TIOL-DDT 880 · 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 bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 880 </font><br> 05.06.2008 <br> Thursday</strong> </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs and Excise Duties reduction for petro </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Petroleum Crude will now be charged to nil rate of Customs duty instead of 5%. Petrol and HSD will attract a 2.5% Customs Duty instead of 7.5% as of now. Other Petro product will attract a 5% Customs duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a one rupee reduction in excise duty on unbranded petrol and HSD. There is no change in the rates of duty for branded petrol and HSD. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue loss is expected to be around 23,000 Crores! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe it's time we plan to reduce the use of petrol and petro products. How long can the Government and PSU oil companies subsidise petro prices? It would be a good beginning to start with from today which is celebrated worldwide as “World Environment Day. </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_074.htm" target="_blank">Notification No. 74/2008- Cus and 30/2008- CX. Dated the June 4, 2008 </a></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on import of Nylon Tyre Cord Fabrics </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty on import of Nylon Tyre Cord Fabrics was imposed by Notification No. 36/2005- Customs, dated the 27th April, 2005. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However vide notification No. 84/2006- Customs dated the 29th August, 2006, Government stipulated that pending the outcome of the review by the designated authority, the subject goods, when exported by M/s Junma Tyre Cord Company Limited, People's Republic of China and imported into India, shall be subjected to provisional assessment till the review is completed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On review, the Designated Authority recommended that anti dumping duty at the rate of Rs. 51.36 per kg be imposed on imports of Nylon Tyre Cord Fabrics falling under Chapter 59 of the Customs Tariff Act, 1975 produced and exported to India by M/s Junma Tyre Cord Company Limited, People's Republic of China; Based on the above recommendation, the Government has imposed anti dumping duty at the rate of Rs. 51.36 per kg on imports of Nylon Tyre Cord Fabrics falling under Chapter 59 of the Customs Tariff Act, 1975 produced and exported to India by M/s Junma Tyre Cord Company Limited, People's Republic of China. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently Notification No. 84/2006- Customs is rescinded. </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_072.htm" target="_blank">Notification No. 72/2008- Cus</a><strong> and </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_073.htm">73/2008- Cus Dated the June 2, 2008 </a></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Government notifies Service Tax Dispute Resoluti on Scheme Rules, 2008 and issues detailed guidelines </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This great amnesty scheme which covers Service Tax arrears of a princely amount of Rs. 25,000/- is open from 1.7.2008 to 30.9.2008. And an elaborate procedure is prescribed. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The Commissioners are to appoint Designated Officers. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The Declaration has to be made before the Designated Officers in the prescribed form. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The Designated officer shall issue an order specifying the amount payable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The declarant shall pay the amount within thirty days. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. If the demand is less than Rs. 25,000/- amnesty is granted if 50% of the Service Tax demanded is paid. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Rule stipulates that, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>5. Sum payable under the Scheme:</strong> Any sum payable under the Scheme shall be paid in cash. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now do they collect cash in the Service Tax Department? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2008/stnot08_028.htm" target="_blank">Notification No. 28/2008-ST</a><strong> and </strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/sercir102.htm" target="_blank">Circular No. 102 /5/2008- Service Tax Dated: June 4, 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 color="#006600">– Tomorrow ' s cases</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 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></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>Deduction for leave salary payable - any liability which has accrued in relevant year of account is allowable as a deduction; Appeal by Revenue to Tribunal on same issue already decided, not maintainable: ITAT</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This amount was debited to the profit loss account and credited to the provision account. The provision was in respect of leave accrued and due to the employees but not availed of by them as per company's rules. It was also explained by the assessee that whenever the amount is paid as leave salary, the payment would be debited to the provision account. The Assessing Officer disallowed the claim on the ground that there was no justification or evidence adduced by the assessee. Before the CIT (Appeals), the assessee contended that since it was following the mercantile system of accounting, the provision made in respect of an accrued liability is to be deducted in computing its profits. Accepting these submissions, the CIT (Appeals) allowed the claim placing reliance on the judgment of the Supreme Court in Bharat Earth Movers Limited vs. CIT </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wrongly taken credit, before being utilized, reversed voluntarily – Prima facie no cause for imposition of interest or penalty – Tribunal. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Madras High Court in the case of R.A.Mani vs. Palanimuthu Pillai, AIR 1967 Madras 16 (V 54 C7) observed that the word “ <em>avail </em>” is stated to mean that “to take advantage or<strong> <em>utilize</em></strong><em> </em>”; a person can be said to have availed himself of something only if he had taken advantage or profited by that thing or utilized it to his benefit. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“A <em>vailment </em>” and “ <em>taking </em>” of Cenvat Credit cannot be treated as <em><strong>synonymous</strong> </em> terms as held by the Tribunal in the case of Sagar Twisters <strong>[</strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2005/2005-TIOL-574-CESTAT-MUM.htm" target="_blank"><strong><font size="1">2005-TIOL-574-CESTAT-Mum</font></strong></a><strong>]</strong> following the Allahabad High Court's decision in Hello Minerals Water (P) Ltd. <strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2004/2004-TIOL-57-HC-ALL-CX.htm" target="_blank">2004-TIOL-57-HC-All-CX</a></font>]</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, the Assistant Commissioner had dropped the proceedings for imposition of penalty and interest but the Revenue appealed & their appeal proved successful before the Commissioner(A) who confirmed the demand of interest amounting to Rs.1,67,018/- and <em>imposed a penalty </em> of Rs.5.00 lakhs on the applicants. </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>Sec. 45 & 48, unlike the provisions of Wealth Tax, do not make provision, providing for any deemed profit, or gain, to be taxable, as a capital gain- High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To charge capital gains under Sec.45 & 48, four conditions are required to be fulfilled,: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. There should be a capital asset, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Capital asset should be transferred, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Consideration has been received in lieu of transfer, and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. There was cost of acquisition and cost of improvement. </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">vijaywrite@taxindiaonline.com </a></font></p> </body> </html>