TIOL-DDT 780 · 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=utf-8"> </head> <body bgcolor="#FFFFFF"> <p><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 780 </font><font size="3"></font><font size="2"><br/>11.01.2008 <br/>Friday </font></strong></font></p> <p align="center"><strong><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"> Anti Dumping Duty on TMP - JIT extension</font></strong></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Anti Dumping Duty on Trimethoprim ( TMP ), originating in, or exported from, the People's Republic of China, imposed <em>vide </em>notification No. 89/2002-Customs, dated the 3 rd September 2002 was to expire on 8.1.2008. An alert government woke up Just In Time! This duty is re-imposed for another period of five years from 8.1.2008. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Consequently, Notification No. 89/2002-Customs, dated the 3 rd September 2002, is rescinded. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_005.htm" target="_blank">NOTIFICATION NOs. 5</a><strong> & </strong><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_006.htm" target="_blank">6/2008- Cus ., Dated: January 4, 2008 </a></font></p> <p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>DGEP – work allotted </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The CBEC has decided to allocate the following items of work to the Directorate General of Export Promotion ( DGEP ) </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(I) Work relating to the following Export Promotion Schemes (both Customs and Central Excise). </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(i) 100% Export Oriented Units </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(ii) Special Economic Zones ( including work relating to erstwhile Free Trade Zones and Export Processing Zones) </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(iii) Special Jewellery Complexes and Gem and Jewellery Export Promotion Schemes </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(iv) Software Technology Park and Electronic Hardware Technology Park Schemes </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(II) Monitoring of the Export Promotion Schemes as at Item No.(I), analysis of periodical reports/returns/statistics, and legislative work relating to the above schemes (both Customs and Central Excise). </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(III) Meetings of the Foreign Investment Promotion Board ( FIPB ), Boards of Approval (BOA) for EOU / SEZ , Inter-Ministerial Standing Committee ( IMSC ) in the Department of Information Technology etc., meetings with DGFT / Ministry of Commerce on matters relating to above Export Promotion Schemes and interaction with Trade including Export Promotion Councils. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(IV) Act as a central consultative body with the trade and other stakeholders (Trade Associations and Chambers of Commerce such as FlEO , Federation of Freight Forwarders Associations of India, Air Cargo Agents Association of India, National Association of Container Freight Stations, Export Promotion Councils, Indian Ports Association etc.) and suggest changes in Customs clearance procedures with a view to facilitate international trade, wherever necessary. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(V) Review Customs trade facilitation measures from time to time with a view to evaluate their efficacy and suggest further improvements. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(VI) Study the best international practices concerning Customs clearance procedures for their adoption. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">( VII ) Over-see and analyze the dwell time for clearance of import/export cargo at various major ports, airports, ICDs etc. and, as appropriate, make recommendations relating to clearance procedures followed by Customs and other agencies, with a view to reduce dwell time. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(VIII) Review the trade facilitation initiatives of the Custom Houses and other field formations e.g. Review the working of the Drawback Committees/Regional Advisory Committees/ED! Committees/Watch Dog Committees etc. in the various customs field formations for any modification in law and procedures. Monitor the maintenance and updating of the websites of the Customs Commissionerates / Customs Houses. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(IX) Work relating to WTO Negotiations on Trade Facilitation; matters relating to Trade Facilitation under various Trade Agreements. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(X) Matters related to recommendations of WCO on trade facilitation. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">However, if you have a problem, don't rush to the DGEP , for his function is limited to policy level issues and would not address individual grievances relating to customs Trade Facilitation (like delays in assessment of Bill of Entry, grant of refund, etc). </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">The Board has to find a new DGEP very soon. Let's hope they will do it after having given the office so much responsibility. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2008/cuscir08_01.htm" target="_blank">CIRCULAR NO. 1 /2008-Customs, Dated : January 9, 2008 </a></font></p> <p></p> <p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Eligibility of Industrial Parks and Special Economic Zones for benefits under section 80- IA( 4)(iii) – IT rules amended </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Rule 18 C of the Income Tax Rules as at present reads as, </strong></font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>18C . </strong>(1) The undertaking shall begin to operate an industrial park during the period beginning on the 1st day of April, 1997, and ending on the 31st day of March, 2002. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">( 1A ) The undertaking shall begin to develop or develop and operate or maintain and operate a special economic zone any time during the period beginning on the 1st day of April, 2001 and ending on 31st day of March, 2006. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(2) The undertaking shall be duly approved by the Ministry of Commerce and] Industry in the Central Government under the scheme for industrial park or Special Economic Zones notified by that Ministry. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(3) The undertaking shall continue to fulfill the conditions envisaged in the scheme. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(4) On approval under sub-rule (2), the Central Board of Direct Taxes, shall notify industrial parks for benefits under section 80-IA. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Now this is amended to read as: - </strong></font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">18C . ( 1) The undertaking shall begin to develop, develop and operate or maintain and operate an industrial park any time during the period beginning on the 1st day of April, 2006, and ending on the 31st day of March, 2009. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(2)The undertaking and the Industrial Park shall be notified by the Central Government under the Industrial Park Scheme, 2008. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2">(3)The undertaking shall continue to fulfill the conditions envisaged in the Industrial Park Scheme, 2008.” </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2008/it08not002.htm" target="_blank">CBDT NOTIFICATION NO 2/2008., Dated: January 8, 2008 </a></font></p> <p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Industrial Park Scheme, 2008 - Notified </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Consequent to the amendment to Rule 18C of the Income Tax Rules, the Government has notified the Industrial Park Scheme, 2008. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Salient features: </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Procedure for approval. – </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(1) Any undertaking which develops, develops and operates or maintains and operates an industrial park may make an application for notification in the prescribed form, IPS -I, to the Secretary ( ITA -1 section), Central Board of Direct Taxes. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(2) The Central Board of Direct Taxes shall process the application for approval and notification by the Central Government and for this purpose it may call for reports from other Departments or agencies, as it may deem fit. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Criteria for approval .- </strong>An undertaking shall be considered for notification if it fulfills all of the following conditions, namely:- </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(1) The date of commencement of the Industrial Park should be on or after the 1st day of April 2006 and not later than 31st of March 2009; </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(2) The area allocated or to be allocated to industrial units shall not be less than ninety per cent of the allocable area; </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(3) There shall be a minimum of thirty industrial units located in a industrial park; </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(4) For the purpose of computing the minimum number of industrial units; all units of a person and his associated enterprises will be treated as a single unit. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(5) The minimum constructed floor area shall not be less than 50,000 square meters ; </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(6) No industrial unit, along with the units of an associated enterprise, shall occupy more than twenty five per cent of the allocable area; </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(7) The industrial park should be owned by only one undertaking; and </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(8) Industrial units shall undertake only manufacturing activity as defined in section D of the National Classification, 2004, Code issued by the Central Statistical Organisation, Department of Statistics </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>General Conditions.- </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(1) The industrial park shall be construed as developed on the date of commencement. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(2) Tax benefits under the Act will be available to the undertaking only after minimum number of thirty units are located in the Industrial Park. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(3) The tax benefits under the Act will be available to the undertaking only if the undertaking and the industrial park have been notified by Central Board of Direct Taxes under section 80-IA of the Act. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(4) The tax benefits under the Act will be available only to the undertaking notified by the Central Government and not to any other person who may subsequently develop, develops and operates or maintains and operates the notified industrial park, for any reason. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(5) The undertaking must keep separate book of accounts for the industrial park and must file its income tax returns by the due date to the Income-tax department. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(6) An industrial park approved under Industrial Park Scheme, 2002 will continue to be governed by the provisions of that Scheme to the extent it is not in contravention with the provisions of Act, as amended from time to time. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">(7) The undertaking shall electronically furnish an annual report to the Central Board of Direct Taxes in Form IPS -II. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2008/it08not003.htm" target="_blank">CBDT NOTIFICATION NO 3/2008., Dated: January 8, 2008 </a></font></p> <p align="center"><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Rs. 1 Lakh Car vs 1 Lakh sari </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">While the Tatas have launched their One Lakh Rupees car, enabling the middle class Indian to own a car and to add to the traffic woes of India 's Metros, a shop in Hyderabad launched a Sari that costs a Lakh of rupees. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">More than thirty years ago, I took a US Embassy official to a small time maharajah. The Us officer was enamoured with an old Rolls Royce Car the maharajah had and offered him any brand new American car in exchange of the old Rolls Royce. The maharajah refused saying that the car was bought by his grandfather and was made by the company exclusively for them. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">I could not understand why the stupid American wanted to give a new car for the useless old Rolls Royce and why the more stupid rajah did not buy the offer! </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">But then there is no logic as far as cars and saris are concerned! And to understand this, you have to acquire a car and/or a wife and as KPS Menon once stated, your integrity is intact until you acquire a car and/or a wife and more than fifty years ago he noticed that bureaucrats are acquiring both within five years of their joining the service! </font></p> <p align="center"><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font color="#006600">Jurispruden</font> <font color="#ff6633" size="5">tiol</font> <font color="#006600">– Monday's cases </font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><font color="#006600" face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><font face="Verdana, Arial, Helvetica, sans-serif" size="2"><b><strong><b><img align="left" alt="Legal Corner Icon" border="0" height="160" hspace="5" src="https://taxindiaonline.com/RC2/image/stories/ddt_31.gif" width="191"/></b></strong></b></font></b></font></b></font></b></font></b></font></b></font></strong></font></strong></font></strong></font></strong></font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Income Tax </strong></font></p> <p align="justify"><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Interest on deposits made compulsorily to get BG is not income; Fee paid to RoC is capital expenditure and loss on account of exchange rate fluctuation is admissible deduction </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">The Assessing Officer on perusal of schedule D to pre-operative expenses (pending allocation) attached to the balance sheet has found that a sum of Rs. 5 ,25,385.87 was credited to these pre-operative expenses on account of interest received. This amount was not offered for taxation by the assessee as its income, the assessee was, therefore, asked to show cause as to why this amount should not be treated as income in view of the of the Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT ( <a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2002/2002-TIOL-489-SC-IT-LB.htm">2002-TIOL-489-SC-IT-LB </a>). The assessee in its reply submitted that out of total interest amounting to Rs.5,25,385.87 , Rs.3,42,891.14 had been received on account of fixed deposit kept with the bank as margin money against the letter of credit issued for import of capital goods. Balance Rs. 1 ,82,494.73 had been received on account of fixed deposit kept with the bank as margin money against bank guarantee, etc. the assessee further submitted that the purpose of keeping the deposits with the bank was to facilitate the import of capital goods and not to earn interest income. As per the assessee, as the production of the company had started after the close of financial year 1997-98, the said interest income of Rs.5 ,25,385.37 had rightly been credited to pre-operative expenses. However, the said submissions of the assessee did not find tenable by the Assessing Officer. He observed that in view of the decision of the Hon'ble Supreme court in the case of M/s Tuticorin Alkali Chemicals & Fertilizers Ltd. (supra) the interest received by the assessee from deposits kept with the banks is the income of the assessee chargeable under the head "Income from Other sources" and cannot be adjusted against pre-operative expenditure as business of manufacturing had not commenced during F.Y. 1997-98. Accordingly, he added the sum of Rs.5 ,25,386 to the income of the assessee. </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Central Excise </strong></font></p> <p align="justify"><font color="#ff6633" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>Valuation – MRP mentioned but scored out - Torches cleared for free supply by manufacturers as advertisement propaganda to be assessed in terms of Section 4 of the CEA ' 44 : Tribunal </strong></font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">THE applicants are engaged in the manufacture of torches which are notified items under Section 4A of CEA . The revenue wants to assess these goods under Section 4A of the Act whereas the case of the applicant is that as the torches are for free supply for advertisement purposes to various other manufacturers, they are to be assessed under Section 4 of the Act. </font></p> <p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif" size="2">Since the demand was confirmed, the appellant is before the Tribunal & places reliance on the SC decision in Jayanti Food Processing (P) Ltd ( <a href="https://taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2007/2007-TIOL-150-SC-CX.htm">2007-TIOL-150-SC- CX </a>). </font></p> <p align="justify"><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif" size="2"><strong>See our columns Monday for the judgements </strong></font></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Until Monday with more DDT </font></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Have a nice weekend. </font></p> <p align="justify"><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2">Mail your comments to</font><font color="#ff6666" face="Verdana, Arial, Helvetica, sans-serif" size="2"></font><font face="Verdana, Arial, Helvetica, sans-serif" size="2"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>