TIOL-DDT 979 · 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 979</font><br>
27.10.2008<br>
Monday</strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tremor in CESTAT – Almost all Judicial Members Transferred</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In a surprise order released late on Thursday, six of the eight Judicial Members have been transferred sending mild tremors across the country. While this cannot be measured in the Richter Scale, this was a hot topic for discussion among the legal circles, especially those connected with the CESTAT. It is learnt that most of the transferred Members are not happy with their transfers and there may be even a couple of resignations.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is understood that the President has resigned and may leave in a couple of days. Several agitated Netizens called us to register their protest and many wondered why the transfers had to take place a few days before the President's leaving the Tribunal. Our phones never stopped ringing and like an agony aunt we listened to all the woes. They felt that the transfers should have been taken up by the new President.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per the Transfer Policy for CESTAT Members - <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/policy.htm" target="_blank">F
No 27/49/06-Ad IC – dated 27th July, 2006</a></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">v) Although it is not necessary that the President should consult the Vice-Presidents, President in all fairness should consult the Vice-Presidents keeping in view the fact that Members are functioning at different places and, thus, it may sometimes become impossible for the President to know about the intellect or otherwise of the Member for the purpose of his posting, including his efficiency, disposal and other relevant factors, which may be considered by the President in ultimately passing such orders of transfer and posting.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally in this transfer, both the Vice-Presidents have been transferred. Now one of them will be the Acting President if the news about the President leaving, is correct.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CESTAT is like the little master, Sachin Tendulkar – diminutive in size but gigantic in performance – it has only six benches and less than 20 Members but the reputation it has earned is enormous, a little aberration here and there notwithstanding. Members are liable to be transferred, no doubt but should it cause so much displeasure?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">High Court Judges are also transferred but what are the facilities given to CESTAT Members compared to High Court Judges? Most of the CESTAT Members are not even provided with vehicles and they are called upon to decide issues involving Crores of Rupees.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Exchange Rates amended – US Dollar at Rs. 50.33</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has amended the exchange rates for Imports and Exports – for imports, now the US Dollar is worth Rs. 50.33 compared to Rs. 46.75 fixed for the month starting from 1 st October 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The new rates are effective from 24th October, 2008. Now exporters and importers have to keep a close watch on the exchange rates before importing and exporting – bad times for the economy indeed.</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=24&filename=notification/custom/2008/cnt08_114.htm" target="_blank">Notification NO. 114/2008 – Cus (N.T.) Dated: October 24, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Anti Dumping Duty on Yarn</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Government had imposed a provisional anti-dumping duty at the rate of US$ 107 per MT on fully drawn yarn or fully printed yarn or fully oriented yarn or spin drawn yarn or flat yarn of polyester and other yarns produced and exported by M/s H.K. Corporation, Republic of Korea and imported into India vide notification No.69/2008-CUSTOMS, dated the 15th May, 2008.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Central Government has amended Notification No. 15/2007-CUSTOMS, dated the 20th February, 2007, to include</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“3. The anti-dumping duty imposed under this notification on imports of fully drawn yarn or fully printed yarn or fully oriented yarn or spin drawn yarn or flat yarn of polyester and other yarns falling under Chapter 52 of the First Schedule to the said Customs Tariff Act, produced and exported by M/s H.K. Corporation, Republic of Korea and imported into India, shall be levied with effect from the 15th November, 2007”.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consequently Notification No. 69/2008-CUSTOMS, dated the 15th May, 2008 is rescinded.</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=24&filename=notification/custom/2008/cnt08_111.htm" target="_blank">Notification NO. 111/2008</a> </strong>and <strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_112.htm" target="_blank">112/2008 – Cus Dated: October 22, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Conditions for Import of Security Printing Paper – DGFT Notification</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Import of Security Printing Paper may be made without a licence by India Security Press, Nasik and Security Paper Press, Hyderabad subject to actual user condition on specific letter of approval from the Ministry of Finance (Department of Economic Affairs), Government of India for the import. The letter of approval of Ministry of Finance should be submitted to the Customs for clearance of the import.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) The importer shall furnish quarterly returns of the quantity and value of the imports made by him to the Ministry of Finance for the quarters ending 30th June, 30th September, 31st December and 31st March of each financial year, within 30 days of the close of the quarter concerned.</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=45&filename=notification/dgft/2008/dgft08not049.htm" target="_blank">DGFT Notification NO. 49/( RE-2008)/2004-2009, Dated: October 23, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Conditions for Import of Marble blocks – DGFT Notification</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of Tiles, cubes …powder; Marble blocks/tiles; Marble monumental block; Marble, Travertine & Allabaster is <strong>FREE</strong> subject to the condition that <strong>“Import
permitted freely provided cif value is USD 50 & above per square metre except, in case of import of the product from Nepal. However, the said exemption shall be applicable only on such imports, which have been processed/manufactured out of marble mined in Nepal. The facility will not be available on products which have been manufactured/processed in Nepal using imported marble.</strong></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=45&filename=notification/dgft/2008/dgft08not050.htm" target="_blank">DGFT Notification NO. 50/( RE-2008)/ 2004-2009, Dated: October 23, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT notifies new form for claiming deduction under (11C) of section 80-IB.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT has notified a new form 10 CCBD as Form of report for claiming deduction under sub-section (11C) of section 80-IB.</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=35&filename=notification/cbdt/2008/it08not098.htm" target="_blank">CBDT Notification NO. 98/2008, Dated: October 22, 2008</a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax Rules - National Skill Development Corporation added to Rule 17C</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Rule 17 C of the IT Rules,</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>17C. The forms and modes of investment or deposits under clause (xii) of sub-section (5) of section 11 shall be the following, namely :—</strong></font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6633">i) investment in the units issued under any scheme of the mutual fund referred to in clause (23D) of section 10 of the Income-tax Act, 1961;</font></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) any transfer of deposits to the Public Account of India;</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) deposits made with an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) investment by way of acquiring equity shares of a depository as defined in clause (e) of sub-section (1) of section 28 of the Depositories Act, 1996 (22 of 1996);</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) investment made by a recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (hereafter referred to as investor) in the equity share capital of a company (hereafter referred to as investee)-</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A. which is engaged in dealing with securities or mainly associated with the
securities market;</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">B. whose main object is to acquire the membership of another recognised stock
exchange for the sole purpose of facilitating the members of the investor to
trade on the said stock exchange through the investee in accordance with the directions or guidelines issued under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by the Securities and Exchange Board of India established under section 3 of that Act; and</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">C. in which at least fifty-one per cent of equity shares are held by the investor and
the balance equity shares are held by members of such investor;]</font></p>
</blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) Investment by way of acquiring equity shares of an incubatee by an incubator.</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Explanation.</strong>—For the purposes of this clause,-</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) “incubatee” shall mean such incubatee as may be notified by the Government of India in the Ministry of Science and Technology;</font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) “incubator” shall mean such Technology Business Incubator or Science and Technology Entrepreneurship Park as may be notified by the Government of India in the Ministry of Science and Techno-logy</font></p>
</blockquote>
</blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now a new clause is added</font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">“(vii) Investment by way of acquiring shares of National Skill Development Corporation”.</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=35&filename=notification/cbdt/2008/it08not099.htm" target="_blank">CBDT Notification NO. 99/2008, Dated: October 22, 2008</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">– Wednesday'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>Supplementary invoices – CENVAT Credit - Taking recourse to Settlement Scheme and payment of additional or differential duty on receipt of show cause notice, <em>per se </em> may not necessarily be treated as admission of guilt: Larger Bench of Tribunal</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WORLD </strong>over, commercial prudence dictates that an early quietus is given to disputes with the tax departments. Taking a cue from this ideology prevalent in the business world, we have witnessed the Central Government launching short term <strong>Voluntary Disclosure of Income Schemes, Kar Vivad Samadhan Scheme, Tax Dispute Resolution Schemes and Tax Amnesty Schemes</strong> to mop up revenue. To ensure that there exists a permanent machinery for settlement of disputes, the Central Government on the recommendations of the <strong>Wanchoo Committee</strong>, set up the Income Tax Settlement Commission in the year 1976 and tried to replicate its success by establishing the Customs and Central Excise Settlement Commission in the year 1999.</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>Revenue wins first Transfer Pricing case; Once conditions for invoking Sec 92 are prima facie satisfied, burden lies on assessee to prove that loss suffered in international transactions is not because of arrangement with non-resident parties: ITAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS is perhaps the first Transfer Pricing (TP) case which has gone in favour of Revenue. What has also emerged from this decision is that if the Revenue invokes the relevant Section 92 in a case after certain conditions are satisfied, the burden lies on the assessee to prove that this is not a fit case to be referred to the TPO or their abnormally low profit is not on account of any arrangement with the related non-resident parties. The Tribunal in this case has also held that for considering profit it is not gross profit but net profit which is to be taken into account.</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>For invoking TP Section what is to be seen by the Revenue is the fulfilment of three conditions:</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The business is carried on between a resident and a non-resident.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There is a close connection between the resident and non-resident party.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>The resident earns either no profits <em>or </em>less than ordinary profits </strong>because of arrangement existing between parties.</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>Valuation of goods imported –Evidence of special relationship between the supplier and importer influencing gross undervaluation of imports available – Pre-deposit of Rs 2 Crores ordered: CESTAT</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Based on prima facie evidences put forth by the Revenue, the Tribunal held that the transactions are of a dubious nature and the import value declared by the appellant is not genuine. In view of these substantial evidences of misstatement and suppression of facts by the appellants, Tribunal ordered the appellant to pre-deposit an amount of Rupees Two Crores within eight weeks subject to which the balance amount of duty with interest and penalty shall be waived and stay granted.</font></p>
<blockquote>
<blockquote>
<blockquote>
<p><font color="#FF0000" size="6" face="Verdana, Arial, Helvetica, sans-serif"><strong>A happy Deepawali</strong></font></p>
</blockquote>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While the rest of the world is reeling under an economic recession, the Central Government employees must be a happy lot with the Pay Commission Arrears of anything ranging from Rs. 30,000 to Rs. 2 lakhs.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Wednesday for the judgements</strong></font></p>
<p align="center"><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/diwali_2008.jpg" alt="Legal Corner Icon" width="600" height="400" hspace="5" border="0" align="center"></b></strong></strong></strong></strong></strong></strong></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday 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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