TIOL-DDT 944 · the untouched capture
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="3">TIOL-DDT 944</font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><br>
04.09.2008<br>
Thursday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EOUs claiming Deemed Export Benefits – Alternative Bank Certificate to be produced</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has amended Appendix 22B of the HOP to stipulate that EOUs claiming deemed export benefits should produce an alternative bank certificate along with the domestic supplier certificate as required now.</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=47&filename=notification/dgft/2008/dgft08pn071.htm" target="_blank">DGFT Public Notice No. 71 (RE-2008) 2004-09, Dated: September 2, 2008</a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cashew eligible for VKGUY benefits</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has amended the HOP to stipulate that, “Exports of cashew and value added products of cashew (covered by ITC HS Codes 080131, 080132 and 20081910) shall be entitled to VKGUY scheme benefits as continuing products and this shall be applicable for exports made during the period 27.4.2005 till 31.3.2007 as well.”</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=47&filename=notification/dgft/2008/dgft08pn074.htm" target="_top">DGFT Public Notice No. 74 (RE-2008) 2004-09, Dated: September 2, 2008</a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Execution of Bank Guarantee/Legal Undertaking for Advance Authorisation/DFIA and EPCG Authorisation</font></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>And</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Advance Authorisation for Annual Requirement</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DGFT has amended the HOP to stipulate that, “In case, the firm has already executed BG/LUT for the full value of the licence/certificate/ authorization/permission (covering the items indigenously procured) to the Customs and furnishes proof of the same to Regional Authority (RA), no BG/LUT shall be required to be executed with the RA. The RA concerned shall endorse on the authorization that the Customs Authority shall release/redeem BG/LUT only after receipt of NOC or EODC from the RA concerned. RA shall endorse a copy of the same along with a forwarding letter to the Customs Authority at the Port of registration for their information and record”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Regarding <strong>Advance Authorisation for Annual Requirement</strong>, the DGFT amendment now provides that, “In respect of export product for which Standard Input Output Norms (SION) does not exist, the authorization holder shall submit an application in “ Aayaat-Niryaat Form” along with prescribed documents to NC before making the shipment. The applicant shall also furnish Advance Authorisation for Annual Requirement No. and date along with the File No. from which the same was issued in the covering letter to the application”. </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=47&filename=notification/dgft/2008/dgft08pn075.htm" target="_blank">DGFT Public Notice No. 75 (RE-2008) 2004-09, Dated: September 2, 2008</a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Revalidation of DFIA</font></strong></font></p>
<div align="justify">
<ul>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The time period for filing application for revalidation of DFIAs mentioned stands extended upto 30th September, '08. </font>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No application fee shall be required for such revalidation.
</font>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Application for revalidation can be made in the request letter itself along with the original DFIA and amendment sheets, if any.</font></li>
</ul>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Disposal of the old cases of advance licences issued before 31.03.2002: </strong>The importer is supposed to produce proof of non availment of MODVAT credit. ARE 1 or similar document(s) duly authenticated by the Central Excise Authority and evidencing non availment of MODVAT/CENVAT credit facility, is now accepted as one proof</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=47&filename=notification/dgft/2008/dgft08pn076.htm" target="_blank">DGFT Public Notice No. 76 (RE-2008) 2004-09, Dated: September 2, 2008 </a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Meeting Legal Expenses for Trade Related Matters – DGFT amend FTP </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per para 3.2.1.1 of the Foreign Trade Policy, “DOC would provide financial assistance to deserving exporters on recommendation of EPCs for meeting cost of legal expenses for trade related matters.” </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now it is added, </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“However, financial assistance would be restricted to statutory compliances such as registration charges, litigation in anti dumping and countervailing cases, etc. as provided under the Market Access Initiative (MAI) Scheme of DOC.” </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/dgft08not036.htm" target="_blank">DGFT Notification No. 36 (RE-2008) 2004-09, Dated: September 2, 2008</a></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Export
of PUSA -1121 variety of Non-basmati rice - allowed </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export of PUSA -1121 variety of Non-basmati rice shall be allowed subject to the following conditions: - </font></p>
<div align="justify">
<ol>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export allowed subject to registration of contracts with APEDA, New Delhi , prior to shipment;
</font>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export permitted only if the minimum FOB price is US$ 1200 per ton or Rs.48,000/- per ton; </font>
<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export will be restricted through the following ports only:-</font></li>
</ol>
<blockquote><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. Kandla </font></blockquote>
</div>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. Kakinada </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iii. Kolkata </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">iv. JNPT , Mumbai</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v. Mundra , and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">vi. Pipavav </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Export shall be allowed only with effect from 15 th October, 2008.</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/dgft08not037.htm" target="_blank">DGFT Notification No. 37 (RE-2008) 2004-09, Dated: September 2, 2008</a> </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">High Court Judge and former ITAT Member in Rs 15 Lakhs cash scam</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On
13th August, Additional Advocate General Sandeep Bansal , through his <font color="#FF0000"><em>munshi</em></font> Prakash
Chand delivered a packet containing Rs 15 lakhs in cash to the residence
of Justice Nirmaljit Kaur , a Punjab and Haryana High Court judge. She called
the police. Bansal was arrested by the police. He resigned from the position
of AG immediately and apparently told the police that the money was wrongly
delivered to Justice Kaur's residence and that it was actually meant for
Justice Nirmal Yadav. He claimed that he had sent his <font color="#FF0000"><em>munshi</em></font> with
the currency notes because the money was needed for a land deal made by the
judge in Solan in Himachal Pradesh. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It seems another sum of Rs. 15 lakhs was delivered at Justice Yadav's home the next day by Bansal's friend and property dealer Rajiv Gupta. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Nirmal Yadav was a Judicial Member of the ITAT and was posted in Mumbai for about 2 years before her elevation on 05.11.2004. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delivering slush cash to the wrong person can have serious consequences.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Another High Court Judge (former ITAT Member) in trouble – appointment challenged </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It's again a former ITAT Member who had been recently elevated to the Allahabad High Court. It was only last month that Dr. Satish Chandra, Judicial Member, ITAT joined as a judge of the Allahabad High Court and there is a petition challenging his appointment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petition filed by Advocate MC Gupta, alleges that the appointment is unconstitutional. The petitioner searched the official website of the Income Tax Appellate Tribunal, where his personal profile and career profile was fed. The petitioner found that the career profile of Satish Chandra baffling and full of gaps and loose ends. For instance, it does not mention as to from where he obtained his LLB, LLM or LD degrees. It also does not throw any light on his career as an advocate. Nine years from 1975 to 1984 are explained by mentioning that either he was with the Law Commission of India or was the constitutional advisor to the Government of Zanzibar. In between, he has also taught in certain law colleges, names of which have not been mentioned. The petitioner challenged the information that of Chandra being a High Court judge of Zanzibar, Tanzania. His name was also not enrolled as a High Court bar member, said the petitioner. Being a member of the Income Tax Appellate Tribunal as per terms in Section 252 of the Income Tax Act, does not amount to holding a judicial office belonging to the judicial service of the High Court.</font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">FM's </font></strong><font color="#006600"><strong> Tight Rope Walking and the Pay Commission Implementation</strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. PC will go down in history as the Finance Minister who had to implement two Central Pay Commission Reports. He was the FM during the last CPC also. During the last year of his current tenure as FM, he is faced with more political problems which are perhaps economic disasters. The silver lining is the Pay Commission is likely to bring in Rs. 5,000 Crores as Income Tax. And all the arrears are going to be spent in buying that bike/car/fridge/AC/washing machine/LCD TV/laptop/any other consumer goods which the government servants were postponing all these days – and this will mean more excise duty – maybe the Government can recover about 50% of what it gives to its employees.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7816" target="_blank">COBWEB</a> today for an incisive analysis on the fiscal situation. </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Income Tax – Revenue appeal against Enron dismissed by Supreme Court</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee involved in this case is Enron Oil & Gas India Ltd (EOGIL). It is incorporated in the Cayman Islands, and its business is oil exploration. The bone of contention is exchange losses which were disallowed by the Revenue. Under normal circumstances had it been attributable to import of any capital assets, it would have been added to the cost of the assets on which the assessee would have claimed depreciation u/s 32. But here is a very special scenario which has been described by the Apex Court as a 'special regime' and the same does not come under the Accounting Standard 11. Although the exchange losses have been allowed to the assessee but why and how can be understood only from the matrix of facts of this very special case for the mineral exploration industry. This ruling becomes landmark also from the viewpoint of authoritative and lucid interpretation of the concept of Production Sharing Contract (PSC) which is a special fiscal regime, followed by most countries worldwide. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>We bring you this landmark judgement delivered just a couple of days ago. See our</strong> <strong><a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7815" target="_blank">Breaking News.</a> </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">PM appeals for contributions to PMNRF</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Prime Minister, Dr. Manmohan Singh, has issued an appeal to all citizens to donate generously to the Prime Minister's National Relief Fund to help fund the relief and rehabilitation measures for the flood affected people of Bihar.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The contributions can be made by cheque or draft in the name of “The Prime Minister's National Relief Fund” and sent to the Prime Minister's Office, South Block, New Delhi 110001. As per directions on the subject the nationalised banks are not to charge any commission on preparation of drafts favouring the PMNRF.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Contributions can also be made directly to the branches of the following banks: 1) State Bank of India 2) Central Bank of India 3) Union bank of India 4) Dena Bank 5) Syndicate Bank 6) Corporation Bank 7) Bank of India 8) Indian Overseas Bank 9) Punjab National Bank 10) Indian Bank 11)Allahabad Bank 12) Citi Bank 13) Canara Bank 14) UCO Bank, 15) Bank of Baroda 16) Vijaya Bank 17) HDFC Bank 18) Standard Chartered 19) HSBC Bank 20) Axis Bank 21) ICICI Bank.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Contributions can also be sent through Money Orders with no commission chargeable. Contributions to the PMNRF have been notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act.</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 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">Central Excise</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Marker ink is also writing ink, rules Supreme Court</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Reliance on HSN: </strong> it is settled law that when the entries in the HSN and the said Tariff are not aligned, reliance cannot be placed upon HSN for the purpose of classification of goods under the said Tariff.. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Service Tax</font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Del- credre agency service is not taxable under clearing and forwarding agent service: CESTAT </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issue involved in this case is as to whether services of Del- credre agency are covered under the category of Clearing and Forwarding (C&F) agency service and leviable to service tax. The appellants entered into two agreements with their clients, one is a consignment stockist agreement under which the company, i.e , M/s Haldia Petrochemicals Ltd shall make available to the Consignment Stockist their Product, from its factory/warehouse for distribution/sale by him on the terms and conditions contained in the agreement and the procedure/policy already prescribed or to be prescribed by the company from time to time for stocking and selling the said product. Apparently there is no dispute on this agreement and the demand of service tax is on the second agreement, i.e. Del- credre agency agreement. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Income Tax</font> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">Indo-UK Treaty - freight income earned on transportation of cargo in international traffic by ships operated by other enterprises under slot chartering arrangement would be taxable only in state of residence and not under Indian laws: ITAT </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Interpretation of tax treaties: </strong> rule of interpretation for interpreting a statute are not applicable for interpreting the covenants of tax treaties between the contracting states; the words or expression used in the treaties, if not defined in the treaties itself, should be understood in the sense in which the contracting states understood at the time the treaty was executed i.e. contemporaneous thinking; and contemporaneous thinking can be gathered from the provisions of domestic laws of the contracting states and in the absence thereof from the various commentaries available at the time of such contract. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our columns Tomorrow for the judgements</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">Have a nice Day.</font></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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