TIOL-DDT 749 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<html>
<head>
<meta http-equiv=Content-Type content="text/html; charset=windows-1252">
<link rel=Edit-Time-Data href="DDT%20749%20271107_files/editdata.mso">
<style>
<!--
-->
</style>
<link rel=themeData href="DDT%20749%20271107_files/themedata.thmx">
<link rel=colorSchemeMapping
href="DDT%20749%20271107_files/colorschememapping.xml">
<style>
st1\:*{behavior:url(#ieooui) }st2\:*{behavior:url(#ieooui) }
</style>
<style>
<!--
p.MsoNormal
{margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman","serif";
margin-left: 0cm;
margin-right: 0cm;
margin-top: 0cm;
}
a:link, span.MsoHyperlink
{color:blue;
text-decoration:underline;
}
a:visited
{color:purple;
text-decoration:underline;
}
p
{margin-right:0cm;
margin-left:0cm;
font-size:12.0pt;
font-family:"Times New Roman","serif";
}
-->
</style>
</head>
<body bgcolor="#FFFFFF" link=blue vlink=purple lang=EN-IN>
<div class=Section1>
<div>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 749</font><br>
27.11.2007<br>
Tuesday</b> </font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Do Not Call – UCC – RBI instructions</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are all pestered by the UCC - <b><font color="#663399">Unsolicited Commercial Communications</font>. </b>How often you have been told by a sweet voice that you have been <b><font color="#663399">selected</font></b> exclusively for a special loan or card or whatever from some bank!</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reserve Bank of <st1:country-region
w:st="on">India</st1:country-region> in a communiqué, yesterday stated, It is an emerging practice in <st1:country-region w:st="on"><st1:place w:st="on">India</st1:country-region> to engage agents/outsource business operations for the purpose of soliciting or promoting any commercial transactions using telecommunication mode. There is a need to protect the right to privacy of the members of public and to curb the complaints relating to unsolicited commercial communications being received by customers/non-customers, as part of best business practices. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Telecom Regulatory Authority of India (TRAI) has framed the Telecom Unsolicited Commercial Communications (UCC) Regulations for curbing UCC. The regulation envisages that all the telecom service providers would set up a mechanism to receive requests from subscribers who do not want to receive UCC and for this purpose will maintain and operate a Private <b><font color="#663399">Do Not Call List</font></b><font color="#663399">.</font> The Private Do Not Call List will include telephone numbers and other details of all such subscribers. The telephone numbers and area code from this Private Do Not Call List will be updated online by the operators to a National Do Not Call Registry (NDNC) which will be maintained by National Informatics Centre (NIC) and thus the NDNC will have the telephone numbers of all the subscribers all over India who have opted not to receive any UCC. Telemarketers will have to register in the NDNC Registry. The telemarketers would submit online the calling list to the NDNC Registry where the list will be modified/scrubbed by excluding the numbers listed in the registry and the modified/scrubbed list will be online transferred back to the telemarketers for making calls. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department of Telecommunications (DoT) has issued relevant guidelines for telemarketers along with the registration procedure. These guidelines have made it mandatory for telemarketers to register themselves with DoT or any other agency authorized by DoT and also specified that the telemarketers shall comply with the Guidelines and Orders/Directions issued by DoT and Orders/Directions/Regulations issued by Telecom Regulatory Authority of India (TRAI) on Unsolicited Commercial Communications(UCC). TRAI have also clarified that <b><font color="#663399">banks/their Call Centres, while registering themselves as Telemarketers, will be required to give the details of the telephone numbers used for telemarketing. The instructions would be equally applicable to NBFCs</font></b></font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI has therefore advised NBFCs:</strong></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) not to engage Telemarketers (DSAs/DMAs) who do not have any valid registration certificate from DoT, Govt of India, as telemarketers; (ii) to furnish the list of Telemarketers (DSAs/DMAs) engaged by them along with the registered telephone numbers being used by them for making telemarketing calls to TRAI; and </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) to ensure that all agents presently engaged by them register themselves with DoT as telemarketers .</font></p>
<p ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbindmc.htm" target="_blank">RBI/2007-08/193-DNBS.PD/ C.C No.109/03.10.001/2007-08 - Dated: <st1:date
ls="trans" Month="11" Day="26" Year="2007" w:st="on">November 26, 2007</a></u></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Reversal of Cenvat Credit amounts to not taking credit. A Gracious Board bows to <ST2:STREET u1:st="on"><ST2:ADDRESS u1:st="on"><st1:Street
w:st="on"><st1:address w:st="on">Apex Court</ST2:ADDRESS></ST2:STREET> –<ST2:STREET u1:st="on"><ST2:ADDRESS u1:st="on"> Public <ST2:STREET u1:st="on"><ST2:ADDRESS u1:st="on">Circular issued </font><ST2:STREET u1:st="on"><ST2:ADDRESS u1:st="on"></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please recall yesterday's DDT on the subject, wherein it was mentioned, </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, as this column has been repeatedly mentioning, Board is terribly shy of making public its good deeds. This is an amendment to a circular and should have been properly issued as a circular. But this is contained in a Private letter from the Board to the Chief Commissioners. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Or is it that the board wants this information to be known only to the departmental officers and not to the industry, for whose benefit this clarification has been given. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are informed by an officer that the Circular had been issued.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT is grateful that the Board has issued a public circular and made it public and we regret the lapse.</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/excircular858.htm" target="_blank">CBEC Circular <u>No. 858/16/2007-CX</u> dated 8<sup>th</sup> Nov 2007. </a></font></p>
<p align=center ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:stockticker w:st="on"><b><font color="#006600">RTI – CBEC tones down rank of CPIO</font></b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently, the CBEC like other Government Departments is not very happy with the Right To Information Act and its clumsy procedures, whereby senior Departmental officers are made to waste their time appearing before ordinary members of the Central Information Commission. So now, they have found out an easy way. Now the CPIO is an Assistant Commissioner/Deputy Commissioner and the appellate authority is the JC/AdC. So an appeal against the JC's refusal to part with the information will lie to the CIC. The Chief Information Commissioner is of the rank of Cabinet Secretary/ <st1:stockticker
w:st="on">CEC/Supreme Court Judge and now the CBEC wants the JC's order to be heard by such an eminently high Authority – just to protect the Commissioners and Chief Commissioners from the ire of the CIC. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The ideal situation would have been to make the Sepoy as CPIO and a tax assistant as the appellate authority – that way exalted senior officers like AC and JC too could have been also spared of the inconvenience of answering stupid questions from the citizens who are your real masters! </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6423" target="_blank">See our Breaking News for more details.</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>MOUs with foreign countries – give the PM breathing time - CabSec</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName w:st="on">Cabinet Secretary <st2:GivenName w:st="on">KM</st2:GivenName> <st2:Sn w:st="on">Chandrasekhar</st2:Sn> (who was our Revenue Secretary till recently) has written to all Secretaries that proposals for MOUs with foreign governments are received for approval of the Cabinet/Cabinet Committee/ PM at the last minute,. Just before the visit of the foreign dignitary.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the visits of the foreign dignitaries are planned well in advance and as such international agreements require careful examination, the Cabinet Secretary shall be grateful if the Secretaries put in place a mechanism whereby such proposals get placed before the cabinet in time obviating the need for rushing such proposals at the last moment.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is certainly not easy to be Cabinet Secretary!</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/cabinet.pdf" target="_blank">Cabinet Secretary's letter</a></font></p>
<p align=center ><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Malaysia
wants cut in Customs duty on palm oil</b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You think <st1:country-region w:st="on">Malaysia</st1:country-region> is a small country compared to <st1:country-region w:st="on">India</st1:country-region> but according to <st1:PersonName w:st="on">Commerce Minister <st2:GivenName
w:st="on">Kamal</st2:GivenName> <st2:Sn w:st="on">Nath</st2:Sn>, <st1:place w:st="on"><st1:country-region
w:st="on">Malaysia</st1:country-region> ranks as the 23rd largest overall investor and the second largest investor from ASEAN with a total foreign direct investment (FDI) inflow 142.98 million dollars during the period August 1991 to July 2007. <st1:country-region
w:st="on">India</st1:country-region>'s exports to <st1:country-region w:st="on">Malaysia</st1:country-region> during 2006 - 07 stood at 1.3 billion dollars and imports from <st1:country-region
w:st="on"><st1:place w:st="on">Malaysia</st1:country-region> stood at 5.3 billion dollar. A recently concluded Joint Study has indicated that the two countries could catapult bilateral trade to 16 billion dollars by 2012.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:country-region w:st="on">India</st1:country-region> imports about three million tons of palm oil and its variants annually, mainly from <st1:country-region
w:st="on">Malaysia</st1:country-region> and <st1:place w:st="on"><st1:country-region
w:st="on">Indonesia</st1:country-region>. <st1:place w:st="on"><st1:country-region
w:st="on">Malaysia</st1:country-region> accounts for roughly half of the world's total palm oil output of around 28 million tons. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rafidah Aziz, Malaysia's Minister of International Trade wants India to cut customs duty on import of palm oil.</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></b></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="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Capital gains made from immovable property in Malaysia is not taxable in India under DTAT- Review petition filed after about three years dismissed on limitation as well as merits – Supreme Court </b></font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2004, the Supreme Court in <i>COMMISSIONER OF INCOME TAX Vs PVAL KULANDAGAN CHETTIAR (DEAD) THROUGH LRS </i><b>- <a
href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2004/2004-TIOL-61-SC-IT.htm">2004-TIOL-61-SC-IT</a> </b>held that Capital gains made from immovable property in <st1:country-region
w:st="on">Malaysia</st1:country-region> is not taxable in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:country-region> under DTAT. The <st1:stockticker w:st="on">CIT was aggrieved but not well within time. He filed a review petition after a lapse of 1027 days. Maybe it was the height of hope that the Commissioner believed that a delay of more than a thousand days will be condoned and that too without explaining the delay. Even on merits, the Supreme Court did not find any ground to entertain the petition and dismissed the same.</font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who will bear the costs of such frivolous litigation? </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF9966">Tax paid by employer on behalf of expatriate employees - Is it taxable perquisite? - Tribunal says it is 'pay' and same is defined as 'salary' under Rule 3 of Income Tax</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LET's</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> begin with the presumption that you are a salaried employee and your employer pays the tax on your behalf. Now the bone of contention is that whether the income tax paid on your behalf by your employer is a part of your 'salary' under Rule 3 of the Income Tax Rules? Can it be called a perquisite taxable under Sec 17(2)? While deciding the case against the Japanese major M/s Mitsubishi Corporation, the Tribunal has held that the <b><font color="#FF9966">tax payment by the employer is nothing but 'pay' which is defined as 'salary' under Rule 3 of the Income Tax</font>.</b> And it further added that the dictionary meaning of the word "pay" includes all periodical payments for services rendered and, therefore, the words "salary" and "pay" would include tax paid by the employer on behalf of the employee within their ambit.</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="#FF9966">ST paid on outward transportation - Liquid Oxygen, Nitrogen and medicinal gas delivered in transport vehicles maintained at sub-zero temp - Cenvat Credit prima facie doubtful - Tribunal orders pre-deposit</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> the case of India Cements Ltd. <strong>[</strong><a
href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-1248-CESTAT-BANG.htm">2007-TIOL-1248-CESTAT-BANG</a><strong>] </strong>the issue was whether Cenvat credit can be taken on the Service Tax paid on goods transport services availed by the appellants for the transport of the final products from the place of removal to the place of destination viz., the buyers premises, for payment of duty on final products, treating the above services as 'Input Service '. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After elaborately going through definition of Input Services given in Rule 2(1) of the CCR, 2004, the Tribunal came to the conclusion that the transportation from the factory to the destination of the buyer becomes an 'outward transportation' & accordingly in terms of Rule 2(1)(ii) [First limb], this service becomes an 'Input Service' meaning to say that credit was available. The decision of the Commissioner of Customs and Central Excise, Tirupati in denying Cenvat credit on the Service tax paid in respect of outward transportation from the place of removal to the buyer's premises was, therefore, held to be incorrect. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, since this view was at variance with the interpretation carried by the co-ordinate Bench of Tribunal in the case of Gujarat Ambuja Cement <strong>[</strong><a
href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2007/2007-TIOL-539-CESTAT-DEL.htm">2007-TIOL-539-CESTAT-DEL</a><strong>]</strong>, the matter was referred to the Larger Bench for resolving the issue. </font></p>
<p align="justify" ><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF9966">Now can the Tribunal order pre-deposit when the matter is <i>sub-judice </i>before the Larger Bench? But then in this case, the above decisions were not apparently brought to the notice of the Tribunal.</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Moral: If you want to win cases log on to TIOL! </b></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="#FF9966">Manufacturer is entitled to Cenvat Credit of Sugar Cess paid on the imported raw sugar – CESTAT</font></b></font></p>
<p align="justify" ><font color="#FF9966" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHY</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>sugar cess should be denied in the first place? Let us have a look at the relevant provisions of the Cenvat Credit Rules. Rule 3 specifies various duties which the manufacturer or the Service provider can take as input credit. The list includes the <st1:stockticker w:st="on">CVD paid on the imported goods equivalent to duties specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via) of Rule 3(1). These seven types are respectively, Excise duty ( under first and second schedules of the CE Tariff) <st1:stockticker w:st="on">AED under Textiles and Textile articles Act, <st1:stockticker w:st="on">AED under Goods of special importance Act, NCCD, Education Cess and Secondary Education Cess.</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>
</div>
</div>
</body>
</html>