TIOL-DDT 734 · the untouched capture
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<p><font size="3"><b><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 734</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>
05.11.2007<br>
Monday</b> </font></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Simplified procedure for sanction of refund of unutilized credit/rebate claims in cases of export.</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board had issued a Circular No. 828/5/2006-CX, dated 20.04.2006, aimed at facilitating quick and regular refund of service tax/excise duty to exporters. The procedure for such provisional sanction of refunds is that 80% of the rebate/refund claimed by select categories of exporters is paid within 15 days from </font></p>
<div align="justify">
<blockquote><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) filing of the rebate claim; or </font></blockquote>
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<blockquote>
<p align="justify" style="text-align:justify;"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) filing of document evidencing payment of duty including the periodical return, subject to the claim, prima-facie, being found to be complete and in order. </font></p>
</blockquote>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has received representations from the trade that some field formations are insisting on pre-audit of claims, at the stage of provisional sanction of 80% of the claim.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board now clarifies that as the provisional amount is sanctioned based on a mere preliminary scrutiny of documents, pre-audit is not required in such cases. As it may not be possible to pre-audit a claim within the period of 15 days, insistence on pre-audit would defeat the very purpose of the scheme. It may also be noted that this simplified procedure for sanction of refund/rebate claims has been restricted to select categories of exporters only, having proven track record. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore, it is hereby clarified that the provisional sanction of 80% of the refund/rebate claims is not required to be subjected to pre-audit. However, the balance amount will be paid only after completion of the verification, and other formalities including pre/post audit within 45 days from the date of filing of the claim.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Audit scared field formations are advised accordingly. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/instruct03_07.htm" target="_blank">CBEC's F.No. 268/4/2005-XC-8(Pt) <u>Dated : <st1:date Year="2007" Day="3"
Month="10" ls="trans" w:st="on">October 3, 2007</u> </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Export of goods manufactured under area based exemption and exported to countries other than Nepal and Bhutan</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board's letter dated 8.12.06 clarified that in case of export of goods which are manufactured by availing the specified area based exemption notifications available in Jammu & Kashmir, North Eastern States, Sikkim & Kutch, the rebate of that portion of duty, which is refunded to the manufacturer in terms of these notification, is not admissible in terms of rule 18 of the Central Excise Rules, 2002.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government has amended Notification No. 19/2004-CE(NT), dated 6.9.2004 by Notification No. 37/2007-CE(NT) dated 17.9.2007 to provide that the excisable goods manufactured and cleared by availing the specified area based exemption notifications are not eligible for rebate of duty paid when exported. Consequently, such excisable goods that are cleared from the factory on or after 17.9.2007 will be permitted to be exported only under bond and not under claim of rebate under Notification No. 19/2004-CE(NT) dated 6.9.2004. However, such manufacturers can avail the rebate of duty paid on inputs used in the manufacture of goods exported in terms of notification no. 21/2004-CE(NT). dated 6.9.2004.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is still a lot of doubt whether this is a double benefit or a single denial.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/instruct02_07.htm" target="_blank">CBEC's F. No. 209/11/2005-CX-6 Dated : October 13, 2007 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rebate of Automobile Cess paid on goods exported and payment of Cess on export under Bond</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had earlier clarified that where goods are exported under bond, without payment of duty, the applicable 'Cess' is liable to be paid 'unless it is exempted by a notification. In this regard, references have been received wherein it is stated that as per Order S.O. 247(E) dated 22.03.1990 issued by the Department of Industrial Development, the Automobile Cess is not levied on goods exported. In view of this S.O., it was requested to re-examine the instructions dated 20.03.2007.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the instructions dated 20.03.2007, it was clarified that where goods are exported under bond, without payment of duty, the applicable 'Cess' is liable to be paid unless it is exempted by a notification. S.O. 247(E) dated 22.03.1990 is issued by the Government of India (Department of Industrial Development). This S.O. is also a notification and therefore, it would be covered by word 'notification' used in the Board's letter dated 20.03.2007</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2007/instruct01_07.htm" target="_blank">CBEC's F. No. 262/01/2007-CX-8 Dated : October 8, 2007 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Exemption to fuel supplied for consumption on board a vessel of the Indian Navy</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has exempted Fuels falling under Chapter Heading 2710 manufactured and supplied by Indian Oil Corporation Limited as stores for consumption on board a vessel of the Indian Navy or Coast Guard; or procured by Indian Oil Corporation Limited from any other manufacturer of the said fuels and supplied as stores for consumption on board a vessel of the Indian Navy or Coast Guard subject to the conditions that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.
Indian Oil Corporation Limited obtains registration under rule 9 of the Central
Excise Rules, 2002, with the Assistant Commissioner or Deputy Commissioner
of Central Excise having jurisdiction over the concerned supply point;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. maintains records of receipt and supplies of these fuels; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3.
submits a monthly reconciliation statement to and proves to the satisfaction
of the jurisdictional central excise officer that such fuels have been supplied
as stores for consumption on board a vessel of Indian Navy or Coast Guard;
and</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4.
Failing which Indian Oil Corporation Limited pays the excise duty leviable
on fuels not properly accounted for along with interest.</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2007/etariff07_37.htm" target="_blank">NOTIFICATION No.37/2007-CENTRAL EXCISE Dated :November 1, 2007 </a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>100-year-old
Income Tax assessee</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. F. D. Engineer, aged about 100 years, resident of Secunderabad, Andhra Pradesh filed his Income-tax return on 31st July 2007 and paid due taxes. The Finance Minister of <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region> personally appreciated the unique achievement, congratulated the taxpayer and conveyed his best wishes. On the FM's instructions, Mr. Engineer's tax return was processed out of turn by the Income Tax department on 11.10.2007 and intimation to this effect was handed over to his authorized representative on 12.10.2007. </font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"The Income Tax department wishes him speedy recovery and a long, healthy life", says a Departmental press note.</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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<b><font color="#FF0000">Service Tax</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>ST on Coaching Classes - when language of amending Not 12/2004-ST does not restrict exemption only to standard text books sold, notification cannot be whittled down by Circular - Prima facie case for total waiver of pre-deposit of Rs 2.8 Cr : Tribunal</b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF9966">''<i>CORRECT</i> </font></strong><font color="#FF9966"><b><i>guidance, well planned and consistent hard work lead to a bright future!"</i></b></font><b><i> </i></b>- brags an advertisement of a reputed coaching class splattered on hoardings all across <b><i><font color="#FF9966">aamchi</font></i></b> Mumbai. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yes, even coaching classes have resorted to mindless advertisements in the media - not a single railway compartment or a public transport vehicle or for that matter the costliest and gigantic hoardings have been spared, not to speak of full page colour advertisements in the newspapers. </font></p>
<p align="justify"><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><i>Everything costs - yes, a bomb & sadly you pay for it! </i></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Gone are the days when you learnt what your school teacher taught or for that matter in the after-school tuitions at the teacher's residence & appeared for exams, both internal and the external. We passed our 10 th and 12 th Board exams just like every one else and were proud when we got a first class - distinction was a rarity those days. </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="#FF9966">Sec 80HHC - deductions when there is a loss - word 'or' has been used intentionally and it cannot be substituted with 'and' : ITAT</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>main point raised in this appeal is against the reduction in the claim of deduction u/s. 80HHC. The facts are that the return of income was filed claiming deduction u/s. 80HHC at Rs. 7,38,416/-. During the course of assessment proceedings the Assessing Officer noted that there was a net profit of Rs. 14,54,272/- on total export turnover of Rs. 2,48,26,964/-. The net profit included Duty draw back turnover of Rs. 21,10,298/- and DEPB of Rs. 6,63,942/-. The Assessing Officer on verification of export in Form No. 10CCAC observed that the assessee has Loss on export turnover at Rs. 10,19,985/-. He considered Taxation Laws (Amendment) Act <ST1:METRICCONVERTER u1:st="on" ProductID="2005, in"><st1:metricconverter
ProductID="2005, in" w:st="on">2005, in which amendment has been carried out to section 80HHC. Since the assessee's export turnover was below Rs. 10 Crores and there was loss on the total export turnover, he noted that the assessee was entitled to set off of 90% of any one of the export incentives specified u/s. 28(iiia) to (iiie) as per the 5th proviso to sub-section (3) of Section 80HHC. Accordingly, the amount of deduction u/s. 80HHC was scaled down to Rs. 4,39,641/- as against the assessee's claim of Rs. 7,38,420/- </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="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Laptops and Desktops are not one and the same - Acer wins in Supreme Court</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF9966">AS</font> </b>per Section 3(1) of the Customs Tariff Act, any article when imported into <st1:country-region
w:st="on">India</st1:country-region> shall be liable to a duty equal to the excise duty on a like article if produced or manufactured in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region>. Normally this rate is 16%, equal to the domestic excise duty rate.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether or not any article is subjected to duty under the above Section, under Section 3(3) of the Customs Tariff Act, additional duty can also be imposed on the articles imported to counter balance the excise duty leviable on any <b><font color="#FF9966">raw materials, components and ingredients</font> </b>of the same nature used in production of such goods.</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="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>"Wonderful", "Suspense" manufactured without the aid of power - once it is held that the goods manufactured by the appellants were not liable to duty at all, the question of satisfying the requirement of Section 11D does not arise - Tribunal. </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant is engaged in the manufacture of Alcohol based perfumes and other perfumery products and air fresheners. While perfumery products manufactured by them were claimed to have been manufactured without aid of power and hence not dutiable, the air fresheners were dutiable and they applied for Central Excise registration on 29.11.1995 which was granted to them. As the perfumes manufactured by them under the brand 'Wonderful' and 'Suspense' were without aid of power and therefore fully exempted, they intimated the Central excise department vide their letter dated 15.12.1995 about the manufacture of perfumes along with manufacturing process.</font></p>
<p align="justify"><font color="#FF9966" 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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