TIOL-DDT 2511 · the untouched capture
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<p align="justify"><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"></font></strong></font></strong></font></strong></font></strong></font></strong></s><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 2511 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
06 01 2015 <br>
Tuesday </font></strong></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">CE - 100% EOU - DTA Clearances - Third Time CESS - Supreme Court Dismisses Revenue SLP on ground of delay </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is much fought out battle. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT</strong> raised this issue in <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=1020" target="_blank"><strong>DDT-48 07.02.2005. </strong></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=10588" target="_blank"><strong>DDT 1318 - 15.03.2010</strong> </a>observed, <strong>"<em>FOR</em></strong><em> setting up an EOU in India, you need two things. One is LOP from the Development Commissioner and the other is a Master's in Mathematics from a reputed University. The former is required for carrying the operations as EOU and the latter for computing the duties payable on DTA clearances and the CENVAT Credit against such clearances</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the <em>Sarla Polyesters case </em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2008/2008-TIOL-985-CESTAT-AHM.htm" target="_blank"><em>2008-TIOL-985-CESTAT-AHM</em></a></strong>, the CESTAT held that the third time cess is payable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2008/2008-TIOL-516-HC-MUM-CX.htm" target="_blank"><strong><em>2008-TIOL-516-HC-MUM-CX</em> </strong></a>set aside the CESTAT order and remanded the matter to the Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On remand, as per the directions of the Bombay High Court, Tribunal served notice to the general public so that all the parties who are interested may also apply as interveners. After hearing the appellants, the interveners and the departmental representative, the CESTAT held, "<em>What is required for the purpose of proviso to Section 3 of Central Excise Act, 1944 is to arrive at aggregate of customs duties and once we take a view that education cess is part of the customs duty and is an enhancement, the question of adding it again does not arise". (Sarla Performance Fibres Ltd v CCE, Vapi - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-408-CESTAT-AHM.htm" target="_blank"><strong>2010-TIOL-408-CESTAT-AHM</strong></a>)</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ten months after the tribunal order, Board issued a clarification that education cess had to be paid a third time. (Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12349" target="_blank"><strong>DDT 1584 - 06.04.2011</strong></a>). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While this confusion was in full swing, the Delhi Bench of the CESTAT did not agree with the decision in <em>Sarla Performance and referred the issue to the Larger Bench</em> - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2011/2011-TIOL-1180-CESTAT-DEL.htm" target="_blank"><strong><em>2011-TIOL-1180-CESTAT-DEL</em></strong> </a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue also appealed against the <em>Sarla</em> case in the High Court. The Gujarat High Court dismissed the Revenue appeal on the ground that the appeals were not maintainable before the High Court as it was a question of rate of tax and the appeal had to be made to the Supreme Court. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2012/2012-TIOL-359-HC-AMH-CX.htm" target="_blank"><strong>2012-TIOL-359-HC-AMH-CX</strong> </a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Revenue took the matter to the Supreme Court but the appeal was dismissed on the ground of delay. [See <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTcwMjY=" target="_blank"><strong>DDT 2047</strong></a>] </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Larger Bench delivered its order on 22.02.2013 in <em>Kumar Arch Tech Pvt Ltd Vs Commissioner of Central Excise </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODc3OTY=" target="_blank"><strong>2013-TIOL-614-CESTAT-DEL-LB</strong></a>, holding, "<em>The intention of the legislature was never to charge education cess on education cess</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Gujarat High Court passed strictures against the department and quashed the Show Cause Notice in <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTAyNjc=" target="_blank"><strong>Claris Lifesciences Ltd vs UOI</strong></a>, reported in <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTAyNjc=" target="_blank"><strong>2013-TIOL-802-HC-AHM-CX</strong></a>. The High Court observed, <em>Despite clear and specific directions and authoritative pronouncements, act of issuance of show cause notice by the Deputy Commissioner is wholly impermissible and unpalatable and deserves to be quashed and struck down with a specific note of strong disapproval.</em> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against this judgement of the High Court, the Department filed an SLP in the Supreme Court. The Apex Court yesterday dismissed the petition on the sole ground of delay. <strong><em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTg2NDc=">2015-TIOL-01-SC-CX-LB </a> </em></strong><em>.</em> Department can still say the matter is not decided on merits. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What is the present position</strong>? Please see <em>Third time Cess fiasco in</em> <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjEwNDg=" target="_blank"><strong>DDT 2401 22.07.2014</strong></a>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For more on this, please see:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjEwNDg=" target="_blank"><strong>DDT 2401</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTg4MzM=" target="_blank"><strong>DDT 2209</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTc1MTY=" target="_blank"><strong>2086</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTcwMjY=" target="_blank"><strong>2047</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTUyODE=" target="_blank"><strong>1885</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTMxNzg=" target="_blank"><strong>1690</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTIzNDk=" target="_blank"><strong>1584</strong></a>, <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTA4MTU=" target="_blank"><strong>1354</strong> </a>& <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTA1ODg=" target="_blank"><strong>1318</strong></a>.</font></p>
<p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600" size="3">WCO NACEN Regional Workshop on SAFE and AEO</font></em></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Workshopon.jpg" alt="" width="579" height="195" hspace="5" border="0" align="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Chairman Mr. Kaushal Srivastava yesterday inaugurated in Delhi a five day WCO Regional Workshop on SAFE Framework of Standards (SAFE) and Authorised Economic Operator (AEO). The programme is conducted by NACEN in India.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">32 participants are attending from 22 countries of the Asia-Pacific Region, including representatives from WCO Brussels. </font></p>
<p align="center"><font color="#006600"><strong><em><font size="3" face="Verdana, Arial, Helvetica, sans-serif">CBDT - Standard Operating Procedures (SOP) for Administering TDS </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> introduction to the SOP says,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TDS is a non-obtrusive but powerful instrument to prevent tax evasion as well as to expand the tax net. TDS also minimizes tax avoidance by the taxpayer (income earners), as the payee's transaction(s) are reported to the Department by the third person. The contribution of TDS to the overall gross direct taxes collections during F.Y.2013-14 was Rs.2,71,069crore. This is a 17.88% growth over the collections shown under this minor head from Rs.2,29,943crore during F.Y.2012-13. Thus, TDS now contributes more than 37% to the gross direct taxes collections, emphasizing its ever-growing importance. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With the Centralized Processing Cell for TDS at Vaishali, Ghaziabad, the TDS administration is now driven through technology support. The CPC-TDS provides comprehensive MIS on compliance behaviour of the deductors, defaults details, PAN errors besides helping the deductor or the Department to identify & rectify mistakes. The strategy to augment revenue through TDS ought to be, therefore, a mix of enforcement, capacity building (external and internal) and leveraging of information that is now available with the Department through the CPC-TDS.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With the enablement of all functionalities, available to the TDS Assessing Officer through AO Portal, the Standard Operating Procedure (SOP) specifying the role of Officers, who are associated with TDS administration, becomes necessary. The SOPs have been framed to address the various features in the re-engineered processes in TDS administration. The SOPs have been made on following issues: - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. <strong> Matching the unconsumed challan.</strong> A challan may remain unconsumed on the computer system under following circumstances: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. <strong>Top deductors paying less/no tax with respect to previous financial years:</strong> In past few years it has been observed that the list of top deductors is fluctuating very frequently in each CsIT (TDS) charge. This is mainly due to sudden break in depositing TDS or by paying very less TDS by many top deductors in relevant financial years. The downfall in TDS deduction of top deductors of the region needs to be monitored. The analysis of the downfall in TDS deduction should consider quantum of deduction, nature of the payment and reason for downfall. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. <strong>Resolvable/Collectible TDS Demand</strong>. The outstanding TDS demand can be classified under various categories on the basis of immediate liquidation and prioritization. The outstanding TDS demand which are recoverable immediately and free from any dispute or litigation or corrections can be clubbed the category "resolvable demand". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv. <strong>G-OLTAS</strong> reconciliation. Reconciliation of TDS reported by AINs with payments through OLTAS by State AGs is an important task for the field formation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v. <strong>Corporate connect for TDS compliance.</strong> CPC(TDS) has taken steps like "Corporate connect for TDS Compliance" for providing non- adversarial tax administration at the corporate level. The attempt is to make the "Principal Officer" of the corporate entity aware about the TDS defaults being committed by underlying branches. The purpose of the exercise is to impress upon the Head office that any default on part of branches and consequential interest, penalty is ultimately the liability of the corporate. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As on date, a comprehensive view is available to the corporate entity (at PAN level) that displays TAN-wise defaults/compliance patterns for different years. This view is available to the corporates online under the heading ‘Aggregated TAN compliance' on the portal of the CPC-TDS TRACES. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/CBDT_TDS_SoP.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT SoP for Administering TDS </font></strong></a></p>
<p align="center"><font face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600" size="3">No excise duty concession to Automobiles and Capital Goods beyond 31st December 2014</font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WE</strong> got this mail from a PSU employee: </font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a concession available to some of the capital goods falling under chapter 84 & 85. Previously, it was 12%. It was reduced to 10%, valid till June '14 and then extended to Dec '14. Please advise if the 10% rate is continuing / withdrawn after Dec' 14. If so, if there is any notification to that effect. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We regret to inform you that the Government has not extended the concession beyond 31 December 2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his last Budget Speech on February 17 2014, the then Finance Minister Chidambaram said, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) To stimulate growth in the capital goods and consumer non-durables, I propose to reduce the excise duty from 12 percent to 10 percent on all goods falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act for the period <strong>up to 30.6.2014.</strong> The rates can be reviewed at the time of the regular Budget. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) To give relief to the automobile industry which is registering unprecedented negative growth, I propose to reduce the excise duty as follows for the period up to 30.6.2014: </font></em></p>
</blockquote>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top" width="394"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Small cars, motor cycles, scooters and commercial vehicles </font></em></td>
<td valign="top" width="170"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">from 12% to 8% </font></em></td>
</tr>
<tr>
<td valign="top" width="394"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SUVs </font></em></td>
<td valign="top" width="170"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">from 30% to 24% </font></em></td>
</tr>
<tr>
<td valign="top" width="394"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Large and mid-segment cars </font></em></td>
<td valign="top" width="170"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">from 27/24% to 24/20% </font></em></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Notification No. 4/2014-Central Excise, dated 17th February 2014 was issued, but the notification allowed the concessional rates only till 30.6.2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By 30.6.2014, Mr. Chidambaram ceased to be a Finance Minister and the new Finance Minister was magnanimous to extend this. On 25th June 2014, in a media Statement Mr. Arun Jaitley said, "<em>In order to provide a fillip to the capital goods and automobile sector, and given its commitment to revive the economic growth, the Government of India has decided today to extend these duty concessions beyond 30th June for a period of six months upto 31st December, 2014</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so Notification No. 6/2014 CE dated 25.06.2014 was issued extending the concession till 31.12.2014. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Everybody thought the Finance Minister will be kind enough to extend this at least till budget, but there was deafening silence from the Government as our phones continued ringing loudly and mail boxes got filled with messages from anxious assessees wanting to know if the concession is extended. Sadly it was not. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When a lawyer friend asked me to give a flash on 31st that the exemption is not extended, I wondered as to why I should give a flash for something that is not done and anyway I wanted to wait. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, now it is FINAL - the reduced rates are not applicable after 31.12.2014 - Cars have already become costlier; capital goods will follow.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also please see <strong><a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjIzNzY=" target="_blank">DDT 2504</a></strong>. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><font color="#006600">CBI arrests its own Inspector along with a Bank Officer </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT </strong>do you do when the fence eats your crop?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sambi Reddy, a Chief Manager of Syndicate Bank was working with CBI in its Banking Securities & Fraud Cell (BS&FC). There was another bank officer whose case of a fraud of Rs. 30 crores was being investigated by CBI. Reddy is alleged to have demanded a bribe of Rs. 25 lakhs from the other bank officer. Finally the amount was settled for Rs. 10 lakhs to be paid in two instalments. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Little did Reddy suspect that there is an outer fence, and Reddy was caught red handed while accepting an amount of Rs. 1 lakh. During interrogation Reddy told CBI that an Inspector in CBI SK Jha (who was investigating the bank fraud case) was also part of the deal. And the CBI immediately nabbed him too. Jha is on deputation to CBI from CISF. </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></em></strong></font></strong></font><em><strong><strong><font color="#006600">-Wednesday's cases</font></strong></strong></em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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">Central Excise </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Adjudicating authority's observation that any physical change like change in brightness/whiteness will result in manufacture of "modified starch" covered under Ch. Heading 35.05 is devoid of any basis - conjectures cannot be basis for deciding classification - Order set aside & appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue involved is whether the impugned goods are maize starch classifiable under Tariff heading 11.03 or it is modified maize starch classifiable under Tariff heading 35.05. Maize starch classifiable under heading 11.03 was exempt from duty during the relevant period while modified maize starch classifiable under heading 35.05 was not. By classifying the impugned goods as modified maize starch, Heading 35.05, the CCE, Panchkula confirmed a duty demand of Rs.3.17crores along with interest and penalty. </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 grant of gift coupons to employees in nature of mementos to commemorate receipt of safety awards can be said to be in nature of salary - NO: HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee PSU is engaged in the business of polymers, synthetic fibres, solvents, surfactants, industrial chemicals and polyesters. Consequent to filing of its return, scrutiny assessment was undertaken and it was noticed that the assessee had distributed gift coupons to its employees, which was not disclosed in its return and therefore, there was short deduction of tax. The AO accordingly passed the order u/s 201(1). On appeal, the CIT(A) confirmed the order of AO, and in addition, levied penalty u/s 271C. On further appeal, the Tribunal reversed the order of AO and deleted the penalty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE issue before the Bench is - Whether grant of gift coupons to employees in nature of mementos to commemorate receipt of safety awards can be said to be in nature of salary. 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">For any service, there has to be service provider, service receiver and consideration - records show that no consideration has been paid by Govt. for undertaking work of Survey and Exploration & what is received is only reimbursement of actual expenses - it cannot be said that service has been provided to the Ministry of Mines: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is a PSU owned 100% by the Government of India. They undertake two kinds of activities. First, they provide exploration report based on survey and detailed expression of mineral deposit for which they get grant-in-aid from the Govt. of India. This is called preliminary exploration. The second activity is exploration work in respect of which they provide detailed survey and exploration reports on contractual basis to various clients. On the second activity, Service Tax is paid by them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards the first activity, these reports are kept by them and may be sold to private users later, on payment of fees on which Service Tax is also being paid. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The demand of Service Tax of Rs.4,36,88,734/- has been confirmed only on the reports prepared by them on the basis of exploration work and the activity undertaken is classified by Revenue under Scientific and Technical Consultancy Services. </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>
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