TIOL-DDT 765 · 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"><strong><font color="#663399" size="3">TIOL-DDT 765 </font><br> 19.12.2007 <br> Wednesday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exemption from excise duty – NHAI Member can sign </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per notification No. 108/95- C.E dated 28.8.1995, exemption is granted to goods supplied to the United Nations or an International Organisation, or project financed by the United Nations or organisation, as per the conditions specified in the Notification. For claiming exemption, the manufacturer of subject goods is required to produce before the jurisdictional Central Excise AC/DC a certificate, for various situations as mentioned in the notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">National Highway Authority of India ( NHAI ) has represented that they are implementing such projects and the Chairman of NHAI has to sign hundreds of such certificates, making it a very time consuming exercise. Therefore, in their Board meeting, NHAI has resolved to delegate the power vested in the Chairman as ‘executive head' to Member (Finance). Hence they have requested to extend the exemption under the said Notification on the basis of certificate issued by Member( Finance), NHAI . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The benign Board has acceded to the request and has ordered that the certificates signed by the Member should be accepted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exactly three months ago, the CBEC issued a similar instruction in respect of the customs duty exemption for NHAI . Why did they not think of the excise exemption at that time? <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6082" target="_blank">Please see TIOL-DDT 701 18.09.2007 </a></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/cbecinstruct.htm" target="_blank">CBEC's F.No . 110/ 49 /2007- CX.3 dated December 17, 2007 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SEZ – Exemption to Castor Oil cake </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 113/2003 – cus exempts castor oil cake falling under item 23 06 9017 of the First Schedule to the said Customs Tariff Act, when manufactured from indigenous castor oil seeds on indigenous plant and machinery by a unit in special economic zone, which was in existence prior to the 1 st day of November, 2000 and brought to domestic tariff area in accordance with the provisions of the Special Economic Zones Act, 2005 (28 of 2005) and the Special Economic Zones rules, 2006, from the whole of the duty of customs leviable thereon under the said First Schedule and the additional duty, if any, leviable thereon under section 3 of the said Customs Tariff Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now Castor de-oiled cake is also exempted, but now it is provided that </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption shall not apply in the cases where castor oil cake and castor de-oiled cake are manufactured out of inputs on which duty drawback or benefit under Duty Entitlement Passbook ( DEPB ) schemes or any other export benefit as admissible under the Foreign Trade Policy has been availed of either by the unit in special economic zone or by the supplier of inputs, as the case may be. </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=23&filename=notification/custom/2007/ctariff07_118.htm" target="_blank">NOTIFICATION NO. 118/2007- Cus ., Dated: December 17, 2007 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of new motor cycles DGFT amends </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Notification No. 59(RE-2006) has been amended to stipulate that </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of new motorcycles with engine capacity of 800 cc or more, <font color="#FF0000">by all categories of importers, including </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Individuals </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Companies and firms and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) OEMs (Original Equipment Manufacturers- who have manufacturing and service network in India ) </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> will be exempt from the conditions at Sl. No. (2) (II) (c). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, at the time of Customs clearance, <font color="#FF0000">an EC</font> Type Approval Certificate / Certificate of COP , of an accredited agency <font color="#FF0000">from any member state of EU</font> , including a notarized English translation thereof, shall be furnished. This Type Approval shall stipulate that the vehicle to be imported <font color="#FF0000">meets the technical requirements of all relevant separate directives, as last amended and as listed in EU Directive 2002/24/EC. Such imported motorcycles shall meet the EURO III emission norms as defined in EU Directive 2003/77/EC. </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The text marked in red are the amendments. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Condition at (2) (II) (c) stipulates that </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whoever being an importer or dealer in motor vehicles who imports or offers to import a new vehicle into India shall, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) at the time of importation, have valid certificate of compliance as per the provisions of rule 126 of Central Motor Vehicle Rules( CMVR ), 1989, for the vehicle model being imported, issued by any of the testing agencies, specified in the said rule; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) be responsible for all the provisions assigned to the manufacturer as per Rules 122 & 138 of CMVR , 1989 and for issuing Form 22, as per provisions of CMVR , 1989; and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) give an undertaking in writing that the proof of compliance to conformity of production as per rule 126A of CMVR shall be submitted within six months of the imports. In case of failure to do so, no further import of new vehicle of that model shall be allowed thereafter. </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=45&filename=notification/dgft/2007/dgft07not062.htm" target="_blank">DGFT NOTIFICATION NO. 62 (RE-2007)/2004-2009, Dated: December 12, 2007 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax – net tax collection at 1.64 Lakh Crores </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Nothing can stop! The IT Department is smiling all the way. Even the innocuous looking Banking Cash Transaction stood at Rs. 376 Crores <strong>. </strong></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><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></font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tribunal imposes Rs 5000 as costs on applicant while condoning delay in filing appeal before Commissioner( A) </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">YOU may have heard of the Courts imposing or awarding costs, but Tribunal imposing any costs is <em>virtually unheard </em>of. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Long ago, the Calcutta High Court in the case of Debabrata Ghosh vs. Assistant Collector of Customs <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2003/2003-TIOL-182-HC-KOL-CUS.htm"><font size="1">2003-TIOL-182-HC- KOL - CUS</font> </a> while passing strictures against the department and <em>awarding costs </em>to the petitioner remarked - <em>"The respondents have argued this case needlessly for 3 days. What is fun to the Department is death to an individual writ petitioner . Therefore, the respondents must pay costs... </em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The closest the Tribunal came to awarding <em>costs against </em>the Revenue was in the case of CCE , Delhi vs. Superior Air Products Ltd. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2002/2002-TIOL-386-CESTAT-DEL.htm"><font size="1">2002-TIOL-386-CESTAT- DEL </font></a>where the Tribunal held - </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Going by the contentions raised in the appeal, we feel that it is vexatious in nature. Revenue should not have filed such an appeal. The Tribunal will be compelled to award costs against the Revenue if such frivolous appeals are filed. With these observations, we dismiss the appeal." </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Reimbursements of salaries and infrastructural expenses cannot be said to be amounts "charged" by service provider - not includible in value of taxable service : CESTAT </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>appellants were engaged by M/s ICICI Bank Ltd to market the bank's personal loan products, for which service the appellants employed marketing executives who took up the task of telemarketing, contacting prospective customers, process documentation etc. to market the personal loan products of the bank and evaluate the customers and forward the prospects to the bank. In terms of the agreement with the bank, the appellants raised invoices for service charges on a monthly basis and the bank paid the same. Apart from this, the appellants received reimbursement, from the bank, of the salaries paid to their personnel deputed to render the above service to the bank as also of infrastructural expenses such as rent, telephone charges, electricity, stationery charges, internet charges, travel expenses, courier charges, advertisement etc. All these payments received by the appellants from the bank under invoices or debit notes were credited directly into the appellant's bank account. But, in the service tax returns filed by them for the relevant periods, the service charges alone were declared to the department as the taxable value for the purpose of payment of service tax. The appellants voluntarily paid service tax on such value. </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>Indo-USA Tax Treaty - Tribunal upholds concept of computer PE and rules assessee generating income by marketing CRS services to travel agents in India has business connection - 15% of income attributable to PE in India - Distributor marketing CRS is dependent agent </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">IN a landmark decision the ITAT has upheld the concept of computer PE (Permanent Establishment) under the Indo-USA Tax Treaty and ruled that the assessee Galileo International had a business connection in India as per the I-T Act. Though there is a school of thought which feels that unlike the India-Australia DTAT where 'plant' and 'equipment' are deemed to be PE, such a provision is not there in the case of India-USA treaty and the Tribunal has read in the provsions what does not exist in the statute book. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, a review exercise of all DTATs is going on in the Ministry of Finance which can take note of such grey areas identified and convassed by legal pundits and a clear-cut provision can be inserted to lend fresh legitimacy to such a concept. Given that a modern business draws huge support from IT-based infrastructure for its revenue generation like in the present case, no country or judiciary in the world can ignore the concept of computer PE which has come to be explained and upheld by the Tribunal. </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 color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>