TIOL-DDT 868
19.05.2008
Monday
The CBEC clarifies:-
Service tax is applicable on "club and association service" with effect from 16.6.2005. The taxable service under this category is any service provided by a club or association to its member for a fee or any other consideration.
A number of trade associations have disputed the levy of service tax on them under this category of taxable service. In this regard it is stated that there is no dispute that such bodies fall within the scope of club or association. The services provided by these associations are not of charitable, religious or political in nature. They collect membership fees and other charges form their members and they work for the interest of trade and industries. Therefore, they do not have objectives which could be categorized as public service. Accordingly, they do not fall within the scope of the excluded categories.
Further some of the trade associations have also argued that they are providing service to their own members and thus the service is self service. However such argument does not have any legal basis. In this regard attention is invited to the Explanation to section 65 of the Finance Act, 1994, which clearly clarifies that taxable services includes any service provided by any unincorporated association or body of person to a member thereof, for cash deferred payment or any other valuable consideration.
In view of the above, appropriate action may please be taken for recovery of service tax in all these case.
We had carried this clarification from Delhi Service Tax Commissionerate on Friday; now we have it from the Horse's mouth and so we are carrying it again for record and posterity.
CBEC F.No . 137/50/2008- CX.4 Dated: April 28, 2008
Punjab Cricket Association to get Service Tax Show cause Notice
Chandigarh Chief Commissioner, Sra told reporters that his Department was considering issue of Show cause Notice to PCA for conducting IPL and evading the service tax. “Some of the areas of IPL such as event management, advertising and franchise arrangements, come under the purview of Service” , according to him. But instead of issuing the Show cause Notice, why is he giving press statements? Does the Department want publicity or tax? Can the Department go round publication of names even without issuing a Show cause Notice?
What applies to Punjab applies to all other places where the IPL matches are held; why are the other Chief Commissioners not issuing press statements? DDT was witness to a senior officer frantically trying for complimentary passes for self and family, including vantage seats for the kids to watch the matches, Service Tax evasion notwithstanding. Howzzat ? It's not Cricket!
Judge directed to write order in legible handwriting
“The manner in which the learned metropolitan magistrate has recorded the order in his handwriting leaves much to be desired; The order is hardly legible”, commented a Delhi High Court judge on an order by a Metropolitan Magistrate.
"The purpose of recording orders is not merely to make a record for the concerned Magistrate which he is able to read, but also for others to be able to read the same. It is expected that the Magistrate shall in future take care to write the orders in a more legible handwriting," the Judge said.
Write off/abandonment of irrecoverable amount of arrears of revenue
The Arrears Recovery in the Department is a big farce. The other day DDT was witness to an interesting recovery proceeding. A young Deputy Commissioner was forcefully telling his Commissioner that the arrears are not recoverable and should be written off. The Commissioner wanted to show the arrears under “persuasive action”. The Deputy Commissioner said no amount of persuasion can recover the arrears and why can't the Commissioner write off the arrears. The Commissioner told the young Deputy Commissioner, “you will understand why I can't write off the arrears only when you become a Commissioner; for now show them under persuasive arrears”
Now the Commissioner, TAR has advised the Chief Commissioners and Commissioners that:-
1. The CBEC had instructed that any proposal for write off of the arrears of revenue may be sent to Board only after completely following the directions/guidelines contained in the Board's OM dated 12.8.2004 circulated under F.No.296 /34/20034- CX.9 (Pt.) dated 12.8.2004, that too in the proforma already prescribed vide Board letter F.No.290 /4/85/ CX -9 dtd 23.3.1985.
2. The Board vide letter F.No.296 /34/2008- CX -9 dated 20.3.2008 has further advised that the procedure step by step have to be followed with respect to recovery of arrears which have become difficult to recover.
3. It is accordingly advised that any case for write off of revenue/penalty may be sent to the Board after following the directions/guidelines in proper proforma . It is needless to repeat that only those matters wherein revenue involved is more than Rs.15 lakhs would be referred to the Board for write off.
Letter No.CC/ TAR /53/2007 of the CHIEF COMMISSIONER ( TAR ) Dated: April 23, 2008
Seniority List – Promotee appraisers lose case in Supreme Court
The Supreme Court observed,
It is a matter of grave concern that although the parties have filed a large number of original applications and writ applications and the matter had at least once been taken up upto this Court, the Union of India has singularly failed to lay down a proper legal framework for the purpose of determination of inter se seniority between the direct recruits and promotees. Correct facts and figures have also not been placed by the Union of India before the learned Tribunal. It furthermore appears that even they are not in possession of all the relevant documents. If anybody is to be blamed for the messy situation, the Union of India, must take upon it the major chunk of the blame.
Therefore, promotions may have to be continued whether on an ad hoc basis or otherwise so as to enable the Department to function effectively and efficiently. The promotees may continue in their service but when a question arises in regard to determination of seniority, the statutory rules must be given effect to.
See our Breaking News No seniority for ad hoc promotions
Jurisprudentiol – Wednesday's cases 
Central Excise
D-linked – Excise Valuation Case – sandwiching cost of IT peripherals into value of driver software - Pay pre-deposit of Rs One Crore, says Tribunal
THEY say that the best way to reduce your duty liability is to indulge in undervaluation because experience says that on almost on all occasions the law falls short to pin you down & you scrape through!
There was this case of the assessee collecting higher transportation charges from his clients & the department alleging that it is only the “actual transportation” costs that can be allowed as a deduction from the Assessable value. Consequently, the said “ excess charges of transportation ” have to be loaded into the assessable value of the manufactured goods & differential duty paid thereon, is what the authorities alleged.
Plastic shelves used in bathroom for keeping small items like creams & soaps or on table top or in kitchen are 'household articles' & not 'furniture' - classifiable under sub-heading 3924.90, says Larger Bench of Tribunal
WHEN the company was young and wanted to make its presence felt in the market, it had a unique marketing strategy. A call would be made to a telephone subscriber randomly selected ( mobiles did not exist – there was no ‘do not registry' either ) & if he/she responded with a “Cello” instead of a “Hello”, he/she stood a chance of winning a prize! On to the case now.
Okay, so you wish to buy a Plastic Shelf so as to keep in it your favourite fluoride toothpaste, shaving cream, tooth brushes, after shave lotion, soap, cream etc, or a shelf which can also hold some essential kitchen items. Of course, use of such shelves are interchangeable & one would normally visit a hardware shop or a Bathroom fittings shop to purchase the compact Plastic shelf but never a furniture shop simply because they do not usually stock it for sale.
Income Tax
Deduction u/s 80 HHF - profits of entire business to be taken into consideration, notwithstanding loss in exports; expenditure on leased building - depreciation allowable & cable subscription is turnover: ITAT
Referring to several decisions of the Courts, the ITAT held, that for claiming deduction u/s. 80HHF , the profits derived from the business as referred to in sub-section (1) would be such profits as are computed in accordance with the provisions of sub-section (3) read with Explanation (f) thereof. For this purpose, the profits of the entire business would be taken into consideration. Consequently, it is held that the Assessing Officer was not justified in denying the claim on the ground that there was loss in the business of export television's software on the basis of segmented Profit & Loss A/c. The order of the learned C IT (A) is, therefore, upheld on this aspect of the issue.
Tomorrow is a holiday
See our columns Wednesday for the judgements
Until Wednesday with more DDT
Have a nice Day.
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