TIOL-DDT 918 · 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 918 </font><br>
29.07.2008 <br>
Tuesday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Intellectual
Property: Geographical Indications and biodiversity - hot topic at WTO
meet</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">GI or Geographical indications, was an important matter for the WTO meet which concluded yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“TRIPS” is “trade-related aspects of intellectual property rights”. One group of countries has asked for three intellectual property issues to be part of the agenda and to link them with Agriculture and NAMA modalities. Another group opposes both the linking and the assertion that the subjects are ready for negotiations based on draft texts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Only one of these subjects is officially part of the Doha round of negotiations and accepted as part of the “single undertaking” in which all Doha round subjects form part of a single package, with “nothing agreed until everything is agreed”: </font></p>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify"> the negotiation to create a <strong>multilateral register </strong> for geographical indications for wines and spirits. </font></li>
</ul>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other two subjects are officially “implementation” issues. Members differ over whether these are subjects for negotiation or not: </font></p>
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">“ <strong>GI extension </strong>”: a proposal to extend to other products the higher level of geographical indications protection now given to wines and spirits </font></li>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif" align="justify">“ <strong>Disclosure </strong>”: requiring that patent applicants disclose the origin of genetic material and traditional knowledge used in their inventions, or alternative proposals. This comes under the “ <strong>relationship between the TRIPS Agreement and the UN Convention on Biological Diversity ( CBD) </strong>”. </font>
</li>
</ul>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Geographical indications: </strong>Geographical indications are place names (in some countries also words associated with a place) used to identify products that come from these places and have specific characteristics (for example, “ Champagne”, “Tequila” or “Roquefort”). Under the TRIPS Agreement, <strong>all geographical indications have to be protected </strong>at least to avoid misleading the public and to prevent unfair competition (Art.22). <strong>Wines and spirits are given a higher or enhanced level of protection </strong> (Art.23): subject to a number of exceptions they have to be protected even if misuse would not cause the public to be misled. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Negotiation: the multilateral register for wines and spirits: </strong>This negotiation, which takes place in dedicated “special sessions” of the TRIPS Council, is about creating a multilateral system for notifying and registering geographical indications for wines and spirits, which today benefit from a level of protection that is higher than for other geographical indications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Implementation: geographical indications ‘extension': </strong>The issue here is whether to expand the higher level of protection to other products. A number of countries want to negotiate extending this higher level of protection to other products (i.e., cheeses, ceramics, meat, tea, coffee, etc.). Some others oppose the move, and the debate has included the question of whether the Doha Declaration provides a mandate for negotiations. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Patents, biodiversity and ‘disclosure': implementation: </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This debate focuses on how the TRIPS Agreement relates to the Convention on Biological Diversity, and particularly whether the agreement should be amended to require “disclosure”. The ideas put forward include: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>1.</strong> <strong>Disclosure as a TRIPS obligation </strong>: A group represented by Brazil and India and including Bolivia, Colombia, Cuba, Dominican Republic, Ecuador, Peru, Thailand, and supported by the African group and some other developing countries, wants to amend the TRIPS Agreement so that patent applicants are required to disclose the country of origin of genetic resources and traditional knowledge used in the inventions, evidence that they received “prior informed consent” (a term used in the Biological Diversity Convention), and evidence of “fair and equitable” benefit sharing. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>2.</strong> <strong>Disclosure through the World Intellectual Property Organization (WIPO) </strong>: Switzerland has proposed an amendment to the regulations of the WIPO's Patent Cooperation Treaty (and, by reference, WIPO's Patent Law Treaty) so that domestic laws may ask inventors to disclose the source of genetic resources and traditional knowledge when they apply for patents. Failure to meet the requirement could hold up a patent being granted or, when done with fraudulent intent, could entail a granted patent being invalidated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>3.</strong> <strong>Disclosure, but outside patent law </strong>: The EU's position includes a proposal to examine a requirement that all patent applicants disclose the source or origin of genetic material, with legal consequences of not meeting this requirement lying outside the scope of patent law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>4.</strong> <strong>Use of national legislation, including contracts rather than a disclosure obligation </strong>: The United States has argued that the Convention on Biological Diversity's objectives on access to genetic resources, and on benefit sharing, could best be achieved through national legislation and contractual arrangements based on the legislation, which could include commitments on disclosing of any commercial application of genetic resources or traditional knowledge. </font></p>
</blockquote>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India has important trade interests on tropical products and we cannot accept decision among a few as a fait accompli – India 's Ambassador Ujal Singh Bhatia </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his Statement at the Meet yesterday, India 's Permanent Representative to the WTO, Bhatia said, <strong>During the negotiations this week, India has shown considerable flexibility with the objective of enabling the negotiations to move ahead towards conclusion. However, I would like to emphasise that our flexibility and our constructive engagement are premised upon us receiving comfort on the key issues that concern us especially issues which affect the livelihoods of the millions of subsistence farmers and fishermen in India and the protection of infant and vulnerable industries. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He also mentioned; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong>NAMA</strong>, we are somewhat confused regarding new aspects being raised on the Sectorals issue. We had very detailed negotiations on this issue before the last text was issued and we were under the impression that we had settled the issue. We would like to stress that the voluntary nature of the mandate has to be preserved at all costs. We cannot have a situation where Sectorals are made mandatory. We hope that we can find a solution fully consistent with the mandate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bangladesh finds itself in a strange situation. On the one hand, it has found no comfort for its market access problems through the <strong>DFQF </strong> initiative. On the other hand, its situation as a disproportionately affected member has not been recognised. In this Development Round, an <strong>LDC </strong> member cannot be put at a double disadvantage. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The unfinished business includes a number of issues relating to disciplines in domestic support. Needless to say, commitments for reduction of trade distorting support will only have meaning if they are accompanied by strict disciplines. In yesterday's Green Room, a number of delegations spoke in favour of 100% tariff simplification. As we have pointed out earlier, this issue has important implications for transparency and equity. <strong>We find it difficult to understand why some developed countries should resist tariff simplification when developing countries, both in Agriculture and in NAMA, are moving towards 100% simplification. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">NAMA = Non Agricultural Market Access </font></strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DFQF = Duty Free Quota Free (market access) </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LDC = Least Developed Countries </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Come and pick up our apples – Himachal exempts trucks entering for transport of apples. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Himachal Pradesh Government has exempted from goods tax under the Himachal Pradesh Passengers and goods Taxation Act, 1955, on those trucks entering from the neighbouring States of Punjab, Haryana, Uttaranchal, UP, Delhi and Chandigarh, specially engaged for transportation of apples and potatoes from the State. </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/hpnotification.htm" target="_blank">Himachal Notification</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></strong></font><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> – Tomorrow's cases</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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 color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></font><font color="#663399">CESTAT</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CESTAT has no power to impose pre-conditions for de-novo adjudication: Madras High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 129B of the Customs Act, the Tribunal is vested with the power either to confirm or modify or annul the decision of order appealed against. In the facts of the case, the Tribunal did not think fit either to confirm or modify or annul the decision appealed against, but thought it fit with supporting reason, to refer the case back to the authority, which passed such decision or order. In the absence of any power vested on the Tribunal to impose condition, rather a pre-condition for setting aside the order appealed against, the pre-condition imposed by the Tribunal can only be regarded as arbitrary, and without any statutory backing. The terminology "as it thinks fit" cannot be interpreted independently without having any regard to the subsequent terminology used in the provision such as confirming, modifying or annulling the decision. The terminology "as it thinks fit" would only mean to empower the Tribunal either to confirm or to modify or to annul the order appealed against. That would not clothe the Tribunal with the power to refer for the purpose of remitting back the case with a direction to conduct de novo enquiry by imposing pre-condition.</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>Payment
received by foreign Company in respect of software and provision of services
of installation, testing and training shall be taxable under Income Tax
Act read with DTAA: Advance Ruling</strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THESE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> two
applications have been filed by the Airports Authority of India (‘AAI’),
which has been established under the Airports Authority of India Act, 1994. The
applicant is a public sector undertaking, but has filed these applications
in the capacity as a ‘resident’, seeking ruling on the tax liability
of a non-resident US company, namely, Raytheon Company (‘RC’)
with which it has entered into two separate contracts. Under these contracts,
RC will provide software documentation, software, hardware, installation,
testing, training, etc., to the applicant.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Transfer of technical know-how–Tribunal has consistently held that this is not Consulting Engineer's service-Revenue by its conduct has created confusion and chaos in mind of assessee regarding classification of service: CESTAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This conduct of the department was enough to create confusion in the mind of the appellants as to which of the two taxable services would cover the present case of transfer of technology <em>( Para 3) </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fact remains that they have already paid the tax with interest and are entitled to CENVAT credit of the tax, creating a revenue-neutral situation. In the circumstances, in our considered view, the appellants are entitled to the benefit of Section 80 of the Finance Act, 1994, whereunder the penal provisions of Sections 76 & 78 are not to be invoked against a person who failed to pay service tax within the prescribed time due to reasonable cause </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>Larger Bench delivers powerful blow–There is no provision in Central Excise Act and Rules allowing <em>suo motu </em>taking of credit – filing of refund claim u/s 11B is a necessity to examine whether claim is hit by bar of unjust enrichment </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant's contention that refund in respect of duty paid twice cannot be considered as refund of duty and is only the accounting error does not appeal to us as the debit entry made in the accounts is towards payment of duty only and therefore refund of these amounts has to be considered as refund of duty only. The PLA account and the credit accounts are required to be submitted to the department and any correction carried therein, need to have department's sanction. We also note that the law relating to refund has been fully analyzed by the Apex Court in the case of Mafatlal Industries which makes it very clear that all types of refund claim be there of excess duty paid or otherwise are to be filed under section 11B and have to pass the proof of not passing on the incidence of duty to others. The recent decisions of Hon'ble Supreme Court in the case of <em><strong>Sahakari Khand Udyog and Others</strong> </em> clearly laid down that all refunds have to pass through doctrine of unjust enrichment, even if it is not so expressly provided for in the statute. </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 <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>
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