TIOL-DDT 977 · 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 977</font><br>
23.10.2008<br>
Thursday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on Vitamin C – extended</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Anti Dumping Duty on Vitamin C, originating in or exported from the People's Republic of China, imposed vide Notification No. 159/2003- CUSTOMS dated the 24th October, 2003 would have in the natural course expired on 23rd October 2008 (though there is difference of opinion on that within our edit team); but this time around the Government woke up well within time and extended the notification before it lapsed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Notification is valid till 23rd October, 2009, unless of course revoked earlier. Incidentally our <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8050" target="_blank">CobWeb</a> </strong>today highlights on Anti Dumping Duty and our statistics on nearly half the notifications of 2008 being related to Anti Dumping includes this latest notification.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_109.htm" target="_blank">Notification NO. 109/2008 – Cus Dated: October 21, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FTP - SION - General Notes for Textiles - DGFT explains</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the existing General Notes for Textiles at Sl.No.6 of the Handbook of Procedures, Vol.2, 2004-2009, it is stipulated that,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Wherever import of Acrylic Fibre has been allowed, Acrylic Tow may also be allowed as an alternative of acrylic fibre with the same quantity.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the following sentence is added,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“Further, wherever import of Acrylic Tow has been allowed, acrylic fibre may also be allowed as an alternate input with the same quantity (i.e. quantity as indicated for Acrylic Tow).”</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2008/dgft08pn096.htm" target="_self">DGFT Public Notice No. 96 (RE :2008)/2004-2009, Dated: October 22, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service Tax on Commodity Market – Board Clarifies</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a letter to the Director, Forward Market Commission, the CBEC has clarified that:-</font></p>
<blockquote>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Commodity exchanges have been specifically brought under service tax net w.e.f. 16.5.2008.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The value of taxable service provided by the commodity exchanges shall include all charges levied on account of the services rendered (like transaction charges, annual subscription charges, processing charges and VSAT line charges).</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Therefore, unless broker charges service tax on gross amount, the CENVAT chain would break.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Accordingly, w.e.f. 16.05.2008, this issue raised is not relevant in view of the fact that the Investor is liable to pay service tax on all charges, including any charges levied by exchange.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. As regards earlier period, it is matter of fact as to whether the broker acted as a pure agent or not.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. In this regard the illustrations given in the Service Tax (Determination of Value) Rules, 2006 may also be seen.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2008/File137.htm" target="_blank">CBEC F.No.137/14/2008- CX -4 Dated: August 5th, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cases
that can't wait till tomorrow
</strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ISRO'S HUGE SUCCESS – NOT IN SPACE BUT IN AAR</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income tax – Leasing of navigation transponder capacity by non-resident – Payment is only for deriving the benefit of satellite navigation capacity and not use of equipment – Not liable to tax under IT Act or Indo-UK DTAA - AAR</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While scientists of ISRO were moonstruck at Sriharikota, their lawyers were fighting it out in the AAR and as of now ISRO is on a winning streak and nothing goes wrong.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ISRO</strong> entered into an agreement with Inmarsat Global Limited, UK for leasing of the Inmarsat navigation transponder capacity for its GAGAN TDS project to be carried out in India along with AAI. Under this contract, the applicant has taken on lease the space segment capacity consisting of L1 & L5 transponder of “Inmarsat 4th Generation Satellite”. This capacity is utilized through data commands sent from a ground station set up by the applicant. In terms of the contract the applicant pays a fixed annual charge regardless of the actual use of transponder capacity.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
approached the Authority for Advance Rulings with two questions ... <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8049">See Breaking
News</a></strong></font></p>
<p align="left"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Non-resident Co - liaison offices in India - Even if company does not earn any income, fringe benefits paid to employees are liable to FBT in India: Advance Ruling</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Fringe Benefit Tax (FBT) which was born in Finance Act, 2005 appears to be walking through various judicial fora unscarred and victorious. It was levied by Mr P Chidambaram, in addition to the Income Tax. In the latest ruling, the Authority for Advance Ruling has held that even a non-resident company keeping liasion offices in India and not earning any income as per the RBI's conditional approval, is also liable to pay FBT if it is providing fringe benefits to its employees.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you these cases today. See <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=8046">Breaking News</a></strong>.</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>Income Tax</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>No deduction is allowable, against the income from taxable business, in respect of any expenditure in relation to income which does not form part of the total income – ITAT Sp. Bench by majority</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> President, ITAT, has constituted the Special Bench to adjudicate upon the following issue:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>“Whether, in the facts and in the circumstances of the case and in law, the provisions of section 14A of the income Tax Act, 1961, are applicable with respect of dividend income earned by the assessee engaged in the business of dealing in shares and securities, on the shares held as stock in trade and when earning of such dividend income is, therefore, incidental to trading in shares?”</strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There was a difference of opinion in the Special Bench and the Bench by majority decided the issue.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The core of the issue is to interpret section 14A of the Income-tax Act, for determining as to whether or not any disallowance of expenses is warranted under this section when the assessee is dealing in shares by way of purchase and sale and any dividend income, which is exempt u/s. 10(33), is earned on the shares or other securities held by it as stock-in-trade.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Education Cess payable by the EOUs on clearances in DTA - goods cleared in DTA are to be treated as imported goods. Issue remanded - Bombay High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> 100% EOUs while clearing the goods in DTA are required to pay central excise duty equivalent to the aggregate duties of Customs leviable on like goods imported. While computing aggregate duties of Customs, the education cess is also taken into account as a part of CVD and again on the aggregate duties of Customs. The revenue is of the view that the EOUs have to pay education cess again, as whatever amount paid under Section 3 of the Central Excise Act is only excise duty and cess is levied under Section 93 of the Finance Act 2004.</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>Merely because a particular CTV Model no. 21HT 1532 is sold to Hotel industry but not in retail, it cannot be said that they are exempted under rule 34 of SWAMs Rules, 1977 so as to be assessed u/s 4 of Excise - Televisions rightly assessable u/s 4A : Tribunal</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant is engaged in the manufacture of Colour televisions (CTVs). Inasmuch as CTV is one of the specified items in terms of Section 4A of the Central Excise Act, the appellants were clearing the same on payment of duty, in terms of the said section based upon MRP fixed on the CTVs. The dispute in the present appeals relates to CTVs of a particular model No.21HT 1532 manufactured by the appellants and supplied to <em>M/s Philips Electronic India Ltd., Pune</em>. The said particular brand of CTVs was <strong><em>sold by M/s Philips Electronic India Ltd. only to hotel industry and not to the open market for retail</em></strong>.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue feels that such an assessment is improper (they want assessment u/s 4 of the CEA'44) little remembering the fact that CTV's were brought under the ambit of Section 4A to mop up more revenue by assessing them on the basis of the MRP.</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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</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 color="#FF6633" 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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