TIOL-DDT 544 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
544</font><br>
02.02.2007<br>
Friday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Bulk
sale of ice-cream to hotels/restaurants – MRP applicable</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
Circular No. 625/2002, the CBEC clarified that <b><font color="#663399">in respect
of bulk sale of ice-cream to hotels/restaurants, which are not meant for retail
sales as such, the provisions of the Standards of Weights and Measures Act will
not apply.</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But
now Board has changed its opinion based on a feed back from the Legal Metrology
Department. And so Board now clarifies that <b><font color="#663399">bulk sale
of ice cream in packages to hotel/catering industry etc. is required to comply
with the provisions of Standards of Weight & Measures (Packaged Commodities)
Rules, 1977, and accordingly, the assessee is required to declare the retail
sale price on such packages. </font> </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What
about MRP articles sold at much higher prices at airports and inside aircrafts?
</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=31&filename=notification/excise/2007/excircular843.htm">CIRCULAR
NO. 843/1/2007-CX., Dated: January 17, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Special
procedure for removal of excisable goods for carrying out certain processes
under rule 16 C of the Central Excise Rules </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By
notification no. 26/2006-CE(NT), dated 28.12.06, rule 16C of the Central Excise
Rules, 2002 has been substituted with a new rule. In the new rule, it has also
been provided that a manufacturer can send excisable goods to a job worker for
carrying certain processes not amounting to manufacture also.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For
example, a manufacturer of HR/CR coil can send the products for cutting/slitting,
even though said processes does not amount to manufacture. As per new Rule 16C,
a manufacturer can be permitted to remove excisable goods manufactured by him
for carrying out test or any process not amounting to manufacture to any other
premises including to a job worker without payment of duty. The other person
or a job worker may be a registered or unregistered person. The rule further
provides that after carrying out specified processes, the goods can be cleared
from the premises of the said other person or from the premises of the job worker
on payment of duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
wants that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
Proper records of such goods should be maintained both by principal manufacturer
and job worker.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
Any waste/scrap arising at the premises of the said other person/job worker
while carrying out the test/other processes should either be cleared on payment
of duties or it should be returned back to principal manufacturer.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
The value at which the principal manufacturer (person who has sent the goods
for test/carrying out processes) sells the final goods to the customer should
be taken as the value for payment of appropriate duty.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
This aspect should also be incorporated in the permission.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.
The permission should be given only in deserving cases and only for one financial
year at a time. </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=31&filename=notification/excise/2007/excircular844.htm">CIRCULAR
NO. 844/02/2007-CX , Dated : January 31, 2007 </a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Board
Circulars – aimed at resolving the complexities or creating them?</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday
Board (CBEC) issued a circular relating to simultaneous availment of the benefit
of Notifications 29/2004 and 30/2004 CE dated 9.7.2004. Notification 30/2004
provides complete exemption for specified goods, mostly, textiles from payment
of duty with the condition that no input credit shall be availed. Notification
29/2004 prescribes effective rate at 4% or 8% with Cenvat benefit on the inputs.
Board had earlier clarified that simultaneous availment of both the notifications
is allowed subject to the condition that separate books of accounts have to
be maintained for goods cleared under the two notifications.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
the manufacture of textile articles requires continuous use of chemicals, dyes
etc, it is practically not possible to maintain separate accounts for these
consumables. Therefore some manufacturers were reversing the proportionate credit
on these consumables used in the exempted gods. Board has received representations
from the trade and field officers whether such proportionate reversal can be
allowed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Board has clarified that non-availment of credit on inputs is a precondition
for availing exemption under this notification and if manufacturers avail input
tax credit, they would be ineligible for exemption under this notification.
Reversal of credit on a later date would not suffice to make them eligible for
this exemption</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
further clarified that though it may not be practically possible to segregate
and store inputs like dyes and chemicals separately or maintain separate accounts,
in such cases, in order to facilitate simultaneous availment of the two notifications,
such manufacturers may be advised not to take credit initially and instead take
only proportionate input credit on inputs used in the manufacture of finished
goods cleared by him on payment of duty. Such proportionate credit should be
taken at the end of the month only. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What
is the difference between taking credit proportionately for the consumables
used in the dutiable goods as directed by the Board and taking full credit but
reversing the proportionate credit of the consumables used in the exempted goods
as is being done by certain manufacturers? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
this circular has been issued on 1.2.2007 and can now be followed by the manufacturers
prospectively. Since these two Notifications are in force from 9.7.2004, what
about those assessees who reversed the credit proportionately on the inputs
used in the exempted goods at a later date? Show Cause Notices will follow,
possibly with the suppression fact that assessee being aware in 2004 that Board
is going to issue a circular in 2007!</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=31&filename=notification/excise/2007/excircular845.htm">CIRCULAR
NO. 845/03/2006-CX., Dated: February 1, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">NTT
Ordinance –lawyers and CAs to have exclusive right to appear</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
<u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2007/2007-TIOL-06-SC-NTT.htm">2007-TIOL-06-SC-NTT</a></u><b><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2007/2007-TIOL-06-SC-NTT.htm">
</a></u></b>which we carried recently, the Government had promised the Supreme
Court that the Government would make appropriate amendments in the Act to ensure
that</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
only lawyers and Chartered Accountants and party-in-person are permitted to
appear before the Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.
the expression `consultation' in Section 5(5) of the Act may be construed as
`concurrence'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
there is no question of the two Secretaries over-riding the opinion of the Chief
Justice of India or his nominee since primacy of the Chairperson is inbuilt
in the provision itself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the government is ready with an ordinance and a bill will be introduced in the
Budget session of Parliament.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
<i>NATIONAL TAX TRIBUNAL (AMENDMENT) ORDINANCE, 2007</i> seeks to amend the
NTT Act as follows.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section
5(5) reads as, </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(5)
The Central Government may <b>in consultation with the
Chairperson</b> transfer a Member from headquarters of one Bench in one
State to the headquarters of another Bench in another State or to the headquarters
of any other Bench within a State.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the words, <font color="#663399"><strong>“in consultation with the Chairperson”</strong></font>
are omitted. This does not mean that the Government can transfer Members of
the NTT without consulting the Chairperson. A new proviso has been added that
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> “<b>Provided</b>
that no Member shall be transferred without the concurrence of the Chairperson.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So
the Chairperson’s concurrence is required to transfer a member.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per section 6(2) of the Act,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2)
A person shall not be qualified for appointment as Member unless he-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a)
is, or has been, or is eligible to be, a Judge of a High Court; or</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)
is, or has been, a Member of the Income-tax Appellate Tribunal or of the Customs,
Excise and Service Tax Appellate Tribunal for at least <b>seven</b> years.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the seven years restriction is reduced to <b>five</b> years. More members of
the ITAT and CESTAT can hope to join the NTT.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>And
now the ‘only lawyers’ clause:</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per Section 13(1)</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">(1)
A party to an appeal other than Government may either appear in person or authorise
one or more chartered accountants or legal practitioners<b> or any person duly
authorised by him or it</b> to present his or its case before the National Tax
Tribunal.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now
the words, “or any person duly authorised by him or it” are omitted, which means
only Lawyers and CAs can appear before the NTT. What is so great about lawyers
and CAs that only they can appear? Even a retired Chairman of the CBDT or CBEC
cannot appear before the NTT if he is not a lawyer. A Registered Medical Practitioner
without a degree of MBBS is allowed to tinker with people’s lives but an expert
without a law degree will not be allowed to enter the hallowed portals of the
NTT. Why? Are our lawyers afraid of competition from non-lawyers? If so are
they worthy of the noble profession which they profess to practice?</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Sour
comments on lawyers – DDT bouquet and brickbats</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>DDT</b>
should show restraint while commenting about lawyers and doctors. While making
the nearly 600 editions of <strong>DDT</strong>, we have received virulent attacks
and embarrassingly high approbation, both of which we take stoically and usually
don't report; but yesterday’s DDT evoked two different reactions which <strong>DDT</strong>
would like to share with the netizens. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
response to DDT’s remarks on lawyers, an eminent lawyer friend wrote in,</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refer
to your remarks on doctors and advocates in today's DDT, wherein you have raised
a general question as to who evade the taxes most between lawyers and doctors
and have answered that it is almost axiomatic that these two professionals are
the most blatant evaders of tax and between the two, doctors are the worse offenders.
Not commenting as to whether these two professions warrant imposition of service
tax or not, I strongly condemn your blatant criticism thrown in general against
two esteemed professions. with no service tax imposed on them till date, I am
surprised as to what tax did you mean by your remark, that they had evaded?
Is it Income tax? If so, without any sort of statistics on hand how can you
throw such a defamatory remark, that too in your esteemed column? I feel you
should withdraw the comments immediately. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
same DDT had some remarks on taxing God-men,</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">God-men
do provide the service of mental peace and perhaps they should be taxed and
maybe Sai Baba will become the biggest Service Tax assessee. Just imagine a
Superintendent summoning Sai Baba and recording a statement from him. The Statement
may turn into ashes before the Show Cause Notice is issued.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An
eminent consultant wrote in response to this,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I
loved your flight of fancy on saibaba and the hapless Superintendent!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I
replied to her,</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Just
now I got a mail from an advocate blasting me for my irresponsible comments
on lawyers and doctors. Before I could recover from the blast, Baba seems to
have sent me your message.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Pundit
APJ Kalam on the Vedas</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday
the President Pundit APJ Abdul Kalam visited <b>Sanskrit Vidyapeetam, Mantralayam,
Andhra Pradesh </b>and remarked:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
I have come across two great teachers, one in the primary school and another
in the <st1:place><st1:City>St. Joseph</st1:City></st1:place>’s College. My
primary school teacher Sri SivasubramanyaIyer was a great Sanskrit scholar apart
from being my science teacher. Everyday he used to perform SandhyaVandanam three
times a day.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
My college teacher Prof ThothathriIyengar who taught me complex numbers and
number theory was also a Sanskrit scholar. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
While the base of these two great teachers was science and mathematics, their
life was shaped by the ancient wisdom of Sanskrit scholarship.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Recently, I have come across a great scholar Dr MA LakshmiTathachar of <st1:place><st1:PlaceName>Sanskrit</st1:PlaceName>
<st1:PlaceType>Academy</st1:PlaceType></st1:place>, Melkote, Karnataka who has
been carrying out intensive research in Sanskrit including the agriculture using
organic farming.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Such is the richness of Sanskrit and I am happy that Sanskrit Vidyapeetam is
preserving and nurturing this great language.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Though I am not an expert in Sanskrit, I have many friends who are proficient
in Sanskrit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++Sanskrit
is a beautiful language. It has enriched our society from time immemorial.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Today many nations are trying to research on the Sanskrit writings which are
there in our ancient scriptures.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
I understand that there is a wealth of knowledge available in Sanskrit which
the scientists and technologists are finding today.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ <b><font color="#663399">There
is a need to carry out research on our Vedas particularly Atharvana
Veda for eliciting many valuable information in Science and Technology
relating to medicine, flight sciences, material sciences and many other
related fields.</font></b></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">After
that rather longish DDT</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Monday with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice weekend. </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@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p>
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