TIOL-DDT 756 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 756</font><br>
06.12.2007<br>
Thursday</b></font></p>
<p></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:PersonName
w:st="on"><st2:GivenName w:st="on"><b><font color="#006600">Amitabh</font></b></st2:GivenName><font color="#006600"><b> <st2:Sn
w:st="on">Bachchan</st2:Sn></span></b></font></st1:PersonName><font color="#006600"><b>'s smuggled goods - If plagiarism is the
best form of flattery - we can be proud! </b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"If music be the food of love, play on",
said the Bard and if plagiarism is the best form of flattery, we in <strong>TIOL</strong> can
justifiably be proud of the flattery heaped on us. Our editorial on 4<sup>th</sup> December
highlighted the fact that the Bachchans had walked
through the green channels of Air Customs without paying customs duty amounting
to over Rs. 35 lakhs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All major news channels and newspapers carried
the story more than 24 hours after we informed the Nation that Amitabh Bachchan and his son had
actually owned up evading Customs Duty and even paid up the duty - and not
a channel, not a newspaper had the grace to acknowledge the story to <strong>TIOL</strong>!
In fact the great Times of India carried the same picture of the Bachchans that we did! Reporting has become so easy - just
pick it up from some website which does all the work!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">My colleague who helped me in writing the story on the Madras High Court judgement in the Income Tax 40a(1a) story was aghast on seeing the story verbatim in another site. Only he and I know how many hours we spent in making that story and all that somebody had to do was just copy and paste it in his site!</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently we had carried a report of the Chennai Customs arresting a poor pax for carrying gold ornaments valued at less than Rs. 2 lakhs in his rectum for the fear of Sri Lanka Customs. And the Bachans could walk away with about a Crore of Rupees of imported goods and not a whimper! </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Member of the CESTAT in a speech we carried recently mentioned,</font></p>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>1. Laws are
spider webs through which the big flies pass and the little ones get
caught. </i></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>- <st2:Sn w:st="on">Balzac</st2:Sn></i></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>(1799-1850)</span></i>
</font></p>
<font size="2" face="Verdana, Arial, Helvetica, sans-serif">
</p>
<i>2. Laws are like cobwebs, for any trifling or powerless things falls into them, they hold it fast; but if a thing of any size falls into them it breaks, the mesh and escapes. </i></font>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i>- Anacharsis
(600 BC) </i></font></p>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And
the <st1:PersonName
w:st="on">Lady <st2:Sn w:st="on">Bachchan</st2:Sn></st1:PersonName> was angry
that the Service Tax Department asked her family a few questions!</span></font></p>
<p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2">Steps Taken To Solve Problems Of Textile Industry </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Level Committee on Manufacturing (HLCM) under the Chairmanship of the Prime Minister, while considering the Action Plan of the Ministry of Textiles for the growth of textile industry, decided that the Ministry of Finance, in consultation with the Ministry of Textiles and the National Manufacturing Competitiveness Council (NMCC), would expeditiously consider the fiscal proposals required for the textiles sector. This information was given by the Minister of State for Textiles, <st2:GivenName
w:st="on">Shri</st2:GivenName> <st2:middlename w:st="on">E.V.K.S.</st2:middlename> <st2:Sn w:st="on">Elangovan</st2:Sn>, in the <st1:PersonName w:st="on"><st2:GivenName
w:st="on">Rajya</st2:GivenName> <st2:Sn w:st="on">Sabha</st2:Sn></st1:PersonName> yesterday, in a written reply. Consequently, the Government announced a set of measures in July, 2007 to provide relief to exporters by way of accelerated reimbursement of dues to exporters, reduction in the interest rate on pre-shipment and post-shipment credit and revision in drawback rates and Duty Entitlement Pass Book (DEPB) rates. In addition, the Government has also notified exemption of certain service tax in respect of exporters, the Minister added. </span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Minister further informed that a meeting was recently taken by the NMCC with the officials of Ministry of Finance, Ministry of Commerce & Industry and Ministry of Textiles, where representatives from Textiles industry associations were also present, on issues relating to restoring competitiveness in the Textiles & Garment Sector. Finance Minister also took a meeting with the Textile industry along with the officials of the Ministry of Textiles, the NMCC and the Ministry of Finance. The Government has announced a relief package in November, 2007, which reduces basic Customs Duty on certain items relating to textiles sector. Refund of service tax paid by exporters on taxable services linked to exports has been further extended. A support package for providing relief to export sectors, like Textiles, which have low import intensity, was also announced through additional subvention of 2% in pre-shipment and post-shipment credit to the textiles including Ready Made Garments and carpets but excluding man-made fibre. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Minister also informed that some new initiatives taken by the Government for the growth of textile sector, inter alia, include creation of Investment Regions to consolidate the phenomenon of agglomeration, visible in textiles to further reduce transaction costs and enhance competitiveness; launching of Manpower Development Scheme - known as the "Neighbourhood Apparel & Textile Training Institutes for Job Assurance (NATIJA)" - for establishing a network of employment-linked training facilities to meet the projected demand of 4 million trained workers over the next 5 years; and to revitalize handloom cooperatives on the pattern of agricultural cooperatives. Necessary action in this regard has since been initiated in consultation with the Planning Commission, Ministry of Finance, etc.</font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">How much Governance can we really afford?</font></b></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There appears to have been a fundamental
shift in American thinking over the last half century. <st1:PersonName w:st="on"><st2:GivenName
w:st="on">Tom</st2:GivenName> <st2:Sn w:st="on">Brokaw</st2:Sn></st1:PersonName>'s "The
Greatest Generation" admires the self-reliant ambition of the people
who returned from the Second World War to build the greatest economy the
world has ever seen. These entrepreneurs took charge of their own future
and built businesses that profited owners and workers alike -- with the result
that the average "poor" of today lives as well as the middle class
of that generation. </span></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But this appears to be changing. Many of us no longer look to the business world and our own initiative to provide for our needs. Instead, we look to the government. We have become risk-averse, wanting guarantees that our retirement, our job security, our health care, and all the needs of our poor will be taken care of by the government. In return, we seem willing to give up our personal freedoms and pay exorbitant taxes. Unfortunately, this dream of government being able to provide for our needs is an illusion -- something that, in the final analysis, simply doesn't work. </font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our founders understood that individual freedom, the rule of law, and the ability to own private property are the key to a prosperous and civilized society. History's lesson, from ancient <st1:country-region w:st="on"><st1:place w:st="on">Greece</st1:place></st1:country-region> to today, is that people who give up their freedoms for the "common good" are starting down the slippery slope to tyranny. </span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But after <st1:place
w:st="on">Eastern Europe</st1:place>'s devastated economy was fully revealed, these countries quietly shelved their plans in favor of free markets. The result has been the explosion of countries like <st1:country-region
w:st="on">China</st1:country-region> and <st1:country-region w:st="on"><st1:place
w:st="on">India</st1:place></st1:country-region> into the global economy. They are shedding government controls while we are moving in the opposite direction.</span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ownership of property is the incentive that drives people to generate wealth. It's when you know you can improve your life by owning the home you want, the car you like, and the clothes you desire to wear that it becomes worthwhile to work hard. If you are only working so you can give your money to the government for redistribution, what's the point? And people take better care of what they own. Low-income housing projects around the world prove the point. When governments make it possible for people to own their own homes, they are well cared-for. Government owned properties are not.</font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But back to the initial question: Where are we headed? Let's look at an example. Swedish citizens face a top personal income tax rate of about 57 percent. A payroll tax is also levied, with the employee paying a 10 percent tax and the employer paying 32.28 percent. Wealth is taxed, as are capital gains. And, if a taxpayer has any disposable income left after paying these taxes, the value added tax (sales tax) is 25 percent. The expansion of the welfare state has badly undermined <st1:country-region w:st="on"><st1:place w:st="on">Sweden</st1:place></st1:country-region>'s competitiveness. "Real" unemployment -- including government programs for unemployed persons -- has been estimated by various sources at 15 percent to 20 percent. Is this the future you want here?</span></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We really don't know the source of this interesting information sent to us by a concerned Netizen!</font></p><p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Jurispruden</b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="5">tiol</font><font color="#006600">- Tomorrow's cases</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><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></b></font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399"></font></b><font color="#663399"><b>Narcotics - but universally applicable </b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:stockticker w:st="on"><b><font color="#FF6633">DRI</font></b></st1:stockticker><font color="#FF6633"><b> loses a narcotics case because the officer receiving the information did not record it in writing - An officer who received such information was bound to reduce the same in writing and not the person who hears about it. NDPS Act is a penal statute. It invades the rights of an accused to a large extent. A right to be left alone is a right which would fall under Article 21 of the Constitution - An authority cannot be given an untrammelled power to infringe the right of privacy of any person - while a hotel may be a public place a room in the hotel may not be - Supreme Court</b></font></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#000000">An authority cannot be given an untrammelled power to infringe the right of privacy of any person. Even if a statute confers such power upon an authority to make search and seizure of a person at all hours and at all places, the same may be held to be ultra vires unless the restrictions imposed are reasonable ones. What would be reasonable restrictions would depend upon the nature of the statute and the extent of the right sought to be protected. Although a statutory power to make a search and seizure by itself may not offend the right of privacy but in a case of this nature, the least that a court can do is to see that such a right is not unnecessarily infringed. Right of privacy deals with persons and not places.</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399"></font></b><font color="#663399"><b>Customs </b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><st1:stockticker w:st="on"><b><font color="#FF6633">DRI</font></b></st1:stockticker><font color="#FF6633"><b> wins major case of Customs valuation - value of refurbished parts imported for maintenance of power plant should include the value of used parts sent back to the supplier under Rotable exchange programme.</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b></b>In a significant case booked by <st1:stockticker
w:st="on">DRI</st1:stockticker>, involving revenue of nearly four Crores on valuation issue, the CESTAT has upheld the demand. The case relates to demand of customs duty on parts supplied by an overseas company under an agreement for maintenance of power plant in <st1:country-region
w:st="on"><st1:place w:st="on">India</st1:place></st1:country-region>.</span></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399">Income Tax </font></b></font></p><p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income on rigs hired to ONGC taxed but AO refuses to allow depreciation on the rigs as ownership is not proved; The onus to prove the apparent as not real is on the person who so alleges. Directors of two companies having the same surname does not prove any relation - ITAT</b></font></p><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee is a company engaged in providing various services to ONGC/OIL etc. such as short hole-drilling seismic data acquisition, deep well drilling, work over services, mud logging services, reservoir data acquisition services etc. In the course of assessment proceedings for the A.Y. 2001-2002, the AO noticed that there were additions to the assets in the form of purchase of two numbers 50 tonne work over rigs of IDECO make for a total consideration of Rs.375 lakhs. In support of the claim for depreciation the assessee filed a copy of the MOU entered into by the assessee with a company by name Assam Valley Logistics P.Ltd. ('<ns1:ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">AVL</ST1:STOCKTICKER></st1:stockticker>') dt. 15.4.2000. M/s <ns1:ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">AVL</ST1:STOCKTICKER></st1:stockticker> claiming to be the legal and constructive owner of the rigs agreed to sell the same to the assessee for a consideration of Rs. 375 lakhs. The rigs were at Ahmedabad at the time of the MOU and the assessee was to take delivery of these rigs from the site in which they were lying in Ahmedabad. On 23.5.2000 <ns1:ST1:STOCKTICKER u1:st="on"><st1:stockticker
w:st="on">AVL</ST1:STOCKTICKER></st1:stockticker> had raised an invoice for Rs. 375 lakhs in respect of the rigs. On the very same day there has been a delivery challan singed by <ns1:ST1:STOCKTICKER u1:st="on"><st1:stockticker w:st="on">AVL</ST1:STOCKTICKER></st1:stockticker> handing over delivery to the assessee. The details of the rigs and its accessories have also been given in the annexure to the delivery challan. The assessee had acknowledged taking delivery of the rigs in the goods receipt note. The trailers were taken delivery by the assessee from the site at which they were lying to the site of ONGC at Ahmedabad. The assessee had engaged the services of one Global Transport Company P.Ltd. and paid them a sum of Rs.80,000/-. During the P.Y. the rigs were given on hire to M/s ONGC Ltd who have paid a sum of Rs.1,73,90,076/- as hire charges to the assessee. In respect of the payment M/s ONGC had also deducted tax at source. The assessee made payments to <ns1:ST1:STOCKTICKER u1:st="on"><st1:stockticker w:st="on">AVL</ST1:STOCKTICKER></st1:stockticker> though cheques.</span></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><strong><font color="#663399">See our columns tomorrow for the judgements</font></strong></u></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></span></font></p>
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