TIOL-DDT 715 · the untouched capture
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<p><font size="3"><b><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 715</font></b><font face="Verdana, Arial, Helvetica, sans-serif"><b></b></font></font><font size="2"><font face="Verdana, Arial, Helvetica, sans-serif"><b><br>
09.10.2007<br>
Tuesday</b></font></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>A Blank entry in the Tariff - CBEC wants to correct </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 8 digit classification for cotton corduroy fabrics is 58012210 and against which the rate of duty has not been mentioned in the Central Excise Tariff. Board thinks this to be an<font color="#FF0000"> unintentional</font> error. Do they make intentional errors too? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board also thinks that the notification No. 29/2004 prescribes an effective rate of duty @4% and 2% Education Cess.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But can an exemption notification prescribe an effective rate for a product for which no tariff rate has been prescribed? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Notification for exemption can be given by the Government, read Board but the Tariff can be amended only by Parliament and you know the Government/Board has scant respect for the wisdom of parliamentarians. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now before making that amendment in the Tariff which will most probably smuggled into Parliament in the next Budget, God and Communists willing, the Board wants to know if there has been any terrible damage because of its careless drafting. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants to know whether any manufacturer or importer has claimed nil duty or no duty on removal/import of said fabric for the period 1.3.2005 till date and if yes, the revenue loss amount may be specified. The report must be sent by 19th October positively.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Chief Commissioners don't exactly maintain a record of how much duty has been foregone, because Board forgot to mention the rate of duty in the Tariff. And the Board wants the report by 19<sup>th</sup> October! </font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why do they waste so much paper and time? Why can't they just amend the Tariff and admit that there was a mistake, which is being corrected prospectively?</font></p>
<p ><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/letter.htm" target="_blank">CBEC's F. No. 19/01/2007-CA-1 Dated : <st1:date Year="2007" Day="27" Month="9"
ls="trans" w:st="on">September 27, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>It is not Law alone which the Board hides - Nomination for the Post of Deputy Director in WCO - Board calls for applications - a little too late?</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The World Customs Organisation has invited applications from Customs organisations for a post of Deputy Director. We understand the last date was 30<sup>th</sup> September, 2007 and as we reported in the <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=71&filename=_3be8a5884b362a_inside.htm" target="_blank">Insider <u>Nomination for the WCO post - <st2:Sn
w:st="on">Un'O</st2:Sn>'ly haste again at its best</u>!</a></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a
few days ago, one clever officer managed to get his/her application through
without telling anyone that there is such a post. All hell broke loose
after we reported the brazen way in which the whole matter was kept a secret
and not informed to the aspirants in the field. We also reported that one
of the officers came to know about this deputation and applied for it without
being called to apply. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Board has asked Chief Commissioners to nominate suitable officers for the post and the applications are to reach the Board by 12<sup>th</sup> October, 2007. When are the Chief Commissioners going to circulate this and find out the willing and suitable officers?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, what is all this exercise about when the last date is already over? Is the circular just an eyewash/cover-up? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are we going to tell the WCO that we could not locate an officer suitable for the job?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the WCO called for the post in August 2007. Why is the Board calling for nominations after two months and after the last date is over?</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The WCO posting is a lucrative one for any Customs Officer in <st1:country-region w:st="on">India</st1:country-region> and if he can manage to get that post, he can come back to <st1:country-region w:st="on"><st1:place
w:st="on">India</st1:country-region> after five years with nearly Rs. 2.5 Crores! And that's a cool kitty! And these posts are attempted to be snatched away by a few parked in 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=70&filename=pitara/deputation/vacancies_wco.htm" target="_blank">CBEC's F.No. 528/11009/2007-CUS/ICD dated: the 5<sup>th</sup> October, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Due
date for filing Income Tax returns - extended - only for <st1:place w:st="on">Bihar </b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has extended the last date of filing of income tax returns due by <st1:metricconverter ProductID="31 st"
w:st="on">31 st October 2007 to <st1:metricconverter ProductID="31 st" w:st="on">31 st December <st1:metricconverter ProductID="2007 in" w:st="on">2007 in the State of <st1:place w:st="on"><st1:State w:st="on">Bihar. The decision has been taken in view of the disruption caused by floods in the State. </font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Does Lalu's <st1:place w:st="on">Bihar get a preferential treatment?</font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName w:st="on"><st2:GivenName
w:st="on"><b><font color="#006600">Hillary</font></b></st2:GivenName><font color="#006600"><b> <st2:Sn w:st="on">Clinton</st2:Sn>'s Economic Policy - Middle class biased?</b></font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"I believe that middle class is the backbone of our economy, the key to real growth, and the guarantor of the American Dream. <st1:country-region w:st="on"><st1:place
w:st="on">America</st1:country-region> is only as strong as our middle class. And so I judge the health of our economy by asking whether our middle class is expanding and getting ahead. This Administration has failed that test. Mine will not," said <st1:PersonName w:st="on"><st2:title
w:st="on">Mrs</st2:title> <st2:GivenName w:st="on">Hillary</st2:GivenName> <st2:Sn
w:st="on">Clinton</st2:Sn> announcing her economic policy in the run up to the White House.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She added, "Today, I propose a new economic blueprint for the twenty-first century economy, a plan to create the new, good jobs essential to broad-based prosperity; to restore fairness to our economy; to renew the basic bargain that if you work hard, you can get ahead; and to put our fiscal house in order again. "The secret to <st1:country-region w:st="on"><st1:place w:st="on">America</st1:country-region>'s past economic success is clear: Whenever the economy changed, we changed with it - and mastered it. We innovated. We invested in our people. We managed downturns - and overcame them. We generated wealth - and made sure it was shared. We have to change our economic course just as we have to change course in <st1:country-region w:st="on"><st1:place w:st="on">Iraq</st1:country-region>, and change course when it comes to health care. When it comes to the economy, I believe I have the strength and experience to make that change -- and make our economy work again for our middle class and for all our people."</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Her blueprint to restore the American middle class includes</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.Harnessing innovation to create the high-wage jobs of the 21st Century </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.Creating a $50 billion Strategic Energy Fund to jumpstart research and development of alternative energies </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 3.Strengthening unions and ensuring our trade laws work for all Americans </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 4.Providing quality, affordable health care to every American </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 5.Making college accessible and affordable </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Confronting the growing problems in the housing market </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Bolstering retirement security by promoting savings and investment </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 8.Returning to fiscal responsibility and moving towards balanced budgets</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Come to India - call in Thailand</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Thai
companies looking to invest in the subcontinent are being wooed to look
to <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region>'s Northeast. Attractive
government incentives and nearly $50 billion in planned road and highway
upgrades make this one of the region's most lucrative areas, says an Indian
delegation. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st2:GivenName w:st="on">Ashwani</st2:GivenName> <st2:Sn w:st="on">Kumar</st2:Sn>, minister of state for industries along with <st1:PersonName w:st="on"><st2:GivenName
w:st="on">Mani</st2:GivenName> <st2:middlename w:st="on">Shankar</st2:middlename> <st2:Sn w:st="on">Aiyar</st2:Sn>, the minister for the development of the northeast region of <st1:country-region
w:st="on">India</st1:country-region> addressed a Seminar for the government of <st1:country-region
w:st="on">India</st1:country-region> told Thai investors in <st1:City w:st="on">Bangkok during a seminar in <st1:place w:st="on"><st1:City w:st="on">Bangkok. They told the prospective Thai investors about the benefits as </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.FA 10-year income tax holiday from the date of investment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.Exemption from all forms of excise duty on products manufactured in the region. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.Capital investment subsidy of 30% of capital expenditure on machinery and equipment to companies that set up plants in the region.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 4.3% interest-rate subsidy for investors.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Comprehensive insurance, whereby the government subsidises 100% of the insurance premium that the investors undertake.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 6.transport subsidy for 90% of total costs for transport of raw material from any part of <st1:country-region
w:st="on">India</st1:country-region> to the region's manufacturing base and for the shipment of finished goods from the region manufacturing plant to any part of <st1:place w:st="on"><st1:country-region w:st="on">India</st1:country-region>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7.Besides the manufacturing sector, the benefits would also be available for service industries such as tourism, hospitality, health care, vocational training and IT.</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>From our Legal Corner - tomorrow's cases</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></b></font></strong></font></b></font></strong><b><b></b></b></font></b></font></strong></font></b></font></strong></font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Service Tax </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Mighty department demands Rs 4,650 as service tax from an 81 year old as consulting engineer - CESTAT vacates demand</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>must be 21 years when <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region> attained freedom. But age can not be a reason for giving any relaxation from the tax or giving any special treatment, may be except some discount on railway fare under senior citizen category. This gentleman was paid a sum of Rs 68,750/- by M/s Nagammal Mills Ltd., Nagercoil during the period April, 2000 to March, 2005. That makes an average of Rs 13,750/- per annum. The reason for such payment was that the appellant was supervising the electrical work of the Mill. The revenue classified this service as "consulting engineer" and demanded service tax for the above five year period.</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">Singapore-based Co - if control and management is not situated wholly in <st1:country-region w:st="on">India</st1:country-region>, it cannot be treated as resident Co in <st1:place w:st="on"><st1:country-region
w:st="on">India</st1:country-region> u/s 6(3)(ii) : ITAT</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">an interesting case, the Delhi Bench of Tribunal has held that if the central control and management of the Singapore-incorporated company is not situated wholly in India, the company cannot be treated as a resident in India u/s 6(3)(ii). And the control and management means the major decisions of the company rather than the day to day activities. Even though one of the share-holders, a resident Indian, had 99% stake in the company, this fact cannot determine the residency status of the company. And then, the residency certificate issued by the Singapore Govt goes to substantiate the fact that the company is not a resident in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region>.</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>Commissioner allegedly ignored provisions of Sec 11A(2B) of Central Excise while imposing penalty and interest - Tribunal sets aside erroneous order and allows appeals</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In January 2002, an EA 2000 audit was conducted & an anomaly was noticed in the assessment of the product cleared in 25kg and 180kgs packs. The appellants made enquiry with M/s Castrol India Ltd. & it was informed that the said packs were required to be valued under Sec.4A of the Act as the same were being sold in retail. Thereafter, the appellants worked out the differential duty right from 1.3.99 and debited Rs.1,17,067/- in their <st1:stockticker
w:st="on">PLA A/c on 11.3.2002. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nearly after two years i.e on 31.1.2004, the appellants were served with a demand notice alleging suppression with an intention to evade excise duty and asking them to show cause as to why differential duty amounting to Rs.1,17,067/- should not be demanded and recovered from them for the period March 1999 to 1.3.2002 under Sec. 11A of the Act and the duty voluntarily paid by them should not be appropriated against them same.</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Commissioner has discretion to renew <st1:stockticker
w:st="on">CHA licence and should use such discretion : Tribunal</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">appellant, a <st1:stockticker
w:st="on">CHA licence holder, was issued a demand notice stating that he had failed to transact minimum volume of business as prescribed by the Commissioner vide Public Notice 5/2004 dated 21.4.2004 read with Public Notice No.9/98-Cus dated 4.4.1998. Further for the said reasons, the <st1:stockticker w:st="on">CHA licence was revoked under Regulation 20 read with regulation 22 of Customs House Agents Licensing Regulations, 2004.</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 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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