TIOL-DDT 823 · 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="3" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">TIOL-DDT </font></strong><font color="#663399"><strong> 823 </strong></font><strong></strong></font><font face="Verdana, Arial, Helvetica, sans-serif"><font size="2"><strong><br> 12. 03. 2008 <br> Wednesday </strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>First dispose of the Stay petition; then you can think of the appeal! Board warns Commissioners (Appeals) </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now that there ARE too many Commissioners (Appeals), it hardly takes more than three months for an appeal to be decided. And normally the Commissioners (Appeals) don't decide the Stay Petitions as the main appeal itself is heard and decided within three months. So in reality nobody makes a pre deposit at this first appellate stage. Board must have realised the “loss of Revenue”, because of this superfast appellate mechanism. While many Netizens in this portal have demanded that there should not be any pre-deposit in this first appeal stage, Board wants the Commissioners (Appeals) to first decide on the Stay Application and then decide the Appeal. So, now for every appeal before the Commissioner (Appeals), there will be two hearings, one for stay and one for the main appeal. Consultants and Lawyers should send bouquets of the choicest flowers to the Board for giving them another opportunity to bill the client !. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC, in a rare show of respect to judiciary has cited several judgements of the Supreme Court, High Courts and Tribunal to drive home the point that appeal should be heard only after the “stay' matter is decided – mainly on pre-deposit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Is this another way to reach the target of Revenue Collection during the year end? In Revenue review meetings called for by Chief Commissioners, the Commissioners (Appeals) are also invited and their participation is sought. Are Commissioners (Appeals) agents for Revenue collections? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has directed the Chief Commissioners to<font color="#FF6633"> issue suitable directions to the Commissioner (Appeals) to first dispose of the stay application filed by the party under section 35F of the Central Excise Act, 1944/Section 129E of the Customs Act, 1962 and only thereafter take up the proceedings in the appeal for decision. It may also be emphasized upon them that while granting stay specific findings should be given in the stay order leading to the conclusion that the deposit of duty or penalty would cause undue hardship to the appellant. At the same time while disposing of stay applications, Board's circular No. 396/29/ 98- CX dt 2.6.98 directing the Commissioner (Appeals) to dispose <strong>of the stay application within one month </strong>of its filing may be adhered to it may be brought to their notice that <strong>any deviation from the provisions of the statute as stated above shall be viewed very seriously. </strong></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are they trying to intimidate the Commissioners (Appeals)? Please understand , this is India – where Democracy, Rule of Law and Judicial Independence are emotionally cherished ideals. Even in Gen. Musharaff 's Pakistan , the Judiciary tried to maintain its independence. It is certainly in bad taste for the Board to tell the Chief Commissioners that they should inform their Commissioners (Appeals) that any deviation will be viewed <strong><font color="#FF6633">seriously</font> </strong>. If you don't want your Commissioners (Appeals) to give judicial orders and if you want to treat them just like any other executive subordinate, why don't you think of abolishing the very institution? Let the civil courts have jurisdiction – at least they are not under the control of the Chief Commissioner and the Board! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This, certainly is, not the way to collect taxes – your job is to collect the correct taxes – not a penny more, not a penny less! </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=31&filename=notification/excise/2008/instruct01.htm" target="_blank">CBEC's F.No . 275/8/2008- CX.8A Dated : February 20, 2008 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax on freight charges – Postal Department – Board has its doubts </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Postal Department had a doubt, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is to intimate that this office has engaged several shipping companies for conveyance of outward surface Indian Postal Mails to the various ports of foreign countries. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recently some shipping companies are charging service tax in their freight bills for following services: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1) delivery charges </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2) Terminal Handling charges @ 12.24% </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kindly intimate whether Indian Postal outward surface mail bags are subject to levy of service tax or otherwise </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further it is to add that these shipping companies liable to pay service tax @ 12.24% of the amount payable to them as mail conveyance charges. It may kindly be clarified. <br> <br> The Board has clarified to the DGST, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As stated, Postal Department has engaged shipping companies for conveyance of outward surface Indian Postal Mails to various ports of foreign countries and handling of export cargo or passenger baggage etc. From the facts mentioned it appears that the service provided by shipping companies is in the nature ‘ distribution, management and logistics' and delivery order charges and inland haulage charges collected by shipping companies are for such ‘distribution management and logistics' service. Such service is specially covered under ‘business support services' and is liable to service tax. <strong><font color="#FF6633">However, in case there are facts which indicate that that appropriate classification of the service provided is ‘cargo handling service' the same may be brought to the notice of this office. </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Board which was supposed to give a clarification has expressed a doubt as to whether the service is “Cargo Handling service”. And for a change, the Board is right! But should the Board express a doubt, when they are supposed to clarify on the doubts? </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=41&filename=notification/servicetax/2007/freight.htm" target="_blank">CBEC's F.No . 137/131/2007 - CX.4 Dated : December 12, 2007 </a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Measures to curb the menace of counterfeit and refurbished IT products – CVC Circular </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With the increasing use of IT to leverage technology, a large number of Government organizations are either upgrading or in the process of procurement of new computer hardware and software. It is often difficult to know the difference between PC made of "Genuine Parts" and that made of "Counterfeit Parts". It may also be the case often that while various organisations order and pay for brand new equipment, they end up getting an inferior PC with counterfeit and second hand/refurbished parts disguised as new in new/ original cabinets to various customers designated as consignees by the ordering agencies at the headquarters of these organizations who are ignorant or have little or no technical knowledge in the matter. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In effect, this amounts to the organisation not getting what they actually ordered and paid for. The supplies of such PC in the long run would defeat the very purpose of going for a new system. COUNTERFEITING is designed to cheat naive consumers/ organizations. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This current circular is intended to help/ inform and enable due diligence as well as curbing the menace of counterfeit and refurbished IT products disguised as new. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a first step, there is a need for all buyers in the Government Departments/ PSU to insist on a signed undertaking (sample format enclosed) from some authority not lower than the Company Secretary of the system OEM that would certify that all the components/parts/assembly/software used in the Desktops and Servers like Hard disk, Monitors, Memory etc were original/new components/parts/assembly/software, and that no refurbished/duplicate/ second hand components /parts / assembly / software were being used or would be used, so that the buying organizations were not cheated and get the original equipments as ordered by them. Also one could ask for 'Factory Sealed Boxes' with System OEM seal to ensure that the contents have not been changed en route. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following advisory checkpoints it is hoped shall help identify the fraudulent practices that have come to notice and help guard against spurious and refurbished/duplicate/ second hand components/parts/ assembly / software being received by purchasers and consignees who receive such goods and may not have much technical knowledge. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1.<font color="#FF6633"> <strong>CPU</strong></font><strong>. </strong> Buyers are cautioned against buying IT Hardware with remarked CPUs that are freely / readily available in the market today. Entry Level processors get Remarked / Over clocked and sold as high end processors. These CPUs, come disguised as higher clock speed processors (e.g. a Celeron CPU can be remarked as a P4 CPU) while their real clock speed may be lower. Since Operating System is loaded from CD bundled with Motherboard, the CD contains image of configured OS. Hence information as seen in ‘My Computer' – ‘System Properties' shall give deceptive information. In other words, a Celeron CPU remarked as a P4 CPU, shall be seen as a P4 CPU only. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Buyers should therefore, use various tool / utilities like the ‘CPU-Z' Utility or the ‘ sSpecNo .' for ascertaining the real parameters of the CPU. Utility like CPU-Z ( appox . 1.3 MB size) are available free on the web. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Hard Disk IT Hardware with refurbished Hard Disks that are actually 2nd hand / repaired hard disks are readily available at low cost. In hard disk drives, the factory repaired hard disk drives, which are mainly used in the warranty replacements are substituted in the new machines. Same is the case observed with floppy drive and Optical disk drives many times. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Most of the competent hard disk makers use a sticker on such hard disks sold by them that clearly distinguishes such hard disks from the fresh ones. For example, manufacturer ‘Seagate' marks Green Border and label of "Certified Repaired HDD " to distinguish such disk drives from New Genuine HDD . There is No border or Refurbished label on genuine new HDD . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In addition to this, buyers may also use HDTUNE_210 Utility. This utility shall return Hard Disk Manufacturers' Serial no. and Date of manufacturing of the Hard Disk. These parameters can be used to cross-verify with the hard disk vendor. Various Hard Disk vendors also put a date code on the hard disk. A mismatch between this date and the one returned by HDTUNE_210 Utility can also be viewed as tampering with the actual information of the hard disk. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Monitors. IT Hardware with refurbished Monitors that are actually 2nd hand / repaired monitors are given a "new look" by changing the body, with internal components remaining "old / repaired". These CRT monitors are usually discarded from developed countries like US and Europe. There are also B Grade (New but Low Quality) CRT Monitors used in place of new monitors. Many times these can be distinguished by opening the cabinet body and noticing that the label on the tube does not carry various certifications and there are scratch marks on the tube. While 'Genuine' Picture Tubes have all mandatory Certifications, 'Counterfeit' Picture Tubes would not have these certifications. Certification gives an assurance of Reliability. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further many such cathode ray tubes (Picture Tubes) are found to need extra magnets to achieve focusing and earthing also is missing. Genuine Monitors rely on 'Yoke Coil' alone to focus electronic beam. Counterfeit Monitors typically require Numerous Magnetic Strips in addition to Yoke Coil to focus electronic beam. Further, ' Earthing ' and 'Shielding' provide ESD (Electro Static Discharge) protection. Genuine Picture Tubes have proper " Earthing and Shielding". Earthing and Shielding is compromised in counterfeit Picture Tubes to reduce cost. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 'B' Grade LCD Monitors, panels used are B grade in which the number of spots may be higher, response time & brightness of lower specs than what is stated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Above monitors are all available at low cost. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The "Signed Undertaking" as suggested shall serve as a deterrent and as a safeguard to ensure that bidders are not fleecing them by supplying such monitors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Operating System. Purchasers should check the IT Hardware supplied (randomly selected IT Hardware) for Certificate of Authenticity ( COA ) pasted on the PC for product serial number and OEM's / Supplier's name to be printed on it. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In Operating systems, pirated OS software with fake Certificates of Authenticity are used by some suppliers to cut costs. They look as good as the real ones. In PCs, counterfeiters buy legitimate software and copy the box design and packaging. Using sophisticated and expensive copiers, many copies of illegal CDs are created in a day. Purchasers should guard against buying IT Hardware with pirated copies of Operating Systems. Such Operating Systems, though, available at low prices, do not have the updated patches and security features that help safeguarding the PC and also improve its lifespan. Purchasers, therefore, may use the standard testing procedures (randomly on randomly selected IT Hardware) available on the following URL for ascertaining the in authenticity of the operating system installed on their PC </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.microsoft.com/resources/howtotell/ww/windows/%20default.mspx%20.%20" target="_blank">http://www.microsoft.com/resources/howtotell/ww/windows/ default.mspx . </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Microsoft provides an inbuilt tool to diagnose the "Genuineness of its Operating System". One could go to 'My Documents', and 'Help', from where one shall get step by step instructions to find out whether the windows installed is genuine. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.microsoft.com/resources/howtotell/windows/default.aspx?displaylang=en" target="_blank">http://www.microsoft.com/resources/howtotell/ww/windows/default.mspx </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Mechanical Keyboards: Fake mechanical keyboards that are partially mechanical, with only the key plunger being that of a real mechanical keyboard and rest of the keyboard features remaining the same as those of membrane keyboard are being passed on as true mechanical keyboards. While these keyboards are available at low prices, they do not offer the robustness and long key-stroke life expected of a real mechanical keyboard. Real Mechanical Keyboards are expected to have Keystroke life of 50 Million as against 10 million for Membrane and Semi-Mechanical Keyboards. In case of bulk orders, it is recommended to physically examine a few keyboards for their construct to ascertain the genuineness of their being real mechanical keyboards. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Low Quality Memory Module - Memory chips are remarked or downgraded wafers are plastic packed under unknown brands or remarked with names of well-known brands. Such memory modules have lower performance levels. It is better to go in for proven reputed brands such as Kingston, Transcend, Corsair, Samsung and Hynix to name a few available in the market. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. Fraudulently Marked SMPS - In power supplies, wrong marking of the wattage is done. The power supplies do not carry all required certifications. While 'Genuine' Power supplies carry all mandatory certifications, in counterfeit Power supplies these certifications shall be found missing. Further Short circuit & over voltage protection circuitry could be missing in counterfeit Power Supply to reduce cost. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. Counterfeited Consumables - Counterfeited consumables such as printer cartridges etc are used which are refilled with ink of poor quality leading to poor performance and clogging, smudging in printers etc. It is advisable to buy such consumables from OEM authorized suppliers or distributors to ensure quality and longevity of the printer equipment. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cvccir01.htm">CVC Circular No. 007/ CRD /008 Dated : February 15, 2008 </a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NPPA to monitor 10% rise in prices based on reduced MRP following excise cut </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The National Pharmaceutical Pricing Authority ( NPPA ) issued guidelines regarding reduction in prices of non scheduled formulation packs consequent to reduction in excise duty from 16% to 8% and the rate of abatement from 42.5% to 35.5% notified by the Ministry of Finance, (Department of Revenue) on Mar. 1, 2008. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is to ensure that the benefit of the excise duty reduction announced in the Union Budget for 2008-09 is passed on to the Consumers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the guidelines, consequent upon the reduction in the rate of excise duty on medicines from 16% to 8% notified by the Ministry of Finance, Department of Revenue vide Notification Central (Excise) dated onMar. 1, 2008 and the rate of abatement from 42.5% to 35.5% vide Notification the Central Excise ( N.T. ) datedMar. 1, 2008, all manufacturers and marketing companies of formulation packs are advised to ensure that the benefit of this excise duty reduction and the reduced rate of abatement is passed on to consumers through reduced Maximum Retail Price ( MRP ). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prices of all non scheduled packs must accordingly be reduced downwards by 4.58% except in those categories of non scheduled formulation packs where no excise duty has been actually paid to the Government and therefore no excise duty shall be chargeable in the MRP of such non scheduled packs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The National Pharmaceutical Pricing Authority ( NPPA ) expects that the above reduction in MRP would be complied with by way of reduced MRP and that necessary revised price lists would be submitted to NPPA forthwith. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NPPA shall accordingly monitor the limit of 10% increase in prices per annum of non scheduled packs based on the reduced MRP for all such -packs where the batch of the formulation pack has been cleared by the manufacturer through the competent excise authorities on or after Mar. 01, 2008 in terms of above mentioned notifications of the Ministry of Finance (Department of Revenue) both datedMar. 1,2008. </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"><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></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 color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Where the assessees are not guilty of suppression of facts, collusion or wilful misstatement of facts, extended period of limitation cannot be invoked – Supreme Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The respondent M/s M.M.K. Jewellers is a unit in Santacruz Electronics Export Processing Zone, engaged in the manufacturing of plain/studded/ unstudded gold jewellery for export from directly imported gold or from the gold procured from MMTC in terms of Notification No. 196/87- Cus dated 5.5.1987 which was further amended by Notification No. 155/92- Cus dated 30.3.1992 and Notification No. 177/94- Cus dated 21.10.1994. The said notification, inter alia, permitted graded percentage of gold wastage or loss depending on the value addition achieved, on the jewellery of the description specified therein, and provided that scrap, dust or sweepings may be forwarded to the Government Mint by the importer for conversion into standard gold bars and returned to the said zone in accordance with the procedure specified by the Commissioner of Customs in this regard. Amongst other conditions, the said notification required that the importer shall maintain a proper account of import, consumption and utilization of the goods and of exports made by him. Public Notice No.2 /1988 dated 28.7.1988 issued by the Commissioner of Customs, Airport in terms of the notification required the units in SEEPZ to maintain registers as per proforma . </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty under section 114A is imposable only when the demand is confirmed under the proviso to section 28(1) of the Act. In view of the clear findings of the Commissioner that the respondent-assessees are not guilty of suppression of facts or are guilty of collusion or misstatement and, therefore, duty cannot be imposed by invoking the extended period of limitation. When the duty itself cannot be imposed, no order of imposing the penalty under section 114A of the Customs Act can be sustained. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Since special discount was not available to other buyers of the same class, the same cannot be considered as permissible deduction: Tribunal </font></strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CONSIDER </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">this – a manufacturer gives a discount of 20% to their high profile customers & gives an even higher discount of 35% to another of their customers with a condition that he will promote the sale of the products purchased by carrying advertisement & sales promotion activities etc. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue alleged that this excess discount quantum was not permissible & accordingly a duty demand was raised & confirmed. </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>Deduction claimed for commissions paid for sales promotion - AO proves commissions were only adjustment entries - Penalty upheld by ITAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">IN</font></strong> a very rare case of penalty, the Tribunal has confirmed the levy of penalty against the assessee for claiming bogus commission as deduction and for deliberately furnishing fake documents. While finding that mens rea is established in this case, the Tribunal has upheld the levy of penalty u/s 271(1 )( c) and also Sec 273(2)(a). </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 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>