IT: An assessment order passed without making reference to Commissioner under section 124 is not a nullity for want of jurisdiction but it results in an irregularity which can be rectified by order of remit
Sunday, 13 July 2014
Leather Exporters Brace For Eu Curbs On Chromium
India’s 35,748-crore leather exports industry is straitjacketed with a demand by the European Union to cut down on chromium content.
The 28-nation bloc has brought down to 3mg/kg the permissible limit of chromium VI, a form of chromium classified as cancer-causing. India should comply by May next year, a deadline that has forced leather exporters to rid goods ranging from footwear to dog leashes to car furniture of harmful chromium.
The move comes under the European Union’s Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH), a regulation adopted to protect human health and the environment.
The industry average is around 5-6 mg per kg.“We are trying out alternative tanning agents such as aluminium. Though any monetary estimate will be premature, we expect a slight cost increase,” said Aslam Basha, Executive Secretary at Indian Finished Leather Manufacturers and Exporters Association.
Hazardous chemicals
Over decades, leather manufacturers have been knocking off hazardous chemicals from their processes such as disinfectant Pentachlorophenol and Formaldehyde. “And this is just one more of them,” says Rafeeque Ahmed, President of Federation of Indian Export Organisations. European nations have been stressing on carcinogen-free leather for long. But now, the official mandate is a concern because chromium occurrence is commonplace in the manufacture of footwear, which constitutes 43 per cent of India’s leather exports, he said.
The carcinogen enters leather products chiefly during the tanning process in the form of Chromium III, which is innocuous but converts to the toxic form at higher temperatures. The Central Leather Research Institute, Chennai, is working on a new processing method to limit chromium presence, but it will take months to crystallise.
Ganesh Jeevan, Principal Technical Officer at CLRI, says 3 mg is the lowest detectible amount of chromium in any leather sample.
“No one adds chromium intentionally, and it cannot be completely done away with. This leaves little scope for alternative processing,” he said. Though there have attempts at replacing chromium with zirconium, the rare earth mineral is available at a large premium and the atomic energy industry is a priority buyer.
While small units make up a large portion of the industry, big players such as the Tata Group are also in the business. A spokesperson for Tata International Ltd which exports leather jackets and car upholstery, says a tannery sourcing “good quality” raw material need not fret over the EU mandate.
Source:- thehindubusinessline.com
HC denied to entertain writ against sec. 153C notice as statutory remedy was available with assessee
IT : Statutory remedy is available against notices issued under section 153C; hence, writ petition cannot be entertained
Cotton Extends Freefall Amid Prospects For Stocks Buildup
Free-falling cotton futures hit fresh two-year-plus lows last week amid expectations for a buildup in U.S. stocks and growing world inventories outside China.
Benchmark December lost 351 points for the week ended Thursday to close at 68.55 cents, a contract low finish just above its lifetime intraday low of 68.25 cents established in early June 2012.
December has closed lower eight sessions in a row and 11 of the last 12, including four new contract low settlements in a row. Fund and speculative selling blunted rally attempts at strategic technical levels.
Traders expected USDA’s supply-demand report Friday to show U.S. 2014-15 ending stocks rising from 4.3 million bales projected last month and stocks outside China growing from 41.95 million bales. The 2013-14 June estimates were 2.7 million and 38.69 million bales, respectively.
The market shrugged off constructive U.S. all-cotton export sales totaling a combined 271,500 running bales during the week ended July 3 for this season and next, up from 101,300 bales the previous week.
New-crop upland sales of 203,200 bales, up from 59,700 bales, were the second largest registered for the marketing year beginning Aug. 1, narrowly behind only 203,700 bales reported for the week ended Feb. 13.
Upland sales for shipment this season of 67,600 bales, up 16 percent from the prior four-week average, and small Pima sales brought 2013-14 commitments to 10.782 million bales, 106 percent of the June estimate.
All-cotton shipments slipped to 141,200 running bales from 175,100 bales the week before, with upland exports of 136,400 bales falling 9 percent from the prior four-week average. But shipments remained slightly above the pace needed to make the estimate.
On the U.S. crop scene, ratings improved and progress remained ahead of last year but behind the five-year average in the week ended July 6.
Cotton in good to excellent condition rose to 55 percent from 53 percent a week earlier, USDA said, with fair at 32 percent down from 34 percent and poor to very poor unchanged at 13 percent. A year ago, 44 percent was good to excellent and 24 percent was poor to very poor.
The DTN cotton condition index based on the USDA report increased to 138 from 135 a week earlier and 97 last year.
In Texas, good to excellent cotton rose a percentage point on the week to 41 percent, but fair fell three points to 37 percent and poor to very poor increased two points to 22 percent.
Squaring across the belt advanced 17 points for the week to 53 percent, four points ahead of last year but seven points behind average. Cotton setting bolls increased five points to 12 percent, up from 9 percent a year ago but behind the average of 16 percent.
U.S. upland growers had contracted about 6 percent of their expected acreage as of July 1, according to informal surveys conducted by the cotton division of USDA’s Agricultural Marketing Service.
The survey, based on the June plantings report, showed contracting was down from 11 percent a year ago and the smallest since 2009 when only 2 percent had been booked. The estimates don’t include cotton consigned to marketing organizations but do include cotton contracted with them.
By regions, bookings included 11 percent in the Southeast, against 32 percent a year ago; 9 percent in the Mid-South, down from 15 percent; 4 percent in the Southwest, up from 2 percent; and less than 0.5 percent in the West, compared with 3 percent last year.
On the international scene, traders monitored a deficit monsoon in key cotton areas of India, the world’s second-largest cotton producer. The monsoon is crucial to the production of various Indian crops.
India’s government, worried that poor monsoon rains will depress the country’s grain production, is planning to hold onto supplies for its domestic market instead of boosting exports — something that could push up prices for wheat and rice, Dow Jones Newswires reported.
India is the world’s No. 1 rice exporter and also has become a prominent supplier of wheat ever since the government lifted a ban on exports of the two grains in September 2011.
To avoid any shortfall, the government has dropped a plan to auction 5 million tons of rice from state stockpiles in the open market and to keep on hold a program under which wheat was being sold regularly through state-run trading companies to global bidders.
India’s 2014-15 cotton production was projected by USDA last month at 28.5 million bales, nearly 7 percent below the country’s 2013-14 output, despite an increase in the estimated area.
With demand for India’s textile product exports expected to remain strong, USDA projected its cotton consumption to rise 2 percent to a record 24.3 million bales.
But with world trade projected down 13 percent from 2013-14, mainly because of China’s reduction in raw cotton imports, India’s exports were forecast to decline 37 percent to 5.7 million bales.
Updated 2013-14 estimates by India’s Cotton Advisory Board earlier this month put exports at 11.4 million 170-kilogram bales, or 8.9 million 480-pound bales, close to USDA’s 9 million bales.
Meanwhile, trend-following funds sold 9,224 lots in cotton futures-options combined to chop their net long position by 38 percent to 5,618 lots during the week ended July 1, according to government data.
Those funds reduced their net longs to the smallest since they were net short Dec. 3. Index funds bought 171 lots to nudge their net longs up to 64,248 lots, while traders with non-reportable positions sold 2,847 lots to reverse to net short 2,342 lots from net long 505 lots.
Commercials bought 11,900 lots, covering 6,776 shorts and adding 5,124 longs to shave their net shorts to 67,526 lots. In futures only, non-commercials cut their net longs by 5.9 percentage points to 8.3 percent of the open interest, which rose by 788 lots to 146,236.
Source:- lubbockonline.com
Milk Prices May Rule Easy Despite Drought Fears
While a looming drought is causing worries over resurgent food inflation, there is one commodity – milk – that could offer some respite.Falling global prices rendering exports unviable, coupled with farmers tending to sell more to dairies in weak monsoon years, may see consumers not spending more on milk this time.
In 2013-14, India exported nearly 1.3 lakh tonnes (lt) of skimmed milk powder (SMP) worth over ?2,700 crore on the back of high international prices and a weak rupee.
Faltering exports
“This year, exports won’t cross 0.5 lt, as we are barely doing 3,000 tonnes a month,” said an industry source.
The country’s annual SMP production is 5-6 lt. Dairies bid up milk prices when export demand is high, as it was last year.
“Export realisations are currently ?215/kg, as against ?250 from domestic sales. Last week’s move scrapping the 5 per cent duty credit scrip incentive (on free-on-board value) will make shipments even less remunerative,” the source pointed out.
Domestic prices have also fallen from the ?285-290 levels until three months back. “Dairies are ready to supply even at ?230/kg for large orders. There is enough surplus powder in the system now,” he added.
Price correction
Diaries require about 12 litres of milk to produce a kg of SMP. A ?50/kg drop in SMP realisation will force them to offer ?4/litre less to farmers.
“The phase of huge procurement price increases we saw from around November is over. From now on, prices will rule flat or lower because there isn’t any export demand at current global realisations,” noted RG Chandramogan, CMD, Hatsun Agro Product Ltd.
Since December, SMP prices at the fortnightly auctions of New Zealand’s Fonterra Cooperative Group, the world’s No. 1 exporter, have tumbled from $4,868 to $3,810 a tonne (Indian powder fetches a $100-200 discount to international rates).
Two factors are driving this fall. The first is a production rebound in New Zealand after last year’s drought, the country’s worst since 1972-73.
The second has to do with the end of the European Union’s 30-year-old milk quota regime – which sets caps on how much each member-country can produce – from April 1, 2015. The dismantling is expected to boost output, especially from relatively low-cost producers such as Ireland and Poland.
Drought insurance
But lower export demand apart, there is another reason why domestic milk prices may rule easy. In years of low rainfall, farmers step up milk sales to make up for lost income from their main crop.
Gujarat Cooperative Milk Marketing Federation (GCMMF), for instance, reported a 9-10 per cent jump in procurement volumes in 2002 and 2009, both severe drought years.
“When the rains aren’t good, farmers go in for short-duration fodder crops that can be fed to animals, rather than raise cotton or groundnut. Dairying, thus, becomes their primary income source,” observed Rs. Sodhi, Managing Director, GCMMF.
There is a flip side, though.
In poor monsoon years, farmers accord priority in feeding to buffaloes and cows already in milk, while pregnant animals and calves tend to suffer fodder deprivation. This can, in turn, impact future milk production via a disruption of the reproduction-cum-lactation cycle of animals.
Source:- thehindubusinessline.com
Cairn Seeks Nod To Export Barmer Crude
The petroleum ministry is evaluating a proposal by Cairn India for exports of crude oil produced at its Barmer fields, which are the country’s largest inland oil producing fields.
A petroleum ministry official told HT that the government has sought a detailed note from Cairn India after the company’s promoter Anil Agarwal met petroleum minister Dharmendra Pradhan on July 3 and sought permission to allow export of Barmer crude.
“He (Agarwal) met the minister and sought approval to allow export of crude as it can substantially increase contribution to the exchequer while improving efficiency of refineries. Cairn has been asked to submit details,” a senior petroleum ministry official said.
Another meeting is scheduled this week between the petroleum minister and the Cairn-ONGC JV to go into details, he said.
“We have proposed a swap agreement wherein we will export this waxy crude and import a better quality and establish a better market price for the Rajasthan crude…any incremental revenue arising out of the higher price would be split between the government and the Rajasthan JV partners (Cairn and ONGC)…it would mean that on every one dollar incremental revenue, the government and its nominee gets 70-80 cents,”said a senior official of the Rajasthan JV of Cairn and ONGC.
Under current law, companies are not allowed to export crude oil. Oil producing companies are obliged to sell their entire produce only to the government or a nominee it appoints.
Keen to export crude to Japan and Singapore, Cairn is currently producing huge volumes of heavy crude in Rajasthan.
If Cairn’s proposal is accepted, it would be a significant step as India meets 80% of its crude oil requirements through imports. Cairn would become the first company to export crude oil from India.
Source:- hindustantimes.com
Merger of service provider with receiver from retro-effect doesn’t wipe out Credit availed of before
Cenvat Credit : Where services were provided during 2006-07, service recipient would be entitled to credit thereof even if, after provision of service, service provider is actually amalgamated into recipient from retrospective date since 1-4-2006
Winding-up of Co. admitted as it was pleading for defective goods even if default was due to scarcit
CL : Where dispute raised by company as regards quality of goods was only after filing of winding up petition for non-payment of dues, said dispute could not be held bona fide; real problem being non-availability of funds, winding up petition was to be accepted
Interest charged from AE held at ALP as Libor plus rate suggested by DRP wasn’t in sync with compara
IT/ILT: Where DRP had directed Assessing Officer to charge Libor + 2 per cent, Libor + 1 per cent charged by assessee could be considered as at arm's length, in absence of any other comparables where Libor + 2 per cent was charged
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