TIOL-DDT 2811 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a><font color="#663399" size="3">TIOL-DDT 2811 </font><br>
21 03 2016 <br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>'Mithi' is a river and not a drain </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> that ill-fated day in July 2005 when Mumbai was under water, Mithi rose to prominence. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The prestigious Bandra Kurla Complex (BKC) abuts Mithi, which unfortunately was never seen as a river but a giant nullah since times immemorial. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Wikipedia describes Mithi (aka Mahim River) as a river in Salsette Island, the island of the city of Mumbai . It is a confluence of tail water discharges of Powai and Vihar lakes. However it is filthy mainly due to the presence of slums and the discharge of industrial effluents. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the period 05/05/2006 to 31/07/2007, the appellant had undertaken dredging of 'Mithi River' under a contract with MMRDA. The <em>CCE, Thane-II</em> demanded service tax of Rs.91.23 lakhs from the appellant on the total amount collected from MMRDA for the work of dredging done in 'Mithi River'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant claimed that 'Mithi River' is not a river in popular parlance but only a 'storm water drain' and that <em>"dredging" </em>of a drain is not taxable in view of the definition of 'dredging' given in section 65(36a) of the FA, 1994. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue claimed that the Mithi was always known as a river and even the tender notice of MMRDA described it as a river and having obtained the dredging work with reference to such tender notice the appellant cannot plead that they were not dredging (the) river during the period of dispute. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench agreed with the submission of the AR and upheld - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ the confirmation of Service Tax demand of Rs.91,23,081/- along with interest thereon; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">+ penalty of Rs.5000/-imposed under Section 77 of the FA, 1994. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the penalty of Rs.1 crore imposed under Section 78 of the Finance Act, 1994 was set aside. Please see <strong><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODgzNjk=" target="_blank">2013-TIOL-795-CESTAT-MUM</a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant took the matter to the Supreme Court. However, the Civil Appeals were dismissed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTEyMTY2" target="_blank">2016-TIOL-32-SC-ST</a></strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f1"></a>De-registration hiccups </em></strong></font></p>
<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><em><font size="2">M/S </font></em><font size="2"> Akasha Syncotex Ltd. closed down their business and applied for cancellation of their CE registration <em><font color="#990000">and that is a different story which we come to later</font></em> . </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">M/s Monomer Chemical Inds. was interested in conducting manufacturing operations from the said premises and, therefore, entered into a purchase agreement with M/s. Akasha Syncotex Ltd . and with due permission from MIDC, the factory premises got leased out in the name of M/s Monomer Chemical Inds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When M/s Monomer Chemical Inds. sought CE registration from the CE authorities, a SCN came to be issued proposing denial of the same. The original authority held in favour of M/s Monomer Chemical Inds. but in Revenue appeal, the Commissioner (A) set aside the order saying that the previous lessee M/s Akasha Syncotex Ltd. had dues pending against them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">M/s Monomer Chemical Inds. took the matter to the CESTAT and the Bench by relying upon the decision in PMS Exports P. Ltd. <em>- </em> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=ODg0NDU="><strong>2013-TIOL-823-CESTAT-AHM</strong> </a>(which in turn relied on the decision in Tata Metaliks Ltd. - <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2008/2008-TIOL-140-HC-MUM-CX.htm"><strong>2008-TIOL-140-HC-MUM-CX</strong></a>) set aside the order of the lower appellate authority and allowed the appeal with consequential relief. We reported this decision as <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTg1MjU="><strong>2015-TIOL-04-CESTAT-MUM</strong></a>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the meantime, the case of <em>M/s Akasha Syncotex Ltd. </em>had also begun its journey. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Their application for de-registration was accepted by the original authority but in Revenue appeal, the same Commissioner (A), by an order passed on the same date, set aside the order-in-original and allowed the Revenue appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>M/s Akasha Syncotex Ltd. </em>also had filed appeal before the CESTAT arguing that they have complied with the procedure prescribed for surrender of registration certificate as mandated by notification <strong><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=NzQ4Mw==" target="_blank">35/2001-CE(NT)</a></strong>; that as on date no confirmed demand is pending against the appellant; that only a SCN has been issued which is pending adjudication; therefore, factory premises was sold to another company and in separate proceedings, the buyer company has been issued new registration certificate after the Tribunal intervened <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTg1MjU=" target="_blank"><strong>2015-TIOL-04-CESTAT-MUM</strong></a>; that at one time same premises cannot remain registered in the name of two persons, therefore, once registration in the name of buyer company <em>M/s. Monomer Chemical Industries Pvt. Ltd </em>has been issued, then registration of appellant will not survive. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT decided the appeal of <em>M/s Akasha Syncotex Ltd. </em> recently and while allowing their appeal <em>inter alia </em> observed – </font></p>
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<p align="justify"><font color="#990000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"It is a national loss to stop production in any factory premises. The law cannot be such by which production in this country can be suspended for any reason."</em></font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=26518" target="_blank">Breaking News</a>. </font></strong></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f2"></a>It's back to business </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JEWELLERS</strong> on last Saturday called off their 18-day old strike demanding roll-back of proposed excise duty on non-silver jewellery after the government assured them that there will be no harassment by excise officials. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#990000">"It (excise duty) has not been rolled back but our grievances have been taken care of. The Finance Minister has assured us that there will be no 'inspector raj' and we are hopeful of getting a notification in this regard. After long deliberations, all associations agreed to call off the stir,"</font> </em> Chairman of All India Gems and Jewellery Trade Federation (GJF) told the press. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 17th March 2016, a number of representatives of jewellery industry met Secretary (Revenue) and Chairman (Central Board of Excise & Customs) to discuss the concerns regarding imposition of this levy and when it was clarified that - </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>a) In case of jewellery manufactured on job work basis, the liability to take registration, pay duty and to file return is on the principal manufacturer and not on the job worker. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>b) Further, exemption from excise duty up to the clearance limit of Rs. 6 Crore is </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>available to a jewellery manufacturer if his aggregate value of domestic clearances is less than Rs. 12 Crore in the preceding financial year. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>c) Artisans and job-workers are not covered within the ambit of this duty and thus they are not required to take registration, pay duty, file returns and maintain any books of account. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>d) A jewellery manufacturer having turnover less than Rs. 12 Crore during the preceding financial year and less than Rs. 6 Crore in the current financial year is not required to take registration and file return. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>e) Application for excise registration as well as returns can be filled online </em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>[https://www.aces.gov.in/]. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>f) Directions have been issued to the field formations to provide hassle free registration within two working days. There will be no post registration physical verification of the jeweller's premises. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>g) There is no requirement of declaring pre-budget stocks. Directions have also been issued barring any visits to the jeweller's premises. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>h) Jeweller's private records or his records for State VAT or for Bureau of Indian Standards (in the case of hallmarked jewellery) would be accepted for all Central Excise purposes. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Last heard is that the former CEA Dr Ashok Lahiri is to hold talks with Jewellers' Association to work out simple procedures for collection of 1% excise duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is estimated that the jewellery industry incurred a loss of over Rs 25,000 crore during the last 18 days. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MjYzOTM=">Excise Duty on Gold Jewellery -<em> Kal, Aaj aur Kal</em>? </a></font></strong></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f3"></a>Taxable income concealed as agricultural earning </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> week ago, the Finance Minister informed the august house that many prominent people are being probed for allegedly concealing taxable income as agricultural earnings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems that the Patna High Court is seized of the matter in a PIL filed. Inasmuch as the Directorate of Income Tax (Systems) has asked the Principal Chief Commissioners and Chief Commissioners to send a feedback report in the matter of ‘ Verification of Genuineness of Agricultural Income shown in the Income Tax Return filed by the assesses for AY 2007-08 to AY 2015-16'. This report is to be sent by today. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTk0MTI=" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>F.No.DGIT(S)/DIT(S)-3/AST/PIL Matter/Agriculture Income /97/2015-16 </strong></font></a></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em><a name="f4"></a>Justice Goda Raghuram's brilliant lecture at Vizag </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FORMER</strong> CESTAT President Justice Goda Raghuram gave a scintillating lecture on tax laws at Vizag on Saturday. The speech interspersed with devastating humour and scholarly analysis was listened to in rapt attention. He mentioned the four ingredients of tax legislation as </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The taxable event </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Rate of tax </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Who should pay the tax, and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The mechanism for tax collection. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a lighter vein he mentioned that people made money by selling fair and lovely promising to make people white – making a buffalo a cow. But a white skin means an unhealthy skin. A healthy skin should be dark. Even if they are doing a great disservice to human kind, the taxman may claim it as a service and demand tax. </font></p>
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<td><div align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Goda Raghuram addressing the gathering. On the dais are K. Vijay Kumar, Editor in Chief, TIOL, Mr. Rajendiran, Principal Commissioner, Customs and Central Excise and Mr. G. Prabhakara Sastry, Convener, Tax Law Research Group. </font></strong></div></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He said that a government officer trying to collect tax without the authority of law is worse than a highway robber. He said that GST will provide gainful employment to a large number of lawyers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He cautioned the departmental adjudicating authorities that if the people lost faith in the system of adjudication, nothing can save the department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. C. Rajendiran, Principal Commissioner, Vizag said that his department was doing everything possible for promoting ease of doing business. He said, <em>"We are only a phone call away."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. G. Prabhakara Sastry, advocate and convener of Tax Law Research Group which hosted the programme highlighted several problems relating to the 2016 Budget proposals. </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 <a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p>
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