TIOL-DDT 654 · the untouched capture
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<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 654</font><font size="3"></font><font size="2"><br>
11.07.2007<br>
Wednesday</font></b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Mumbai blast anniversary - victims still wait for help</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>"In my 33 years of service, I have generated so much revenue for the government. But when it was their time to repay, they abandoned me"</b></font></p>
<p align=right><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Shri
Dhiraj Rathod, </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">an unfortunate victim of the blast and an officer of Central Excise in Mumbai. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">"When
staff welfare is pitted against technicalities, particularly in a case
like this ,the cause of welfare should always prevail over such technicalities.
That is where lies the challenge for a leader',</font></b> says Mr.S.K.Choudhury,
Former Member, CBEC in an open letter to the Chairman of the CBEC, which
we are carrying today in our <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5748" target="_blank">Special Column</a>. </font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">The Morgan Stanley case</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally the wait is over!, The Morgan Stanley judgement has been delivered by the Supreme Court. And as usual TIOL is the first to bring you the whole judgement. See our <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5747" target="_blank">Breaking News</a></u> for more details.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Exemption to goods procured by EOUs - SION to be fulfilled</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification No. 22/2003 C.E., dated 31.3.2003, the EOU has to pay, on demand, if the proper officer is not satisfied that the goods procured are used for production of export goods or cleared for home consumption within a period of three years. Now a condition is added that the proper officer has to be satisfied that the production is in accordance with the Standard Input Output Norms (SION) as notified by the DGFT. What happens if there is no SION? The kind department will allow 2% as wastage. What happens if the waste is beyond 2% and goods other than those given in the SION are used? Use of the goods will be allowed on the basis of self-declared norms and Development Commissioner will fix <i>ad hoc</i> norms within three months and the Board of approval will fix the norms finally. The definition of status holder has also been changed. (Please see yesterday's DDT for the changes in Customs notification.)</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/etariff07_29.htm" target="_blank">NOTIFICATION NO. 29/2007-Cex., Dated: July 6, 2007</a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">EOUs</font></b><font color="#006600"><b> need not follow the procedure in C.E (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then what? The Government has liberated them from the frying pan into the fire! As per Condition No. 6 of the Notification No. 22/2003 C.E., dated 31.3.2003, to procure inputs without payment of duty, the EOU has to follow the procedure contained in Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. Now this condition is deleted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then how to procure inputs? Don't worry - the CBEC has prescribed a draconian procedure in circular No. 851/2007 dated 3.5.2007. Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5424" target="_blank">DDT 606 dated 04.05.2007</a> for adetailed analysis of the circular. It was suggested<font color="#663399">,<b>"Is it worthwhile for an EOU to go through all these troubles when they can as well get the goods on payment of duty and take credit and even if they do not have DTA clearances, they can claim refund of the unutilized credit?"</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It took the Board two months to remove the provision from the rule!</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/etariff07_29.htm" target="_blank">NOTIFICATION NO. 29/2007-Cex., Dated: July 6, 2007</a></u></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Service Tax - exports - exemption - Commerce ministry still struggling?</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Remember the grand announcement of the Commerce Minister on 19<sup>th</sup> April while announcing the Foreign Trade Policy that Service Tax is to be exempted for exports. <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5356" target="_blank">DDT 597 - 20.04.2007</a> had commented</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Exports - Service Tax - Exempted?</font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Every Newspaper and everyone in the other media in the country screamed that Service Tax has been abolished/waived/exempted on exports in the Foreign Trade Policy announced by the Commerce Minister. Nobody has reported that it is not the Commerce minister who decides about exemption of Service Tax. In 2004, the Hon'ble Commerce Minister announced that EOUs are exempted from paying Service Tax. But the Revenue Ministry was not impressed. And they did not issue any notification to that effect. The hype about this new benefit should be subject to the Notification from the CBEC! And most probably it will not come.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Commerce Ministry is still struggling with the exemption and the Finance Ministry is silent and mind you there is absolutely no conflict between the ministers as has been clarified.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commerce ministry now wants Trade and Industry Association, EPCs, Commodity Boards and other stakeholders to forward the list of services linked to exports which may be eligible for service tax remission / exemption. It would be relevant if illustration showing calculation basis for arriving at the exact figure for exemption / remission are also submitted. Of course they wanted comments by 10<sup>th</sup> July 2007 - that is yesterday! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now what are they going to do with that list? Most probably forward it the CBEC. They could have asked the stake holders to forward the list directly to the waste Paper Basket of CBEC!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Really difficult to get out of the situation. In the mean time of course you can call for comments and reports and issue a few clarifications. It is three months since the minister announced the exemption (with the concurrence of the PM) and they are still going round asking for lists and calculations. Are they going to announce a drawback rate for Service Tax? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/notice_ser.htm" target="_blank">DGFT Notice No. 01/94/180/07-08-Service Tax/AM 08/PC I/ Dated: 29-6-2007</a></u></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Great job! <st1:City
w:st="on"><st1:place w:st="on">Bangalore</st1:place></st1:City> Service Tax</font> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bangalore Service Tax Commissionerate has launched a new impressive interactive web site. Yesterday DDT carried a circular from the Board directing the field to facilitate refund claimants to see the status of their claims online. And today we find that the Bangalore Service Tax Commissionerate has already done it! The <st1:City
w:st="on"><st1:place w:st="on">Bangalore</st1:place></st1:City> web site, apart from the usual rules and Acts, has some very interesting useful features:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.Check your refund claim status online</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.You can even make complaints on line</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.Personal hearing schedule is given akin to a cause list - (Right now this link seems to be not working)</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.The forms like ST1, ST3 and returns can be filled and downloaded. Even the GAR 7 can be filled in the net. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.The site, at a click will tell you where your bank is, where your Service Tax offices are, your accounting codes, etc.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6.They have also started a <b><font color="#663399">Discussion and Information forum</font></b> at <a
href="http://groups.yahoo.com/group/stbangalore">http://groups.yahoo.com/group/stbangalore</a> for a stimulating exchange of Service Tax ideas. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the remarkable feature of this remarkable website is that it has been done totally in-house without any expenditure to the Government. The Government still runs because there is someone somewhere strongly believing that he has to do something for the government which has given him status, salary and a secured job. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the problem with government sites is that they wither away faster than yesterday's news. Updating is rarely done after the initial euphoria. There are any number of departmental web sites which are vast graveyards. We hope that the <st1:City w:st="on"><st1:place w:st="on">Bangalore</st1:place></st1:City> experiment is successful and will be sustained. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As of now it seems to be in efficient hands. I called up the webmaster to inform him that accounting code for education cess was not mentioned in his site. Within five minutes I got a call that it has since been uploaded. I have never seen faster updating by any site and coming from government that is faster than speed of light.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a look at <a href="http://servicetaxbangalore.gov.in/">http://servicetaxbangalore.gov.in</a> </font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">From our Legal Corner - tomorrow's cases</font></b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_31.gif" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left"></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Income Tax</font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Creation of website is designing within the definition of the word 'design' - eligible for deduction under Section 80 O - ITAT</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">What is web design? Ask ITAT</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a highly technical case, the ITAT delved into the meanings of some familiar net words and gave a <i>net</i> benefit to highly talented Indian web designers.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><font color="#FF0000">Customs</font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">It's unimaginable that exporter loading goods on ship in a far away country would be aware of Public Notice issued by DGFT (even before it is issued) - Confiscation and imposition of penalty set aside by Tribunal </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">Central Excise </font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notwithstanding retrospective amendment of Sec 11A and its validation being upheld by SC, demand raised after issue of 37B order for earlier period is not sustainable : Tribunal </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#6633CC">THIS</font></strong> story is all about classification of STD/PCO Monitor, the changing departmental stand, the villainous demand notice and the happy ending. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000"> Service Tax </font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Services from foreign service provider - legality of tax by Indian receiver prior to Jan 1, 2005 - matter likely to go to LB - partial stay granted by Tribunal</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u><font color="#663399">See our columns tomorrow for the judgements</font></u></b></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></font></p>
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