TIOL-DDT 864 · the untouched capture
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<p><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL-DDT
864</strong></font><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
13.05.2008<br>
Tuesday</font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Refund
of service tax paid under notification No. 41/2007-Service Tax – where
to file - Board clarifies</font></strong></p>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
notification No. 41/2007-ST, dated 6/10/2007 allows refund of service tax paid
on specified services used for export of goods. This notification stipulates
that a merchant exporter shall file the claim of refund to the Assistant Commissioner/Deputy
Commissioner of Central Excise having jurisdiction over the registered office
or the head office [Proviso to para 2(b) of notification]. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
has been brought to the notice of the Board that certain doubts have arisen
in field, regarding,- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a)
Whether an office, other than the registered or the head office, of a merchant
exporter can file claim for refund; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)
Whether in cities, having exclusive service tax Commissionerates, such claims
should be filed with central excise formations or service tax formation. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
has also has come to know that in a number of cases, regional or other offices
(which is neither a head office nor a registered office in terms of the provisions
of the Companies Act, 1956) of a merchant exporter are registered with department
as service assesses (sic) [what they mean is Service Tax assessees], and it
has been represented that in such cases, these offices registered with the department
may be allowed to file the refund claim without insisting for filing of refund
claim with the Assistant Commissioner/Deputy Commissioner of Central Excise
having jurisdiction over the head office/registered office.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday,
the Board clarified that</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
Normally, a merchant exporter is not required to register with the department,
and therefore, the condition of filing a refund claim at the location of head
office/registered office has been stipulated in the notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
However, in cases, where a premises or an office of a merchant exporter is
registered with the department under service tax law, the merchant exporter
can, at his option, file refund claim with the jurisdictional office, he is
registered with. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
Therefore, refund claims can be filed from any premises / office of a merchant
exporter provided the same is registered for service tax purposes under the
Finance Act, 1994 or rules made thereunder. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
However, even in such cases, if the merchant exporter so desires, he may file
refund claim at the location where his head office/registered office is located.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
In cases where no premises or offices of merchant exporter is registered with
the department, a merchant exporter should file a declaration, as prescribed
in notification No. 41/2007-ST, and thereafter, file the claims with the jurisdictional
Assistant Commissioner/Deputy Commissioner as stipulated under proviso(ii)
to paragraph 2(b) of the said notification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
In case, the head office/registered office is located within the jurisdiction
of exclusive Service Tax Commissionerates at Ahmedabad, Bangalore, Chennai,
Delhi, Kolkata, and Mumbai, the claim should be filed before the jurisdictional
Assistant Commissioner / Deputy Commissioner of Service Tax (who, as per the
provisions is also an AC/DC of Central Excise). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
In all other cases, the refund claim should be filed with the Assistant Commissioner/Deputy
Commissioner of Central Excise and Service Tax, having jurisdiction over Head
office or Registered Office for the purposes of service tax.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
wants the field to give wide publicity to this and difficulty if any to be brought
to its notice immediately.</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/2008/sercir101.htm">CBEC
CIRCULAR NO. 101 /4 /2008-ST., Dated: May 12, 2008</a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">GOES
- Pay 100 Dollars to pass through Customs quickly!</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No,
we are not talking about speed money. Air travellers will soon be able to speed
through Customs checkpoints at some U.S. airports when they return from trips
abroad through the new Global Entry program.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">People
who pass a background check and pay 100 dollars to enrol will enter a separate
Customs line at Washington Dulles, Houston Intercontinental and New York's Kennedy
starting June 10. They will swipe their passport at a kiosk instead of having
it read by a Customs officer and electronically answer questions similar to
those on a Customs declaration form.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
U.S. Customs and Border Protection announced the Global Entry pilot program,
scheduled to launch soon. Global Entry is designed to expedite the screening
and processing of low-risk, frequent international “trusted” travellers
entering the United States.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Global
Entry will be available for U.S. citizens or lawful permanent residents who
are frequent international travellers, provided they have not been found guilty
of a criminal offense, charged with a customs or immigration offense, or declared
inadmissible to the U.S. under immigration legislation. Biometric fingerprint
technology will be used to verify the passenger’s identity and confirm
his or her status as a Global Entry participant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The
Global Entry pilot program is an important next step in building upon the foundation
of CBP’s other trusted traveller programs, such as NEXUS and SENTRI, and
extending expedited processing to low-risk, international air travellers,”
said CBP Commissioner W. Ralph Basham. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
pilot will be initially conducted at John F. Kennedy International Airport,
George Bush Intercontinental Airport and Washington Dulles International Airport.
The program will begin processing applications from the public starting May
12 with operations at the three initial airports scheduled to begin June 10.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Upon
returning from international travel, Global Entry -enrolled travellers may bypass
the regular passport control line and proceed directly to the Global Entry kiosk.
At the kiosk, the Global Entry traveller will activate the system by inserting
his or her passport or U.S. permanent resident card into the document reader.
The kiosk will direct the traveller to electronically provide his or her fingerprints
and will compare that biometric data with the fingerprint biometrics on file.
A digital photograph will also be taken of the traveller as part of the transaction
record. Finally, the traveller will be prompted to answer several CBP declaration
questions posted on the kiosk’s touch-screen. Once the process is successfully
completed, the traveller will be issued a transaction receipt which must be
presented to the CBP officer as the participant leaves the CBP inspection area.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Applications
for enrolment in the Global Entry program will be available through the Global
On-Line Enrolment System (GOES). </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Cell
sites/RF Antennas atop building terraces – Not excise but Service Tax!
</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We
had carried this capsule in our </strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=6777" target="_blank">DDT-800 on 8th February 2008 </a><strong>and understandably
the</strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/dojstru2.htm" target="_blank"> Board in its letter 334/1/2008-TRU dated 29.02.2008</a><strong> informed thus –</strong></font></p>
<blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“5.5
Renting of immovable property service:</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.5.1
Use of immovable property is allowed for placing vending/ dispensing machines
in malls and other commercial premises and erection of communication towers
on buildings. In such cases, there may or may not be transfer of right of
possession or control of the immovable property in favour of the person using
such property.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.5.2
Renting of immovable property includes renting, letting, leasing, licensing
or other similar arrangements of immovable property for use in the course
or furtherance of business or commerce. Transactions mentioned in para 5.5.1
get covered under the category of other similar arrangement, if not covered
under other categories.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.5.3
It is proposed to clarify by way of removal of doubts that renting of immovable
property service includes allowing or permitting the use of space in an immovable
property, irrespective of the transfer of possession or control of the immovable
property. Field formations may ensure that service tax is collected in all
such cases.”</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
said “proposal” is by way of insertion of an Explanation numbered
‘Explanation 2’ in clause 65(90)(a) by the Finance Bill, 2008
& which is now a reality as the Bill has been enacted on the 10th May
2008. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our
friendly Netizen reminded us about this TRU letter & wishes to add something
more into this list –</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
The Indian Railways permit shooting of films/documentaries at various railway
stations for a fee. These charges collected by the Railways for “Renting
out the Railway platforms/stations” runs into lakhs of rupees per year.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
The Indian Railways allows “Canteens/food stalls/tea stalls/khomcha’s
etc. to be run” on the Railway platforms & the licences for the
same are auctioned; allows Book stalls to operate in the Railway premises;
allow shoeshine boys to conduct their business on railway premises officially
[where do they sit & put up their shoeshine kit although is not pre-determined]
& allow Electronic Weighing machines to be installed on railway platforms
etc. etc. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
hope that the authorities concerned delve into these too and do the needful!
</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font><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 color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></strong></font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font></strong></font><font color="#663399">Income
Tax</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>For
debts to be classified as 'bad', assessee has only to write it off as irrecoverable,
if subsequently any part of written off debt is recovered, same to be charged
to tax; primary power, rather obligation of Tribunal, is to dispose of appeal
on merits & incidental power to remand is only an exception and should be
sparingly used: Third Member</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THE
</font></strong>following question has been referred to the third Member as
there was difference of opinion between the AM and JM of the ITAT.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether
on the facts and in the circumstances of the case, the addition with regard
to bad debts should be deleted or the issue is required to be restored to be
restored to the file of AO for further verification of facts? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
facts: The assessee was a limited company engaged in the business of leasing
and hire purchase of equipment, financing, bill discounting, loan placement
etc. In the return of income for the assessment year under consideration, the
assessee claimed bad debt written off at Rs.85,69,350/-. The total income declared
was a negative figure of loss of Rs.64,17,960/-. The Assessing Officer took
up the assessment and issued notice u/s 143(2) on 29.10.2002. During the course
of assessment proceedings, the assessee, as per letter dated 21.10.2003 claimed
that the Bombay High Court vide order dated 4.7.2003 directed amalgamation of
the assessee company with its holding company M/s Zuari Industries Ltd., Goa.
According to the assessee, the Assessing Officer thereafter was not sure whether
assessment was to be made by him or by the Assessing Officer at Goa assessing
the holding company.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FERA</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Discrimination
on the ground of valid classification does not attract the wrath of Article
14 – Constitutional validity Sections 18 of FERA upheld – Supreme
Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Constitutionality
of Sub-sections (2) and (3) of Section 18 of the Foreign Exchange Regulation
Act, 1973 is in question in this appeal against a judgment and order dated 30.07.2007
passed by the High Court of Bombay.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally,
the Act finds place in the Ninth Schedule of the Constitution of India. In terms
of Article 31B of the Constitution of India inter alia none of the Acts specified
in the Ninth Schedule is ultra vires even if it is inconsistent with or takes
away or abridges any of the rights conferred by any provisions of Part III of
the Constitution of India.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Kar
Vivad Samadhan Scheme does not grant immunity from prosecution under IPC or
PCA – Supreme Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fourteen
years ago, one Dr.S. Balakrishnan, purchased the Toyota Lexus Car which was
sent by Ship to Madras Port in July, 1994. His son Yogesh Balakrishnan presented
certain documents for getting clearance of the said car from the Customs Department.
One such document was a letter dated 8.9.1994 authored by the appellant herein
Shri M. Natarajan who is the publisher of a magazine called "Tamilarasi"
which publication had commenced in the year 1992. He is also the author of bi-monthly
magazine " Pudiya Paarvai " which surfaced in the year 1993. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A
First Information Report came to be lodged at the instance of Central Bureau
of Investigation, Chennai for offences under Sections 120B read with Section
420, 468, 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention
of Corruption Act. In that First Information Report, four accused were arrayed,
they being, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i)
Shri S. Senthivel , Commissioner of Customs , Chennai, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii)
Shri Hariharan , former Asstt. Collector Customs, Chennai, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii)
Shri Raja Manoharan, Former Apprising Officer, Customs, Chennai and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv)
Shri Balakrishnan .</font></p>
</blockquote>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See
our columns Tomorrow for the judgements</font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more <strong>DDT</strong></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" target="_blank">vijaywrite@taxindiaonline.com</a></font></p>
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