TIOL-DDT 692 · the untouched capture
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<p align="justify" ><font size="2"><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 692</font></b><font face="Verdana, Arial, Helvetica, sans-serif"><b><br>
05.09.2007<br>
Wednesday</b></font></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Definitive Anti dumping Duty on phenol- yet another dead notification resurrected </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Phenol originating in, or exported from, <st1:country-region w:st="on">South Africa</st1:country-region>, <st1:country-region w:st="on"><st1:place w:st="on">Singapore</st1:country-region> and European Union was subjected to anti dumping duty with effect from 13.8.2002 by Notification No. 79/2002 dated 13.08.2002, confirmed by Notification No. 47/2003 dated 24.3.2003. Apparently this imposition lapsed on 12.08.2007, but obviously the Government does not have a mechanism to renew lapsing notifications on time. Now, on the recommendations of the Designated Authority to extend the anti dumping duty for another year, the Government issued a notification imposing fresh anti dumping duty till 12.08.2008. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But what happens to the period between 13.08.2007 and 31.08.2007, when there was no notification for imposing anti dumping duty? Incidentally, the Government has superseded Notification No. 47/2003, which had an unfortunate death on 12.08.2007. Can the government supersede a notification that does not exist? </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=23&filename=notification/custom/2007/ctariff07_098.htm" target="_blank">NOTIFICATION NO. 98/2007-Customs ,Dated: <st1:date ls="trans" Month="8"
Day="31" Year="2007" w:st="on">August 31, 2007 </a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Duty on Software preloaded / etched or cleared in CD form along with main computers.</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Manufactures' Association for Information Technology had requested the government to clarify </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether operating software/customized software, either loaded or accompanied with the machine has to be levied with duty at the rates applicable to the equipment/machines for which the software is meant? i.e. Whether Software like Windows XP, Linux, Free Dos cleared along with any computer system should suffer duty at 12% on the value thereof from 01.01.2007?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What does the government do? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board by a letter dated <st1:date ls="trans"
Month="8" Day="3" Year="2007" w:st="on">August 3, 2007, wanted the field to report whether the computers which are being imported are including the value of software or not specifically after 1.1.07 and which is the present practice undergone by the customs authorities on such import. Board wanted a report by 15<sup>th</sup> August 2007. Don't they know that 15<sup>th</sup> August is a holiday?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By another letter, Board wants the field to </font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Offer their comments on the issue and also to inform the practice of assessment followed in the Commissionerates before and after 1.1.07 in respect of such software.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Clarify whether from 1.1.2007 the software which is pre-loaded or cleared/imported separately along with the machine/equipment/computes is being classified as machine/equipment/computer and charged to same rate of duty or whether the software is classified separately under heading 8523/8524 and machine/equipment/computer is classified separately.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Clarify whether the erstwhile practice of classifying the software separately by inserting a chapter note should be reintroduced specially keeping in mind the commercial realities of the manner of clearances from the factory or manner of import of these items. </font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. clarify whether the system of classifying the software along with main machine/equipment/computer may help Department in reducing the valuation disputes or under valuation cases.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What happens to the Association which has asked for the clarification? They have to wait till all the Commissioners in the country give their views! </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/instruct02.htm" target="_blank">F.No. <st1:date ls="trans" Month="6" Day="8" Year="2007" w:st="on">6/8/2007-CX.1</a></u><b><u> and </u></b><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/instruct01.htm" target="_blank">F.No. 167/32/2007-CX.4 of CBEC. </a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Fee payable to senior standing Counsels - Generous government- CBDT norms - you will get monkeys for the peanuts </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Senior Standing Counsels will get Rs. 4500/- for appeals in the High Court, Rs. 1500/- for drafting pleadings, written statements in suits, counter affidavits/returns/answers, Rs. 900/- for opinion, a maximum of Rs.3,600/- as clerkage, telephone bill of Rs.1000/-, He will get no fee for adjournment,</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30% of the fees payable to the Counsel shall be deducted if certified copy of the judgment is not handed over to the Commissioner/Director of the Income tax within ten days (excluding the time taken by the Court) from the date of judgment.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When the Counsel files separate and materially different affidavits, applications or grounds of appeal etc. in more than one case but the argument is heard in the main case and the other cases are decided accordingly, the Counsel shall be paid the full fees in the main case and Rs.200/- for each of the connected cases,</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fees will be payable in two stages, 1/3rd fees after substantial work has been carried out and the remaining 2/3rd fees after the case has been decided. If the high court decides that no question of law is involved, only 1/3rd of the fees shall be payable to the Counsel.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No fee will be admissible for preparation of cases but the Government may consider payment of separate fee for preparation in special cases involving arduous work.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And what are the qualifications?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Senior Standing Counsels:</font></b> In order to be eligible for appointment as Senior Standing Counsel a person should</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. be enrolled/registered as an advocate with the High Court</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. have a minimum experience of five years of handling direct tax matters before High Courts or Tribunals. </font></p>
<p align="center" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>OR</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have been an officer of the Income-Tax Department who retired/resigned from the post of Commissioner of Income-Tax or above or retired/resigned as Member/Chairman of ITAT/Settlement Commission and is enrolled/registered as an advocate in the High Court. </font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Duties of the Counsel</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Counsel shall:</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) appear in the High Court in the cases assigned to him and also appear, if so required on behalf of the Department, before the Supreme Court, other High Courts, Tribunals, Settlement Commission, Commissioner of Income Tax (Appeals) and other statutory bodies</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) give legal advice to the Department on such civil, criminal and revenue matters pertaining to direct taxes and such matters arising in the course of administration of the Department as are referred to him by the officers of the Department including:</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) examination and settling of drafts of legal nature,</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) examination of trust deeds and draft rules of provident funds for recognition, and</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) drafting of applications, petitions etc. to be filed in courts of law.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) when any case attended to by him is decided against the Department, give his opinion regarding the advisability of filing an appeal against such a decision</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) if required, render all assistance to the law officers, Advocate General of the State government, special or senior Counsel, who may be engaged in a particular case before the High Courts, Tribunal, etc.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) keep the Department informed of the important developments in the case from time to time particularly with regard to drafting, filing of papers, dates of hearing of the case, supplying copies of<br>
judgment etc.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) furnish to the Department monthly statement about the cases represented by him before High Court or any other authority.</font></p>
<p align="justify" > <font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) Perform such other duties of legal nature, which may be assigned to him by the Income Tax Department.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And he will be always under the watchful eyes of the Chief Commissioner. Now where would you get such a counsel? No wonder the Government loses cases! </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=67&filename=notification/cbdt/2007/instruct0708.htm" target="_blank">CBDT INSTRUCTION NO 8/2007, Dated: <st1:date ls="trans"
Month="8" Day="30" Year="2007" w:st="on">August 30, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Purchase of machinery - damages received for breach of contract, on capital account - price of machinery stands reduced and so does <i>depreciation -</i> A 50 year old dispute settled : HC</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Deepak
Jain, Advocate [Completing LL.M. from NUJS, Kolkata] wrote to us,</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The article has brought out the dilemmas in the Indian Legal System specially the Courts. Justice delayed is justice denied for sure - which has taken place in this case. Normally the cases are decided in 5-20 years, but this is too much! A very important observation made is appreciated that the cases pending in appeals etc. beyond a period of 20 years should lapse automatically. <br>
<br>
Further, it may be noted that a decision on a legal ground may have serious impact on the Statute and precedential law. The law may have been changed many a times in the mean time - which makes the effect of decision given by HC of little or no importance. <br>
<br>
Another important point to be noted that, legislature in its own wisdom, if the case is not in favour of Revenue and all these 50 years there was no amendment or change in the legal provisions, we not have been surprised to witness a retrospective revision w.e.f. <st1:date
ls="trans" Month="1" Day="4" Year="19" w:st="on">1-4-1957 or so. On the substantive part of the judgment it may be noted that primarily the distinction has been drawn with respect to breach of contract and breach for warranty which again is very crucial. Had the out of court settlement not taken place this could be more interesting. </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner - Tomorrow's cases<br>
</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><b><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></b></b></font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Gutka as understood in common parlance is a 'tobacco preparation' and 'chewing tobacco' Dhariwal Industries loses mega case - Not entitled to Sec 80I benefits : ITAT Special Bench </font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FOR direct and indirect taxes, it is a settled view that the Tribunals are the highest fact-finding bodies. What re-establishes this view more emphatically is the present case decided by a Pune Special Bench. This was set up following two conflicting decisions on the issue of whether gutkha or gutka containing marginal quantity of tobacco qualifies as a 'tobacco preparation' enumerated by the negative list and, is therefore not eligible for sec 80I/80IA benefits.</strong></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:stockticker w:st="on"><b>TDS credit - firm vs partners - If dividend income is assessed in hands of assessee-shareholder, proviso to Sec 199 not to apply and credit to assessee cannot be denied : Bombay HC</b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE AY is 1972-73. And the issue before the High Court is : who - the firm or the partners - are entitled to avail credit for <st1:stockticker w:st="on">TDS deducted on dividend income?</strong></font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Central Excise </b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>SSI exemption - brand name owner need not manufacture identical goods it is enough if he is also eligible for the SSI exemption - Supreme Court</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#6633CC">The</font></strong> respondents are manufacturers of aerated water. They are SSI units. They manufactured aerated water and cleared the same after affixing the brand name "Citra" during the period 1993-94. The brand name belonged to another person namely M/s Limca Flavours and Fragrances Ltd which was eligible for exemption (as SSI unit) under Notification No.1/93-CE dated 28.2.1993. These facts are not in dispute.</font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs </b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Titan gets relief in MRP related case : Tribunal sets aside Rs 3.75 Cr <st1:stockticker
w:st="on">CVD demand and equal penalty on button cells imported </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THIS is yet another dispute on the applicability of Section 4 or 4A of the Central Excise Act for arriving at the value of the goods. When the initial disputes on the subject were limited to the payment of excise duty on manufactured goods to be settled only by the Supreme Court recently, with the extension of these provisions to the goods imported, the disputes on payment of <st1:stockticker w:st="on">CVD are relatively fresh.</font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><u>See our columns tomorrow for the judgements</u></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6666">Until tomorrow with more DDT</font></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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