TIOL-DDT 811 · the untouched capture
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<p><font size="2"><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 811 </font><font size="3" face="Verdana, Arial, Helvetica, sans-serif"></font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
25.02.2008 <br>
Monday </font></strong></font></p>
<p align="center"></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central
Excise Days !</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
is Celebrations time in Central Excise. The DAY was celebrated on Friday
in Lucknow where
Minister of State for Steel Akhilesh Das was the Chief Guest and Chief Commissioner
Rajesh Dhingra claimed a 71 per cent growth in revenue collection from central
excise. In Friday's celebration in Coimbatore, Commissioner Rajindiran said
that Coimbatore was the first e-filing Commissionerate in the country. He
plans to achieve a 100 per cent e-payment and e-filing of central excise
returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But there are also examples where an Administrative Officer (HQ), had issued an ultimatum to the staff as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>I HAVE BEEN DIRECTED BY THE ADDITIONAL COMMISSIONER (P & V) TO INFORM THAT ALL THE MEMBERS OF THE STAFF ARE TO ATTEND THE `EXCISE DAY' FUNCTION ON 22.02.2008 AT 5.30 PM AT SUGUNA KALYANA MANDAPAM WITHOUT FAIL AND THE <font color="#FF0000">NON-ATTENDANCE WILL BE VIEWED SERIOUSLY. </font></strong></font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, for the FM, the Day was on the Day – February 24 th . He addressed a Central Excise gathering yesterday.</font></p>
<p align="center"><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"><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"><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"><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/pc_ed.jpg" alt="Legal Corner Icon" width="250" height="172" hspace="5" border="0" align="center"></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></strong></font></strong></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></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
FM was optimistic that the Department would meet the target and collect the
one percent incentive. Let us hope the FM would use a part of the one percent
to provide some infrastructure facilities for the CESTAT. CBEC Chairman S
K Shingal said growth rate of excise duty collections was a matter of concern.
Excise duty collections were growing at a rate of 7.6 per cent. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“You have a little over Rs 200 Crores that could be spent on infrastructure, improving the working conditions of your officers and other employees and make the environment friendly and conducive for better work through good housekeeping,” Mr Chidambaram told the Central Excise officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And today is Excise Day in Chennai. Fr. P. Christie, Director, Loyola Institute of Business Administration, Chennai, will be the Chief Guest .Here the directions to the staff were polite, <font color="#FF0000">“All Officers and staffare requested to attend along with their family members and make the celebrationa grand success.” </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Pondicherry will also have the celebration today with Rakesh Behari , Chief Secretary as Chief Guest . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What's in a Day – you can celebrate it whenever it is convenient to you. When you are not serious of a particular day, why can't you have it after you have achieved those Revenue Targets – sometime in April ? </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"><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"><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"><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></strong></font></strong></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></strong></font></strong></font></strong></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">Customs - no prosecution if departmental proceedings are dropped on same set of facts: Delhi High Court </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>Petitioner Nos. 1 and 2 companies are engaged in the business of distribution of medicines. These Petitioners inter alia imported IV Cannulas viz. Vasculon, Neoflon, and Venflon at nil rate of customs duty against proper Bills of Entry taking benefit of the Exemption Notification No. 23/98 Cus. On 23rd August 1998 the Customs raided the godowns of Petitioners 1 and 2 and seized certain medicines all of foreign origin valued at Rs. 1,31,45,000/-. Alleging that there was a misdeclaration of the goods and therefore a fraudulent evasion of customs duty, the Customs initiated proceedings both departmentally as well as in the criminal court. A show cause notice dated 18th February 1999 was issued under Section 124 of the Customs Act, 1962 to which the Petitioners replied. Meanwhile a complaint dated 19th May 1999 was filed in the court of the ACMM for the offences under Sections 132 and 135(1) (a) of the Customs Act, 1962. </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 sets aside Rs 6 Cr plus demand confirmed by CCE , Pune, says Department cannot blow hot and cold at the same time. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">A</font> </strong>cursory glance at the issue and one may feel that the Revenue needs to be taught the basics of the Credit Scheme all over again. Is NACEN listening?<font color="#FF6633"> <strong><em>Harsh words, one may say, but we are helpless! </em></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The short facts go thus – </font></p>
<div align="justify">
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The appellants are engaged in the manufacture of Hydraulic Cylinders, Hydraulic Pumps and parts thereof falling under Chapter heading 84 of the Central Excise Tariff Act, 1985.
</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++They procure the inputs either domestically or import the same. Such inputs are used in the manufacture of hydraulic pumps, valves, cylinders etc. The appellants avail credit of duty or CVD paid on the inputs, as the case may be. </font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++They also import parts and spares of hydraulic pumps, valves, cylinders etc. <strong><em><font color="#FF6633">for sale as such</font> </em></strong> in India . In such cases also, the appellants avail credit of CVD paid on such parts and spares of hydraulic pumps, valves, cylinders etc. </font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The appellants did not have separate inventory control system for such imported goods used in production and in respect of imported goods sold as such. In other words, the inventory control system and the central excise records were common. </font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++The common pool of credit is used <strong><em><font color="#FF6633">for payment of duty on </font></em></strong> manufactured goods as well as <strong><em><font color="#FF6633">goods sold as such</font> </em></strong>. In the case of the imported goods sold as such, the assessable value based on the sale price was always more than their landed cost. </font></p>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This, the department felt was blasphemous inasmuch as a demand notice was issued in the year 2006 to deny credit of Rs.6,64,40,668/- being the <strong><em>CVD availed </em></strong> during the period July 2001 to July 2005 <strong><em><font color="#FF6633">on the goods imported on the ground that these goods were sold as such in India without using them in the manufacturing process.</font> </em></strong> This amount also included the Cenvat component of Rs.14,61,839/- being the credit availed on imported parts & spares lying in the factory on the day of visit on 17.08.2005 & which were to be sold as such. </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>Valuation – royalty - cost of technical know-how is included if same is to be paid, directly or indirectly, as a condition of sale of imported goods : Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">M/s Ferodo India Pvt. Ltd ("buyer") is a subsidiary of M/s T & N International Ltd., UK and are thus related, which is not in dispute in this Revenue appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The buyer is the manufacturer of brake liners and brake pads in India . On 8.9.1995, a technical assistance and trade mark agreement ("TAA") was entered into between the respondent (buyer/licensee) and M/s T & N International Ltd., UK (foreign collaborator/licensor). Under the said agreement, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. the licensor claimed to be in possession of certain secret processes, formula and information. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. the licensor agreed to permit manufacture of brake liners and brake pads (licensed products) by the licensee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. the licensor agreed to disclose the relevant secret processes, formula and information to the licensee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. the licensee was required to import/buy raw material and capital goods from the licensor. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. the licensee was obliged to pay a licence fee along with royalty, based on the net sales value of licensed products sold, consumed or otherwise disposed of. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax </font> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">No deduction for provision of bad and doubtful debts u/s 36(1)(vii) : ITAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>QUITE</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong>often, Revenue ' s decision to dispute either settled decision or clear-cut statutory provisions are found to be bad in taste by the judicial forums. But not the latest case, decided by the Delhi Bench of Tribunal in the case of Maruti Countrywide Auto Finance Ltd, an NBFC. The Revenue ' s move to appeal against the CIT (A) decision <strong><font color="#FF6633">to allow the provision for bad and doubtful debts u/s 36(1)(vii) has finally not turned to be bad at all! In view of the Explanation inserted vide FA, 2001 w.e.f 1.4.89 to Sec 36(1)(vii) the Tribunal has ruled in favour of the Revenue by observing that allowing deduction for the provision for bad and doubtful debts has clearly been explained to be not the intention of the legislature. </font></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>
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<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT's cartoon from Dr. Gopalakrishnanan, IAS (rtd) </strong></font></p>
<p align="center"><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"><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"><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"><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_cartoon_811.gif" alt="Legal Corner Icon" width="284" height="450" hspace="5" border="0" align="center"></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></strong></font></strong></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></strong></font></strong></font></p>
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Start the week with a smile with Gopal's cartoon </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>
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