TIOL-DDT 790 · the untouched capture
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<p><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 790 </font><font size="3"></font><font size="2"><br>
25.01.2008 <br>
Friday </font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MRP valuation extended to computers and Co. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Retail sale Price based assessment is extended to the following goods: The prices of all these items are now bound to go up. It is a practice in the market that these goods are sold below the printed MRP on them. </font></p>
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<td valign="top" width="51"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl.No. </font></strong></p></td>
<td valign="top" width="93"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chapter or heading <br>
or sub heading </font></strong></p></td>
<td valign="top" width="336"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Description </font></strong></p></td>
<td valign="top" width="96"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Abatement as % of retail sale price </font></strong></p></td>
</tr>
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<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8443 31 00 or 8443 32 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Printer whether or not combined with the functions of copying or facsimile transmission </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
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<tr>
<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8443 99 51 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ink cartridges, with print head assembly </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
</tr>
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<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8471 30 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Computers </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22.5 </font></p></td>
</tr>
<tr>
<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8471 60 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Input output units like keyboard, scanner, mouse </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
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<tr>
<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8517 62 30 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Modems (modulators – demodulators) </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
</tr>
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<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8517 69 60 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Set top boxes for gaining access to internet </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24 </font></p></td>
</tr>
<tr>
<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8528 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Monitors of a kind solely or principally used in automatic data processing machine </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
</tr>
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<td valign="top" width="51"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8 </font></p></td>
<td valign="top" width="93"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8528 71 00 </font></p></td>
<td valign="top" width="336"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Set top boxes for television sets </font></p></td>
<td valign="top" width="96"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24 </font></p></td>
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</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The notification was issued yesterday, but for some strange reason, it is applicable only from today. </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=30&filename=notification/excise/2008/exnt08_05.htm" target="_blank">NOTIFICATION NO. 5/ 2008- CX ., ( N.T. ), Dated: January 24, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>All these items included in the Third Schedule to the Central Excise Act </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Do you know that the Central Excise Act has three schedules? The First Schedule was the Central Excise Tariff and with the Tariff Act in 1986, this First Schedule was omitted. But the Second Schedule continued without a first one. The Second schedule actually deals with tobacco and should have been deleted long before the Tariff Act came into force. But it merrily continues in the statute. And in 2003, a new schedule christened as Third Schedule was inserted. When there is no first schedule, why can't they at least re-number these schedules? There is no first schedule, the second schedule is irrelevant and what is the sanctity of the Third schedule?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Third Schedule gets its right to exist from section 2(f) (iii) of the Central Excise Act, which defines manufacture as, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"manufacture" includes any process,—
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Xxxxx </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Xxxxxx </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) which, in relation to any goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, for the products listed in the Third Schedule, packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer, would amount to manufacture. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 3 rd Schedule itself is a big confusion and is best deleted from the statute. The 3 rd Schedule consists of about 100 and odd items which are also the same items as notified under Section 4A for MRP valuation. Now for the items listed under Section 4A , MRP based assessment is required <strong>only </strong> if those goods are covered under the Standards of Weights and Measures Act or any other Act requiring mandatory printing of MRP on the package. There is no such requirement for the goods mentioned under the Third Schedule . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To cite a specific example, Paint under Chapter 32 is covered under MRP ( Standards of Weights & Measures Act) and is also covered under Notification issued under Section 4A as well as under the Third Schedule. Now Paint in bulk packing for industrial use is not covered by SW&M Act and so is automatically out of Section 4A . But it does not go out of the Third Schedule as Schedule 3 does not mention about SM&W Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The result is, if you re-pack or re-label a drum containing 500 Ltrs of paint, the activity amounts to manufacture simply because the item finds a place in 3 rd Schedule. This could not have been the intention of the Government. The easiest thing the Government could have done was to mention in Section 2f (iii) that for the goods assessed to duty under Section 4A , packing, re-packing, alteration of retail price etc. would amount to manufacture. Instead of doing this simple thing, the Government has inserted a new Schedule to the Central Excise Act and lands itself and trade in confusion. Every time a new product is brought under Section 4A , it should remember to amend the 3 rd Schedule, which the Government is sure to forget. Why, but why this confusion? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But to be fair to the bright boys of TRU , this time around they did not forget to amend the Third Schedule – actually they amended it nearly a year ago. In the Budget 2007, to be precise! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Act, 2007 had amended the Third Schedule to include the items now brought under MRP valuation, but this was to be effective from a date to be notified by the Government. Now the Government has notified today that is 25 th day of January 2008 as the effective date. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just imagine the tremendous amount of work our poor babus have to do to draft, administer and manage such complicated laws. The best professional organisations in the world would have failed miserably in keeping track of these provisions, but then they would not have such complicated procedures. </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=30&filename=notification/excise/2008/exnt08_06.htm" target="_blank">NOTIFICATION NO. 6/ 2008- CX ., ( N.T. ), Dated: January 24, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti-Dumping Duty on PVC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has imposed Anti dumping duty on the import of Homopolymer of vinyl chloride monomer (PVC) suspension grade originating in, or exported from, Taiwan , People's Republic of China , Indonesia , Japan , Korea RP, Malaysia , Thailand and USA </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/2008/ctariff08_011.htm" target="_blank">Notification No. 11/2008- Cus ., Dated: January 23, 2008 </a></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 size="5"> </font><font color="#006600">– Monday's cases </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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></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>Depreciation and amortization on investments held in permanent category cannot be allowed to be deducted while computing taxable income : ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since RBI guidelines as held by Madras High Court in the case of TN Power Finance and Infrastructure Development Corporation Ltd. cannot override the mandatory provisions of Income Tax Act, 1961, <strong><font color="#FF6633">the depreciation and amortization claimed by assessee on investments held in the permanent category cannot be allowed to be deducted while computing the taxable income. We may also like to state that income is to be computed as per the mandatory provisions of section 145 of the Act and not in accordance with guidelines issued by RBI . </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Central Excise </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Cenvatted Master cartons cleared from factory to depots for packing excisable goods cleared from factory in primary cartons eligible for Credit after 14.05.2003 when 'depot' was notified as place of removal : Tribunal </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HARAKIRI</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>at its best was exhibited by the Central Government when it substituted the earlier provisions of Section 4 of the Central Excise Act, 1944 by the Finance Act, 2000 [ w.e.f 01.07.2000]. The earlier concept of ‘normal price' was replaced by the new generation “Transaction Value” in an effort to garner more revenue and avoid the embarrassment suffered on account of the earlier provisions which had failed to weather the cyclonic valuation storms. Just prior to this substitution, the Finance Act, 1996 [ w.e.f 28.09.1996] saw the advent of “extended place of removal in the form of depots, consignment agents etc. ”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The significance of this change was that sale price at any of these “places of removal” will be the normal price for levy of excise duty and there could be different assessable values for the same excisable goods depending upon the place of removal. It also meant that duty will be required to be paid at the time of clearance of goods from the factory for those goods which are sold by the manufacturer at depot, consignment agents or any other place etc. at a sale price of the place of removal i.e. depot, consignment agents etc. [Board Circular No. 251/85/96- CX , dated 14-10-1996]. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All this good deed was turned upside down when the new Section 4 saw its birth. The reason being that the new definition of “place of removal” failed to incorporate in it a reference to depot, premises of a consignment agent or any other place or premises. Anyways, this inadvertent omission was set right by the Finance Act, 2003, by re-insertion in the definition of place of removal a clause (iii) w.e.f 14.05.2003. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">CHA – resignation of a qualified employee would not automatically cancel Custom House Agent licence – in worst situation, it becomes inoperational until a qualified person is appointed : Bombay High Court </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner is determined to cancel the licence of a CHA that he is before the High Court against a Tribunal decision which set aside his decision. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
respondent was having a CHA License valid upto 31st December, 2006. It appears
from the record that they have appointed one Shri Girish P. Manjeshwar ,
who was a Regulation 9 Pass holder (now Regulation 8 as per CHALR , 2004).
The said employee tendered his resignation. The respondents by letter dated
10th August, 2004 accepted the resignation with effect from 14th August,
2004 and relieved him from the services of the Company as per the terms and
conditions of the appointment letter. As the respondents did not have a Regulation
9 pass holder they surrendered his pass on 18th November, 2004 as though
they had made attempts to get a qualified person they were not in a position
to get one. The Commissioner of Customs (General) vide notice No.116 /06
dated 8th August, 2006 made the license of the respondents inoperative. The
respondents vide their letter dated 17th August, 2006 wrote to the Commissioner
of Customs (General) that they were shortly employing a qualified person
and would continue to work as CHA and requested to condone the delay. They
were informed by letter dated 30th August, 2006 that their request to continue
the license as CHA cannot be considered in terms of the provisions of Regulation
15(2) of the CHALR , 2004. On 1st September, 2006 the Respondents intimated
the Commissioner of Customs that they have appointed Shri S.Subhash , a Rule
9 qualified person under CHALR , 2004 and he would join in the first week
of October, 2006. Various other representations were made. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Monday with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice weekend. </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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