TIOL-DDT 787 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!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 face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 787 </font><font size="3"></font><font size="2"><br> 22.01.2008 <br> Tuesday </font></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Validity of Registration-cum-Membership Certificate ( RCMC ) and Councils authorized to issue RCMC - DGFT clarifies </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT clarifies that </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. As per Para 2.44 of FTP, any person applying for an authorization to import/export or for any benefit or concession under FTP shall be required to furnish RCMC granted by competent authority. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Accordingly, it is clarified that for grant of any authorization or any other benefit or concession under FTP, RCMC is required to be valid on the date of application made to DGFT or any Regional authority under DGFT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Vide Policy Circular No.9 dated 31.8.2007, it has been clarified that while obtaining RCMC , an exporter has to declare main line of business in the application. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The exporter is required to obtain RCMC from the Council, which is concerned with the product of his main line of business. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. In this regard, it is further clarified that in case where the main line of business of the exporter has changed after obtaining RCMC from a particular Council, such RCMC shall continue to be acceptable under this Policy, till the expiry of its validity. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Meaning thereby, in these cases the exporters shall not be required to obtain a new RCMC from the Council, which is concerned with his new main line of business, till the old RCMC is valid. </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=46&filename=notification/dgft/2007/dgft07cir027.htm" target="_blank">POLICY CIRCULAR NO. 27 (RE-07)/2004-2009 Dated: January 17, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Procedure for claiming Deemed Exports Drawback & Terminal Excise Duty Refund / Exemption from payment of Terminal Excise Duty – DGFT amends HOP </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the existing HOP, para v reads as, </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) In case of supplies under paragraph 8.2(a), (b) & (c), claim shall be filed against receipt of payment through normal banking channel as in Appendix 22B . Such claims shall be filed within a period of 6 months from end of monthly / quarterly / half yearly period reckoned from the date of payment as per the option of applicant. In cases where payment is received in advance, last date for submission of application may be correlated with date of supply instead of date of receipt of payment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is to be amended as, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“8.3.1(ii) In case of supplies under paragraph 8.2(a), (b) & (c) of FTP, claim shall be filed against receipt of payment through normal banking channel as in Appendix 22B . Claims should be filed within a period of <strong><font color="#FF6633">twelve months</font> </strong> from the date of payment. In cases where payment is received in advance, last date for submission of application may be correlated with date of supply instead of date of receipt of payment. <font color="#FF6633">Claim can be filed ‘Invalidation Letter/ ARO wise against individual licences within the time limit as specified above. 100% TED refund may be allowed after 100% supplies have been made physically and payment received at least up to 90%. However, grant of deemed export duty draw back will be limited to the extent of payment received. </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 8.3.1( iv ) reads as, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) In respect of supplies under categories mentioned in paragraphs 8.2(d), (e), (f), (g), (h), ( i ) and (j) of FTP claim may be filed for payment received / supplies effected during a particular month / quarter / half year at option of applicant either on the basis of proof of supplies effected or payment received. Claim may be filed either against a particular project or all the projects. Such claims shall be filed within a period of 6 months from end of monthly / quarterly / half yearly period reckoned from date of receipt of supplies by project authority or from date of receipt of the payment as per the option of applicant. Such claims may also be filed where part payments have been received . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Which is now amended as, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>8.3.1(iv) In respect of supplies under categories mentioned in paragraphs 8.2(d), (e), (f), (g), (h), ( i ) & (j) of FTP, claim may be filed either on the basis of proof of supplies effected or payment received. Claims should be filed within a period of <strong><font color="#FF6633">twelve months</font> </strong> from date of receipt of supplies by project authority or from date of receipt of the payment as per the option of applicant either against a particular project or all the projects .. Claims may also be filed where part payments have been received. 100% TED refund may be allowed after<font color="#FF6633"> 100% supplies have been made physically and payment received at least up to 90%. However, grant of deemed export duty draw back will be limited to the extent of payment received” </font></em></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=47&filename=notification/dgft/2007/dgft07pn102.htm" target="_blank">PUBLIC NOTICE NO. 102 /( RE-2007) 2004-09, Dated: January 16, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Focus Product and Focus Market – DGFT amends HOP </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Last date for filing application shall be 6 months from the date of realization. Eligibility of Focus Product (including High-Tech products) (as in Appendix 37D ) shall be determined from date of export as per Para 9.12 of HBP v1 . However, exports for which realizations have already been received till the date of this Public Notice, the last date of filing application shall be 30.7.2008. “ </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Last date for filing application shall be 6 months from the date of realization. Eligibility of Focus Market (as in Appendix 37C ) shall be determined from date of export as per Para 9.12 of HBP v1 . However, exports for which realizations have already been received till the date of this Public Notice, the last date of filing application shall be 30.7.2008. “ </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently, for exports made during 2006-07 and 2007-08 and realized till the date of this Public Notice, applications can be filed till 30.7.2008. Multiple applications, without supplementary cut are permitted for FPS applications 2006-07 and 2007-08. The modified procedure shall apply to applications already received. Revised application forms need not be called, and RA concerned may finalize / review applications already received as per amended procedure. </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=47&filename=notification/dgft/2007/dgft07pn103.htm" target="_blank">PUBLIC NOTICE NO. 103 /( RE-2007) 2004-09, Dated: January 17, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Excise exemption - Himachal and Uttarakhand – no exemption for peripheral activities – notifications and circular made available – certainly not retrospective </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday's <strong>DDT </strong> carried as top story, the amendments to the Himachal and Uttarakhand exemption notifications that the excise exemption will not be applicable to peripheral activities. The Board Circular issued in this regard clarifies that, <font color="#FF6633">It may further be noted that the above provisions are applicable to all the existing units availing the benefit of these notifications as also to new industrial units that may be set up in future. </font></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some pink newspapers have indicated that this means that the notifications have retrospective effect. This is certainly not the case – the notifications can have effect only from 18.01.2008. The Notifications and the Board Circular are now available and we made them public yesterday. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But were these notifications postponed till the elections in Himachal? Is there a politics to the economics or economics to the politics? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While announcing sops to the city of Bombay , the then Finance minister Manmohan Singh said in his budget speech, “voting congress is not only good politics, but good economics”. Is he out to prove this in the case of Himachal and Uttarakhand , both BJP ruled states? – That voting the BJP is not good economics? </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/etariff08_01.htm" target="_blank">NOTIFICATION NO. 1/2008- CX</a> ., <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/exnt08_03.htm" target="_blank">3/2008</a> <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2008/exnt08_04.htm" target="_blank">4/2008 - CX ., ( N.T. )</a>, <strong>and</strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2008/excircular863.htm" target="_blank">CIRCULAR NO. 863/1/2008- CX . all Dated: January 18, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Stock market crash – Government's advice </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most of Asia opened the year 2008 on a weak note with heavy selling pressure seen in most markets. Comparing the major Asian market indices as on 2nd January, 2008 with their closing today, it is seen that the Straits Times has fallen by 14.75%, Hang Sang by 13.58% and the Nikkei is down by 9.29%. The corresponding figure for BSE Sensex is 13.97%. <br> <br> Today the BSE Sensex has fallen by 1408.35 points or 7.41% and the NSE Nifty has closed down 496.5 points or 8.7%. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> As regards domestic economic conditions, the just released Review of the Economy 2007-08 by the Economic Advisory Council of the Prime Minister has estimated the rate of growth of the GDP in 2007-08 at 8.9%. Corporate profits as reflected in the third quarter 2007-08 results continue to be buoyant. Direct tax revenues have shown an increase of 42.8% this financial year ( April to December, 2007). Banks have reported that investments in the pipeline are robust and credit demand is high. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> Thus, the fundamentals in the domestic economy are quite strong. Today's market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy. </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Investors should take informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehensions. (Whatever that means!) </strong></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font> <font color="#FF6633" size="5">tiol</font> <font color="#006600">– Tomorrow's cases </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></font></strong></font></strong></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>Loss on sale of debentures – deduction allowed even if loss was known at the time of applying for debentures – High Court dismissing Revenue appeal as no substantial question of law arose – High Court's decision is binding precedent on subordinate forums including Special Bench of the Tribunal – ITAT SB </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Special Bench decided on a substantial question of Law. A bench of the Tribunal decides an issue in favour of the assessee. The Revenue goes in appeal to the High Court, which dismisses the appeal as there was no substantial question of law. Is this decision of the High Court a binding precedent on the Special bench? ‘Yes', ruled the Bench. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">TDS – deduction to be treated as tax payment from the person from whose income tax was deducted; IDBI bonds – TDS to be deducted from holder of bond at maturity – credit should be given to him : Punjab and Haryana High Court </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TWO</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>substantial questions of law were brought to the High Court by revenue. Whether on the facts and in the circumstances of the case, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. ITAT was right in law in upholding the order of the CIT (Appeals), directing the Assessing Officer to allow full credit of T.D.S to the assessee, in contravention of the provisions of section 199 of the Income Tax Act ? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. the findings recorded by ITAT in allowing full credit of TDS to assessee are perverse and sustainable in view of statutory provisions of Section 199 of Income Tax Act, 1961 ?” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One Vivek Bansal , Liberty House, Karnal had originally purchased deep discount bonds 1997 of Industrial Development Bank of India ( I.D.B.I ) @ of Rs. 5500/- each (the original purchaser). From him the assessee-respondent purchased those bonds @ Rs.9700 /- each on 01.01.2001 for total value of Rs.19 ,40,000 /- (the assessee secondary purchaser). The original purchaser filed his return for the assessment year 2001-02 and reflected the difference in amount of purchase and the sale. Thus, a sum of Rs. 9 ,40,000 /- became long term capital gain in respect of the original assessee. It is undisputed that the bonds were subject to accruing of interest year to year although, no income was received annually by the bond holder. The condition was modified by issuance of a press note later. The assessee-secondary purchaser received a draft of Rs. 19 ,08,200 /-. This amount has been accounted for by the assessee-secondary purchaser. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cargo imported from USA refused admission by Customs - re-exported to UAE - rejected by UAE Customs - returns to India - importer refuses to file BoE - Customs refuses to dispose of goods - Containers caught in cross-fire - please return my empty containers, pleads shipping line before Madras HC </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The story begins: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 nd respondent, ITC filed two Bills of Entry in September 2005, for the clearance of 1007 MTS of goods declared as waste paper, contained in 40 containers, supplied by a Company by name M/ s.Evergreen Specialities Inc, USA . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On an examination of the goods found in the containers, the Customs Department came to the conclusion that there was contaminated municipal waste in the containers which could not be allowed clearance. </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">Employees working on rolls of applicant diverted to undertake manufacturing activities of another company – Prima facie Services provided cannot be held to be taxable as “Manpower Recruitment or Supply agency ” : Tribunal </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SERVICE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> tax has been demanded from the applicants on the ground that they were providing services of ‘manpower recruitment agency' to M/s Bajaj Organic Chemicals Limited for the period March, 2003 to July, 2006. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The applicant is before the Tribunal seeking a stay of the tax demand of Rs.3.44 lakhs and penalty of Rs.25 ,000 /-. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> The short facts are that the staff of the applicant was loaned to M/s Bajaj Organics Limited for carrying on its manufacturing/production activities. Until 16/06/2005 the definition of “manpower recruitment agency” was “any commercial concern engaged in providing any services, directly or indirectly, in any manner for recruitment of manpower, to a client.” However, w.e.f 16/06/2005 service tax is leviable on “manpower recruitment or supply agency ” which means “any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to a client.” </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 time. </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>