News Update

RIL Q2 Results - PBDIT increased by 15.5% to Rs 25820 CroreCus - Section 166A of CrPC is not an independent island on which any investigating/inquiring authority can jump on without taking recourse to Section 154/155 - Letter rogatory quashed: HCChief Justice of India supports senior most Judge Justice S A Bobde as next CJIService of notice as per PAN database is sufficient compliance of Sec 143(2); Change in address with no intimation to I-T Dept is fault of taxpayer for which he cannot raise limitation issue: SC Larger BenchPulpwood used in the manufacture of paper and paperboard is classifiable under heading 4403 and attracts GST @18%: AARAir Handling units are classifiable under HSN 8415 9000 and Air Ventilators under HSN 8414 5910: AARGST - Transfer of assets fastened to building on delivering possession to lessor amounts to supply u/s 7 of CGST; hence taxable: AARGST - Reimbursement of stipend paid to trainees is not taxable under the GST Acts: AARGST - GST payable under reverse charge for payment made towards National Mineral Exploration Trust and District Mineral Fund: AARSupply of e-campus solutions is classifiable under SAC 997329; attracts @18% GST: AARGST - There is no provision in the Act for shifting the tax liability: AARIncome tax raids Chennai-based 'Wellness Group' at 40 locationsRules of Origin - WTO partners with ITC & WCOGST - Respondent cannot enrich himself at the expense of flat buyers by denying them benefit of ITC till completion of the project while he uses the same in his business for discharging his output tax liability every month: NAAGST - If respondent insists on passing on benefit of ITC to buyers after completion of the project, he should also claim the benefit of ITC after completion of the same: NAAST - Pandal/shamiana services provided on the occasion of Gur-ta-Gaddi Tercentenary Celebration is not liable to service tax: CESTATCX - If brand name is used by the firms of the same family member, it cannot be said that one is using the brand name of other person - SSI exemption available: CESTATST - Transport for long or short distances is not the relevant criterion for classification under the category of 'Goods Transport Services': CESTATCX - Sale is on FOR basis - Place of removal being the buyer's premises, disallowance of credit of the ST paid on GTA Services cannot be sustained: CESTATCX - Products that are not intentionally manufactured but only arise during the process of refining of crude vegetable oil are to be considered as waste and entitled to the benefit of exemption notfn 89/1995-CE: CESTATCX - When the refund is not under any provisions of CEA, the provisions of the Act relating to interest do not apply: CESTATCX - Since assessee has purchased goods in auction, department is free to settle their excise duty liability with Official Liquidator and not from assessee: CESTATCX - Goods purchased in auction, dismantled and sold as waste and scrap - no duty liability: CESTATFor computation of eligible deduction u/s 54F in case of sale of long term capital asset, payment made towards purchase of new residential house up to due date of filing belated return, will be taken into consideration: ITATIf allegations of siphoning of funds and forgery based on incriminating documents found during search remained unanswered, case should be remanded to give final opportunity to substantiate case: ITATIn composite sale if assessee fails to give bifurcation of assets and its value which are capitalized and has claimed depreciation in earlier years, then value of land is rightly taken as Nil: ITAT
TIOL Awarded WCO Certificate of Merit


IN a glittering function at Delhi 's National Museum , Chairman of the Central Board of excise and Customs, Shri Dutt Mazumder presented the WCO Certificate of Merit to Shri Shailendra Kumar, CEO of for rendering exceptional service to the international Customs Community.

The other awardees in this category were Shri R K Jain, Editor of Excise Law Times and Shri Naval H Mehta, CHA Advisor.

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Dr. Awadesh Kumar Singh, AD, NACEN receiving award from CBEC Chairman S Dutt Majumder R K Jain, Editor, ELT, receiving award from CBEC Chairman S Dutt Majumder

The Chairman also presented the certificates of merit to seven distinguished officers of the Department who had all made immense contribution in the field of Customs Knowledge, who were all lustily cheered by the elite audience. But the loudest and long-standing applause came for Dr. Avdhesh Kumar Singh, AD, NACEN. The audience consisted of a large number of probationers from NACEN who all went into raptures seeing their teacher getting the award from the CBEC, Chairman.

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WCO Awardees along with S Dutt Majumder, CBEC Chairman, S K Goyal, Member Customs, CBEC and Salil Bhandari, President, PHD Chamber of Commerce

The Chairman said, “No Customs initiative can be successful without the partnership of our stakeholders. I am delighted that this year's celebration in India is being marked by honouring both the Departmental officers and the distinguished people from private initiatives. I have personal experience of interacting with each of them and I can tell you, the Board has made the right choices”.

A retired Member told me that there could not have been a better selection than Shri R K Jain and Shri Shailendra for this award.

The function was attended by a galaxy of senior officers from the department including retired Chairmen apart from current and retired Members of the CBEC.


Transfer / Transshipment of cargo - CBEC Circular

BOARD has received representationsfrom trade that procedures regarding international transhipment of cargo arriving from a foreign destination and proceeding to a foreign destination via an airport in India from one flight to another needs to be simplified in order to ensure an efficient Cargo Transfer Facility and to reduce dwell time.

In order to redress the issue and to simplify the procedure, Board has decided that in case of international transhipped cargo (Foreign to Foreign), for the pre-sorted containers wherein Cargo does not require segregation, ramp to ramp or tail to tail transfer of cargo can be effected, provided the same is carried out under preventive supervision on payment of MOT and Observance of Cargo Transfer Manifest (CTM) procedure. In these cases, transhipment Cargo meant for destination abroad need not be sent to Cargo warehouses. In the case of containers other than pre – sorted containers, the existing procedure for transhipment of Cargo (Foreign to Foreign) would continue to apply.

Circular No. 6/2007 - Cus Dated 22.01.2007 is modified.

CBEC Circular No. 8/2011 - Cus; dated January 28, 2011

This Circular was issued today and DDT brings it to you today!

Self Assessment in Customs - CBEC's Vision

ADDRESSING the International Customs Day Celebrations, the CBEC Chairman Shri Dutt Mazumder said, “We must continuously modernize our Customs administration. We have implemented EDI in Customs through Version 1.00. Now we are in the process of migration to a more robust system, Version 1.5.0. This would enable us to undertake many more systems modernization schemes. Once RMS is stabilized, we are in the process of having a robust PCA – Post Clearance Audit. We realized, just as we have self assessment in Central Excise and Service Tax, we must also have self assessment in Customs.”

In fact three days ago, the Chairman had announced in the presence of the Finance Minister, during the investiture ceremony that, “our vision is to have self assessment in Customs, as soon as we implement PCA successfully”.

The Chairman noted that Customs Revenue Collections were extremely good, but he said, “ E e ven as revenue collection continues to be our core competency, we cannot ignore the overreaching requirement of trade facilitation and tax payer friendly processes. There has to be a seamless flow of goods so that transaction cost in international trade is minimized”.

To this end, there is a need to modernize the Customs Administration and perhaps Self Clearance and Self Assessment in Customs will be a reality soon.

Excise MRP Notification - Corrigendum issued

THROUGH Notification No. 30/2010-CE (NT) dated December 21, 2010 “packaged software or canned software” was brought into retail sale price based assessment by amending Notification No. 49/2008-CE (NT), December 24, 2008, with an abatement of 15%. In that amending notification, the Chapter description was given as “8523”. Now the Government has further amended this ‘amending notification' to correct the Chapter description to “8523 80 20”.

CORRIGENDUM, Dated: January 6, 2011

Provisional Anti-Dumping Notification for PVC Flex Films - Corrigendum issued

THROUGH Notification No. 79/2010-Cus, dated July 30, 2010 anti-dumping duty was provisionally imposed on PVC Flex Film which is valid upto January 29, 2011. Now the “Note” appended to this Notification is amended as follows:

(i) The words, “PVC films and tarpaulins” has to be read as “tarpaulins”; and

(ii) The letters, “PVC Rigid Films” has to be read as read “PVC films”.

The effect of this corrigendum is that the provisional anti-dumping duty will not be applicable to “PVC Films”and may be all those who paid anti-dumping duty on PVC Films under this notification can now claim refund.

CORRIGENDUM, Dated: January 24, 2011

CVC Disposed of 804 Cases in December 2010 - Major Penalty Proceedings Recommended against 226 Officers

THE Central Vigilance Commission disposed of 804 cases during December 2010 referred to it for advice. Of these, 667 complaints were sent for necessary action/ATR whereas 48 complaints were sent for investigation and report. No action was required on 123 complaints.

The Commission advised imposition of major penalty against 226 officers including 50 from Department of Communications, 36 from Central Board of Excise & Customs, 23 from Ministry of Railways, 13 from State Bank of India, 10 from Vijaya Bank, 9 from Punjab & Sind Bank, 8 from M.C.D., 7 from Andhra Bank, 6 from Canara Bank, 5 each from Allahabad Bank, Bank of India, Punjab National Bank, Power Grid Corporation of India Ltd. & UCO Bank. Remaining 31 cases pertained to different departments of the Government of India and PSUs.

Recoveries to the tune of about Rs.2.78 crore were effected after Commission conducted technical examination of some departments.

Exchange rates for import and export notified

CBEC has notified the exchange rates for February 2011.

Notification No 6/2011,Dated January 27, 2011

Jurisprudentiol – Monday's cases

Legal Corner IconCustoms

Customs - Exports - Mis-declaration - Confiscation upheld; Penalty and Fine reduced – Letter given to Magistrate not taken as retraction of Statement: CESTAT

The appellant company filed two Shipping Bills both dated 3.4.2003 for export of 9900 pieces of Woven trousers valued atRs.500/- per piece. The total declared FOB value of the goods wasRs.49,50,000/- with a claim of draw back ofRs.5,94,000/-. The appellant company also filed four shipping Bills all dated 3.4.2003 for export of 6120kgsof articles of Nickel Welding Electrodes with declared value ofRs.400/- per kg. The total declared FOB value was Rs.24,48,000/- with a claim of drawback ofRs.3,42,720/-. Both these consignments were consigned to a buyer in Russia .

Income Tax

Income tax - Sec 32 - Is depreciation allowable even when a unit in factory is completely closed, and there is no plan to revive the same? - NO, says ITAT

The assessee company is engaged in the manufacturing and dealing in snack foods, edible oil and MEG/DEG/TEG. It wanted to carry out major modification to its MEG plant. It treated all costs incurred in doing so to work in progress account. The unit started trial production in FY 1993-94. Trial production was carried out up to FY 1997-98 relevant to AY 1998-99. On 29.3.1996, the MEG division was closed. Thus, there was no use of the assets of MEG unit during the previous year relevant to AY 1999-2000. In AY 1999-2000, the assessee capitalized the value of work-in-progress account of MEG Unit and claimed deprecation. Thus, the assessee till such capitalization had treated the line of business as not having been set up.

Service Tax

Service Tax –GTA - Payment of Service Tax on GTA by Abu utilizing Credit earned on GTA - Permissible prior to 19.04.2006: CESTAT

In other words, a s far as the issue in question is concerned to the extent it related to the period prior to 19/04/2006, the consistent view taken by the Tribunal is that in view of the explanation clause the assessee would be entitled to avail the benefit of such service tax in order to claim theCENVATCredit thereof.

See our columns Monday for the Judgements.

Until Monday with more DDT

Have a Nice Weekend.

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