TIOL-DDT 724 · the untouched capture
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<p><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 724</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br>
22.10.2007<br>
Monday </b></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Delay in issuing Service Tax registration – Board is angry</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems CBEC has come to know that in some cases, there are inordinate delays in grant of service tax registration to new service taxpayers, after submission of completed application. And applicants are asked to furnish irrelevant information. They are also asked to submit documents like income tax returns, copies of contract, balance sheets, etc., which is not required to be done.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board is worried. <b><font color="#663399">Delay in grant of registration not only affects the business of the taxpayer adversely, but also dissuades the potential taxpayers from taking registration and complying with the service tax laws. </font></b><font color="#663399"><strong>Apparantly the field offices are bad salesmen for the Board! </strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So CBEC has directed that it should be ensured that in no case, grant of registration should be delayed beyond the prescribed time and that <strong><font color="#663399">appropriate action should be taken against the officers causing such delays.</font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2007/issueregistration.htm" target="_blank">Dy. No.294/Com(ST)/2007 Dated : September 3, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Foreign Trade Policy – simplification or harassment?</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A regular critical reader of this column, <st1:PersonName
w:st="on"><st2:GivenName w:st="on">Rajesh</st2:GivenName> <st2:Sn w:st="on">Kalla</st2:Sn> wrote in about the simplification or otherwise of the requirement under para 5.3.2 of the Handbook Of Procedure of the HOP of the FTP. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Para 5.3.2 of the HOP</font> </b>has undergone the following changes in the last 18 months. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>1.<font color="#663399"> HOP 2004-2009, dt. 07.04.06</font></b><font color="#663399">:</font> The Authorisation holder shall produce to the <b><font color="#663399">concerned(?)</font></b> Regional authority a certificate from the Jurisdictional Central Excise authority confirming installation of Capital goods at the factory/premises of the Authorisation holder or his supporting manufacturer(s) vendor(s) within six months from the date of completion of imports. <b><font color="#663399">(certificate to be obtained from excise authorities and no mention about spares)</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2.</strong> <b><font color="#663399">HOP 2004-2009,dt.19.04.07:</font> </b>Authorisation holder shall produce to concerned RA a certificate from jurisdictional Central Excise authority or an independent Chartered Engineer (<st1:stockticker w:st="on">CEC) confirming installation of Capital goods at factory premises of authorization holder or his supporting manufacturer(s) vendor(s) within six months from date of completion of imports.<font color="#663399"> <b>(Certificate to be procured either from Excise or Charted Engineer, hence some relief from going to Excise office regularly. Here also, para is silent about importation of spares.)</b></font></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>3. <font color="#663399">Public Notice No.22(RE-2007)/2004-2009,dt.17.07.2007:</font> </b>Authorisation holder shall produce to concerned RA a certificate from Jurisdictional Central Excise authority or an independent Chartered Engineer (<st1:stockticker w:st="on">CEC) confirming installation of Capital goods at factory premises of authorization holder or his supporting manufacturer(s)/ vendor(s) within six months from date of completion of import. In the case of import of spares, the installation certificate shall be submitted by the importer within a period of three years from the date of import. <b><font color="#663399">(Here, certificate to be obtained from Excise OR Charted Engineer and importation of spares comes into picture.)</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>4. <font color="#663399">Public Notice No.54 (RE-2007)/2004-2009, dt 01.10.07:</font></b> Authorisation holder shall produce to the concerned RA a certificate from the Jurisdictional Central Excise Authority, confirming installation of Capital goods at factory premises of authorization holder or his supporting manufacturer(s)/ vendor(s) within six months from date of completion of import. In the case of import of spares, the installation certificate shall be submitted by the Authorisation holder within a period of three years from the date of import. However, in case of units not registered with Central Excise Authorities, the Authorisation holder shall produce to the concerned RA, a certificate from an independent Chartered Engineer confirming the said installation of Capital goods / spares. <b><font color="#663399">(Certificate from “Central Excise only”, other things remaining unchanged) </font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commenting on this latest change <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6155" target="_blank">DDT 712 - 04.10.2007</a></u> had commented, <b><font color="#663399">DDT</font></b> understands that even the mighty Reliance had problems in getting these certificates from the mightier Central Excise Department and had outsourced this job to a consulting firm.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“How Government intelligence came to know within three months that authorisation holder should be deprived of certification from Charted Engineer and they should run from range to division to obtain certificate from Excise authorities”, wonders, Rajesh.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If getting a registration, which can be given in 45 minutes, is delayed as admitted by the Board, God alone knows how and when the certificate can be obtained. <b><font color="#663399">DDT</font></b> learns that a company has outsourced getting these certificates at Rs. 15,000/- apiece. </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Focus market Scheme - Tracking report from goods carrier - proof</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For proof of landing, prescribed in the Aayaat Niryat Form for Focus Market Scheme, “tracking report from goods carrier, evidencing arrival of export cargo to destination Focus Market” shall also be acceptable for grant of Focus Market Scheme benefits for exports made from 1.4.06 till 31.3.2007. </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=47&filename=notification/dgft/2007/dgft07pn071.htm" target="_blank">PUBLIC NOTICE NO. 71 (RE-2007)/2004-2009 , Dated: October19, 2007</a></u></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>FM in <st1:City w:st="on">Oslo – <st1:country-region w:st="on">Norway</st1:country-region> investment in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region>? Poor <st1:PersonName
w:st="on"><st2:GivenName w:st="on">Rich</st2:GivenName> <st2:Sn w:st="on">India</st2:Sn>!</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Minister, Chidambaram starts a three-day visit to <st1:place w:st="on"><st1:country-region w:st="on">Norway</st1:country-region> tomorrow. During the visit, he will hold bilateral discussions with his counterpart, <st1:PersonName
w:st="on"><st2:title w:st="on">Ms.</st2:title> <st2:GivenName w:st="on">Kristin</st2:GivenName> <st2:Sn w:st="on">Halvorsen</st2:Sn>. The two Ministers had met earlier in March, 2007 during the visit of the Norwegian Finance Minister to <st1:country-region w:st="on"><st1:place
w:st="on">India</st1:country-region>. As the main outcomes of the meeting, <st1:PersonName
w:st="on"><st2:title w:st="on">Ms.</st2:title> <st2:Sn w:st="on">Halvorsen</st2:Sn> had indicated the possibilities of the Norwegian pension fund making investment in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region> (out of their corpus of over US$ 320 billion); suggested possibilities for utilizing our technical manpower strength.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">During the visit, the two Ministers are likely to discuss wide ranging issues of mutual interest particularly related to strengthening of bilateral economic ties in the sectors where either India or Norway have some advantage like information technology, Food processing, hydrocarbons, fisheries, shipping & ship building, hydro-electricity, tunnelling and environment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chidambaram will also meet the Governor of the Central Bank of <st1:country-region w:st="on"><st1:place w:st="on">Norway</st1:country-region>, the Norges Bank. <st1:country-region w:st="on"><st1:place w:st="on">Norway</st1:country-region>'s Pension Fund-Global which has a huge corpus of more than US$ 350 billion is being managed by the Investment Management (NBIM) division of the Norges Bank. NBIM is currently registered with SEBI in <st1:country-region
w:st="on">India</st1:country-region> and has started investments in <st1:country-region
w:st="on">India</st1:country-region> from July 2005 and as per SEBI, the purchase value of Norges Bank investments in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region> on 04.10.07 was Rs. 2107 cores ($ 533 million). While GPF-G investment in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region> has crossed half a billion dollar mark in two years time from its registration with SEBI in June, 2005, the figure is only 0.15% of the total corpus of GPF-G. Finance Minister's meeting with Governor of the Norges Bank is very important in this context.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chidambaram is being accompanied by a Business delegation consisting of members of CII and FICCI, CMD of the Punjab National Bank and a representative of Shipping Corporation of <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region>. The Finance Minister is also scheduled to visit the prestigious Noble Institute at <st1:City
w:st="on">Oslo for delivering a keynote address on the topic “<st1:place
w:st="on"><st1:country-region w:st="on">India</st1:country-region>'s Socio-Economic Agenda: Development with Democracy</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Today we also bring you the FM's speech at <st1:place w:st="on"><st1:PlaceName w:st="on">Harvard <st1:PlaceType w:st="on">University, his alma mater, where he said,</font></p>
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<td width=284 valign=top class="Normal"> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on"><st1:place
w:st="on"><b>INDIA</b></st1:country-region><b> IS <st2:GivenName w:st="on">RICH</st2:GivenName> BECAUSE</b></font></p></td>
<td width=284 valign=top class="Normal"> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on"><st1:place
w:st="on"><b>INDIA</b></st1:country-region><b> IS POOR BECAUSE</b></font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its natural resources</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is unable to exploit those resources efficiently and profitably</font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its native entrepreneurial talent</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Many policy and procedural hurdles stand in the way of the entrepreneurs.</font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its young population</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">it is unable to deliver quality education to all its children</font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its traditional systems of medicine and its capacity to adopt modern medicine</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of the weaknesses in the system to deliver basic medical services to rural <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region></font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its strengths in concept and design of programmes</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of lack of accountability and reluctance to punish the wrongdoers. </font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">its people and its businesses save and invest</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of its obsession with outlays rather than outcomes.</font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">its people set great score by values and moral standards</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">of declining standards in public life</font></p></td>
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<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">its people are hardworking, resilient and pragmatic</font></p></td>
<td width=284 valign=top class="Normal"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">often commonsense is devoured by ideology.</font></p></td>
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<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"><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></font></b></font></strong></font></b></font></strong></font></b></font></strong></font></b></font></strong></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>Central Excise </b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Excess interest paid by assessee - refundable; Revenue to pay Rs 10,000 for frivolous appeal : P&H High Court</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>assessee paid interest on delayed payment of duty, @24% instead of 15%. When the mistake was realised, it claimed for a refund of the excess amount. Do you need a High Court to tell you that this amount should have been honourably refunded? <O:P></O:P></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The very <b><font color="#663399">learned</font></b> Assistant Commissioner rejected the claim in the ground that Section 11B pertains to refund of duty and not refund of interest. Suppose it is proved later that the goods were not excisable and the duty paid had to be refunded, will the Assistant Commissioner refund only the duty and not the interest?<O:P></O:P></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The more <b><font color="#663399">learned</font></b> Commissioner (Appeals) concurred with the views of the learned adjudication authority. <O:P></O:P></font></p>
<div align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><O:P></O:P>
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<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"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>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 <strong><font color="#663399">TIOL</font></strong> had reported the High Court order. <O:P></O:P></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue is in appeal against the order 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.<O:P></O:P></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">Collection of blood samples on behalf of principal lab is not Business Auxiliary Service : High Court</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>appeal filed by the revenue challenges order dated 30.08.2006, passed by the Customs, Excise and Service Tax Appellate Tribunal, holding that the services rendered by the assessee respondent do not fall in any of the category specified in the definition of 'Business Auxiliary Service' as per Sub-section 19 of Section 65 of the Finance Act, 1994. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The argument raised by the revenue is that the activity carried out by the assessee-respondent amounted to promotion or marketing of service provided by its principal M/s Speciality Ranbaxy Ltd. has been rejected by the Tribunal. <O:P></O:P></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">Non-competing fee received in sale considerations is revenue receipt - If there is a doubt, Revenue has power to find out real intention of parties ignoring the apparent : ITAT</font></b></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether the non competing fee received in a sale consideration for transfer of ownership of assets is "capital receipt or revenue receipt in nature "for assessment of tax</strong></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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