TIOL-DDT 901 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 901 </font><br>
04.07.2008 <br>
Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>COFEPOSA - reasons for revoking or refusing to revoke the detention order need not be communicated – EIB communicates High Court order </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><em>BHAVANA MEHRA & ANR vs U.O.I. & ANR </em></strong>, (</font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=27&filename=legal/hc/2003/2003-TIOL-201-HC-DEL-COFEPOSA.htm" target="_blank">2003-TIOL-201-HC- DEL-COFEPOSA</a></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">) the
High Court of Delhi held that <em>an order under Section 11, which is communicated to the affected party, need not contain the reasons for refusing to revoke the detention order. This position would hold good even in pre-detention cases. While deciding on the representations made by the petitioner, reasons for revoking or refusing to revoke the detention order need not be communicated. However, the detaining authority would record the reasons in its file </em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Economic Intelligence Bureau has now communicated this order to the field including DRI , ED, Chief Commissioners and Commissioners of Customs and Central Excise – after five years – with a direction that “ <em>copy of this judgment may be circulated to all field offices, under your control and they may also be suitably advised to keep the observations of the Hon'ble High Court of Delhi in the above-mentioned case in view, while dealing with COFEPOSA Cases in future</em>.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It just took five years for the premier Intelligence Agency to communicate an important High Court order. </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=25&filename=notification/custom/2008/cofeposa.htm" target="_blank">CEIB letter NO . 671/07/2008- Cus.VIII , Dated: April 28, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Scope of the Industrial Park Scheme 2008 – extended </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has notified amendments to the Industrial Park Scheme 2008 under sub-section (4) of section 80IA of the Income Tax Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ambit of the “industrial activity” has been expanded to include </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) research and experimental development on natural sciences and engineering as defined in section K, division 73, group 731 of the National Industrial Classification, 2004 Code, issued by the Central Statistical Organisation, Department of Statistics; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) development of computer software; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) information technology enabled services as notified vide notification number S.O. 890(E), dated the 26 th September 2000 for the purposes of sections 10A , 10B and 80HHE of the Income Tax Act, 1961. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The minimum constructed floor area has been reduced to 15,000 square meters (from the earlier 50,000 square meters ); the area allocated or to be allocated to industrial units has been reduced to 75% of the allocable area (from earlier 90%); and provision has been made to allocate area for commercial activity with a cap of 10% of the allocable area. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Online facility Centre at Hyderabad Central Excise </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a trade facilitation measure an online facility centre is being put in place to answer queries from trade & industry situated in the jurisdiction of Hyderabad-III Commissionerate. The e-mail addresses for seeking clarification are: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax matters : <a href="mailto:commissionerate3servicetax@gmail.com">commissionerate3servicetax@gmail.com </a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise matters : <a href="mailto:cex_hyd3@yahoo.com">cex_hyd3@yahoo.com </a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department will process the queries at a senior level and clarification will be sent to the individual/unit concerned. All efforts will be made by the department to answer such queries within three working days of the receipt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The basic objective of the facility is to, <em>inter alia , </em> help small tax payers/small assessees/service providers to comply with tax laws. The facility Centre is not a forum for grievances redressal. Trade and Industry are advised to use the Public Grievance Committee available in the Commissionerate for such matters. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Hyderabad III Commissioner BB Prasad deserves all praise for this novel scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let's hope this scheme really works and is not closed down even before the hype of inauguration dies down. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Do
you remember what happened to the “help centres” started by the Department
with much fanfare? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/commir_hyd.htm" target="_blank">Hyderabad III Commissionerate TRADE FACILITY NO.2 /2008 Dated 11 June, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Maize Prohibited </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Government has prohibited export of Maize till 15 th October 2008. ITC (HS) Classifications of Export and Import item, 2004-09, is amended accordingly. </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=45&filename=notification/dgft/2008/dgft08not022.htm" target="_blank">DGFT Notification NO.22 / ( RE -2008)/2004-09, Dated: July 3, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden <font color="#FF6633" size="5">tiol</font> – Monday ' s cases</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font><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>Supplementary invoices – Bar in availing Cenvat credit on ground that duty became recoverable on account of fraud, collusion, suppression not applicable when it is a case of Stock Transfer between units: Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Cenvat credit has been denied to M/s Godrej Industries Ltd., Vikhroli , Mumbai, on the ground that the supplementary invoices have been issued on account of short recovery of duty by reason of willful misstatement/suppression of facts and, therefore, in view of Rule 7(1 )( b) of the Cenvat Credit Rules, 2002, the Cenvat credit is not admissible. Penalty of equivalent amount has also been imposed and the appellants have been directed to pay interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed that the instant matter is squarely covered by the Tribunal decision in M/s Karnataka Soaps and Detergents Ltd vs. CCE , Mysore/Bangalore [ </font><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2005/2005-TIOL-647-CESTAT-BANG.htm"><strong>2005-TIOL-647-CESTAT-BANG </strong></a></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">]
where it is held that the<font color="#FF6633"> <strong>prohibition to take credit on supplementary invoices operates only in the case of sale</strong></font> inasmuch
as in the present case also the goods covered by the impugned supplementary
invoices were stock transferred from M/s Godrej Consumer Products Ltd., Malanpur
, Indore to M/s Godrej Industries Ltd., Vikhroli , Mumbai. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tribunal fails to understand why in almost every case of appeal before it, the exceptional power to waive predeposit is being sought to be invoked in a routine manner - orders pre-deposit of Rs 7.6 Cr on branded petrol 'Speed' manufactured from ordinary petrol by BPCL </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE Public Sector oil company BPCL was saddled with a demand of nearly Rs 15.2 crores towards duty on what they call “Branded Petrol” manufactured by mixing the ordinary petrol with some additives which they claim will improve the performance of the engine. A penalty equal to the duty “evaded” was also imposed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is expected that when the financial health of the appellant Company is sound and the adjudicating Commissioner has passed a well-reasoned and speaking order after hearing the Representatives of the appellant Company, the appellant Company should make the predeposit of the amounts of duty etc under Section 35F of the Central Excise Act, 1944 before their appeal can be heard on merit. <strong><font color="#000000">We fail to understand why in almost every case of appeal before this Tribunal, the exceptional power of the Tribunal to waive the predeposit is being sought to be invoked in a routine manner </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Sale and Lease Back – depreciation eligible - tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced - theory of sale and lease back had not been invented by assessee: ITAT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The theory of sale and lease back had not been invented by the assessee: </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced. In other words, the tax planning can be tolerated whereas tax evasion by dubious means cannot be countenanced. On seeing this it appears that each transaction can be scanned under the above scanner and it is easily segregated. But it is not so easy as it appears each and every transaction are to be viewed with caution so as to identify the intention of tax planning and tax evasion. The transaction which appears to be a tax evasion can on scrutiny of series of transactions, the transacting parties, the nature of transaction, the nature of trade, the nature of machinery, etc. will decide the ultimate litmus test. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See
our columns on Monday for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </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>
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