TIOL-DDT 2459 · 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"><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><strong><font color="#663399" size="3">TIOL-DDT 2459</font><br> 20.10.2014<br> Monday</strong></font></p> <p align="center"><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>Long Term Bonds - Concessional TDS - CBDT Conditions. </strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 194LC of the Income Tax Act introduced by the Finance Act 2102 provided for lower withholding tax at the rate of 5% on the interest payments by Indian companies on borrowings made in foreign currency by such companies from a source outside India. The benefit was available in respect of borrowings made either under an agreement or by way of issue of long-term infrastructure bonds. The section further provided that such borrowing and the rate of interest should be approved by the Central Government. Subsequently with a view to lower the compliance burden and reduce the time lag which would have arisen on account of case-by-case approval, the Central Government had decided to grant approval to all borrowings by way of loan agreement and long term Infrastructure bonds provided they satisfy certain conditions. <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTU5NDA=" target="_blank">(DDT 1948 - 24.09.2012)</a></strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance (No.2) Act 2014 has amended section 194LC with effect from the 1st of October, 2014. Consequent to the amendment, the concessional rate of withholding tax has been extended to borrowing by way of any long term bonds, not limited to a long term Infrastructure bond if the borrowing is made on or after 1st day of October, 2014. Further, the concluding date of the period of borrowings eligible for concession under Section 194LC which was earlier 01/07/2015 has been extended to borrowings made before the 1st day of July, 2017. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, the approval of the Central Government is further required in respect of long term bond issue and the rate of interest to be paid on such borrowings </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Considering the fact that there would be a large number of bond issues to be undertaken by Indian companies, providing a mechanism involving approval in each and every specific case would entail avoidable compliance burden on the borrower/issuer of bond. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to mitigate the compliance burden and hardship, the CBDT conveys the approval of the Central Government for the purposes of section 194LC in respect of the issue of long term bond including long term infrastructure bond by Indian companies which satisfy the following conditions:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a. The bond issue is at any time on or after 1st day of October 2014 but before the 1st day of July 2017. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. The bond issue by the Indian Company should comply with clause (d) of sub section (3) of section 6 of the Foreign Exchange Management Act, 1999 either under the automatic route or under the approval route. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c. The bond issue should have a loan Registration Number Issued by the Reserve Bank of India (RBI). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d. The term ‘long term' means that the bond to be issued should have original maturity term of three years or more. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has also clarified that consequent to the amendment to Section 194LC the approval of the Central Government contained in Circular No.07/2012, in so far as they apply to borrowings by way of a loan agreement, shall be valid for the borrowings made on or before 30/06/2017 instead of 30/06/2015 as mentioned in the said Circular. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTcyMTQ=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT CIRCULAR NO. 15/2014 in F. No 133/50/2014-TPL, Dated: October 17 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Due Dates for Filing TDS Statements - Extended </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONSIDERING</strong> the recent natural calamities in the States of Andhra Pradesh, Jammu <em>& </em>Kashmir, Odisha & <strong>Telangana</strong>, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Act has extended the due date for filing the TDS/TCS Statements for the 2 nd Quarter of Financial year 2014-15 by the deductors/collectors in the States of Andhra Pradesh, Jammu & Kashmir, Odisha & Telangana as under:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i) from 31st October, 2014 to 7th November 2014 in case of Government deductors/collectors that are mapped to a valid Accounts Officers Identification Number (A1N); </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii) from 15th October, 2014 to 31st October, 2014 in case of all other deductors/collectors. </font></p> </blockquote> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">What was the <em>natural </em> calamity in Telangana? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2014/Order_385102014.htm" target="_blank"><strong>CBDT Section 119 Order in F. No F.No.385/10/2014-IT(B), Dated: October 17 2014 </strong></a></font></p> <p align="center"><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>Customs - Import of Pesticides - Board Instructions Revised </strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> in Circular No.<strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2014/cuscir14_007.htm" target="_blank">7/2014</a></strong>-Cus dated 7.04.2014 on compliance of Order of High Court of Gujarat reported in <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTI5NDk=" target="_blank"><font size="1">2014-TIOL-444-HC-AHM-CUS</font></a></strong>, regarding import of formulations into India directed that Commissioner of customs concerned should ensure that in case of import of formulations, the samples of its technical grade/material is tested. For this purpose actual physical sample of each technical grade of each consignment had to be provided by the importer which would be subjected to all tests applicable to the indigenous manufacturer such as the examination of the chemical composition, test with regard to bio efficacy as well as its probable effect on the soil and human life. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The matter has been re-examined by the Board in the light of Order dated 28.03.2014 of High Court of Gujarat reported in <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTY4NTQ=" target="_blank"><font size="1">2014-TIOL-1823-HC-AHM-MISC</font></a> </strong> and in consultation with Department of Agriculture. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board now clarifies that the technical grade/material shall not be insisted upon with each imported consignment of formulation once such technical grade/ material has been supplied for the purpose of analysis and scrutiny prior to the registration. Further, each consignment of formulation which is imported should be verified and tested so that it matches with the technical grade material regarding specification and quality. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTcyMTM=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Circular No. 10/2014 - CUS., Dated: October 17 2014 </strong></font></a></p> <p align="center"><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>Charge-sheet Against CE Commissioner - CAT Declines to interfere</strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong>all started with two pseudonymous complaints sent under the names of two Superintendents of Central Excise regarding alleged acts of corruption of the Commissioner. The learned Commissioner of Central Excise, Customs and Service Tax joined the IRS in 1981 and was promoted as Commissioner in 2002. A <em>naka </em> was set up under the orders of the Commissioner on a company on 29.12.2011 which was removed on 09.01.2012. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Charge-sheet was issued to the Commissioner on 10.09.2013 alleging that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. He without disclosing and discussing any intelligence imposed a Naka upon the Company in order to 'put pressure on the assessee to meet his illegal demands'. This action of the Commissioner is alleged to be without any legal authority and in supersession of the process prescribed for the same by the Board. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. on 09.01.2012 he abruptly ordered for lifting of the <em>nakabandi </em> without prior consultation with the AC and ADC, and that to justify his action, he got a note prepared dated 09.01.2012, which would convey the impression that nothing adverse had been found and hence <em>nakabandi </em> had to be lifted without recording any proper reasons in the file. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. there were glaring inconsistencies in the statement of the applicant before the Directorate of Vigilance, inasmuch as he initially stated that the decision to impose nakabandi and to lift the same had been taken by him in consultation with the subordinate officers following due discussions, but when confronted with the facts, he altered his stand in his later statement dated 21.02.2013. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner's complaint is that the Department investigated anonymous complaint without following the due process and contrary to the circulars on the subject. Three of his juniors have been promoted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department held that: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. though the complaints were anonymous, there were certain verifiable facts. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The applicant had been declared unfit by the DPC for reasons other than the pending vigilance investigation or departmental proceedings contemplated/initiated against him. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner is before the CAT for quashing the charge-sheet and the CAT in an order last Monday dismissed his application. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The submissions of the applicant in this OA mostly pertain to matter of facts or documents. Such issues at the first instance are to be thrashed out in the departmental proceedings where evidence is to be led, witnesses are to be produced, examined and cross-examined. We are confident that this Tribunal should not usurp the power of the departmental authorities. We at this stage cannot go into the merits of the case as this would amount to creating prejudice in relation to the disciplinary enquiry which is yet to be held. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>There is nothing in the file to suggest any procedural irregularity/mala fide/violation of statutory provisions to vitiate the proceedings or any element of pre-determination or bias against the applicant. This Tribunal at this stage of the proceedings is neither competent nor does it find it desirable to enter the labyrinth of the articles of charges and the evidence for and against it. It is for the enquiry officer to analyse the evidence, of the witnesses examined and assess such documentary and oral evidence as has been submitted and to give his findings. We, by no account, propose to usurp this prerogative of the enquiry officer nor are we permitted to do so by numerous pronouncements of the Hon'ble Supreme Court, Hon'ble High Courts and of the Central Administrative Tribunal. </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However the Tribunal observed that the applicant is a senior officer and continuous departmental enquiry for long is likely to hamper his career and, therefore directed the Department to conclude the enquiry within a period of three months and the final order thereon be passed thereafter within another three months subject to cooperation of the applicant. In the event the applicant does not cooperate, it would be open to the disciplinary authority to proceed ex-parte. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Vigilance Directorate had noted in one of the files in this case: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Normally Commissioner is not a part of search/visit team and if an operation of such large level is carried out, the intelligence is recorded prior to action, either as AE-1 or as a file noting, which was not done in the present case. It has also not been taken on record as to who had gathered the intelligence and what transpired during discussion which necessitated a large scale operation under the leadership of Commissioner. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see </strong></font><strong><font face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTY4NzQ=" target="_blank"><font size="1">2014-TIOL-03-CAT</font></a></font></strong></p> <p align="center"><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong>In-house weekly Training for Babus </strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> important part of valuing and managing employees effectively is to ensure that they have access to relevant, high quality, accessible and on-going training. At present, the senior civil servants are exposed to a number of training programmes at different stages such as induction training, mandatory mid-career training, in-service training etc. These trainings are mostly organised service wise and within services at same level. Perhaps there is no training being imparted at Ministry/Department level covering all its Group B and C employees on same subject. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A need for starting in-house training in each Ministry/Department was emphasised by the Prime Minister during the presentation of the Ministry of Personnel, PG & Pensions on 12.09.14. Such training session in each Ministry/Department should ideally have 45 persons and should be for duration of one hour to be held on weekly basis. Subjects and master trainers could also be identified in-house for this purpose. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The objective of an hour in-house weekly training is to provide training to all employees of the Ministry/Department on a regular basis without dislocating their work. This being in-house training, there may not be any additional financial burden as well. The Departments would be free to choose training topics as per their requirements and utilise in-house expertise for imparting training. This will also help in achieving the National Training Policy 2012 objective of training of all employees. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This weekly training will perhaps make all the babus at least know what they are expected to do. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/empanelment/inhouse171014.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DoPT Office Memorandum in F. No.T-17/1/2014-CTP(CSS), Dated: October 17 2014 </strong></font></a></p> <p align="center"><em><font size="2" face="Georgia, Times New Roman, Times, serif"><strong><strong><font color="#006600" size="3">Jurispruden</font><font color="#FF6633" size="4">tiol</font><font color="#006600" size="3"> - Tuesday's cases</font></strong></strong></font></em></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">Central Excise </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notfn. 23/2003-CE - Goods cleared by EOU to their own units in DTA - it is not disputed that such goods when sold in DTA had not been exempted from sales tax by State Govt. by any Notification - no requirement to go into analysis that there is no sales tax on stock transfer: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants claimed exemption (in respect of clearances of finished goods to their own units in DTA on stock transfer) from payment of duty of excise leviable as is equivalent to Special Additional Duty under Section 3(5) of the CTA in terms of sr. no. 1 of notification 23/2003-CE read with condition no. 1 of Annexure to notification. The condition no. 1 stipulates that exemption is available if the goods being cleared into Domestic Tariff Area are not exempted by the State Government from payment of sales tax. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Rule 9B - Whether exhibition rights, broadcasting rights and satellite rights are to be construed as distribution rights - YES: HC</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is an individual. She had declared income at Rs.44,65,471. During assessment, the AO noticed that the assessee had claimed depreciation of Rs.1.20Crores on cinematographic films @ 100%. But the AO observed that the assessee did not purchase any cinematographic films for consumption but what was purchased were broadcasting/exhibition rights, satellite rights, therefore held that depreciation should be allowed @ 25% instead of 100% depreciation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issues before the Bench are - Whether exhibition rights, television rights or satellite rights can be treated as ‘distribution rights'. And the verdict goes against the Revenue. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bus service provided by appellant to transport employees - appellant are neither having tourist permit nor operating in tourist vehicle, therefore, they are not liable to pay service tax under category of tourist operator prior to 10/09/2004: CESTAT</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> company is engaged in the service of providing bus service to various companies for transporting their employees from the designated spots to the Company and back on a contract basis. The spot(s) from which the employees were to be picked up/dropped and timing at which they are to be picked up/dropped was determined by the Companies who hired the buses and the appellant was transporting the employees as per the schedule given by the companies. This activity was considered as taxable service as defined under the category of ‘Tour Operators' which was in vogue with effect from 01/04/2000. </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@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>