TIOL-DDT 798 · 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"><strong><font color="#663399" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 798</font><font face="Verdana, Arial, Helvetica, sans-serif"> <br> 06.02.2008 <br> Wednesday </font></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax on maintenance or repair of roads- Revenue rejects MP CM 's request </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Madhya Pradesh Chief Minister, Shivraj Singh Chauhan sought exemption from Service Tax on maintenance or repair of roads. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Promptly the DGST has written a letter to the field formations, </font></p> <blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“You are requested to kindly ensure that service tax is collected from the service providers undertaking management, maintenance or repair of roads and rendering service to Public Works Department of the State or the Central Government or to any other Department of the State or the Central Government.” </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the poor Chief Minister has prompted the Department to collect the tax. Now Service Tax officers will be on the roads to check up which roads are being maintained or repaired. Now you find our cities being cleaned by hired workers during midnight and early morning. Is the sweeping of the roads, maintenance or repair? As such, our civic bodies are so helplessly handicapped with lack of funds that the roads are in bad shape. Can they afford to pay an additional 12.36% for the repairs and maintenance? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And since when is this road tax leviable? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clause 64 of Section 65 of the Finance Act, 1944 (when will we have a Service Tax Act – with GST looming large, perhaps no such possibility) defines the service as </font></p> <blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(64) " management , maintenance or repair" means any service provided by— </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">( i ) any person under a contract or an agreement; or </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) a manufacturer or any person authorised by him, in relation to,- </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) <strong>management of properties, whether immovable or not; </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) <strong>maintenance or repair of properties, whether immovable or not; or </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) maintenance or repair including reconditioning or restoration, or servicing of any goods, excluding a motor vehicle; </font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, "goods" includes computer software;</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is the road an immovable property? It is, at least as per the CBEC. In <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2005/doletter2005.htm">F.No.B1 / 6 /2005- TRU , dated : July 27, 2005</a> , </strong>the TRU calrfied , </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">16. Maintenance or repair service </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">16.2 Prior to 16/6/2005, such services covered maintenance or repair or servicing of any goods or equipment, excluding motor vehicles. However, since 16/6/2005, services relating to maintenance or management of immovable property <strong>(such as roads, airports, railways, buildings, parks, electrical installations </strong> and the like) have also been covered under the purview of service tax. Such services would be taxable when provided under a contract or an agreement by any person or by a manufacturer or any person authorized by a manufacturer. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So this tax is leviable from 16.6.2005, but was it being collected? Can the DGST tell the country how much tax was collected on road repairs? Now perhaps SCNs will fly alleging suppression and evasion. Will Municipal Commissioners be summoned to give information about repair contracts given by them in the last three years? The possibilities are exciting and varied. The Service Tax officers can go to remote villages and forests to survey road repair activity and detect evasion. The Border Roads Organisation can also be a good target. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If somebody repairs the Jammu - Pathankot national highway, how will he be taxed, for there is no Service Tax in J&k but it is payable across the border! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is it worth taxing the road repair? 99% of the roads belong to the Government – state or central, Municipal bodies, panchayats . As mentioned earlier, should the cost of maintaining the horrible roads be enhanced for these fund starved bodies? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Perhaps the FM can graciously accede to the request of the Madhya Pradesh CM and exempt road repair from Service Tax and for this he need not wait for the budget. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And perhaps, the BJP has a political agenda in this request. They can now take to the road and say the FM has made even a basic requirement like road repair prohibitive! The BJP demagogues will remind their audiences that it was Emperor Asoka , Sher Shah Suri and then Atalji , who built roads in India and now this government wants to tax even repair of these roads! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/repair.htm">DGST's F No V/ DGST /30-Misc-16/2008448 Dated : January 31, 2008</a> </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scarp – Increased; No change in other items </strong></font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has increased the Tariff Value of imported Brass Scrap from US Dollars 4114 to US Dollars 4249. Tariff value for poppy seeds remains at 5398 Dollars. There is no change in the Tariff Value of other products too. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_006.htm" target="_blank">NOTIFICATION NO. 6/2008- Cus . ,( N.T. ), Dated: February 05, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Summons through video conference – CIC's e-hearing </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please refer to <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6501" target="_blank">TIOL-DDT 760 12.12.2007</a> - we reported about the Central Information Commission summoning former senior officers of the CBI for a video conference. The appellant, Customs officer, Ajay Ubale had asked for some gate registers from CBI and they asked him to get them from different officers. He had also asked for information about a case in which investigation had been completed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The hearing took place with the applicant Ajay Ubale at NIC studio Mumbai, V.V. Lakshmi Narayana , DIG, CBI at NIC studio Hyderabad and S. N. Saxena , SP, CBI at NIC studio Mumbai. Now the video hearing is over and the CIC was told that the gate registers have been destroyed and though investigation is over, a revision petition is pending. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CIC ordered that gate registers cannot be inspected now as there remains nothing to inspect. Regarding the case details, the Commission held <font color="#FF6633">that that mere continuation of prosecution or process of investigation is not enough to deny information to an information seeker under the RTI Act, unless the disclosure of such information would impede the process of investigation or apprehension or prosecution of offenders. </font><br> <br> </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And so directed the CPIO to furnish the information. </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"><strong><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"><strong><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></strong></font></strong></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>Condonation of delay – 1530 days - assessee pursuing ROM with Commissioner (Appeals) – Delay not condoned – penalty confirmed : ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The delay of 1530 days was due to the Assessee being unaware of the correct procedure to contest the original CIT (A)'s order and was advised wrongly by the earlier Authorized Representative and hence not deliberate and neither willful nor wanton but on account of the bonafide belief on the part of the assessee that it was proceeding on the right track, which to its-utmost dismay it found was a mistaken belief. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal was not impressed. Accordingly, the appeal was dismissed as time barred. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Prosecution vs adjudication </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No prosecution on same set of facts if departmental adjudication drops proceedings on strong reasons - After exonerating the party on merits, the same authority cannot be a prosecutor for the same offence : Delhi High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Respondent has itself exonerated the petitioner in the adjudication proceedings on merits and its order has attained finality. The continuation of criminal proceedings on identical facts and requiring a higher degree of proof cannot be justified. </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>Aircraft on foreign run although making some halts within Indian territory entitled to concessional rate of duty : Tribunal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">INGENUITY knows no bounds when it comes to Departmental officers interpreting an exemption notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case goes thus - the appellant supplied Aviation Turbine Fuel (ATF) at concessional rate of duty to an Air India Aircraft operating through Sahar Airport . It is the allegation in show cause notice that the said ATF was supplied to flights of Air India for plying between Mumbai and Ahmedabad /Hyderabad/Goa/Calicut in India without a trip to foreign Airport on their voyage. After granting hearing, the adjudicating authority confirmed the demand and also imposed penalty and directed to pay the interest on the said amount <strong>. </strong></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> </body> </html>