CBEC gives posting orders to 104 </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has issued posting orders to 104 recently promoted Assistant Commissioners, followed promptly by a corrigendum involving six names whose present places of posting have been incorrectly mentioned. How could CBEC correct this mistake within hours of issuing the transfer order? Normally it would have taken days or even months to get these corrected after representations through proper channel. Obviously there is another channel which is working at supersonic speed. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Friday's cases</font></strong></strong></font></font></p>
<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"><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></strong></font><font color="#FF6633">VAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Accepting defective compressors outside the warranty period with certain fixed repair charges and replacing them at the option of the customer with any other repaired compressor does not tantamount to sale so as to attract Sales tax: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Applicant is the Additional Commissioner of Sales Tax, VAT-III, <em>Mumbai</em>. The Respondent is engaged in the business of manufacturing and selling compressors of various models and capacities used in air-conditioners. They are also engaged in accepting defective compressors outside the warranty period with certain fixed repair charges and <em><font color="#FF0000">replacing them at the option of the customer with any other repaired compressor</font></em>, off the shelf. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a customer has a defective compressor <em><font color="#FF0000">outside the warranty period</font></em>, he approaches the Respondent with the same for repairs. At such time, the customer is informed about the repairing charges and the amount of time it would take for repairing the defective compressor which is normally about 60 days. The customer is then given an option by the Respondent either (i) to wait for 60 days to receive back his defective compressor after repairs; or (ii) to take a repaired compressor of the same capacity, size and model off the shelf of the Respondent,<font color="#FF0000"> <em>after paying the repair charges</em></font>. </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"><font size="2"><strong><font color="#FF6633" face="Verdana, Arial, Helvetica, sans-serif">Income
tax - </font></strong></font><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether
when assessee commits to supply certain product more than its plant capacity
and finally resorts to purchases from sister concern and a third party
to meet its obligation, any disallowance of part of sale price on ground
of being excessive is warranted - NO: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues
before the Bench are - Whether when assessee commits to supply certain product
more than its plant capacity and finally resorts to purchases from sister
concern and a third party to meet its obligation, any disallowance of part
of sale price on ground of being excessive is warranted and Whether AO is
justified in rejecting books of account without pointing out any defects
in the books maintained by the assessee. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cutting and slitting of jumbo rolls of self-adhesive rolls does not amount to manufacture u/s 2(f) of the CEA, 1944 - if the legislature wanted to connote this activity as manufacture it would have included CETH 4811 and 8546 in the Third Schedule or added a chapter note in the respective chapters of the CE Tariff - no merit in Revenue appeal, hence dismissed: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> <em>CCE, Belapur </em> dropped a <strong><em>jumbo </em></strong> duty demand by holding that cutting and slitting of <strong><em>jumbo </em></strong> rolls or <strong><em>log </em></strong> rolls of self-adhesive rolls of Chapter 48 and 85 would not amount to 'manufacture'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aggrieved of this <strong><em>jumbo </em></strong> largesse, the <em>Committee of Chief Commissioners </em> directed filing of appeal before the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the appeal memorandum it is mentioned that by undertaking the process of cutting and slitting there are changes in the dimensions of the product both in terms of width and length so as to make it suitable for use as adhesive tapes by the users. Therefore, a new commodity has emerged which has a distinctive name, character and use and, therefore, the process amounts to 'manufacture'. </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"><strong>Have a nice day. </strong></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>
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