TIOL-DDT 934 · 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 934</font> <br>
21.08.2008 <br>
Thursday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Delhi Customs Valuation Study – Dubious? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please refer to the story in yesterday's <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7746" target="_blank">DDT</a> <strong><font color="#006600">Import of Roller Drawer Sliders (Telescopic/Ball Bearing Type) – Delhi Customs valuation study </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An alert Netizen wrote to us:- </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">As regards, the Delhi SVB's proposed assessable values for import of telescopic drawer channels based on their study, it appears that they have adopted a flat per inch rate of Rs . 2.95 per set across the spectrum for different lengths. As per the study if the MRP itself varies from Rs . 3/- to Rs . 8/- and as we are aware that MRP is an all inclusive price i.e. it includes even the customs duty paid by the importer, in addition to VAT, administration and distribution expenses, distributor and retailers margins, transport and insurance and last but not the least profit margin of the importer. If all these cost elements are taken into consideration and loaded to the proposed AVs then the MRP will be sky high. On the face of it, the proposed MRPs do not make any sense and the so called study is a farce. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">At the end of all this, my fundamental question is can the Customs Authorities at the Port intervene in valuation of an importer who is not a related party and impose these arbitrary values, based on this dubious study? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A very valid question indeed! Any answers? </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of Rough Marble Blocks - DGFT enhances quota</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The quantity of import allowed is raised from 1.1 lakh MT to 1.4 lakh MT for the year 2008-09. </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=46&filename=notification/dgft/2008/dgft08cir028.htm" target="_blank">DGFT Policy Circular NO 28 (RE-2008) 2004-09, Dated: August 20, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP – VKGUY benefits can be claimed by supporting manufacturer or exporter </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has amended Foreign Trade Policy to stipulate that for VKGUY, FMS and FPS, benefits can be claimed </font></p>
<div align="justify">
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. By the company/firm who has realized the foreign exchange directly from overseas, or</font>
</p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2.By the supporting manufacturer (along with disclaimer from the company/firm who has realized the foreign exchange directly from overseas). </font></p>
</blockquote>
</div>
<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/dgft08not031.htm" target="_blank">DGFT Notification No. 31(RE-2008)/2004-2009, Dated: August 19, 2008</a> </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Basmati Rice and Maize – Restrictions</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Restrictions for export of Non Basmati Rice (seed quality) and Maize (corn) </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Seed quality are </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Export will be allowed subject to submission of following documents to Customs at the time of export: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) A certificate of registration from authorized State Seed certifying Agency that it is a registered Seed producer/dealer; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Declaration that the export consignment of seeds has been chemically treated and is not fit for human consumption; and </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Export packets will be labelled that seeds are treated with chemical insecticides and cannot be used for food or feed purposes. </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/dgft08not032.htm" target="_blank">DGFT Notification No. 32(RE-2008)/2004-2009, Dated: August 19, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Nothing to worry about the Health of the economy - Government's clarification on slowdown of Advance Tax collections</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Finance Ministry has clarified that:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The total Direct Tax collection during the period April-July, 2008 is Rs. 71648 crores as against an amount of Rs . 48756 crores during the corresponding period in 2007-08. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. This translates into a robust growth rate of 46.95 per cent during the current fiscal year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The total direct tax collections comprise of, inter alia, advance tax payments, tax deducted at source, self-assessment tax payments and post-assessment tax collections. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. At the level of the taxpayer, advance tax payments and tax deducted at source are substitutes and inversely related to each other, i.e., if the tax deducted at source is high, a relatively smaller amount is payable as advance tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. During the period April-July, 2008, tax deducted at source on payments received by companies has increased to Rs. 22128 crores from Rs . 13782 crores during the corresponding period in 2007-08, thereby recording an increase of 60.55 per cent as against a growth rate of 43 per cent during the same period in the fiscal year 2007-08. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. This unprecedented increase in TDS collections is reflected in relatively lower growth rate of 24 per cent in advance tax payments during the same period as against a growth rate of 28 per cent during the same period in the fiscal year 2007-08. This trend is consistent with past experience. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The trend of direct tax collections is one of the many indicators of the health of the economy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. The robust growth of direct tax collections by 47 per cent during April-July, 2008 is rather an indication of a buoyant economy. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>9. It is, therefore, inappropriate to use the growth rate in advance tax payments, in isolation, for analyzing the health of the economy. </strong></font></p>
</blockquote>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs – Not enough appraisers – Draft Superintendents (temporarily) – Board tells Field</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a result of stoppage of direct recruitment of Appraisers for the last few years and also due to the increase of sanctioned strength of the appraising cadres because of the sanction of new SEZs, ICDs, CFSs, etc, the Department has been presently facing shortage of appraising officers. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In view of such shortage of appraising officers, CBEC has decided to provide flexibility to the Commissioners of Customs/Central Excise to assign the assessment or examination work to the Superintendents of Customs/Central Excise whenever it is considered absolutely necessary. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As and when appraising officers become available, the work may be assigned to them by divesting the Superintendents of Customs/ Central Excise of such work. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board's Manpower Planning has gone totally out of control – they have too many officers and too much shortage of staff at the required places! </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/appraiser.htm" target="_blank">CBEC's F.No.A -12018/3/2003- Ad.IIA Dated : 25 th June, 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 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>Welding electrodes entitled for CENVAT Credit – High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue is back! This time the High Court has not agreed with the Larger Bench of the Tribunal in Jaypee Rewa <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2003/2003-TIOL-246-CESTAT-DEL-LB.htm" target="_blank"><font size="1"><strong>2003-TIOL-246- CESTAT-DEL-LB. </strong></font></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We had recently reported the case where a Single Member had held that the Larger Bench decision is not applicable. <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2008/2008-TIOL-816-CESTAT-BANG.htm" target="_blank"><font size="1"><strong>2008-TIOL-816-CESTAT-BANG</strong>. </font></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the expression “in the manufacture of goods” should normally encompass entire process carried on by the dealer, of converting raw materials into finished goods, where any particular process, or activity, is so integrally connected with the ultimate production of the goods, but for that process, manufacturing, or processing of the goods would be commercially inexpedient, goods required in that process would, fall within expression “in the manufacturing of goods”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Also see our story - <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7352">Welding
Electrodes – Cenvat Credit available, trumpets Tribunal </a></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No extended period of limitation when facts are known to the Department; Burden is on Revenue to prove that interest-free advance has influenced the price: Supreme Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Since the fact regarding advances received was already in the knowledge of the Department and the earlier similar proceedings initiated by the Department were dropped by the Assistant Commissioner, the Revenue was not justified in invoking the extended period of limitation. </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>Lease of table space to financial institutions and receiving remuneration for the same cannot be categorized as Business Auxiliary service - Not liable to service tax: Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPELLANTS </strong> are engaged in selling sales and services of two wheelers. They also arrange loan from various financial institutions/banks for Hire Purchase and are therefore promotion/marketing of the products/services of the financial institutions/banks for which they are getting a consideration called pay-out/incentive/commission from the financial institution/banks. Service tax authorities tried to fasten service tax liability on the appellant for the consideration received in this regard by categorizing the activity under ‘Business Auxiliary service'. </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>Indian PSU acting as agent of foreign company – dispute with Income Tax – no need for COD clearance: for purposes of levying Customs duty on design and engineering received in a packed condition are treated as machinery, but for that reason alone it cannot be called a plant: ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Tribunal held that the mere fact that the drawings and designs were sent to SAIL by the assessee from Germany in a packed condition on free delivery basis at Calcutta airport does not make it a plant. The plant is what the assessee supplied to SAIL under contract no.1 . The design and engineering and other services described in contract no.3 are technical services rendered by the assessee, though from Germany , to SAIL. </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">Until Tomorrow with more</font><strong> <font color="#FF6633">DDT </font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">Mail your comments to </font><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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