19.05.2014
Monday
 THE Tax Laws enforcement officer has now become the Law Maker. As predicted by us, Dr. Ravindra Babu former Additional Commissioner of Customs and Central Excise has won from the Amalapuram Lok Sabha Constituency in Andhra Pradesh with a thumping majority of over one lakh twenty thousand votes.
When DDT called him up to congratulate him, he was proudly celebrating the sweet victory. He said he hardly had twenty days to campaign and he was able to make an impact in the constituency. The shrewd taxman chose the right party at the right time and is now an honourable Member of Parliament.
We understand that there are two other IRS officers who are entering the hallowed portals of India's Parliament.
 Malyadri Sriram,a former Commissioner of Income Tax has won from the Bapatla constituency in Andhra Pradesh. Like Dr.Babu, Sriram was also a TDP candidate.
This seat was earlier represented by Union Minister Panabaka Lakshmi who polled about 23,000 votes compared to the 5,78,000 votes by Sriram.
Sriram popularly known as SM Anna, not exactly new to politics, was defeated from the same seat in 2009.
Dr.Udit Raj, a 1990 batch IRS officer resigned as Additional Commissioner of Income Tax in 2003 to enter active politics. He founded the Indian Justice Party in 2003. In the Income Tax Department he was senior to Arvind Kejriwal. He calls the Aam Aadmi Party as the 'Jhooth Aadmi Party'. And now Raj has won the North West Delhi Lok Sabha Constituency by a convincing margin of over a lakh of votes against the nearest AAP candidate Rakhi Birla with the Union Minister and sitting MP KirishnaTirath relegated to a third place.
Udit Raj was active in social work before joining the BJP to contest the 2014 elections. He says that the living conditions of the people, the lack of sanitation and sewer facilities appalled him when he was canvassing in some of the areas.
With three IRS officers - all belonging to the same social group elected to Parliament, at least one of them is sure to become a Minister.
Anti-dumping duty on NTCF extended till April, 2015
THE ADD on import of Nylon Tyre Cord Fabric originating in or exported from the People's Republic of China was originally imposed by notification No. 72/2004-Customs, dated the 26th July 2004 provisionally and confirmed by Notification No. 36/2005-Cus, dated 27.04.2005.The said notification which would have expired on 26.07.2009 was rescinded by notification 42/2009-Cus.dated 29th April, 2009. Inasmuch as the Government re-imposed the anti-dumping duty much before its expiry by a fresh notification 41/2009-Cus dated 29th April, 2009.
Those were the days!
But now what happened is that the notification 41/2009-Cus dated 29 th April, 2009 lost steam after five years on 28th April, 2014.
Perhaps everyone in the Board was too busy to notice this. So, after more than a fortnight, an amending notification was issued and which simply inserts the following paragraph in the notification -
"3. Notwithstanding anything contained in paragraph 2, this notification shall remain in force up to and inclusive of the 28th day of April, 2015, unless revoked earlier".
The result is that the anti-dumping duty continues on the import of the subject goods till 28th April, 2015.
Notification 21/2014-Customs (ADD), Dated: May 16, 2014
Definitive anti-dumping duty imposed on Persulphates
THE Central Government has imposed definitive anti-dumping duty on 'Peroxosulphates' also known as 'Persulphates' [Chapter 28] originating in, or exported from the Taiwan, Turkey and the United States of America and imported into India. The anti-dumping duty imposed under this notification shall be effective for a period of five years.
Notification 22/2014-Customs (ADD), Dated: May 16, 2014
Provisional anti-dumping duty imposed on imports of Phenol for 6 months
THE Central Government has imposed provisional anti-dumping duty on imports of Phenol [Chapter 29] originating in, or exported from Chinese Taipei and the United States of America and imported into India.
The anti-dumping duty imposed under this notification shall be levied for a period not exceeding six months (unless revoked, amended or superseded earlier) from the date of publication of this notification.
Notification 23/2014-Customs (ADD), Dated: May 16, 2014
Customs - New Exchange Rates from 16 th May
CBEC has notified new exchange rates for Imported Goods and for Export Goods with effect from 16 th May 2014.The US Dollar is 60.10 rupees for imports and 59.10 rupees for exports.
The popular perception is that the rupee would dramatically surge with a stable government at the helm.
Standard & Poor's Ratings Services expects the new government's reform initiatives in economic and fiscal policies in the next two to three months to have significant implications on the sovereign credit rating on India.
The Exchange rates were last notified on 1st May, 2014.
Notification No.41/2014-Cus (N.T.), Dated: May 15, 2014
FTP - Enlistment under Appendix 4C- Agencies Authorized to issue Certificate of Origin (Non-Preferential)
THE DGFT has authorised Trade Promotion Council of India to issue Certificate of Origin (Non Preferential). Accordingly, name of the above agency is added at Serial No. 12 (Delhi) of Appendix 4C (List of Agencies Authorized to issue Certificated of Origin-Non-Preferential) to Handbook of Procedure Vol.I, 2009-2014 (Appendices & ANFs).
DGFT Public Notice No.60/(RE 2013)/2009-2014, Dated: May 15 2014
FTP - Agencies Authorised to Issue Certificate of Origin - Appendix 4D Amended
THE DGFT has made certain changes to the Appendix 4D.
The Bilateral/Regional Preferential Trade Agreements signed by India are being included along with their respective agencies authorized to issue Certificate of Origin (Preferential) . While, the Export Inspection Council (EIC) is mandated to issue Certificate of Origin (Preferential) for all goods under all trade agreements; Marine Products Export Development Authority (MPEDA) is also now being authorized to issue Certificate of Origin (Preferential) for Marine products under all trade agreements. In addition, with respect to textiles and made ups, the Textiles Committee is being authorized to issue Certificate of Origin (Preferential) under India -Japan Comprehensive Economic Partnership Agreement (IJCEPA).
DGFT Public Notice No.59/(RE 2013)/2009-2014, Dated: May 15 2014
Modi-fied Tax Administration
IN a few days the new Government will be in place and we will have a new Finance Minister. Will he be a technocrat or a politician? Whoever he is, he has a tough job ahead and expectations are very high. Arun Jaitley who wanted the income tax exemption limit to be Rs.5 lakhs, lost his election. He can claim that people did not want that exemption.
BJP is said to be pro-business and if that is true, there are several reforms which are urgently needed in the tax sector. Draconian provisions of arrest, attachment, pre-deposit of insane amounts of illegally confirmed demands, frivolous and unwanted litigation - need changes.
The PM Designate talks a lot about Small Scale Industries - perhaps they need a steep hike in the excise exemption limit.
The outgoing FM is said to have left tons of pebbles of wisdom in the files of North Block for the benefit of his successor. His Magnum Opus - the Direct Taxes Code is also slowly gathering dust in the North Block. The Finance Minister may also have to try to revive the almost dead GST or announce its permanent death.
Jurisprudentiol - Tuesday's cases
 Service Tax
Appellant had provided construction services to UP Vikas Parishad for housing BPL persons and institutions for promotion of educational objectives - such services prima facie appear to be outside the ambit of "construction of residential complex" and "commercial or industrial construction" - Pre-deposit waived and stay granted: CESTAT
THE appellant had provided construction services to around 36 bodies/ institutions during 01/04/2005 to 31/03/2010 and 01/04/2010 to 31/03/2011, including to an Uttar Pradesh State instrumentality known as the U.P. Avas Avam Vikas Parishad (Vikas Parishad) for housing persons who are below the poverty line; the LIC, several trusts and foundations promoting and maintaining educational institutions and to another State instrumentally, the U.P. Rajkiya Nirman Nigam Ltd. - for establishment of a medical college and hospital; to the IIT Kanpur; and to several private bodies for establishment of infrastructures towards pursuing commercial or industrial objectives.
In the absence of any attribution in the show cause notice or in the impugned adjudication order that constructions by the petitioner were in relation to construction of residential complex service, since more than 12 residential units were constructed and since there is no finding recorded that the residential units were not for the personal use of the recipient in terms of the statutory definition, in particular the explanation set out in Section 65 (91a) of the Act, Tribunal saw a strong prima facie case in favour of the petitioner.
Income Tax
Whether when assessee-Trust fails to produce any of donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68 - NO: High Court
THE Assessee is a Charitable Trust duly registered u/s 12A. The income of the Trust was exempted u/s 11. For the AY 2001-02, the assessee had received donations towards building fund amounting to Rs.54,38,999/- and for the AY 2002-03, it had received a sum of Rs.12,74,672/-. The return filed u/s 139 for those assessment years was accepted by AO. However, notice u/s 148 was issued to the assessee for reopening the assessment. In response to the said notices, an AR of the assessee appeared before the AO and produced all the details. The assessee also objected for reopening of the assessment u/s 148. In the balance sheet filed along with the returns, the assessee had made known the donations received towards the building fund and had also furnished the details of the donors.
Theissues before the Bench are - Whether when the assessee-Trust fails to produce any of the donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68; Whether the exemption u/s.11(1)(a) is allowable only on income derived from property held under Trust wholly for charitable or religious purposes and Whether in case the amounts received from the third party has been accounted and utilized for charitable purposes by the assessee trust, but the assessee has failed to disclose the names and addresses of the donors as well as the mode of payment, it is entitled for deduction u/s 11. And the verdict favours the assessee.
Central Excise
Appellant clearing own manufactured goods to principal manufacturer under job work challans - procedure for functioning under the job work is different - duty correctly demanded - Revenue neutrality would arise only if activities of clearance takes place within the sister concern or their own units - appeal rejected: CESTAT
DURING the course of preventive checks in the appellant's unit it was observed that the appellants had received goods from their principal manufacturers for carrying out job work. The appellants, instead of clearing goods manufactured out of the said raw materials received from their principal manufacturers, cleared their own manufactured finished goods under the cover of job work challans to the principal manufacturers during period from May to November, 2007.
See our Columns Tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice day.
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