TIOL-DDT 950 · 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 950</font><br> 12.09.2008<br> Friday</strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on steel and fibre glass tapes – further extended</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Anti Dumping Duty was imposed on steel and fibre glass tapes and their parts and components originating in, or exported from, the People's Republic of China and imported into India, vide Notification No. 147/2003-Customs, dated the 7th October, 2003.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Earlier the Central Government had imposed provisional anti-dumping duty on these products <em>vide </em>Notification No. 65/2003-Customs, dated the 4 th April, 2003. The final duty imposed by Notification 147/2003 was to be effective from the date of provisional imposition that is 4th April 2003. And that would have expired on 3rd April 2008.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Notification No. 50/2008- Cus., dated 21-4-2008, this was extended to 3 rd October, 2008.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has extended it to 3rd April, 2009. This time around the government has extended it much before the expiry date – normally it is done after the notification has expired. And a colleague of mine believes that the government need not really extend it and the Tribunal feels that even if it is extended after expiry, during the period prior to resurrection, it would still be valid.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Strange are the ways of LAW.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The sane step would be to extend it before it dies and now the good government has done it. Kudos to them.</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_104.htm" target="_blank">Notification No. 104/2008- Cus ., Dated: September 10, 2008.</a></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT has no information on refunds – CIC asks for written submissions from CBDT Chairman</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In yesterday's <a href="http://taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7850" target="_blank">CobWeb</a> , we commented,</font></p> <blockquote> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“Let's take the case income tax unclaimed refund. In case of income tax, refund cheques are issued out of current receipts. And what goes to the revenue kitty is only the net receipts. But out of the n-number of refund cheques issued, if thousands of them come back undelivered, that money goes into the suspense account only in terms of entry and the money remains with the bank which earns profit on that and does not pay interest on such sum. Even the CBDT is least bothered about such sums. And it continues for a decade and then most statistics gets messed up for anybody to know and inquire about.”</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under the RTI Act, a citizen asked the Income Tax Department the following information.</font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Number of returns filed during the period from 01-04-2003 to 30-09-2007.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Number of refund claims out of sl.1 above.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Number of refunds issued within four months of filing of returns as at sl.2.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Number of refunds issued after four months of filing of return as at sl.2.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Amount of refunds issued as at sl.4.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Amount of interest granted on delayed refunds at sl.5.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All very pertinent questions of national importance. But the Income Tax Department, coolly told the Commission that such information was not maintained in the regular course of business and they were not in a position to state the actual status of income tax refunds as these <strong>might </strong> have been claimed by assessees. <font color="#FF6633">[So they don't have the information because they have a doubt that the refunds have been perhaps claimed by the assessees and so the information would be available with the assessees and not the Department. It really beats logic why an assessee should seek refund which leads to such questions before the CIC]</font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commission found this submission curious because refund of excess income tax paid by assessees is his right and the income tax authorities are duty-bound to assure that they exercise due diligence in making these refunds within a reasonable period. One would surely expect that given the volume of transactions in refunds handled by the Income Tax Department, there would have been some form of central monitoring for these. But no such monitoring is in place. As such, Income Tax Department is not in a position to state clearly as to how many refund-claims it has received in any given year or over the years; how many it has resolved and how many lie in balance.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Considering the larger ramification of this information, the Commission felt that it was important that the views of the highest authority in the income tax hierarchy is received before the Commission makes up its mind about further steps in this petition.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Commission asked the Chairman, Central Board of Direct Taxes (CBDT) to file a written-submission about what the policy of the Department is regarding attending to the several refund-claims filed by income tax assessees and, what system has been kept in place to respond to these claims without loss of time, or at least within a reasonable time.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He is also asked to inform the Commission as to what monitoring mechanism is available for the higher authorities in the Department to ensure that the assessees are not discomfited in receiving these refunds. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT </strong> is also asked to depute a senior officer to explain the position.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If not for the CIC, the CBDT is expected to have this kind of information and if they don't have it, they should have a mechanism to have it immediately.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This should apply to the <strong>CBEC </strong> also. It seems thousands of refund claims are pending, especially in Service Tax and there seems to be absolutely no monitoring. The sad spectacle of officers running after consultants to persuade their clients not to insist on interest for delayed refunds is far too common.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/incometax.pdf" target="_blank">CIC's Interim Order F.No.CIC/AT/A/2008/00238 & 00239 Dated, the 16th July, 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">– Monday's cases</font></strong></font></p> <p align="justify"><font color="#663399" 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>Income Tax</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Star India's transactions with associated enterprises - Transfer Pricing - Revenue cannot club three independent activities to determine common Arm's Length Price - And if AO differs with TPO, reasons to be recorded; Case remanded by Tribunal to AO</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IF</strong> determining Arm's Length Price (ALP) in a Transfer Pricing (TP) case is a tough exercise for the Revenue, it is much tougher for the assessee which has to find reliable comparable cases involved in similar activities. And this is what happened in the latest Star India case decided by the Mumbai Bench of the Tribunal which found that neither the Revenue nor the assessee followed the guidelines decided by the law as interpreted by the Special Bench in the case of Aztec Software (<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/itat/2007/2007-TIOL-210-ITAT-BANG-SB.htm" target="_blank">2007-TIOL-210-ITAT-BANG-SB</a>). Having found that the TPO has clubbed three different activities of the assessee as one activity to determine a common ALP, the Bench has rejected the same and restored the case to the files of the AO with the direction that the case be referred to the TPO for working out fresh ALP in respect of each independent activity, and if the same is rejected, the reasons are to be recorded. And before finalising the assessment, the AO must afford an opportunity to the assessee to comment on the TPO report.</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>Common inputs - Duty paid Molasses used for manufacture of Rectified spirit which in turn is used for manufacture of dutiable denatured spirit and Country liquor which is not chargeable to duty – Payment of 8% amount under rule 6 of CCR , 2004 is proper as captive consumption is also clearance - no cause for credit reversal – Tribunal</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THEY </strong>never seem to be satisfied. They try to experiment with rule 6 of the CCR , 2004 and come up with demands that are so bombastic that the adjudicating authorities and the lower appellate authorities fear ostracism if the proceedings are dropped. <strong>Just goes to show how virile the rule is.</strong></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>Service Tax – Scientific and technical service – project report prepared before Service Tax was imposed, though deliver after – no tax: High Court</strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>question of law involved in this appeal is as under:</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether, service tax is not leviable on the service in respect of which project report by the scientific and technical expert (service provider) is prepared prior to the levy of the service tax?</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend.</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> </body> </html>