TIOL-DDT 764 · the untouched capture
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<p><font size="2"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 764 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
18.12.2007 <br>
Tuesday </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India really shining! It is the best of times. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government's monthly Economic Report for November 2007 paints a rosy picture of India 's fiscal conditions, though the Industrial growth had come down slightly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Exports grew by 20.9 per cent in dollar terms during April-October, 2007. Imports increased by 25.3 per cent in April-October, 2007. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Forex reserves (excluding Gold and SDRs) stood at $256.43 billion at the end of October, 2007. This is over <strong><font color="#663399">ten lakhs Crores</font> </strong>! This was just 1.25 lakh crores in 1999 and you know what it was in 1991! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In terms of value, Fiscal deficit during April-October, 2007-08 decreased by 5.6 per cent over corresponding period last year; Revenue deficit during April-October, 2007-08 was lower by 14.5 per cent over corresponding period last year.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Tax revenue (net to Centre) during April-October, 2007-08 was higher by 25.5 per cent compared with corresponding period 2006-07. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++<strong> <font color="#663399"> 37 Lakh crores of currency is floating around in the hands of the Indian public! (of course this does not include the fake ones)</font> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF0000">It was the age of wisdom, <br>
</font></strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the age of foolishness, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the epoch of belief, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the epoch of incredulity, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the season of light, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the season of darkness, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the spring of hope, <br>
</strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>It was the winter of despair. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are the opening words from “The Tale of Two Cities” by Charles Dickens . Are we in such an age? </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scarp – Increased; Poppy seeds remain stable </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has increased the Tariff Value of imported Brass Scrap from US Dollars 4077 to US Dollars 4205 . Tariff value for poppy seeds remains at 5398 Dollars. There is no change in the Tariff Value of other products too. </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=24&filename=notification/custom/2007/cnt07_122.htm" target="_blank">NOTIFICATION NO. 122/2007- Cus .,( N.T. ), Dated: December 17, 2007 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Continue STPI beyond 2009 – NASSCOM's wish list to FM </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is time to submit your wish list to the FM for your boons in the next budget, though there are many who believe that the Government may not last till the next budget – perhaps a lot depends on Mody-fication of Indian politics. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nasscom has submitted its wish list for the next budget demanding </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Continuation of STPI Scheme beyond 2009 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Broadening the eligibility criteria for Large Tax Payer Unit (LTU) scheme </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Foreign Tax Credits </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Advance Pricing Agreements ( APA ) to provide upfront tax certainty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Refund of service tax paid on services utilised for export of computer software and BPO services. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<strong><font color="#006600">Mobile Gamma-Ray Container Scanning System (MGCSS) – CBEC invites global tenders </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner, Directorate of Logistics, CBEC has invited Global tenders for Supply, Installation, Commissioning and Maintenance of 3 Mobile Gamma-Ray Container Scanning System (MGCSS) for Truck/Trailer Mounted Cargo Containers and other Transport Vehicles as required by the Customs in the ports of Chennai, Kandla and Tuticorin. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The scope of the work shall, inter-alia, include clearance of system through Customs, if required and obtaining the statutory clearances from Atomic Energy Regulatory Board (AERB) and other concerned regulatory agencies such as Regional Transport authority etc on behalf of the Buyer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Pre-Bid conference will be held in the office of the COMMISSIONER, Directorate of Logistics, Customs and Central Excise, 4th Floor, ‘A' Wing, Lok Nayak Bhawan, Khan Market, New Delhi 110003, to answer clarifications if any on the Tender document on <strong><font color="#663399">16/01/2008 </font></strong>. The Bidders are advised to examine the Tender document carefully and if there be or appear to be any ambiguity or discrepancy in the document or any clarifications needed on the Tender documents; these shall be referred to the Commissioner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The completed Tender shall be submitted on or before 1300 Hrs. on <strong><font color="#663399">18/02/2008</font>. </strong>Fax / E-mail / Telegraphic offers shall be considered as invalid and therefore rejected. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The primary objective of this Global Tender is to acquire non-intrusive Container Scanning Systems for scanning of Containers, imported into India or proposed to be exported out of India, so that the system can be utilized as an aid, inter-alia, to detection of violations of Customs Act and other allied laws of other departments of Government of India that are enforced by Customs and during the course of import and export of goods. The main violations of Customs targeted are ‘misdeclaration' and ‘concealment of contraband </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/global.pdf" target="_blank">GLOBAL NOTICE INVITING TENDER (GNIT) No. 02 / 2007 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Vinod Rai is the new auditor for GOI </strong></font></p>
<p align="justify"><font 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><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/guest/vinodrai.jpg" alt="Legal Corner Icon" width="75" height="91" hspace="5" border="0" align="left"></b></strong></b></font></b></font></b></font></b></font></b></font></b>The 1972 batch Kerala cadre IAS officer Vinod Rai is appointed as Comptroller and Auditor General of India , to succeed another IAS officer VIJAYENDRA N.KAUL. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vinod is at present the Secretary in the department of Banking in the Finance Ministry. He is a product of the Delhi School of Economics and Harvard University - a strange coincidence – the FM was also in the same university. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Kerala taxmen seize Ayyappa prasadam – by mistake! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lord Ayyappa with his abode atop the holy hills of Sabarimalai is undoubtedly, the most popular God in Kerala attracting lakhs of pilgrims from all parts of the country. The aravana prasadam distributed in small tins in the temple is divinely sweet! And even the Communist government in Kerala has exempted the consignments meant for the temple, from commercial taxes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But this did not stop a sales tax check post from detaining a couple of trucks carrying the containers for packing the Sabarimalai prasadam. Top officers realised that it was a blunder before they released the trucks. We pray to the Lord to forgive the taxmen! </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Jurispruden</font><font color="#663399" size="5">tiol</font><font size="5"></font><font color="#006600">- Tomorrow's cases</font></b></font></p>
<p align="justify"><font 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><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></b><strong><font color="#663399">Central Excise</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Even when freight actually paid was less than amount collected by way of freight and difference is retained it would still not form part of assessable value : Tribunal by Majority </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL toils and brings you the latest. No, we are not blowing our trumpets. Just that we had told you on the 7th November that the issue was referred to the Third Member as there was a difference of opinion on the issue & today, we carry the Majority decision thanks to the Bench which has disposed of the Revenue's appeal filed in the year 2001 after the matter was referred to the Third Member on 12th October 2007. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A small recap: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The issue involved in this case is regarding the demand of differential duty from the respondent on the ground that they have claimed deductions in respect of freight charges without any documentary evidence. Show cause notices were issued proposing to disallow the deduction claimed in respect of freight charges on the ground that the respondents are unable to produce any documentary evidence that they have actually incurred the same. The adjudicating authority after considering the documents and certificate given by the Chartered Accountant came to the conclusion that the respondents are eligible for deductions of actual average freight charges & not average equalized freight charges. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aggrieved by this order, the appellant preferred an appeal to the Commissioner(A) who held that additional freight charges collected in excess of equalized freight cannot be considered as assessable value and is a profit on activity of transport of goods and, hence set aside the order-in-original. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Not happy, Revenue went in appeal before the Tribunal. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Execution of work is not included under words, 'advice', 'consultancy' or 'technical assistance' in definition of Consulting Engineer – whether amounts realized towards execution of work will be covered under Service Tax – Difference of opinion - Matter referred to Third Member </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AN order in Revision was passed by the Commissioner against the Order-in-original passed by Dy. Commissioner (Service Tax) Vadodara. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The relevant facts are as follows: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a) The appellant company is engaged in the manufacture of mechanical, engineering and electrical goods falling under Chapters 84 and 85 of Central Excise Tariff Act, 1985. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b) In respect of certain buyers, the appellant merely sold their products. In respect of certain buyers, at their request, the appellant has undertaken, at the customer's site, certain activities like construction, civil works including installation, erection and commissioning of machinery to the specific requirements of the customers. In such cases, they collected amounts billed variedly as charges towards erection, testing and calibrations, installation and commissioning, construction activities etc. In respect of some other buyers, they procured some accessories and miscellaneous goods from other manufacturers or open market and in such cases collected the price from their customers for supply of the said bought out items. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c) They have, thus, collected a sum of Rs.36,95,14,983/-towards post clearing activities relating to the period July 97 to December 2000. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">d) A show cause notice was issued demanding Service Tax of Rs.1,84,75,749/- and proposing imposition of penalty under various sections on appellant company and others. The charge – that they are rendering services as Consulting Engineers. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Landlord takes refundable interest-free deposit from tenant - Income Tax wants to tax notional interest - Sec 23(1)(a) does not permit taxing more than rent : Delhi HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">TAXING rent from house property has always been a taxing issue for the Income Tax Department. In the latest case the Revenue wanted <strong><font color="#FF6633">to tax notional interest income on refundable interest-free deposit</font> </strong>made by the tenant with the landlord u/s 28(iv) but the High Court has dismissed the same as the relevant <strong><font color="#FF6633">Section 23(1)(a) does not contemplate taxing such income.</font> </strong> The HC also observed that in a taxing statute it would be unsafe for the Court to go beyond the letter of the law and try to read into the provision more than what is already provided for. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements </strong></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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