TIOL-DDT 744 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 744</font><br> 20.11.2007<br> Tuesday</b> </font></p> <p align="center" ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anti Dumping Duty on acrylic fibre – resurrection? </b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Anti Dumping Duty on acrylic fibre originating in, or exported from, USA, Korea RP and Thailand was imposed by Notification No. 106/2002-Customs, DATED : October 9, 2002. This has expired on 8<sup>th</sup> October 2007.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGAD had initiated, on 8<sup>th</sup> October, 2007, review in the matter of continuation of anti-dumping duty on acrylic fibre, originating in, or exported from Korea RP and Thailand. That is, the review was initiated on the date of death of the notification. And this review did not include imports from USA. The DG has not so far concluded the review and has asked for extension of anti-dumping duty on import of acrylic fibre, originating in, or exported from Korea RP and Thailand for a period of one year <b><font color="#663399">from the date of its expiry</font></b>, in terms of sub-section (5) of section 9A of the said Customs Tariff Act, pending the completion of the review. </font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>But shouldn’t this be done before the expiry date?</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anyway, Government has obliged the Designated Authority and extended the validity of the notification till 8th October, 2008.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What about the period from 9.10.2007 to 15.11.2007, when there was no anti dumping duty on this product? </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should the importer pay for the lethargy of the government?</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the extended date is not applicable to imports from USA.</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_113.htm" target="_blank">NOTIFICATION NO 113/2007-Cus., Dated: November 16, 2007</a></u></font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Issue of Custom House Agent Licence – Board clarifies </b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has clarified that:-</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Regulation 4 of CHALR, 2004, provides the process of issue of CHA licences in detail and is a continuous step-by-step process. The regulations do not provide for a split up process of grant of CHA license by first inviting through Public Notice for appearance in the examination and subsequently, a separate notice for grant of CHA license to those qualified in examination. All Commissioners of Customs shall issue only a single Public Notice inviting applications for grant of CHA licenses which shall provide details regarding examination, conditions etc. as detailed in Regulation 4 to 8 of the CHALR, 2004.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.<font color="#663399"> <b>Concerned(?)</b></font><b> </b>Commissioners of Customs shall issue CHA licences to all those applicants who had passed the Regulation 9 examination conducted under CHALR, 2004, subject to their fulfilment of the requisite conditions as mentioned in CHALR, 2004. </font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board desires that the Commissioners of Customs shall clear up backlog of pending requests by various applicants who had qualified as per CHALR, 2004, for issue of licenses which have been held up by various Customs Commissionerates within a month and send a compliance report to the Board.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Can the Board inform the public, how many Commissioners have submitted their compliance reports?</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should we have the Custom House Agents at all? Are the Customs procedures so complicated that nobody can a file a Bill Of Entry without the help of a CHA?</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=25&filename=notification/custom/2007/cusinsfile07_502.htm" target="_blank">CBEC F. No.</a></u> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2007/cusinsfile07_502.htm"><u>502/ 5 / 2005-Cus.VI Dated: 31st October, 2007.</u></a></font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Agony at Air Customs</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A 28 year old foreign woman with little knowledge of English lands up in a foreign airport after 24 hours of flying and is stuck in the Customs lounge. "I was sleepy, I was so hungry and I was cold and I was thirsty and there are no restaurants in customs.", she said."It was a different country, a different language, everything was so different and it was very stressing."</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Meanwhile, her uncle was waiting patiently in the international arrivals lounge, worried for hours. The only information he could get about his niece was by a telephone hotline near the immigration office, which was closed that day, a Sunday. He said the operator, whose tone he described as aggressive and unhelpful, told him it typically takes two to four hours to clear customs. "She was very aggressive, really, really unhelpful, not polite, and she gave me misleading information."</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He eventually reported his niece missing to a customs office, worrying she had been kidnapped. An officer offered to check the waiting room, where he found the lady still waiting for her turn, a small act of kindness for which the uncle remains grateful. "He was a great guy, a great man, very helpful," he said. "I told him I would never forget him."</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finally, more than seven hours after she arrived, she left with her uncle.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, this did not happen in India but was the harrowing experience of an Iranian woman on her arrival in Canada as reported by <a href="http://www.canada.com">www.canada.com</a> </font></p> <p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Latest Advance Ruling may impact billion-dollar Vodafone takeover case</b></font></p> <p align="justify" ><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>In tune with our tradition of bringing you the latest, today we bring you a ruling of the AAR that is bound to shake the Indian economic scene – a Ruling that was made available only yesterday – only TIOL and you have access to it, as of now.</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">TAXING</font> </b>capital gains has always been a tricky subject for the Revenue. If it ever involved two non-resident entities, it always proved to be a much trickier and harder nut to crack. Then came the insertion of the most crucial clause in the statute - <b><font color="#663399">the situs of the capital asset, a step to iron out the hiatus in the relevant provisions of the Income Tax Act. </font></b>This was designed to take care of the transactions between two non-residents over the capital assets situated in India.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And this is what can be seen as the decider in the latest case decided by the Authority for Advance Ruling. A ruling was sought by a non-resident purchaser of the shares sold by another non-resident share-holder in a JV located in India. And what the Authority has held is going to be of <b><font color="#663399">far-reaching consequences for many high-value cases like the Vodafone. It said that since the situs of the capital assets, the shares in the Indian JV, happen to be India, no matter where does the deal take place, the profits and gains arising out of the deal will come within the ambit of Sec 9(1)(i), and will be assessable under the head 'capital gains' u/s 45(1).</font></b></font></p> <p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6389" target="_blank">Please see our <u>Breaking News</u>. </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<span class="style4"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><strong><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></strong></b></font></b></font></span></b></font></p> <p align="justify" ><font color="#FF3366" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Sales Tax</b></font></p> <p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Repacking of Palmolive oil into smaller packages amounts to manufacture under sales tax law, more so when the certificate was issued by the Authorities - Central Excise law is not relevant – Supreme Court</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Assessee is a Small Scale Industry certified as such by Director of Industries, Government of Pondicherry. The said certificate specifically provided that the Unit of the Assessee was exempted from payment of Sales Tax for five years vide G.O.Ms.No.15/74/FIN (CT) dated 25.6.1974. It is obvious that thereafter this tax holiday was extended from time to time. The Assessee is also registered as a Small Industrial Unit and is certified as such by the Director of Industries by his order dated 9.3.1989. The Assessee purchases Palmolive Oil in bulk and packs the oil in small packages for the purpose of selling in retail and this packing of Palmolive Oil is done in the small industrial unit of the Assessee. </font></p> <p align="justify" ><font color="#FF3366" 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="#FF9966">Can repacking from bulk into retail packs change classification of product – Tribunal finds prima facie case in assessee's favour – orders remand to Commissioner(A) for fresh decision on merits.</font></b></font></p> <p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>M/s</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b> </b>Indian Oil Corporation Ltd. were clearing “Servo 2T Supreme” in bulk to the appellants for repacking into retail packs by classifying the bulk product under Chapter Heading 27.10 and discharging duty liability under the said heading. The case of the department against the appellants is that the product falls for classification under Chapter Heading 34.03 and duty liability is to be discharged on the retail packs (repacking from bulk into retail packs) under heading 34.03.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Against the confirmed demand of Rs.34.44 lakhs & an equivalent penalty for the alleged offence committed during the period 1.11.2000 to 30.09.2005, the company packaged its appeal and went before the Tribunal along with a Stay application.</font></p> <p align="justify"><font color="#FF3366" 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">Mere addition agreed to by the assessees during the course of Survey u/s 133A would not empower Assessing Officer to levy the penalty: Madras High Court</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>assessees were the Directors of M/s Hotel AMS Pvt. Ltd., Kondalapatti, Salem. During the course of survey conducted on 16.11.1999 under Section 133A of the Income Tax Act, it was noticed that the company had constructed the hotel with the share capital funds said to have been floated by the Directors. On enquiry with the assessees, the assessees offered a sum of Rs.12,00,000/- as income, out of which Rs 2,00,000/- each in the name of the assessees and remaining in the name of other members in Hindu Undivided Family. The assessees also admitted that there was no source for share capital and their share in the construction amounting to Rs.2,00,000/- each can be taken as unexplained investment. The assessees filed return of income on 21.9.2001 admitting the income of Rs 2,80,000/- each. However, when notice under Section 148 was issued on 16.10.2001, return was filed admitting additional income of Rs 2,00,000/- each as their unexplained income. In the Section 143(3) proceedings made on 26.3.2003, the unexplained investment of Rs.2,00,000/- was treated as additional income and penalty proceedings were initiated for concealment of income and furnishing of inaccurate particulars. Thus orders were passed on 26.9.2003 one against M.Pachamuthu and other against Balavenkatesan, the brother of the former imposing penalty of Rs.37,400/- each under Section 271(1)(c) of the Act. The assessees being aggrieved by the same preferred appeals before the Commissioner of Income Tax (Appeals), who allowed the same and the department preferred appeals before the Income Tax Appellate Tribunal have also been dismissed not on merits but with reference to the tax effect involved in the case.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF3366">Anti Dumping </font></b></font></p> <p align="justify"><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Anti-Dumping - Is the Designated Authority, if called upon to do so, obliged to carry out what is commonly known as a "sunset review" or can it decline to do so? - Who is to conduct the review? What is really the need for conducting a review? Is a sunset review mandatory? Delhi High Court answers</b></font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Petitioner and others jointly petitioned the Designated Authority alleging that ferro alloys originating in or exported, inter alia, from China and Russia are being dumped in India. It was requested that the Designated Authority may initiate investigations into the allegations and impose anti-dumping duties under the Act.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Designated Authority decided to initiate anti-dumping investigations concerning the import of Ferro silicon originating in or exported from Russia and China. Consequently, an Initiation Notification dated 5th June, 2000 was issued to determine the existence, degree and effect of the alleged dumping of the subject goods originating in or exported into India from the subject countries.</font></p> <p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After conducting its investigations, the Designated Authority notified its Preliminary Findings that Ferro silicon originating in or exported from Russia and China has been exported into India below the normal value resulting in dumping. The domestic industry has suffered injury caused by imports from China and Russia.</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> </body> </html>