TIOL-DDT 550 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body link=blue vlink=blue> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 550</font><br> 12.02.2007<br> Monday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Pan masala – more Central Excise return</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise Rules are amended to add a new proviso to Rule 12 by which Pan Masala manufacturers are now required to file along with their monthly return a statement summarising</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the purchase invoices for the month with the names and addresses of the suppliers of betel nut, tobacco and packing material along with the quantity of the said goods purchased; and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the sales invoices for the month with the names and addresses of the buyers, description, quantity and value of goods sold by the assessee.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And if the goods are not sold from the factory, the address of the premises to which the goods are dispatched from the factory shall also be provided. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And pray, what is the Department going to do with all the information? Even the returns filed now are rarely scrutinized. May be they will send copies of these statements to the Board!</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/2007/exnt07_03.htm">Notification No. 3/2007 - Central Excise (N.T.) dated the February 8, 2007</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Committee of Chief Commissioner – for Commissioner adjudication</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board has constituted a Committee of two Chief Commissioners to review the orders passed by Commissioner, Adjudication, at Mumbai/Chennai/Kolkata/Delhi. The two Chief Commissioners will be the respective boss of the Adjudication Commissioner and the Chief Commissioner having jurisdiction over the place where the case originated. What happens if both of them are one? </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=24&filename=notification/custom/2007/cnt07_006.htm">Notification No. 6/2007, Cus., (N.T.), Dated: February 7, 2007</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">No penalty when there is no income tax – amendment to statute only prospective – Supreme Court </font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court in a landmark judgement held that <b>No amendment in a taxing statute can be retrospective, more so in the case of penal provisions, unless legislature means so expressly through the re-construction of the amendment in the statute.</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court held that prior to 2002, no penalty could be imposed when the assessee retuned a loss. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court also dwelt on the meanings of </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. "in addition to any tax" and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. "total income"</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">and relied on its own earlier judgement wherein it was held that:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. "The word "additional" in the expression "additional income-tax" must refer to a state of affairs in which there has been a tax before."</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. "The words "charge on the total income" are not appropriate to describe a case in which there is no income or there is a loss."</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court agreed that there was a lacuna in the statute but the Court cannot help in such situations as <b>"There is no doubt that if the words of a taxing statute fail, then so must the tax.”</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is a good lesson that all draftsmen, especially of tax laws should learn. Drafting laws should be taken a little above writing note sheets.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4959&PHPSESSID=5ff3fb48f5b0c1609e4b54ddbf0d1071">See our Breaking News for a more detailed story on the case.</a></b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Credit on capital goods – Is eligibility based on date of receipt of capital goods? Why not make changes in the budget?</font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The budget is just a fortnight away. If you are manufacturing goods, don’t buy any capital goods now. Assuming that you buy a machine today for use in manufacture of exempted goods – naturally you cannot take credit, but if the exemption is withdrawn with effect from 1.3.2007, can you take credit? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal in <i>Surya Roshini</i> had held that credit is subject to eligibility at the time of receipt of the Capital goods. The party’s appeal to Supreme Court was dismissed. But another bench of the Tribunal had in <i>Ace Timez</i> case held that credit has to be allowed. Because of the conflicting judgements, the Mumbai bench has now referred the matter to a Larger Bench. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This budget may be a good opportunity for the government to clarify the issue and amend the rules retrospectively so that credit may be allowed say for a period of three years. <b>When inputs lying in stock can get credit, why not capital goods?</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4958&PHPSESSID=5ff3fb48f5b0c1609e4b54ddbf0d1071">See our Breaking News for a more detailed story on the case.</a></b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Service Tax - If lawyers and doctors can be taxed, why not film stars?</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a strong public opinion that lawyers and doctors are going to be brought within the ambit of Service Tax. Even the departmental officer who features in our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4960">budget Column</a> wants lawyers and doctors taxed along with beer manufacturers. But what has sent a chill down the Bollywoods, Mollywoods, Kollywoods and Tollywoods, is the rumour that the FM is seriously contemplating a Service Tax on Film Stars. That will certainly be more glamorous and make more economic sense than taxing brief-less barristers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But assessing the stars would be a mind boggling exercise what with the new valuation concepts. Stars do get paid in ways and types more than one and the money value of the considerations for providing the service, will be matter for future disputes. All kinds of Audit parties, including the CAG variety can visit the stars and audit them.</font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </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> </body> </html>