TIOL-DDT 357 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT
357</font><br>
08 05 2006<br>
Monday</b></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Municipal
water exempted from excise duty</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Drinking
water supplied by civic bodies taxable? Surprisingly the answer is yes. Look
at the statute. These are the headings for water in the tariff.</font></p>
<table width="450" border=0 align="center" cellpadding=3 cellspacing=0>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>2201
</b></font></p></td>
<td width=42 valign=top > </td>
<td width=312 valign=top > <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Waters,
including natural or artificial mineral waters and aerated waters, not
containing added sugar or other sweetening matter nor flavoured; ice and
snow</b></font></p></td>
<td width=81 valign=top > </td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
10 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>Mineral
waters and aerated waters:</i> </font></p></td>
<td width=81 valign=top > </td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
10 10 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">---
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mineral
waters </font></p></td>
<td width=81 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16%
</font></p></td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
10 20 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">---
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aerated
waters </font></p></td>
<td width=81 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16%
</font></p></td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
90 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">-
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>Other:
</i></font></p></td>
<td width=81 valign=top > </td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
90 10 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">---
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ice
and snow </font></p></td>
<td width=81 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil
</font></p></td>
</tr>
<tr>
<td width=93 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
90 90 </font></p></td>
<td width=42 valign=top > <p align=right ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">---
</font></p></td>
<td width=312 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Other
</font></p></td>
<td width=81 valign=top > <p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16%
</font></p></td>
</tr>
</table>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Note
5 of Chapter 22 states,</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
In relation to waters, including natural or artificial mineral waters of heading
2201 and waters, including mineral waters of heading 2202 processes, such as
filtration, purification of any other process or any one or more of these processes,
labelling or relabelling of containers and repacking from bulk packs to retail
packs or the adoption of any other treatment to render the product marketable
to the consumer, shall amount to "manufacture".</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From
the above, it is clear that municipal water which undergoes processes, such
as filtration, purification falls under heading 2201 90 90 and is excisable.
</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
the benign government was kind enough to exempt such waters from excise duty
by Notification No. 3/2005 – Sl. No. 13 of the notification fixed an effective
rate of duty of NIL on this if the water did not have a brand name.</font></p>
<table width=450 border=1 align="center" cellpadding=3 cellspacing=0>
<tr>
<td width=31 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13.</font></p></td>
<td width=130 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201
10 10,</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2201 90
90,</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2202 10
90,</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2202 90
30 or</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2202 90
90</font></p></td>
<td width=267 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All
goods not bearing a brand name</font></p></td>
<td width=52 valign=top > <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nil</font></p></td>
</tr>
</table>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
far so good and the menacing duty collecting officers were not attacking the
civic corporations for tax collections. But in the 2006 budget, in the process
of withdrawing exemptions, this exemption to unbranded water also got washed
away. Notification No. 7/2006 deleted the entry 13 from the above notification.
So from 1.3.2006 any water sold was liable to excise duty and all the civic
bodies in the country supplying water to the citizens were liable to pay excise
duty. It is really surprising why the shrewd excise men did not pounce upon
Municipal Corporations to pay duty. Obviously the government realized the lapse
and now a notification is issued exempting waters not cleared in sealed containers.
But this notification is dated 4.5.2006, which means and proves that such water
was taxable till that date. Will a retrospective exemption be given or will
the department collect the duty from civic corporations till 3<sup>rd</sup>
May 2006?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
similar exemption is now given to “Food preparations not cleared in sealed containers”
which would mean that all hotels were liable to pay excise duty on all food
items served by them. They are still liable for the months of March and April.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2006/etariff06_029.htm">NOTIFICATION
NO. 29/2006-Central Excise, Dated: May 4, 2006</a></u></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Import
of Genetically Modified Food – conditions put on hold</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By
notification No.2/7.4.2006, the DGFT had stipulated certain conditions for import
of Genetically Modified Food, Feed, Genetically Modified Organism (GMOs) and
Living Modified Organisms (LMOs). The conditions were</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(a) The import of GMOs / LMOs for the purpose of (i) R & D; (ii) Food; (iii)
Feed; (iv) Processing in Bulk and (v) For Environment release will be governed
by the provisions of the Environment Protection Act, 1986 and Rules 1989.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(b) The import of any Food, Feed, raw or processed or any ingredient of food,
food additives or any food product that contains GM material and is being used
either for Industrial production, Environmental release, or field application
will be allowed only with the approval of the Genetic Engineering Approval Committee
(GEAC).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(c) Institutes / Companies who wish to import Genetically Modified material
for R & D purposes will submit their proposal to the Review Committee for
Genetic Modification (RCGM) under the Department of Bio-Technology. In case
the Companies / Institutes use these Genetically Modified material for commercial
purposes, approval of GEAC is also required.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
(d) At the time of import all consignments containing products which have been
subjected to Genetic Modification will carry a declaration stating that the
product is Genetically Modified. In case a consignment does not carry such
a declaration and is later found to contain Genetically Modified material, the
importer is liable to penal action under the Foreign Trade (Development and
Regulation) Act, 1992.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
these conditions are kept in abeyance till 7.7.2006.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2006/dgft06not004.htm">NOTIFICATION
NO. 04( RE-2006) / 2004-2009, Dated: May 4, 2006</a></u></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Alexander
offered a meal of gold</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Supreme Court in the case we are reporting today mentioned the story of a fanciful
meeting between Alexander the Great, and the legendary King Katzya, ruler of
a fabulous land beyond the dark mountain to illustrate how morality informs
the subjects' presentation of their disputes and the King's morality in resolving
them. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
visiting Alexander bypassed Katzya's gold and silver but wished to see 'your
customs, your behaviour, and how you administer justice'. The conqueror then
watched King Katzya heard a case between the buyer and the seller of a field
in which hidden treasure had been found. Each disclaimed the treasure, not having
bargained for it in the sale. After hearing their briefs, the king found that
one man had a son and other a daughter. He arranged their betrothal to one another
and bestowed the trove on them. Alexander, laughing, was asked how he would
have ruled on such a case in his own land.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“I
would have executed both of them and confiscated the treasure". So King
Katzya set out a meal all of gold. When Alexander objected that he did not eat
gold, the King exclaimed, with an imprecation: "Why then do you love it
so?" He then asked whether the sun shone and the rain fell in Alexander's
country and whether there were livestock there. On hearing that there were,
he exclaimed, again with an imprecation, "Why then it is only by the desert
of those cattle that you survive.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Judicial
Review would therefore have to be the ever sustaining appreciation of the 'desert'
of all beings in nature and all orders of nature to the possibility of human
life and the need to avoid at any cost the high probabilities of not only the
extinction of the species but destruction of the rich and wonderful variety
of Natures productions. In other words it is more urgent to see judicial review
as one of the most immediate means of generating concern for life beyond us
and orders sustaining us, in the minds of people wielding economic and social
power. </font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Ignited
Indians</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He
did not go beyond the 7<sup>th</sup> Class in school but if you talk to him
today you will have to embarrassingly hide your academic degrees. Starting with
a loan of a hundred rupees, he built a 150 Crores turnover industry selling
nut powder. Today he is a case study for management graduates. See the great
man’s story in his own words in our <b><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3680">Real Life Story</a></u></b> today. </font></p>
<p align="justify" > </p>
<P align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><B><IMG height=62 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_txt2.jpg" width=375></B></font></P>
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<td><TABLE cellSpacing=0 cellPadding=3 width=375 border=0>
<TBODY>
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<TD width="67"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><IMG height=67 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle></font></TD>
<TD><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000FF">sui
generis</font></b> - That which is the only one of its kind.; unique</font></TD>
</TR>
</TBODY>
</TABLE></td>
</tr>
</table>
<p align=justify ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> In
our opinion, considering the language which aims at the “service sectors” alone,
in the light of the attendant circumstances like the purpose and object of the
enactment it cannot be said that this subject of legislation is not <b>sui generis</b>
and in reality pertains to a field of “state legislation”. – Madras High Court
in <u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2003/2003-TIOL-120-HC-MAD-ST.htm"><font size="1">2003-TIOL-120-HC-Mad-ST</font></a></u></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
jurisdiction of this Court, under Article 129 is <b><i>sui generis.</i></b>
The jurisdiction to take cognizance of the contempt as well as to award punishment
for it being constitutional, it cannot be controlled by any statute. Neither,
therefore, the Contempt of Courts Act , 1971 nor the Advocates Act, 1981 can
be pressed into service to restrict the said jurisdiction. Supreme Court of
India in <u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2002/2002-TIOL-197-SC-CONTEMPT.htm"><font size="1">2002-TIOL-197-SC-CONTEMPT</font></a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Legal
Maxims</font></b></font></p>
<p align="justify" class=c-t1><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The
maxim “<i>Judicis est jus dicere, non dare</i>” pithily expounds the duty of
the Court. It is to decide what the law is and apply it; not to make it. – Supreme
Court of India in ASSTT. COMMR., ASSESSMENT-II, BANGALORE v VELLIAPPA TEXTILES
LTD.</strong></font></p>
<p ><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Tomorrow with more DDT </font></p>
<p><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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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