TIOL-DDT 2441 · the untouched capture
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<p><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><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>TIOL-DDT 2441</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
19.09.2014<br>
Friday</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Increasing time limit for availing CENVAT credit from 6 months to 1 year? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per the Proviso inserted to Rule 4(1) of the CENVAT Credit Rules,<em> manufacturer or the provider of output service shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub- rule (1) of rule 9.</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This time limit is considered to be too little by the Trade. This issue was discussed in the Conference of Chief Commissioners held on 11th and 12th of August 2014. It was decided that Chief Commissioners should discuss this issue with the trade representative bodies in their respective zones and recommend their suggestions to the Board for any further action. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Commissioners are required to send their report to the Board by 31st October 2014. Maybe this will be a proposal for the next year's budget. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Important decisions of the Conference: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1. Refund vs Revenue Drive:</strong> Non-sanctioning of refund/drawback claim in the guise of revenue drive is not acceptable. All refund / drawback claim should be sanctioned within the time limit prescribed for such claims. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2. Show Cause Notice and Audit Commissionerates:</strong> SCN will be issued by the Audit Commissionerate and after issuance the SCN, the case file along with the supporting documents will be forwarded to the Executive Commissionerate. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Modus Operandi Circulars</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. On the matters where more than one view was possible, it was suggested that those cases should be referred to Board before issuance of any modus operandi circular </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Chief Commissioners should strictly monitor that no M.O. circular be issued by the field formation as only DGCEI/DRI are authorized to issue the modus operandi circular. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Dispute Resolution </font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. A committee would be constituted to collate and consider all major disputed issues so that departmental views can emerge on such issues. Member (L&J) will hold a conference to resolve disputed issues in this year subject to availability of data regarding the same. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. Since proper appreciation and understanding of law is necessary to minimize disputes, hence, regular training workshop may be held in each zone and good case studies should be circulated among the field formations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. Addressing the concern about the threat of vigilance case on dropping of demand, Member (P&V) emphasised that vigilance action is not a threat for fair and judicious decision-making. Hence, the Chief Commissioners should not hesitate to decide the issues in fair and impartial manner. <font color="#FF0000">(Please see the pathetic case of an Income Tax Commissioner we report today; In any case Chief Commissioners don't adjudicate.)</font></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. Cadre Review:</strong> All promotion orders in the grade of Superintendents and Appraising officers should be issued in the forenoon of 30.9.2014, irrespective of the date of DPC. Cadre Controlling Chief Commissioners were directed to complete all DPCs by 15.09.2014. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addressing the conference, MoS, Nirmala Sitharaman noted, <em>"taxpayers are normally not aware about the steps taken by the department to introduce transparent and simplified procedures. It is important to educate the taxpayers and make them aware about these positive changes and dispel the preconceived notions that they may have towards the tax administration."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Madam, are you aware of 30 percent interest for delayed payment of Service Tax? </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2014/ex_letter_296932014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F.No. 296/93/2014-CX.9., Dated: September 17, 2014</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Hounds Retired Commissioner </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is the sad story of a retired Commissioner of Income Tax who is hounded by the CBDT for the orders passed by him as a CIT(A). I am scared to publish this, as after reading this sad story of a Commissioner who is not allowed to live in peaceful retirement, no Revenue Officer will dare to pass any order in favour of the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the Revenue Board sending a strong message? Will the FM correct this blatant attack on the concept of independence of judiciary? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Read on the story of Pavan Ved, Retired Commissioner of Income Tax, in his own words:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" sans-serif" style="background-color:#B0FFC5" span="span">In 2005-6, I as commissioner of income tax (appeals) allowed the appeal of Shri D S Parihar; a Shiv Sena leader and of Bharat Grih Nirman Samiti. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">After more than 7 Years; in September 2013, I was asked why I wrongly allowed the appeal. I was given incomplete uncertified old files to offer explanation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">I requested the authorities to first certify the old file as correct and complete and to let me know status of further appeal in higher court if any. My request was denied. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">That appeal decision was not placed in file and I was served charge sheet for major penalty on 4-7-2014 and my retirement benefits were withheld. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">When I inquired from the officer concerned under RTI, it was found that the order passed by me was already upheld years ago by higher appellate authorities. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">Thus by not placing these orders, the authorities in CBDT misled entire higher hierarchy and got approval for charge sheet and thus played <em>mala fide</em> against me. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">Moreover the real culprits causing the loss of revenue were the assessing officers who have been spared. A clear case of mala fide exercise of power by vigilance wing of CBDT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">In another appeal decided by me, the allegation is that I allowed the appeal simply on the ground that higher appellate authority had allowed the appeal on the same point in some other case. Such allegation clearly shows that the authorities sitting in CBDT do not have elementary knowledge of law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">In a third case, one of the allegations is that I passed appeal order immediately the next day of hearing. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">I had pointed out that supreme court had already held that questioning the judicial decisions would amount to contempt of court. Judge cannot be challenged. Only his decision can be challenged. Still charges have been framed causing willful contempt of court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">At the same time, it is worth mentioning that when my officers in audit found underassessment of Rs. 500 Crores on the basis of obviously unbelievable transactions done by the assessee, vigilance wing did possibly not find it worth charging the erring official guilty of negligence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">As per procedures, charge sheet is issued after the file passes through </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">(1) DIT (V), (2)DGIT (V), (3)Member CBDT, (4)Chairman CBDT, (5) CVC for advice, (6)Revenue secretary and (7) FM for final approval and drafting of charge sheet. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Two letters written to FM have remained un-replied and my RTI is still pending. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">This is just the tip of the iceberg. Whole episode of harassment by CBDT is just nothing but a good horror story. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Is it not a kind of terrorism to kill the career of innocent officer? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will Chairman CBDT / finance ministry officials offer their version through this publication? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will any member of parliament raise this question in parliament? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will IRS association take up the issue? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will court take suomoto cognizance of this situation? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">Will PMO take any action? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will real culprits ever be punished? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#B0FFC5" span="span">Will Arvind Kejriwal intervene in the matter relating to his own department? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">Else the careers of innocent officers will continue to be attacked by such officers sitting in CBDT? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#B0FFC5" span="span">There appears to be a need to fill vigilance wing of CBDT only with non-IRS officers so that they can take independent view in the matters unaffected by their interpersonal relations of whole career with other officers and personal vendetta can be avoided. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is obviously written in frustration and anguish. Why should the Department torture one of its better officers and that too after retirement? And this man worked as DR in ITAT for many years!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you are going to initiate vigilance action against officers for the orders passed by them, why have an adjudication and appellate mechanism at all? Let the Assessing Officer be made the Final Authority and he should be directed to pass all orders in favour of Revenue only. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IT - Due Date for Advance Tax extended in J&K </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONSIDERING</strong> the large-scale devastation in the State of Jammu and Kashmir, due to the natural calamity, the Central Board of Direct Taxes has issued an order to extend the date for payment of second instalment of advance tax for companies and first instalment of advance tax for others for FY 2014-15 (AY 2015-16) from 15th September, 2014 to 15th December 2014 in case of all the taxpayers in the State of Jammu and Kashmir. These taxpayers can now pay their September 2014 instalment of advance tax by 15th December 2014 without entailing any consequential interest for deferment. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/it_extended.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Press Release, Dated: September 18 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - New Exchange Rates from Today </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified new exchange rates for Imported Goods and for Export Goods with effect from 19 September 2014. The US Dollar is 61.75 rupees for imports and 60.75 rupees for exports.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Exchange rates were last notified on 4th September 2014. </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cnt.htm" target="_blank">Notification No. 87/2014-Cus., (N.T.), Dated: September 18, 2014 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Modinagar notified as ICD </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC </strong> has notified Modinagar in Ghaziabad District of Uttar Pradesh as an Inland Container Depot for Unloading of imported goods and loading of export goods. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_086.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 86/2014-Cus., (N.T.), Dated: September 18, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Company Law - Advisory Committee on Accounting Standards </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Central Government has constituted a National Advisory Committee on Accounting Standards, to advise the Central Government on the formulation and laying down of accounting policies and accounting standards for adoption by companies or class of companies under the Companies Act, 1956. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/Amendment_Notification_18092014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry of Corporate Affairs Notification, Dated: September 18, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC wants Compliance Report on transfers; posts lady officer in NACEN </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> had reported on 15.09.2014, the demand of the IRS association, inter alia , for posting a lady officer to NACEN, Faridabad. CBEC has since posted a lady officer on ‘loan basis'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had recently transferred several Assistant Commissioners, Additional Commissioners and Commissioners and had asked for compliance reports by 14.08.2014. Obviously nobody bothered to send the reports - usually the Board's transfer orders are not immediately obeyed - transferred officers usually send in representations, use political and administrative connections, try several other means and will join the new place only if all these efforts fail.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But this time around, Board was really serious and now they want the compliance reports by 19.09.2014 (today). It is learnt that officers were hurriedly relieved yesterday. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/office_order_14_22011.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC F. No. 22011/03/2014, Dated: September 16, 2014</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Discrepancy in Cadre Review Notification - Certain Places under two jurisdictions? </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> Netizen informs:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As mentioned at S.No.14 of the Notification No. <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_078.htm" target="_blank">78/2014 - Customs (NT)</a></strong> dated 16.09.2014 , the whole of the Districts of Purnea, Katihar, Sahabganj and Godda in the State of Bihar falls under the jurisdiction of the Commissioner of Customs (Preventive), West Bengal. It is also mentioned at S.No.28 of the said notification that the whole of the States of Bihar and Jharkhand fall under the jurisdiction of the Commissioner of Customs (Preventive), Patna. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is submitted that the Districts of Sahabganj and Godda fall in the State of Jharkhand whereas the Districts of Purnea and Katihar fall in the State of Bihar. Since whole of the State of Bihar and Jharkhand fall under the jurisdiction of the Commissioner of Customs (Preventive), Patna as mentioned at S.No.28 of the said notification, the Districts of Purnea, Katihar, Sahabganj and Godda cannot fall under the jurisdiction of the Commissioner of Customs (Preventive), West Bengal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of above facts, S.No.14 of the Notification <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_078.htm" target="_blank"><strong>No.78/2014-Customs (NT)</strong></a> dated 16.09.2014 is required to be corrected. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">This was the position in the earlier Notification No. 15/2002-Cus NT dated 07 03 2002, which they have simply copied and pasted. This is only a small confusion; the real confusion will start from 15 October when these new jurisdictions will come into effect. You will have to be an expert navigator to locate your Central Excise/Customs/Service Tax officer. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rich Verma - new US Envoy to India </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><img src="http://www.taxindiaonline.com/RC2/image/stories/rich_verma.jpg" alt="" width="100" height="125" hspace="5" border="0" align="left">INDIAN</strong> American Richard Rahul Verma is nominated as US Ambassador to India, just ahead of Modi's visit to US later this month. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If cleared by Senate, this would be the first time that an Indian American is appointed as US envoy in India. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rich is currently a lawyer practicing international law and is closely associated with President Obama. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He holds degrees from the Georgetown University Law Center (LLM), the American University (JD), and Lehigh University (BS). </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </font></strong></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Cartoon_2441.jpg" alt="" width="360" height="419" hspace="5" border="0" align="center"><br>
</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"> - Monday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"><strong><font color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cenvatted Moulds cleared under Rule 57S(8) to Job worker without payment of duty - Demand of duty on ground that the consignor cannot be treated as job worker as no raw material was supplied by the Principal manufacturer - No error in order of Tribunal setting aside the demand: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent/assessee is engaged in the manufacture of washing machines. They availed credit of duty paid on capital goods. The assessee had sent their moulds to their consignees/job workers for the manufacture of washing machine parts by using the moulds supplied by the assessee to the said job worker. The job workers, on their part, used the moulds and dies for manufacture of the parts. The raw material, for manufacture of those parts, was, however, procured by the job worker and after the parts were manufactured, they were cleared and supplied to the assessee on payment of Central Excise duty, payable on those goods. The amortised value of moulds was also included in the value of parts. The assessee in this case, while sending the moulds and dies to the job workers invoked the provision of Rule 57S(8) of Central Excise Rules, 1944 and at the time of removal of moulds and dies, the assessee took permission from the Commissioner, removed the moulds and dies without payment of duty and sent to the job workers for the purpose of production of goods on their behalf and in accordance with the specifications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department was of the view that the job workers/consignees were buying the raw materials on their own and manufactured the parts of the washing machine with the help of the moulds and dies supplied by the assessee and therefore, they are the principal manufacturers and the assessee also is a principal manufacturer. </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 interest earned on bill discounting with credit institutions is to be included in interest income u/s 2(7) - NO: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee, a Government of India undertaking, was engaged in the business of general insurance. Pursuant to the return filed by assessee, an assessment order was passed u/s 8(2) computing chargeable interest at Rs.3,84,84,910/-. Subsequently, notice u/s 10 was issued and a return of chargeable interest of Rs.3,92,51,082/- was filed. By an order, AO added certain amounts to the chargeable interest. The additions were made subject matter of challenge before the appellate authorities, including the Tribunal, who had substantially deleted several additions, but in respect of interest on call money with bank and interest on bills re-discounting scheme, the matter was restored to the AO. The remand order was passed to determine the nature of interest. By an order AO referred to definition of the term "interest" in Section 2(7) to hold that the aforesaid amounts had to be treated as interest under the said Section and rejected the contention of assessee relying upon Section 2(5A)(1). This order of AO had attained finality. AO thereafter initiated penalty proceedings u/s 13 and levied penalty of Rs.44,42,839/- in respect of the above two additions. On appeal, CIT(A) had deleted the said penalty after referring to several facts. On further appeal, Tribunal had had affirmed the aforesaid finding of CIT(A). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether interest earned on bill discounting with credit institutions would be included in interest income u/s 2(7). And the answer is NO. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Merely because postal department pays service tax on the Speed Post service, it cannot be held that the appellant need not discharge service tax liability in respect of business support/auxiliary service rendered by him in canvassing business for postal department - Pre-deposit ordered: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants have been engaged as an outsourcing agent by the postal department and they have been asked to canvass business for the postal department. For the business so canvassed, the postal department pays them a commission based on the turnover of business achieved/canvassed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is the case of the department that the appellant is liable to pay Service Tax under the category ‘Business Support Service' on the commission so received. The Commissioner (A) confirmed the service tax demand of Rs.1,96,759/- along with interest. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Monday for the judgements</font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p>
<p align="justify"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend.</font></strong></p>
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