TIOL-DDT 983 · 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 983</font><br> 03.11.2008 <br> Monday </strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Guru Sai Dutt – another Gopichand in the making! </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On Saturday, 18 year old Guru Sai Dutt went down fighting 16-21, 21-17, 17-21 to third-seed Zhengming Wang of China in the Yonex Sunrise BWF world junior badminton championship semi final. Wang went on to win the championship. Guru can have the satisfaction that he lost to the ultimate champion. Guru, one of the four top junior players of the world, is sure to go places and reach pinnacles of glory. Guru's father was with me watching the prize distribution ceremony and was in tears when he saw Wang receiving the trophy – his son was almost there! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Just a fortnight ago, Guru had won the Gold in the III Youth Commonwealth Games. Winning tournaments has just become a habit with the 18 year old lanky Hyderabad lad. In 2008, he had won the Dutch Open 2008, Haarlem, Netherlands. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was in 1980 that an Indian, Prakash Padukone for the first time won the All England Open Badminton Championships. 21 years later in 2001, Pullela Gopichand of Hyderabad became the second Indian to achieve this feat. With Guru around, perhaps the wait for the third champion will not be long. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reports say, “Even in his exit on Saturday in a thrilling 21-16, 17-21, 21-17 match against Chinese Wang Zheng Ming, Guru proved that it was possible to work around China's towering and power-packed arsenal with mental application and quick on-court strategising.”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">After the match, Gopichand said, “Though Sai lost, I feel that he played very well today”. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Guru is a resident student in Gopichand's Academy undergoing strenuous training under the great Champion. Just before the prize distribution ceremony, <strong>DDT </strong> caught up with Gopichand in Pune and asked him whether Guru was a Gopichand in the making. The humble Champion said Guru will achieve far more than what he could ever do. Gopichand said that Guru is shaping up to be a world class player and he is very hard working and highly professional. His other student Saina has just won the Championship in the women's category. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let's hope Gopi will take Guru to the dizzy heights of world badminton.</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/ddt_983_03.jpg" alt="Legal Corner Icon" width="318" height="238" 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"><strong><strong><strong><strong><strong><strong><strong></strong></strong></strong></strong></strong></strong></strong></font><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Guru landed in Hyderabad this morning and is seen with his proud father Bharadwaj .</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">You may wonder why all this in <strong>DDT </strong>. Guru's father RMV Bharadwaj is a Superintendent of Central Excise and the entire Central Excise family is proud of young Guru and wishes all the very best for a great future ahead. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export Duty made Nil on steel products </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Export Duty on steel products had hit the SEZs most and many of them were busy sorting out cases with DRI, assorted Central Excise officers, Commerce Ministry and several High Courts. They can now heave a sigh of relief that the duty has been made nil. Though the SEZ issue is not sorted out and the demands and litigation for the past periods will continue, the future seems to be as strong as steel. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 66/2008 – cus has been amended to substitute “nil” for 15%. Now there are only two dutiable items remaining in the Notification. Ferrous waste and scrap at 15% and Basmati rice at Rs. 8000/- per MT. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_115.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 115/2008 – Cus Dated: October 31, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export Duty on Iron Ore Fines </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Effective Export duty of 15% ad valorem was imposed on iron ore (lumps and fines) in June, 2008 by Notification No. 79/2008-Cus., Dated: June 13, 2008. The 15% ad valorem export duty on fines has been replaced with a specific duty of Rs.200 PMT. The rate of export duty on iron ore lumps continues to remain unchanged. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The international price of fines has gone down substantially making their exports unremunerative. It appears this was done with a view to improve the export competitiveness of the mining industry, and for protecting the interest of the employees engaged in this sector. </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_116.htm" target="_blank">Notification NO. 116/2008</a> </strong>and <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_117.htm" target="_blank">117/2008 – Cus Dated: October 31, 2008 </a></strong></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ATF exempted from Customs Duty – exemption to ferro-molybdenum and ferro-vanadium withdrawn </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The 5% Customs Duty on Aviation Turbine Fuel has been withdrawn. Many newspapers reported that the Government has given a big benefit by abolishing the duty – but the fact is ATF is not imported. What difference does it make if the duty on a product that is not imported is reduced? The fact is the price of domestically produced ATF is based on import parity price factoring in the basic customs duty. The exemption would result in lowering of the base price of ATF and, consequently, lowering the incidence of excise duty and VAT, giving substantial relief to the aviation sector. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Nil rate of duty available to ferro-molybdenum and ferro-vanadium is withdrawn and they will now attract 5% import duty. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2008/ctariff08_119.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 119/2008 – Cus Dated: October 31, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tariff Value of Brass Scrap and Poppy seeds reduced </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government has reduced the Tariff Value of Brass Scrap from 3904 US Dollars to 3832 and the Tariff Value of Poppy Seeds from 6292 Dollars to 6190 Dollars. There is no change in the Tariff Values of other items. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_116.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Notification NO. 116/2008 – Cus ( N.T. ) Dated: October 31, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>EPCG and Common Service Provider </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Foreign Trade Policy is amended to stipulate that Export Promotion Capital Goods (EPCG) Scheme also covers a service provider who is designated / certified as a Common Service Provider (CSP) by the DGFT, Department of Commerce or State Industrial Infrastructural Corporation in a Town of Export Excellence subject to provisions of Foreign Trade Policy/Handbook of Procedures with the following conditions:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) EPCG licence to be given to the CSP should have a clear endorsement giving the details of the users and the quantum of Export Obligation (EO) which each user would fulfil; </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Such exports will not count towards fulfillment of other specific export obligations ; and </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Each one of the users of the CSP apart from the CSP should furnish 100% bank Guarantee (BG) equivalent to their portion of duty foregone apportioned in terms of quantum of EO to be discharged by them and the B.G. will be enforced in the event of the obligation not being fulfilled. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2008/dgft08not051.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT Notification NO. 51 (RE – 2008)/2004-2009, Dated: October 29, 2008 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs Office closed to clean up rodent </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A Customs office in Canada has been declared a dangerous work site and will stay closed until it is cleaned. Health officials found evidence of rodent faeces, urine stains, nesting residue and a foul stench in the Customs office. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sometime back I had accompanied a US based NRI to the North Block. Right outside the CBDT Chairman's office were dumped old unusable furniture. I told my American friend that the man who sits in that office facing the dumped furniture is the equivalent of their dreaded IRS Chief! </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="#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><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>For a credit of Rs.19.62 lakhs, no assessee would forego benefit of 67% of the abatement– Prima facie case for grant of waiver of pre-deposit as credit already reversed: Tribunal </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finding that the applicant had already reversed the amount of CENVAT credit of the service tax availed on the inputs services, it was held that they had made out a <em>prima facie </em> case for the waiver of pre-deposit of the amount involved. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the application for waiver of pre-deposit of the amount involved was allowed and considering the high stake of revenue involved (Rs.9.74 Crores), an out of hearing on the 17th November 2008 is ordered by the Tribunal. </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>Job work charges reduced after end of year to reduce tax liability of sister concern – agreement colourable; It is duty of assessee to extend cooperation to AO and furnish details as required enabling him to make assessment; Tribunal cannot act as a mute spectator to defrauding of Revenue: ITAT by majority </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not possible to accept that the parties to the agreement continued to raise bills not in accordance with the alleged agreement and payments were also accordingly made throughout the year after deduction of tax at source. The facts which are clear to the naked eye cannot be brushed aside. The Tribunal, being a final fact finding authority cannot act as a mute spectator to the glaringly unbelievables going on, which is nothing but an arrangement between two interconnected concerns aimed at defrauding the Revenue and reducing the incidence of tax on the whole. It is under such circumstances that the cloak of corporate veil needs to be pierced for unearthing the real intention of the parties. </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>Yarn received for texturising by job workers in cartons bearing Brand name – Texturised yarn cleared in same cartons – Benefit of SSI exemption available - Tribunal by Majority </strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Third Member on reference has passed the following order:- </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“5. I have considered the submissions and perused the records. Though I am in agreement with the view expressed by the Member (Technical) on the merits of the case, which in the case of texturised yarn in respect of M/s Aakash Filaments is also not being disputed by the ld. advocate of the appellants, the same, in my view, applies to texturised yarn manufactured on behalf of M/s. Modipon, as well as the brand name was being affixed on cheeses also. I do note that <em>Member (Technical) has not expressed any divergent opinion so far as the time bar aspect is concerned and consequently it has to be held that the demand is hit by bar of limitation </em>.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Was reference really needed? </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more <strong>DDT</strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></p> <p align="justify"><font color="#FF6666" 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> </body> </html>