TIOL-DDT 2484 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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><strong><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><font color="#663399" size="3">TIOL-DDT 2484 </font><br> 27.11.2014<br> Thursday </font></strong></p> <p align="center"><font face="Georgia, Times New Roman, Times, serif"><em><font size="3"><strong><font color="#006600">CE - No 11C Exemption for Turpentine Oil - CBEC </font></strong></font></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue is <em>request to reconsider the decision regarding issue of Notification under Section 11C of the Central Excise Act, 1944 for exemption to Rosin / Turpentine Oil falling under Chapter 38 of the Central Excise Tariff Act, 1985 for the period 27.05.1994 to 28.02.2006. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems in March 2012, Board floated a survey to decide the issue of allowing the benefit of Section 11C exemption to the Rosin / Turpentine Oil falling under Chapter 38 of the Central Excise Tariff Act, 1985 for the period 27.05.1994 to 28.02.2006. In January 2013, Board conducted a re-survey. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Board has examined the request for issue of exemption under Section 11C and the case has not been found fit for issue of 11C notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The hope that started in 1994 for benefit for a 12 year period from 1994 to 2006 has turned into despair. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTczMDY=" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoFDept of Revenue CBEC Letter in F.No.110/01/2012-CX.3., Dated: September 30, 2014 </font></strong></a></p> <p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">High Court cannot interfere with the orders of the Settlement Commission - High Court </font></strong></font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Kerala High Court had to recently consider the question, </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether this court, in exercise of its jurisdiction under Article 226 of the Constitution of India, will interfere with orders passed by the Settlement Commission under Section 245D of the Income Tax Act, 1961 and if so, to what extent ? </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court referred to the observations of the Supreme Court in the case of <em>Union of India and Others v. Ind-Swift Laboratories Limited</em> -<em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2011/2011-TIOL-21-SC-CX.htm" target="_blank"><strong><font size="1">2011-TIOL-21-SC-CX</font></strong></a></em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2011/2011-TIOL-21-SC-CX.htm" target="_blank"> </a></font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An order passed by the Settlement Commission could be interfered with only if the said order is found to be contrary to any provisions of the Act. So far as the findings of fact recorded by the Commission or question of facts are concerned, the same is not open for examination either by the High Court or by the Supreme Court. In the present case the order of the Settlement Commission clearly indicates that the said order, particularly, with regard to imposition of simple interest @ 10% per annum was passed in accordance with the provisions of Rule 14 but the High Court wrongly interpreted the said Rule and thereby arrived at an erroneous finding. So far as the second issue with respect to interest on Rs.50 lakhs is concerned, the same being a factual issue should not have been gone into by the High Court exercising the writ jurisdiction and the High Court should not have substituted its own opinion against the opinion of the Settlement Commission when the same was not challenged on merits. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the High Court noted that, "<em>it is well settled that the power of judicial review is not to be exercised to decide the issue on facts or on an interpretation of the documents available before the Court. It follows, therefore, that in the instant case, the enquiry by this Court can only be with regard to whether or not the Settlement Commission exercised a jurisdiction that it did not have or, alternatively, if it did have the jurisdiction, whether it erred in the exercise of that jurisdiction. In the latter event, this court would also have to bear in mind the nature of the jurisdiction exercised by the Settlement Commission, which is akin to a statutory arbitration</em>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Full and True Disclosure:</strong> The case had another interesting aspect. The Revenue argued that <em>the offer of additional amounts by the assessees, over and above the amounts initially disclosed by it as undisclosed income in their applications before the settlement commission, and pursuant to the suggestions of the settlement commission in the course of the proceedings before it, rendered the original disclosure made by them as one that was not " a full and true disclosure" of the income that was not disclosed by it before the assessing officer or the manner in which such income was derived</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed that Settlement Commission was created with effect from 01.04.1976, for the purpose of quick settlement of cases, so that the tax due to the department is collected at the earliest. The question before the High Court was whether <em>in every case where an applicant makes an offer of additional amounts, even at the instance or suggestion of the settlement commission, it would follow that the original declaration made by the applicant did not contain a full and true disclosure of his income and thereby rendering it invalid and, consequently, denuding the settlement commission of its jurisdiction to proceed further in the matter</em>? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court answered, <em>such an interpretation would render meaningless the scheme of settlement that is envisaged under the IT Act. One cannot discount the possibility of the Settlement Commission finding the disclosure of income made by an assessee as being full and true and yet requiring minor adjustments to include even those amounts, which though disputed by the assessee, would nevertheless be offered by the assessee in the interests of putting an end to litigation and in the spirit of settlement. These could be amounts, in respect of which, neither the department nor the assessee have sufficient material to substantiate their contentions, but the assessee is nevertheless willing to give up his claim in the interests of finality to litigation. The consent by an assessee to forgo such amounts, at the suggestion of the Settlement Commission, cannot have the effect of rendering his original disclosure dubious for the purposes of settlement under the Act. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As you must have guessed, it was the Revenue that took this case to the High Court against a peaceful settlement. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If you can prolong litigation, don't let go of any opportunity to do so - seems to be the Revenue Policy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You can see the High Court order in <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTc2MDY=" target="_blank"><strong><font size="1">2014-TIOL-2055-HC-KERALA-IT </font></strong></a></font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Creating Hostile Work Environment amounts to Sexual Harassment - Conduct Rules Amended </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government has amended the Central Civil Services (Conduct) Rules, 1964 and Central Civil Services (Classification, Control and Appeal) Rules, 1965 to make working conditions more conducive for women. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Babus have to be very careful in dealing with women in offices. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Sexual harassment"</em> includes any one or more of the following acts or behaviour (whether directly or by implication) namely: - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Physical contact and advances; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) A demand or request for sexual favours; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Making sexually coloured remarks; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Showing pornography; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Any other unwelcome physical, verbal, non-verbal conduct of a sexual nature. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following circumstances, among others, if it occurs or is present in relation to or connected with any act or behaviour of sexual harassment may amount to sexual harassment: - </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Implied or explicit promise of preferential treatment in employment; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Implied or explicit threat of detrimental treatment in employment; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Implied or explicit threat about her present or future employment status; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Interference with her work or creating an intimidating or offensive or hostile work environment for her; or </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Humiliating treatment likely to affect her health or safety. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was stated by the Minister for Personnel, Public Grievances and Pensions Dr.Jitendra Singh in a written reply in the Lok Sabha yesterday. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please See : <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=22073">Rules amended for making work place more conducive for women </a></strong> </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">Black Money in Foreign Banks - Question is not whether to disclose names, but when to do so - FM </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REPLYING</strong> to the debate on Black Money in the Rajya Sabha, Finance Minister Arun Jaitley said, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>From 627 names, 427 identified; assessments will be completed; 250 have admitted to having foreign accounts. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If we indulge in an adventurist populist stance - put everything on the net - this will help the account holders. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue is not whether to disclose the names of the account holders; the issue is when to disclose.</font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The offence is committed in India; the money is Indian, but is now abroad. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We have done more in 100 days than any other Government. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In our Message Board, an eminent consultant had observed, <em>"Any dubious money would long have vanished from the accounts, not sit around to be brought back!"</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mayawati said something similar yesterday in the Rajya Sabha, "<em>This is in the air that most of the people have already withdrawn their black money from banks</em>." </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">No appeal in Vodafone case - AG Advises </font></em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</strong> several news agencies reported that Attorney General Mukul Rohatgi has advised the income tax department not to file appeal against the Bombay high court order in the Vodafone case where the demand was to the tune of Rs 3,200 crore in a transfer pricing case. There is a similar case of Shell India with Rs. 18,000 Crores. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nobody has reported as to where, when and to whom the Attorney General has given this information. The Attorney General usually doesn't go about publishing his opinion given to his premier client, the Government of India. It is also reported that the Attorney General concurred with the opinion of the Chairman of CBDT in this matter. Already FICCI has welcomed the Attorney General's advice. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the opinion of the Attorney General carries tremendous weight, it is certainly not binding on Revenue. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fact is there is no point in running after a losing litigation and the Attorney General has advised the Government well - if he has indeed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please also see our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=22075" target="_blank">CobWeb</a></strong> today for more on the subject. </font></p> <p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font color="#006600">Jurispruden</font></strong></strong></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font color="#FF6633" size="4">tiol<font color="#006600" size="3">-</font></font></em></strong></font></strong></font><em><strong><strong><font color="#006600">Friday's cases</font></strong></strong></em></font></p> <p align="left"><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">Customs/Excise/Service Tax/Income Tax</font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tribunal cannot go beyond scope of Show Cause Notice and Order-in-Original - When plea of provisional assessment was never raised by revenue, Tribunal cannot hold assessments are provisional - Matter remanded: HC</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> question before the High Court;</font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether the Tribunal can go beyond the scope of the show cause notice and the Order-in-Original No.61/2001- CAU, dated 16.3.2001 of the second respondent to hold that there had been provisional assessment in this case?</font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court referred to a decision of the Supreme Court in <em>SACI Allied Products Ltd. v. Commissioner of Central Excise, Meerut - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2005/2005-TIOL-73-SC-CX-LB.htm" target="_blank"><strong><font size="1">2005-TIOL-73-SC-CX-LB</font></strong></a></em>, in a case relating to excise, wherein the Supreme Court held that the Tribunal ought not to go beyond the show cause notice and the order of the Original Authority. Supreme Court held as under: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"16. ..... . <em><u>It is thus seen that the Tribunal has gone totally beyond the show-cause notice and the order of the Collector, which is impermissible. The Appellate Tribunal cannot sustain the case of the Revenue against the appellants on a ground not raised by the Revenue either in the show-cause notice or in the order</u></em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17. In this context, we may usefully refer to the judgment of this Court in the case of <em>Reckitt & Colman of India Ltd. v. CCE, (1997) 10 SCC 379 =</em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2002/2002-TIOL-813-SC-CX.htm" target="_blank"><strong><font size="1"><em>2002-TIOL-813-SC-CX</em></font></strong></a>. This Court held that it is beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court found that the Tribunal has misdirected itself to consider the issue on a total new plea, which was not canvassed by the Revenue in the show cause notice. </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 loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as ascertained liability in computation of book profit u/s 115JB - YES: ITAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee showed Tariff adjustment of Rs 51.80 crore out of the sale of Rs.1713.79crore. The AO held that the quantification of reduction in sales was based the on assessee's pending application before CERC and as such this was not an ascertained liability. He, therefore, added back the provision of Rs.51.80crore to the book profit u/s 115JB. The CIT(A) reversed the action of the AO. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee claimed depreciation amounting to Rs.1.30crore. Out of total depreciation on land amounting to Rs.1.30crore, an amount of Rs.1.00crore was debited to the Profit and loss account and the balance amount of Rs. 30.25 lac was added to the cost of capital work-in-progress. The AO held that no depreciation was admissible on land. While computing book profit as per section 115JB of the Act, the AO added back this amount. The CIT(A) deleted this addition. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether the loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as an ascertained liability in the computation of book profit u/s 115JB </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notfn. 21/2002 - To qualify as 'other alloy steel' if any one of element is present in proportion specified that would satisfy requirement of Chapter Note 1(f) even if other elements are not present in proportion specified: CESTAT by Majority </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BASED</strong> on information that the appellants were wrongly claiming the benefit of Notification No.21/2002-Cus, Sr.No.190 C on import of steel coils by <em><strong>misdeclaring the same as non-alloy steel</strong></em>, S.I.I.B (Import), NCH, Mumbai undertook investigation and took over 11 live Bills of Entry and carried out a detailed scrutiny. The percentage content of other metals shown in the Mill test certificates were compared with chapter note (f) of Chapter 72, where Other Alloy steel is defined. In all the 11 Bills of Entry, the percentage of Manganese was found to be more than 1.65%, and the Titanium was more than 0.05% and examination of Mill test Certificates of these Bills of Entry also confirmed that goods imported were <em><strong>alloy steel</strong></em> and the benefit claimed under notification No.21/2002 Sr. No. 190C thus was not correct. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements</font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p> <p><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>