TIOL-DDT 717 · the untouched capture
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<p><font size="3" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TIOL-DDT 717</font></b><b></b></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><b><br>
11.10.2007<br>
Thursday</b></font></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Happy Birthday CESTAT</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT is twenty five! Don't ask, how many times? Today is the real birthday, though the official celebrations were held a little earlier. In a short span of twenty five years, this institution has grown into a commanding position, establishing itself as a pillar of justice. Today it has become almost the first and last forum where you can expect to get a fair deal.We bring you today the full text of the speech of the President of the Tribunal, </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName
w:st="on">Justice <st2:Sn w:st="on">Abichandani</st2:Sn>, delivered during the Silver jubilee Celebrations.</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anti-dumping duty on acrylo-nitrile butadiene rubber</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Anti Dumping Duty on acrylo-nitrile butadiene rubber (<st1:stockticker
w:st="on">NBR), originating in, or exported from Korea R.P. and Germany, imposed vide notification No.111/2002-Customs, dated the 10th October, 2002, which was superseded vide notification No.78/2005-Customs, dated the 1st September, 2005 by which the the anti-dumping duty imposed under this notification was to be effective upto and inclusive of the <b><font color="#663399">9th day of October, 2007.</font></b></font></p>
<p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Now this date is extended up to the 9th day of October, 2008</b></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_109.htm" target="_blank">NOTIFICATION NO. 109/2007-Cus., Dated: <st1:date ls="trans" Month="10" Day="9"
Year="2007" w:st="on">October 9, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption from excise duty to zinc sulphate used as micronutrient</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has exempted Agricultural grade zinc sulphate ordinarily used as micronutrient, from the whole of the Central Excise duty</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_36.htm" target="_blank">NOTIFICATION NO. 36/2007-Central Excise, Dated: <st1:date ls="trans" Month="10" Day="9" Year="2007" w:st="on">October 9, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Export Obligation – EPCG Scheme – DGFT amends policy</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Paragraph 5.4(i) related to Export obligation under EPCG scheme,</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export obligation shall be fulfilled by export of goods, manufactured / services rendered by the applicant.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export obligation shall be, over and above, the average level of exports achieved by applicant in preceding three licensing years. Such average would be the arithmetic mean of export performance in last 3 years.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export obligation may also be fulfilled by exports of group company / managed hotel which has EPCG Authorisation. However, in such cases, additional export obligation imposed shall be over and above average exports achieved by unit / company / group company / managed hotel in preceding three years, despite exemption in Para 5.7.6 of <st1:stockticker
w:st="on">HBP v1. For this purpose, average would be based on previous export of goods and services put together.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is replaced with, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Export obligation shall be fulfilled by export of goods manufactured / services rendered by the applicant.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export obligation under the scheme shall be, over and above, the average level of exports achieved by him in the preceding three licensing years for the same and similar products within the overall export obligation period including extended period, if any; except for categories mentioned in paragraph 5.7.6 of Handbook of Procedures, Vol. 1. Such average would be the arithmetic mean of export performance in last three years for the same and similar products.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export obligation may also be fulfilled by exports of other good(s) manufactured or service(s) provided by the same firm / company or group company / managed hotel which has the EPCG authorisation. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, in such cases, additional export obligation imposed shall be over and above average exports achieved by the unit / company / group company /managed hotel in preceding three years for both the original and the substitute product(s)/ service(s) despite exemption in Para 5.7.6 of <st1:stockticker w:st="on">HBP v1.</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=45&filename=notification/dgft/2007/dgft07not036.htm" target="_blank">DGFT NOTIFICATION NO. 36 (RE-2007)/2004-2009, Dated: <st1:date ls="trans" Month="10" Day="8"
Year="2007" w:st="on">October 8, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Excise and Customs Revenue crosses the One lakh Crores mark</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not the Sensex which alone is rising. Revenue is booming with no chance of a fall. CE and Customs Revenues up to September 2007 was at a high of 1,03,134 Crores, 10.8% higher than the collections for the same period last year. Service Tax netted 16867 Crores till August 2007.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">FM should be smiling all the way to the polls.</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Garments exporter disappointed with Service Tax </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Garments exporters Association president sates,</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Garments Exporters are disappointed, with the Notification No.41/2007 Service Tax dated 6th October, 2007 of the Ministry of Finance, Department of Revenue, providing refund of Service Tax paid by exporters on services provided by an Insurer, Technical Testing and Analysis Agency, Inspection and Certification Agency.<br>
<br>
The Notification No.40/2007 Service Tax dated 17th September, 2007 of the Ministry of Finance, had earlier provided refund of Service Tax paid by exporters on Port Services provided for export, services of transport of export goods by road from ICD to port of export by Goods Transport Agency and services of transport of export goods in containers by rail from ICD to port of export. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the refund has not been provided on a number of other important services on which Service Tax is being paid by exporters but they are still outside the preview of the Notifications, only limited relief to the exporters. The relief is limited to few services and therefore, very much short of our expectations as well as recommendations earlier announced by the Ministry of Commerce. It also does not neutralize the adverse impact of sharp appreciation in the value of rupee of over 11 percent which has seriously eroded the profitability of exporters.<br>
The Government's policy has been not to export taxes and duties but only goods and services. Charging Service Tax on exports leads to export of taxes which should be exempted in full.The Commerce Ministry has been advocating neutralizing the entire Service Tax paid by the exporters. The Government should therefore, provide complete exemption to exporters from payment of service tax on all services including banking charges, couriers services, commission to foreign agents, foreign traveling expenses and participating in overseas trade fairs, charges to <st1:stockticker w:st="on">CHA's and Advertising Service charges, etc.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">GEA would therefore again request the Government to exempt exporters from the payment of Service Tax on all export related services so that exporters need not pay the Service Tax and then claim refund so as to avoid unnecessary paper work and procedural delays in availing the benefit.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government may find certain technical hitches in granting the exemption to Exporters as requested above so it is highly recommended by the GEA that the service tax should be factored into the drawback claims made by exporters and the drawback rates should be increased by 5%. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This would eliminate unnecessary paper work and enable the exporters to concentrate on using their energies to compete with our neighbouring countries like <st1:country-region
w:st="on">China</st1:country-region>, <st1:country-region w:st="on"><st1:place
w:st="on">Pakistan</st1:country-region>, Bangladesh etc. who have not been affected by appreciation of their currencies and hence are eating into our orders from foreign buyers with a cascading effect of reducing employment in our factories.”</font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ITAT President was a successful lawyer before joining the Tribunal!</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">How does it matter? We also wonder. But the website of the ITAT says that President Vimal Gandhi's Earning as an Advocate was more than the salary offered to Member, ITAT in 1985 when jointed As Judicial Member.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We really don't know what they are trying to convey. Does it mean that other lawyers who join the Bench were not earning as much as the salary offered to judges. Most often, any lawyer who joins the Bench of a High Court or Tribunal would be earning far more than the salary offered.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a
href="http://itat.nic.in/ITATCMember.htm">http://itat.nic.in/ITATCMember.htm</a> </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"><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></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 color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Expenses on convertible debentures - eligible for deduction till conversion : ITAT</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">THE</font> </b>assessee is in appeal before the ITAT against the order of <st1:stockticker w:st="on">CIT(A), C.III. Mumbai dated 16.11.98 passed for assessment year 1995-96. The first grievance of the assessee relates to confirmation of disallowance of debenture issue expenditure amounting to Rs. 5,21,22,533/- on the ground that it is capital in nature.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Income Tax - <st1:stockticker w:st="on">HUF - interest paid to coparceners - deduction allowed : ITAT</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"><strong> </strong>assessee <ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">HUF has been in existence for the last about 40 years and it is also regularly assessed to income tax. Previously there was a firm viz., M/s <ST1:PERSONNAME u1:st="on"><ST2:GIVENNAME u1:st="on"><st1:PersonName
w:st="on"><st2:GivenName w:st="on">Kedar</st2:GivenName> <ST2:MIDDLENAME u1:st="on"><st2:middlename w:st="on">Nath</st2:middlename> <ST2:MIDDLENAME u1:st="on"><st2:middlename w:st="on">Bishan</st2:middlename> <ST2:SN u1:st="on"><st2:Sn w:st="on">Lal</st2:Sn> which was carrying on the business of pakka arhita of gur and khandsari. The assessee <ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">HUF had deposits with the said firm on which it was getting interest. Besides those deposits the assessee <ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">HUF had also immovable properties including agricultural lands. Partial partitions took place on 5th June, 1971, 31st March, 1970 about the deposits lying with the Partnership firm and of immovable property and agricultural land. Out of deposits of Rs. 3,03,895.14 deposits to the extent of Rs. 3,01,895.14 were apportioned by way of partial partition. These partial partitions were accepted by the AO vide his order dt. 25th January, 1973 and the effect of such partition was given by the AO in completing the assessment of assessee <ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">HUF in Income Tax as well as Wealth Tax Act for the years 1972-73. Thereafter in August, 1974 partial partition took place in smaller HUFs and the said partial partition was also accepted by the AO vide its order dated 1st June, 1976 u/s 171 of the Act. This order was cancelled by the <ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">CIT under the provisions of S.263. However the matter was carried on in appeals and ITAT as well as High Courts had accepted the partitions as valid partitions.</font></p>
<p align="justify" ><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Customs</b> <b> </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Let me not, to the marriage of true minds, admit impediment, <st2:Sn w:st="on">Shakespeare</st2:Sn>'s quote relied upon by Tribunal while allowing appeal</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>THERE</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>is an almost equivalent Hindi saying that goes - Jab <b><font color="#663399">Miya</font></b><font color="#663399"> - <st2:GivenName w:st="on"><b>Biwi</b></st2:GivenName> <st2:Sn w:st="on">Razi</st2:Sn>, <st1:PersonName w:st="on"><st2:GivenName
w:st="on"><b>Toh</b></st2:GivenName><b> <st2:middlename
w:st="on">Kya</st2:middlename> </b><st2:middlename
w:st="on">Karega</st2:middlename> <st2:Sn w:st="on"><b>Kazi</b></st2:Sn></font><st2:Sn w:st="on"></st2:Sn>. (When the bride and the groom agree, what can the pastor do?). The Tribunal chose to place reliance on <st2:Sn w:st="on">Shakespeare</st2:Sn>'s quote though. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case was that the Commissioner of Customs, Mumbai imposed a redemption fine of Rs.15 lakhs in lieu of confiscation of 1540 cartons of 'Topaz' blades held liable to confiscation under Section 113(d) of the Customs Act, 1962 (and released in terms of Tribunal's order dated 16/02/1999) and also imposed a penalty of Rs. 2 lakhs on the appellants. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Duty paid before Show Cause Notice - penalty and interest liable : CESTAT</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>THE</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>speed is catching up. The Tribunal has relied upon a decision of the High Court rendered on 25<sup>th</sup> July, in an order made on 2<sup>nd</sup> of August -because TIOL had reported the High Court order. </font></p>
<p align="justify" style=' text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue is in appeal against the order dated 16.06.2005 made by the Commissioner (Appeals) setting-aside the penalty imposed on the appellant under the order-in-original and holding that no interest was chargeable as was held by the adjudicating authority.</font></p>
<p align="justify" style=' text-align:justify'><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Appellate Commissioner, taking note of the fact that the respondent-assessee had deposited the entire amount of duty prior to the issue of the show cause notice, relying upon the Larger Bench decision of the Tribunal in the case of <st1:stockticker w:st="on">CCE, Delhi vs Machino Montell (I) Ltd., held that, neither penalty was imposable upon the noticees nor interest was chargeable from them. </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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